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 Australia produces some of the best wine in the world and is now the fourth largest global wine exporter after France, Italy and Spain.
Rising incomes and a marked shift in consumer tastes from beer to wine in both domestic and overseas markets are helping drive demand and in 2006, the Australian wine industry generated revenue of more than $5 billion.
Furthermore, the Australian Wine and Brandy Corporation (AWBC) and the Winemakers Federation of Australia (WFA) have announced an ambitious target to sell an extra $4 billion worth of wine by 2010.
Premium quality and branded wines
Increased spending worldwide on entertainment and dining out has led to a greater demand for clearly branded, quality wine products such as those produced in Australia.
The major wine products include:
- Dry white and sweet table wines
- Dry red table wines and rose
- Sparkling wine
- Fortified and other wines
Australia’s wine-growing regions produce grapes that reflect the richness and diversity of the land and the many varied climatic influences.
Meanwhile, Australian wine producers are constantly exploring and developing wine styles that emphasise complexity and depth of flavour.
The leading varieties of wine grapes currently being cultivated in Australia include:
- Shiraz
- Cabernet Sauvignon
- Merlot
- Pinot Noir
- Chardonnay
- Semillon
- Colombard
- Riesling
- Sauvignon Blanc
Chardonnay remains the clear volume leader in the still white bottled category, but aromatic varieties such as Sauvignon Blanc and Semillon Sauvignon Blanc are experiencing significant growth in both domestic and export markets.
Among the reds, Pinot Noir experienced the most growth, while sparkling wines and rose also made strong gains.
Growing demand for wine worldwide
Australia is the world’s fifth largest wine producer (behind France, Italy, Spain and the USA) and the world’s fourth largest exporter.
Around 2.5 million bottles of Australian wine are exported overseas every day – that’s worth about $2.8 billion to the country’s economy.
Australian wine is also making inroads in Japan, Scandinavia and Europe, while greater exposure to international trends means consumers in Asia, Africa, and Central and South America are now drinking more wine.
Emerging markets such as Eastern Europe, Russia and China offer potential export growth opportunities thanks to the cultural shift away from spirits to wine. In addition, Australia’s Free Trade Agreements with Thailand, the US, Singapore and New Zealand have also helped boost international sales.
Export quantities and value
In 2006:
- Over 2000 wine companies processed Australian wine grapes drawn from 67 regions nationwide
- The total grape crush was 1.85 million tonnes
- Around a billion bottles of wine were exported (798 million litres)
- Wine exports were worth $2.8 billion
- Australian wine was exported to more than 100 countries
- The area under vine was at least 150,000 hectares
By value, the top wine export destinations are the UK, USA, Canada, New Zealand and Germany.
Red wine exports currently surpass white wine exports, with bottled red sales accounting for 62 per cent of wines consumed in overseas markets in 2006.
Bottled wine accounted for 80 per cent of total wine product exports, while wine in other containers (essentially bulk wine) accounted for another 17 per cent of export sales.
For the year April 2006–April 2007, Australian wine exports generated the following revenues:
- USA – $963 million
- UK – $958 million
- Canada – $252 million
- New Zealand – $101 million
- Germany – $67 million
- Ireland – $64 million
- Netherlands – $58 million
- Sweden – $51 million
- Denmark – $50 million
- Japan – $47 million
- China – $46 million
- Singapore – $42 million
Major players
South Australia dominates the Australian wine industry, with an estimated 48 per cent of production. This is followed by New South Wales, which accounts for approximately 32 per cent of Australian wine manufacturing.
The five biggest wine companies account for at least 60 per cent of wine production revenue. They are Foster's Group Limited, Hardy Wine Company, Orlando-Wyndham Group, McGuigan-Simeon, and Casella Wines. At the next level, there are a number of medium-sized companies, including De Bortoli Wines, McWilliams Wines, and Lion Nathan.
Finally, there are small firms which crush less than one hundred tonnes of grapes annually and account for around two to four per cent of wine production.
The Australian wine industry also undertakes extensive research and development and has established state-of-the-art facilities for processing, bottling, storage, labelling and packaging.
Several wine companies are building on these technological advances and forming alliances with international firms in a bid to increase Australia’s market position and distribution overseas.
The involvement of global companies is fuelling an increasingly diverse range of wine production and an industry capable of adapting to fluctuating consumer trends.
Sources:
(IBISWorld, Australian Wine and Brandy Corporation, World Trade Atlas)
Success story
Australia’s Free Trade Agreement with Thailand (TAFTA) has helped New South Wales-based wine producer Westend Estate.
The winery, which has been operating in Australia for more than 60 years, has recently sold shipments to Thailand and also won a tender to supply wine to Vietnam’s national air carrier, Vietnam Airlines.
“The tariff cut under TAFTA makes a big difference to the final price of the wine on sale in Thailand,” said winery owner Bill Calabria.
“Export has become a big thing for us. In the past six years, we’ve gone from supplying five overseas importers to thirty.”
For more information please visit:
www.abareconomics.com – Australian Bureau of Agricultural and Resource Economics (ABARE)
www.abs.gov.au – Australian Bureau of Statistics
www.aqis.gov.au – Australian Quarantine and Inspection Service
www.asvo.com.au – Australian Society of Viticulture and Oenology Inc
www.awbc.com.au – Australian Wine and Brandy Corporation
www.awri.com.au – Australian Wine Research Institute
www.daff.gov.au – Department of Agriculture, Fisheries and Forestry
www.gwrdc.com.au – Grape and Wine Research Corporation
www.wineaustralia.com.au – National Wine Centre
www.winepros.com.au/jsp/cda/home.jsp – Winepros
www.winetitles.com/index.asp – Winetitles
(Last updated: 19 Aug 2007) |