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1329.0 - Australian Wine and Grape Industry, 2004  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/01/2005   
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ABOUT THIS PUBLICATION

This publication presents a summary of statistics on grape and wine production and related activities collected by the Australian Bureau of Statistics (ABS) and from other sources.



CHANGES IN THIS ISSUE

There are no changes in this issue.



SOURCE MATERIAL

World comparison data for 2002 was still unavailable at the time of publication. The most recent data for 2001 has been included in this issue.


With the exception of the tables and graphs relating to world comparisons, all sources cited refer to ABS publications and/or ABS data available on request.



ACKNOWLEDGMENT

The continuing collection of varietal data is supported by Australia’s grape-growers and winemakers and the Australian government through the Grape and Wine Research and Development Corporation.



ROUNDING

Where figures have been rounded, discrepancies may occur between sums of the component items and totals.



INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Graeme Thomas on Adelaide (08) 8237 7536.



SUMMARY OF FINDINGS


INTRODUCTION

Record crops in 2003-04 provided a significant turnaround from the drought conditions experienced throughout most of the wine growing regions during 2002-03. The poor results of 2002-03 for the Australian wine and grape industry were followed by record harvest, crush and wine production levels in 2003-04. Grape crush increased 37.1% and wine production rose 34.4%. The year was highlighted by continued growth in exports of Australian-produced wine which reached 584 million litres. Domestic sales of Australian wine also continued to grow, exceeding 400 million litres for the second consecutive year.

WINE AND GRAPE INDUSTRY, 2003-04

% change from 2002-03

Area of bearing vines (ha)
150,561
5.4
Total grape production (t)
2,014,965
34.6
Fresh grapes crushed (t)
1,917,238
37.1
Beverage wine production (million L)
1,424.2
34.4
Beverage wine inventories (million L)
1,854.5
17.2
Domestic sales of Australian wine (million L)
414.6
3.0
Domestic sales value of Australian wine ($m)
1,970.9
-6.1
Exports of Australian wine (million L)
584.4
12.7
Exports of Australian wine ($m)
2,494.1
2.9
Imports of wine (million L)
18.7
9.5
Imports of wine ($m)
152.3
9.6

Sales of Australian Wine and Brandy by Winemakers (cat. no. 8504.0); ABS data available on request, Wine Statistics Survey, 2003-04; Wine and Spirit Production Survey, 2003-04; Inventories of Australian Wine and Brandy 2003-04; Vineyards Survey, 2004.

BEVERAGE WINE TRADE
Graph: BEVERAGE WINE TRADE




VITICULTURE

Estimates from the Vineyards 2004 collection show that season 2004 was a record harvest. The industry recovered from the drought conditions experienced in 2003, a year where the first drop in grapes harvested since 1997 was recorded. Hectares of vines being cultivated increased to a record 164,181 hectares in 2004, from 157,492 hectares in 2003. The total area of vines bearing grapes increased from 142,793 hectares to 150,561, a rise of 5.4%, although the total area of vines currently not bearing grapes decreased by 7.4% to 13,619 hectares, in line with the reduction in plantings since the end of the major planting expansion of the late 1990s.


Grapes harvested in 2004 increased by 34.6% to 2,014,965 tonnes. Red grape varieties comprised 59.9% of the total area of vines and 61.7% of the total bearing area. Red grape production was 1,096,794 tonnes which easily surpassed white grape production of 918,171 tonnes. There were 1,816,556 tonnes of grapes harvested for winemaking, an increase of 36.6% over the previous year’s harvest and 19.9% up on 2002, the previous record year. The production of grapes for drying increased by 40.3%, to 129,489 tonnes, although the harvest of table and other grapes decreased by 8.2%, to 68,920 tonnes.

Grape Production and Intended Usage
Graph: Grape Production and Intended Usage



The net increase in area planted under vines for 2003-04 (derived from vines planted and vines lost during the year) was 2,025 hectares, down by 33.8% on the 2002-03 net increase of 3,057 hectares.

Vine Planting, Net change by state
Graph: Vine Planting, Net change by state



Gains occurred in both the red grape and white grape varieties with red grapes gaining 290 hectares and white grapes gaining 1,735 hectares. For red grape varieties the highest gain in area was recorded for Shiraz, with an additional 963 hectares. The net gain in area of white varieties was almost totally driven by an additional 2,006 hectares of Chardonnay which offset net losses in area of other white varieties, including a drop of 503 hectares of Sultana.


South Australia (SA) remains the principal red grape-growing State with 54.6% of total red grape production and 56.2% of the red grapes used for winemaking. Victoria (Vic.) produced 35.7% of all white grapes produced in 2004 followed by South Australia with 31.3% and New South Wales (NSW) with 27.2%. South Australia accounted for 37.6% of white grapes used for winemaking.



VINEYARD IRRIGATION

Data have been collected as part of the Vineyards 2004 survey collection on irrigation of vineyards in 2003-04. Information on the number of vineyards and hectares irrigated, quantity of water used, watering method used and sources of water were collected.


Of the 7,957 vineyards in Australia, 7,060 (88.7%) were irrigated. There were 142,877 hectares of vineyards irrigated in 2003-04, with South Australia (62,922 hectares) accounting for 44.0% of the total area irrigated followed by New South Wales (34,217 hectares) and Victoria (33,046 hectares). The average usage of water was 3.85 Megalitres per hectare. Victoria averaged 5.20 Megalitres per hectare, New South Wales 4.49 Megalitres per hectare and South Australia 3.17 Megalitres per hectare.


The most common watering method used was drip or micro spray with 105,514 hectares, or 73.8% of total area irrigated. Spray excluding micro spray was the second most utilised method with 23,369 hectares (16.4%). In Victoria 29.3% of all area irrigated was by spray excluding micro spray. The third most common method of watering was furrow or flood (11,740 hectares) with New South Wales accounting for 6,948 hectares, or 20.3% of their total area irrigated using this method.


Surface water from state/private irrigation schemes was the most common source of water with 80,872 hectares drawing from this source. This was followed by underground water supply (33,289 hectares), and other surface water (24,051 hectares). South Australia was the predominant state sourcing water from an underground water supply, with 39.2% of their total area irrigated from this source.



STRUCTURE OF THE WINE AND GRAPE PRODUCTION INDUSTRIES

For the 2004 vintage there were 410 locations around Australia which crushed 50 tonnes or more of grapes owned by 364 winemaking businesses, compared with the 2003 vintage which had 373 locations owned by 324 winemaking businesses. The increase in location numbers in 2004 was mainly attributed to smaller wineries crushing more than 50 tonnes of grapes in a record year for production.


Almost 30% of all locations are in South Australia and these accounted for 48.1% of the Australian wine grape crush, up from 46.3% in 2002-03. New South Wales/Australian Capital Territory (NSW/ACT) had 22.7% of the total number of locations with 32.5% of the total wine crush, while Victoria had 22.4% of all locations with 14.7% of all grapes crushed and Western Australia (WA) had 20.0% of locations with 4.3% of the crush. The increase in locations, attributable mainly to smaller crushing wineries, were concentrated in Victoria and Western Australia with increases of 15 and 8 wineries respectively.


The 364 winemaking businesses are diverse in size, with 185 of these businesses crushing 50-400 tonnes, having a combined crush of 33,405 tonnes (1.7%). The 179 businesses crushing more than 400 tonnes crushed a total of 1,883,833 tonnes (98.3%) of grapes. Compared with the 2003 vintage, the number of businesses crushing 50-400 tonnes increased by 2.2% and their quantity of grapes crushed increased by 11.2%. Those crushing more than 400 tonnes increased by 25.2% in number and 37.7% in the quantity of grapes crushed. The 111 smallest businesses crushed less than 1% of all grapes and averaged 112 tonnes each, while the 14 largest businesses crushed 70.2% of all grapes and averaged 96,164 tonnes each.


An alternative view of the wine manufacturing industry, together with the grape-growing industry is available from the 2001 Census of Population and Housing. It identified 14,480 persons whose main job was in the manufacturing or blending of wine and 15,629 persons whose main job was in grape-growing. This excludes casual workers such as grape pickers and other seasonal workers not working in those industries in the week prior to the census. It also excludes people who worked in wine and grape production as a second job.


Employees comprise 90.6% of all persons employed in wine manufacturing, whilst that category comprise 82.2% across all industries and only 62.7% of employment within the grape-growing industry.


At the time of the census, the proportion of persons working full-time in the grape-growing (71.2%) and wine manufacturing (78.0%) industries was higher than for all industries (64.6%).

LABOUR FORCE, Selected characteristics of employed persons - 2001

Grape-growing
Wine manufacturing
All industries
%
%
%

Status in employment
Employee
62.7
90.6
82.2
Employer
15.0
4.6
7.0
Own account worker
20.7
4.3
10.1
Contributing family worker
1.7
0.6
0.7
Full-time
71.2
78.0
64.6
Part-time
26.9
20.7
32.4
Not stated
1.9
1.3
3.0
Annual individual income
Less than $15,600
21.9
11.9
17.6
$15,600-$25,999
32.7
23.2
20.6
$26,000-$51,999
33.1
47.3
41.3
$52,000 and over
9.6
15.8
18.2
Not stated
2.7
1.9
2.4

Census of Population and Housing, 2001.


There was a higher proportion of low income earners, (workers with an annual income of less than $15,600) in the grape-growing industry (21.9%) than in wine manufacturing (11.9%) and for all industries (17.6%). At the upper end of the income ranges, 9.6% of workers whose main job was in the grape-growing industry earned $52,000 or more compared with 15.8% in the wine manufacturing industry. Both figures are lower than that for all industries (18.2%).


Post-secondary educational qualifications were less common among workers in both the grape-growing and wine manufacturing industries than the average across all industries. Of those employed in grape-growing, 7.3% had a degree or higher compared with 15.3% in wine manufacturing and 18.7% for all industries.


The grape-growing and wine manufacturing industries have a higher male to female ratio than for all industries. Grape-growing workers tend to be older with 42.8% aged 45 years and over compared with 32.6% of wine manufacturing workers and 34.3% for all industries.


The grape-growing and wine manufacturing industries have a higher proportion of Australian-born workers compared with all industries.

SOCIAL CHARACTERISTICS OF EMPLOYED PERSONS - 2001

Grape-growing
Wine manufacturing
All industries
%
%
%

Level of highest qualification
Degree or higher
7.3
15.3
18.7
Other qualification
21.9
26.9
28.0
No qualification
65.5
52.6
47.4
Inadequately described or not stated
5.4
5.1
5.9
Sex
Males
70.3
65.8
54.8
Females
29.7
34.2
45.2
Age group (years)
15-24
14.2
14.4
16.8
25-34
19.2
27.0
23.5
35-44
23.8
25.9
25.4
45-54
23.1
21.2
22.5
55 or more
19.7
11.5
11.7
Birthplace
Australia
81.0
83.1
74.2
Overseas main English-speaking countries
6.2
9.4
10.7
Southern Europe
3.5
1.0
1.3
Other Europe
3.9
2.3
3.8
Other
5.3
4.1
10.0

Census of Popuation and Housing, 2001.



WINE PRODUCTION AND GRAPES CRUSHED

Winemakers who crushed in excess of 50 tonnes of grapes reported a total of 1,917,238 tonnes of grapes crushed in 2003-04, a rise of 37.1% or 518,710 tonnes on the drought year of 2002-03. The rise is an increase of 19.4% or 311,392 tonnes on the previous record year of 2001-02. The increase in crush was influenced by ideal crop conditions in most grape growing regions especially the warmer inland regions. The quantity of red grapes crushed increased by 38.3% to 1,140,727 tonnes while white grapes crushed increased by 35.4% to 776,511 tonnes.


After falling for the first time in six years in 2002-03, production of beverage wine by larger winemakers increased to a new record, with 1,401.1 million litres produced in 2003-04. This production increase was a rise of 35.0% or 363.5 million litres on 2002-03 and a rise of 19.3% or 227.0 million litres on the record year of 2001-02. Production of unfortified wine accounted for 98.6% of the total production of beverage wine. Fortified wine production increased by 10.2% to 20.0 million litres in 2003-04, although its share of total beverage wine production decreased from 1.8% in 2002-03 to 1.4% in 2003-04.

BEVERAGE WINE PRODUCTION
Graph: BEVERAGE WINE PRODUCTION



Beverage wine production in 2003-04 increased in all states, with the three major wine-producing states accounting for 95.8% of total production, down from 96.1% in 2002-03. Western Australia recorded the largest increase in beverage wine production in percentage terms, up 46.6%, followed by Victoria with an increase of 43.2%. South Australia recorded the largest increase by volume, up 176.7 million litres, followed by New South Wales/ Australian Capital Territory which increased by 102.5 million litres.

BEVERAGE WINE PRODUCTION, By state
Graph: BEVERAGE WINE PRODUCTION, By state




WINE INVENTORIES

Inventories of Australian beverage wine owned by winemakers continued to grow reaching another record high of 1,854.5 million litres at 30 June 2004, up 17.2% from the previous year. As with previous years, red/rosť table wine continued to dominate inventories, rising 17.8% (167.4 million litres) to 1,108.1 million litres and representing 59.8% of total beverage wine inventories.

INVENTORIES OF AUSTRALIAN WINE - At 30 June
Graph: INVENTORIES OF AUSTRALIAN WINE—At 30 June



Table wine inventories rose 18.1% to 1,697.8 million litres at 30 June 2004. Red/rosť table wine retained its dominant share of table wine inventories (65.3%).


Following a modest rise of 0.8% in 2002-03, which followed growth in inventories ranging between 9.4% and 21.0% in the previous four years, there was a rise of 17.2% in inventories in 2003-04. This rise was indicative of wine producers rebuilding reserves of wine held following the good harvest of 2003-04, and it largely redresses the impact of a lower production year in 2002-03.

INVENTORIES OF AUSTRALIAN TABLE WINE - At 30 June
Graph: INVENTORIES OF AUSTRALIAN TABLE WINE—At 30 June




BRANDY AND GRAPE SPIRIT

A fall of 5.1% in domestic sales of Australian brandy to 618,000 litres of alcohol occurred in 2003-04. This continues the downward trend evident since 1980-81, apart from 2000-01 when domestic sales increased by 7.6%. Exports of Australian brandy fell 47.6% to 11,000 litres of alcohol, while the volume of imported brandy cleared for home consumption also decreased 3.1% to 540,000 litres of alcohol.

DOMESTIC SALES, IMPORTS AND CONSUMPTION OF BRANDY
Graph: DOMESTIC SALES, IMPORTS AND CONSUMPTION OF BRANDY




DOMESTIC WINE SALES

Domestic sales of Australian wine in 2003-04 were 417.4 million litres, an increase of 14.9 million litres or 3.7% on the record level of the previous year. The rise was predominantly a result of an increase in sales of white table wine (6.3 million litres), Red/rosť table wine (4.2 million litres) and Bulk fermented sparkling (4.5 million litres) which offset the reduced sales of Bottle fermented sparkling (down 1.4 million litres).

DOMESTIC SALES OF AUSTRALIAN WINE BY WINEMAKERS
Graph: DOMESTIC SALES OF AUSTRALIAN WINE BY WINEMAKERS



The quantity of table wine sold in glass containers of less than two litres has increased each year since 1990-91. In 2003-04, 167.1 million litres of table wine was sold in glass containers less than two litres, comprising 84.2 million litres of white wine and 82.8 million litres of red/rosť wine. The amount of table wine sold in soft packs increased to 183.7 million litres, 2.0 million litres more than the previous year. Other containers accounted for 4.2 million litres, up from 1.4 million litres in 2002-03.

DOMESTIC SALES OF AUSTRALIAN RED AND WHITE TABLE WINE
Graph: DOMESTIC SALES OF AUSTRALIAN RED AND WHITE TABLE WINE




INTERNATIONAL TRADE

The strong growth in Australian wine exports, evident since the mid-1980s, continued in 2003-04 as Australia exported a record 584.4 million litres of wine, a rise of 12.7%. The value of these exports rose by $70.6m (2.9%) to $2,494.1m. However, the average price per litre fell 8.6% from $4.67 in 2002-03 to $4.27 in 2003-04. Since 1986-87 the trade balance for wine in both quantity and value terms has consistently been in surplus (exports greater than imports), which in turn has generally been increasing over time.

EXPORTS OF AUSTRALIAN WINE AND IMPORTS OF WINE
Graph: EXPORTS OF AUSTRALIAN WINE AND IMPORTS OF WINE



The European Union continued to be the major regional destination for Australian wine exports in 2003-04. It accounted for 314.1 million litres (53.7% of total exports by volume), valued at $1,133.5m (45.4% of total exports by value). Exports to Northern America increased by 32.5 million litres (or 18.5%) to 208.0 million litres and were valued at $1,071.0m (42.9% of total exports by value). The United Kingdom was the major country of destination for Australian wine, taking 224.7 million litres (up 7.2% from 2002-03) followed by the United States of America which received 174.7 million litres (an increase of 15.7% on the previous year).

DESTINATION OF AUSTRALIAN WINE EXPORTS - 2003-04(a)
Graph: DESTINATION OF AUSTRALIAN WINE EXPORTS—2003–04(a)




GRAPE AND WINE PRICES

The grape price index is calculated by using the base weighted movement in prices for each of the varieties included in the survey. The index does not allow for price movements caused by a change in the mix of varieties. Movements in the prices paid for wine grapes are presented in the graph below and in table 31.

PRICE INDEX OF GRAPES USED IN WINE PRODUCTION, Change on previous vintage
Graph: PRICE INDEX OF GRAPES USED IN WINE PRODUCTION, Change on previous vintage



The wholesale price index of total wine recorded a 4.4% decrease in 2003-04, while the price received by winemakers for table wine and fortified wine recorded an increase of 0.5%. The wine group retail price index for 2003-04 increased 1.5%, with the general, all groups consumer price index increasing 2.4%.

SELECTED PRICE INDEXES, Change on previous financial year
Graph: SELECTED PRICE INDEXES, Change on previous financial year




WINE CONSUMPTION

Apparent per capita consumption of wine has increased to 26.9 litres in 2002-03 after being relatively unchanged in recent years, with levels of 26.0 litres in 1999-2000, rising to 26.2 litres in 2000-01 and returning to 26.0 litres in 2001-02. This latest increase is more in line with the movements of the past decade and to the longer term trend which has seen per capita consumption of wine climb from levels of less than three litres in the late 1930s.

PER CAPITA CONSUMPTION OF WINE
Graph: PER CAPITA CONSUMPTION OF WINE




WORLD COMPARISONS

Of the countries for which 2001 data are available, Australia’s ranking for area of vines planted (0.148 million hectares) was twelfth, the same position as the previous year. Spain (1.235 million hectares), France (0.914 million hectares) and Italy (0.908 million hectares) had the greatest areas under vine. Australia was ranked tenth in terms of total grape production (1.546 million tonnes) with Italy (8.988 million tonnes) and France (7.313 million tonnes) occupying the top two rankings in this category. France (5,338.9 million litres) and Italy (5,009.3 million litres) were the largest producers of wine with Australia occupying seventh placing, producing 1,016.3 million litres.

PRODUCTION OF WINE, Principal countries
Graph: PRODUCTION OF WINE, Principal countries



The countries exporting the largest volumes of wine in 2001 were Italy, France, Spain, Australia, Chile, the United States of America and Germany, accounting for 80.5% of total world wine exports. Australia was ranked the fourth largest exporter of wine and had the second highest proportion of its production exported, compared with other leading exporting nations. The highest proportion was achieved by Chile with 54.6% of production followed by Australia with 36.9%. Australia’s per capita consumption of wine in 2001 increased slightly to 20.6 litres (20.4 litres in 2000), well below the leading countries of France (57.1 litres), Italy (53.0 litres) and Portugal (46.8 litres).

EXPORTS OF WINE, Principal countries
Graph: EXPORTS OF WINE, Principal countries




BIBLIOGRAPHY


ABS PUBLICATIONS

Apparent Consumption of Foodstuffs, Australia, cat. no. 4306.0.


Consumer Price Index, Australia, cat. no. 6401.0.


Household Expenditure Survey, Australia: Detailed Expenditure Items, 1998-99, cat. no. 6535.0.


International Merchandise Trade, Australia, cat.†no. 5422.0.


International Trade Price Indexes, Australia, cat. no. 6457.0.


Producer Price Indexes, Australia, cat. no. 6427.0.


Sales of Australian Wine and Brandy by Winemakers, cat. no. 8504.0.



ABS SURVEYS AND DATABASES

Export Price Index.


Import Price Index.


International Trade database.


Inventories of Australian Wine and Brandy, 30 June 2004.


Vineyards, 2004.


Wine and Spirit Production, 2003-04.


Wine Statistics, 2003-04.



NON-ABS SOURCES

Dutruc-Rosset, G., 2003, The State of Vitiviniculture in the World and the Statistical Information in 2001, Office International de la Vigne et du Vin, Paris.


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