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1329.0 - Australian Wine and Grape Industry, 2007  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 29/01/2008   
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SUMMARY OF FINDINGS


INTRODUCTION

There were 1,397,350 tonnes of grapes crushed in 2006-07, a reduction of 504,210 tonnes (26.5%) on the previous year. Beverage wine production also showed a large drop, falling 31.8% to 978,478 litres. In contrast, the growth in the export of Australian produced wine continued to increase, reaching 787.2 million litres during 2006-07. The value of these exports remained relatively buoyant at $2.9b. Domestic sales of Australian wine increased slightly, rising by 3.9% to 449.2 million litres.

WINE AND GRAPE INDUSTRY - 2006-07

Value
% change from 2005-06

Area of bearing vines (ha)
163 951
3.7
Total grape production (t)
1 530 439
-22.8
Fresh grapes crushed (t)
1 397 350
-26.5
Beverage wine production (million L)
978.5
-31.8
Beverage wine inventories (million L)
1 783.6
-15.3
Domestic sales of Australian wine (million L)
449.2
3.9
Domestic sales value of Australian wine ($m)
2 004.9
5.5
Exports of Australian wine (million L)
787.2
9.0
Exports of Australian wine ($m)
2 878.6
4.4
Imports of wine (million L)
34.3
40.6
Imports of wine ($m)
307.0
45.3

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



AREA OF VINES

The area of vines being cultivated continues to increase, from the record area last year of 168,791 hectares to 173,776 hectares. The total area of vines bearing grapes increased from 158,167 hectares to 163,951 hectares, a rise of 3.7%. The area of non-bearing grapes fell 7.5% in 2007 to 9,825 hectares from 10,624 hectares in 2006.


The net increase in area planted under vines for 2006-07 (derived from vines planted and vines lost during the year) was 477 hectares, which was well down on the 1,103 hectares recorded in 2005-06 (56.8%).

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




VINEYARD IRRIGATION

There were 6,734 vineyards that irrigated in 2007. This was 83.7% of the total number of vineyards in Australia (8,041). The area of grapevines irrigated was 157,401 hectares, with South Australia (68,081 hectares) accounting for 43.3%. New South Wales (40,093 hectares) and Victoria (34,262 hectares) collectively had 47.2% of the area of grapevines irrigated nationally. The average usage of water was 3.4 megalitres per hectare. Victoria averaged 4.8 megalitres per hectare, New South Wales 4.0 megalitres per hectare and South Australia 2.7 megalitres per hectare.


The most common watering method continues to be drip or micro spray with 123,497 hectares, or 78.5% of the total area irrigated. There were 58,034 hectares of vineyard land watered by this method in South Australia.


Spray excluding micro spray was the second most utilised method with 15.7% of irrigated vineyards (24,639 hectares). In Victoria, 30.3% (10,386 hectares) of all area irrigated was watered by spray excluding micro spray. The third most common method of watering was furrow or flood (12,492 hectares) with New South Wales accounting for 8,288 hectares, or 20.7% of their total area irrigated.


Surface water from either state owned or private irrigation schemes was the most common source of water used by vineyards in Australia. There were 93,739 hectares drawing from this source. South Australia (31,780 hectares), New South Wales (30,833 hectares) and Victoria (27,580 hectares) collectively have 96.2% of the vineyard land sourcing water from state owned or private irrigation schemes. Nationally, the next most important water source for vineyards was underground water supply (37,496 hectares), followed by other surface water (25,528 hectares).



GRAPE PRODUCTION

The weight of grapes harvested in 2007 was 1,530,439 tonnes which was a 22.8% decrease on 2006. The production of white grapes was 816,836 tonnes, a 14.5% decrease on the tonnage harvested in 2006 but surpassed the red grape production representing 53.4% of the total grapes harvested. Red grape production had a significant drop, down 30.5% to 713,603 tonnes.


There were 1,370,690 tonnes of grapes harvested for winemaking, a decrease of 23.1% on the 1,781,668 tonnes harvested in 2006. The production of grapes for drying had a further decrease on last year of 31.2% to 81,022 tonnes and the table and other grapes harvested (78,727 tonnes) had a less dramatic decrease of 3.7%.

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




WINEMAKING LOCATIONS AND GRAPES CRUSHED

For the 2007 vintage there were 385 locations around Australia which crushed 50 tonnes or more of grapes owned by 344 winemaking businesses, compared with the 2006 vintage which had 435 locations owned by 392 winemaking businesses. There were 1,397,350 tonnes of grapes crushed in 2006-07, a decrease of 504,210 tonnes (26.5%) from last year.


Over 30% of all locations were in South Australia and they accounted for 43.3% of the national wine grape crush, a fall from the 48.0% recorded in 2006. New South Wales/Australian Capital Territory (NSW/ACT) had 20.5% of the total number of locations with 34.9% of the total wine crush, followed by Victoria (22.3% of all locations and 16.5% of all grapes crushed) and Western Australia (20.3% of locations and 4.9% of the grape crush).


The 344 winemaking businesses, in terms of crush capacity, are diverse in size. There were 199 businesses that each crushed from 50 to 400 tonnes of grapes, producing a combined crush of 32,869 tonnes. Of these smaller businesses, the 109 smallest winemakers accounted for only 0.7% of all grapes crushed and averaged 92 tonnes each.


The 145 winemaking businesses that each crushed more than 400 tonnes of grapes crushed a total of 1,364,481 tonnes (97.6% of the national total) of grapes. There were 13 winemakers that crushed more than 20,000 tonnes each, accounting for a total of 1,030,324 tonnes of grapes or 73.7% of the total crush. These 13 businesses averaged 79,256 tonnes each.



BEVERAGE WINE PRODUCTION

There were 955.0 million litres of beverage wine produced by winemakers that crushed more than 400 tonnes of grapes, or had domestic sales of more than 250,000 litres. This beverage wine production figure was 455.5 million litres (32.3%) less than the total for 2005-06.


Production of unfortified wine accounted for 99.2% of the total beverage wine produced by these winemakers. Red/rosť wine made up 472.3 million litres (49.5%) of the beverage wine produced in 2006-07. This was a decrease of 303.7 million litres (39.2%) on the Red/rosť wine produced in 2005-06. White wine accounted for 474.7 million litres, a fall of 147.1 million litres (23.7%) on the previous year.


The fortified wine production total of 8.0 million litres was 37.0% lower than the figure for 2005-06 (12.7 million litres).

BEVERAGE WINE PRODUCTION
Graph: Beverage Wine Production




WINE INVENTORIES

Inventories of Australian beverage wine held by winemakers fell in 2007, down to 1,783.6 million litres at 30 June 2007. This was a 15.3% decrease on the record high of last year (2,106.9 million litres) and the lowest since 30 June 2003 when stocks of beverage wine were 1,581.8 million litres.


Table wine inventories fell 19.9% to 1,548.8 million litres at 30 June 2007. White table wine (592.9 million litres) made up 33.2% of the stock of total beverage wine stored by winemakers this year.


Red/rosť table wine (955.9 million litres) still represented more than half (53.6%) of the beverage wine stock held by winemakers.

INVENTORIES OF AUSTRALIAN TABLE WINE - At 30 June
Graph: Inventories of Australian Table Wine




BRANDY

The domestic sales of Australian brandy have continued to fall, dropping to 510 thousand litres of alcohol in 2006-07. This was the sixth consecutive year to show a downward movement since the high in 2000-01 (901 thousand litres of alcohol).


The volume of imported brandy cleared for home consumption decreased for the fifth consecutive year, falling to 447 thousand litres of alcohol. Exports of Australian brandy fell to 8 thousand litres of alcohol.

DOMESTIC SALES, IMPORTS AND CONSUMPTION (a) OF BRANDY
Graph: Domestic Sales, Imports and Consumption (a) of brandy




DOMESTIC WINE SALES

Domestic sales of Australian wine in 2006-07 were 449.2 million litres, an increase (3.9%) on the previous year's total of 432.4 million litres. In terms of volume, the component that recorded the largest increases was red table wine (8.7 million litres). The domestic sales for white table wine rose by 6.2 million litres. Fortified wines continued to fall, dropping to 17.4 million litres in 2006-07, which was 1.1 million litres less than last year and 8.2 million litres less than ten years ago.


The quantity of table wine sold in glass containers of less than two litres continued to increase. In 2006-07, 203.5 million litres of table wine were sold in glass containers less than two litres, comprising 102.9 million litres of red/rosť wine (up 12.1%) and 100.6 million litres of white wine (up 8.2%). The amount of table wine sold in soft packs fell again to 173.5 million litres, 5.8 million litres (3.2%) less than 2005-06. Other containers accounted for 4.7 million litres, significantly higher than the total for 2005-06 (2.7 million litres).

DOMESTIC SALES OF AUSTRALIAN RED AND WHITE TABLE WINE
Graph: Domestic Sales of Australian red and white table wine




WINE EXPORTS

Australian wine exports continued to grow in 2006-07 with 787.2 million litres of wine exported to world markets, a rise of 9.0% on last year. The value of these exports rose by $122.1m (4.4%) to $2,878.6m. However, the average price per litre fell 4.2% from $3.82 in 2005-06 to $3.66 in 2006-07. For the 2006-07 period Australia imported 34.3 million litres of wine, significantly less than the volume exported.

EXPORTS OF AUSTRALIAN WINE AND IMPORTS OF WINE
Graph: Exports of Australian wine and imports of wine




DESTINATION OF AUSTRALIAN WINE EXPORTS

The European Union continued to be the major regional destination for Australian wine exports in 2006-07. It accounted for 415.9 million litres (52.8% of total exports by volume), valued at $1,357.2m (47.1% of total exports by value). Exports to Northern America accounted for 262.1 million litres (33.3%) and were valued at $1,112.0m (38.6%).

The United Kingdom was the major country of destination for Australian wine, importing more 269.1 million litres (34.2%) of the Australian wine exported during 2006-07. The volume of wine exported to the United Kingdom in 2006-07 was valued at $977.1m. The United States of America imported 215.2 million litres ($856.8m) of Australian wine and Canada imported 46.8 million litres ($254.7m) of Australian wine.

DESTINATION OF AUSTRALIAN WINE EXPORTS (a)
Graph: Destination of Australian wine exports




GRAPE AND WINE PRICES

The wine grape price index showed a rise in 2006-07, rising 3.9%. The index of prices received by winemakers fell in 2006-07, dropping 2.0%. The price received for wine for domestic consumption rose slightly (0.1%), while the price received for wine for export decreased by 5.0%. The consumer price index for wine dropped by 0.6% in 2006-07, compared with the annual increase of 2.9% in the All groups consumer price index.

PRICE INDEX OF GRAPES USED IN WINE PRODUCTION, Change on previous vintage
Graph: Price index of grapes used in wine production




WINE CONSUMPTION

The apparent per capita consumption of wine by persons aged 15 years and over fell slightly in 2006 to 28.0 litres per person from 28.1 litres per person in 2005. When represented as litres of alcohol per person (aged 15 years and over), the apparent per person consumption of wine alcohol was 3.1 litres in 2006.

PER CAPITA CONSUMPTION OF WINE (a)
Graph: Per capita consumption of wine (a)




HOUSEHOLD EXPENDITURE

The most current details of household expenditure show that during 2003-04 Australian households spent an average of $6.33 per week on wine. Households in the Australian Capital Territory spent the most with $8.04 and those in Queensland the least with $4.65. Australian Capital Territory households spent the highest proportion of their total weekly alcohol expenditure on wine (33.0%), while Northern Territory (NT) households spent the lowest (19.2%). Households in New South Wales (29.0%), Victoria (28.7%) and South Australia (27.8%) spent more than one quarter of their total weekly alcohol expenditure on wine. From 1998-99 to 2003-04 there was a 19.9% increase in weekly expenditure on wine nationally.

AVERAGE WEEKLY HOUSEHOLD EXPENDITURE, Alcoholic beverages
Graph: Average weekly household expenditure, Alcoholic beverages




WORLD COMPARISONS

Of the countries for which 2004 data are available, Australia was the ninth largest producer of grapes. Australia produced 2.0 million tonnes compared to Italy (8.7 million tonnes), France (7.5 million tonnes) and Spain (7.3 million tonnes). The area of vines planted in Australia (164 thousand hectares) was the twelfth highest, giving Australia the same ranking as the previous two years. Spain (1.2 million hectares), France (889 thousand hectares) and Italy (849 thousand hectares) had the greatest areas under vine. The Australian yield (12.3 tonnes per hectare) was higher than the world average yield (8.5 tonnes per hectare).

PRODUCTION OF WINE, Principal countries
Graph: Production of wine, Principal countries



France (5,739 million litres), Italy (5,300 million litres) and Spain (4,299 million litres) were the largest producers of wine. In 2004 Australia produced 1,381 million litres of wine and was ranked sixth in the world for wine production. This volume of wine meant that Australia was responsible for 4.6% of all the wine produced in the world. France (the world's largest wine producer) was responsible for 19.2% of the world's wine.

EXPORTS OF WINE, Principal countries
Graph: Exports of wine, Principal countries



Australia, with 646 million litres of wine exported, was ranked the fourth largest exporter of wine. The top three countries exporting the largest volumes of wine in 2004 were France (1,421 million litres), Italy (1,420 million litres) and Spain (1,404 million litres). The top four countries accounted for 63.5% of total world wine exports. Australia exported 46.8% of its wine production, which was the second highest proportion, when compared to the other leading wine producing countries. The highest proportion was recorded by Chile which exported 75.2% of the wine it made.

Australia’s per capita consumption of wine was 21.9 litres in 2004, well below the leading countries of France (54.8 litres), Italy (49.3 litres) and Portugal (47.9 litres).

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