1329.0 - Australian Wine and Grape Industry, 2008 (Re-Issue)  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 29/01/2009  Reissue
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SUMMARY OF FINDINGS


INTRODUCTION

There were 1.8 million tonnes of grapes crushed last year, an increase of 0.4 million tonnes (31.1%) on the previous year. This was achieved on an area of grape bearing vines that rose 1.4% to 166 thousand hectares this year from 164 thousand hectares last year. Yields rose 26.9% from 9.3 tonnes per hectare last year to 11.8 tonnes per hectare this year.

Beverage wine production also showed an increase, rising 28.5% to 1.3 billion litres. In contrast exports of Australian produced wine fell 9.2% to 715 million litres and domestic sales of Australian wine also dropped by 4.8% to 426 million litres. The result of these movements was an increase in inventory values of 5% from 1.8 billion litres last year to 1.9 billion litres this year. Imports of wine into Australia also rose this year by 55.6% to 53 million litres.

WINE AND GRAPE INDUSTRY - 2007-08

Value
% change from 2006-07

Area of bearing vines (ha)
166 197
1.4
Total grape production (t)
1 956 794
27.9
Fresh grapes crushed (t)
1 831 523
31.1
Beverage wine production (million L)
1 257.4
28.5
Beverage wine inventories (million L)
1 872.4
5.0
Domestic sales of Australian wine (million L)
426.4
-4.8
Domestic sales value of Australian wine ($m)
2 096.2
4.6
Exports of Australian wine (million L)
714.7
-9.2
Exports of Australian wine ($m)
2 680.4
-6.9
Imports of wine (million L)
53.3
55.6
Imports of wine ($m)
431.4
40.8

Source: 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 this season was 173 thousand hectares which was 0.6% lower than last year. The total area of grape bearing vines was 166 thousand hectares compared to 164 thousand hectares last year. The area of vines not bearing grapes was reduced by 34.1% to 6.5 thousand hectares this season.

The net decrease in area planted under vines this year (derived from existing vines, vines planted, and vines lost during the year) was two thousand hectares, a significant change from the 500 hectares that were added last year.

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



VINEYARD IRRIGATION

There were seven thousand vineyards that irrigated this season, 88.3% of the eight thousand vineyards in Australia. The area of grapevines irrigated was 162 thousand hectares, with South Australia's seventy thousand hectares accounting for 43.2%. Along with New South Wales (41 thousand hectares) and Victoria (35 thousand hectares) the three main grape growing states have 90% of vineyards using irrigation. The average usage of water was 3.2 megalitres per hectare. South Australia's average was 2.7 megalitres per hectare, with New South Wales having an average of 3.8 megalitres per hectare and Victoria averaging the highest level at 4.1 megalitres per hectare.

The most common watering method continues to be drip or micro spray with 131 thousand hectares, or 81.0% of the total irrigated area watered using this method. In all States the predominant watering method is drip or micro spray. However, the proportion of area irrigated by spray excluding micro spray methods in Victoria (25.4%) and the use of watering by furrow or flood in New South Wales (16.8%) are still significant.

Surface water from either state owned or private irrigation schemes was the most common source of water used by vineyards in Australia. There were 367 thousand megalitres drawn from this source. New South Wales (123 thousand megalitres), Victoria (118 thousand megalitres) and South Australia (111 thousand megalitres) collectively have 96.1% of the water sourced from state owned or private irrigation schemes. Nationally, the next most important water source for vineyards was underground water supply (75 thousand megalitres), followed by other surface water (46 thousand megalitres).


GRAPE PRODUCTION

The weight of grapes harvested this season was two million tonnes which was a 27.9% increase on last season. The production of white grapes was 933 thousand tonnes, a 14.3% increase on the tonnage harvested last year, representing 47.7% of the total grapes harvested. Red grape production had a significant increase, up 43.4% to one million tonnes, accounting for 72.6% of the increase in this years production.

There were 1.8 million tonnes of grapes harvested for winemaking, an increase of 34.0% on the 1.4 million tonnes harvested last season. The production of grapes for drying decreased further from last year by 30.7% to 56 thousand tonnes. Production of table and other grapes harvested decreased 19.2% to 64 thousand tonnes.

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



WINEMAKING LOCATIONS AND GRAPES CRUSHED

For the 2008 vintage there were 384 winery locations around Australia each crushing 50 tonnes or more of grapes, owned by 342 winemaking businesses. This compares with the previous years vintage where 385 locations crushing 50 tonnes or more were owned by 344 winemaking businesses. There were 1.8 million tonnes of grapes crushed, an increase of 434 thousand tonnes (31.1%) from last year.

A third of all winemaking locations were in South Australia, accounting for 45.3% of the national wine grape crush. This is a rise from last year where South Australia had 43.3% of the total. New South Wales/Australian Capital Territory had 22.9% of the total number of locations and 34.4% of the total wine crush, followed by Victoria (22.7% of all locations and 16.3% of all grapes crushed) and Western Australia (18.2% of locations and 3.4% of the grape crush).

When looking at crush capacity the 342 winemaking businesses were diverse in size. There were 174 businesses that each crushed from 50 to 400 tonnes of grapes, producing a combined crush of 33 thousand tonnes (1.8% of the total crush).

The 168 winemaking businesses that each crushed more than 400 tonnes of grapes crushed 98.2% of the national total. There were 14 winemakers that crushed more than twenty thousand tonnes each, accounting for a total of 1.3 million tonnes of grapes or 70.5% of the total crush. These 14 businesses averaged 92 thousand tonnes each.


BEVERAGE WINE PRODUCTION

There were 1.3 billion litres of beverage wine produced by winemakers that crushed more than 50 tonnes of grapes. This beverage wine production figure was 0.3 billion litres (28.5%) more than the total for last year.

Red/rosť wine made up 675 million litres (53.7%) and white wine 567 million litres (45.1%) of the beverage wine produced this season.

BEVERAGE WINE PRODUCTION
Graph: BEVERAGE WINE PRODUCTION



WINE INVENTORIES

Inventories of Australian beverage wine held by winemakers increased this year to 1.9 billion litres at 30 June 2008. This was a 5.0% increase on last years end of financial year figure. Table wine inventories rose 8.4% to 1.7 billion litres as at 30 June 2008.

White table wine accounted for 661 million litres or 35.3% of the stock of total beverage wine stored by winemakers this year. Red/rosť table wine stocks of one billion litres still represented 54.4% of the beverage wine stock held by winemakers.

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



BRANDY

The domestic sales of Australian brandy of 508 thousand litres of alcohol were similar to last years sales. This follows the downward trend in domestic sales over the past six years, during which sales of Australian brandy have fallen 27.5% in total.

The volume of imported brandy cleared for home consumption steadied at 452 thousand litres of alcohol. Exports of Australian brandy fell to 4 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 last year were 426 million litres, a decrease of 4.8% on the previous year's total of 448 million litres. In terms of volume, red table wine decreased 4.6% to 155 million litres, white table wine fell 5.5% to 206 million litres and fortified wines fell 1.1% to 17 million litres.

The fall in domestic sales was most evident in sales of wine in glass bottles less than two litres followed by sales of wine in soft packs. Sales of wine in glass bottles fell 6.8% to 188 million litres, while sales of wine in soft packs fell 4.5% to 166 million litres. This was consistent across both red/rosť wine and white wine for both of these container types. In contrast sales of wine in other containers rose significantly, accounting for seven million litres of total sales, up 45% from 5 million litres last year. Three quarters of this was represented by red/rosť wine sales.

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



WINE EXPORTS

Australian wine exports dropped last year with 715 million litres of wine exported to world markets, a fall of 9.2% on last year. The value of these exports fell by 198 million dollars or 6.9% to 2.7 billion dollars. However, the average price per litre rose 2.6% from $3.66 last year to $3.75 this year. For the 2007-08 period Australia imported 53 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 destination region for Australian wine exports last year. It accounted for 398 million litres (55.6% of total wine exports by volume), valued at 1.3 billion dollars (47.2% of total wine exports by value). Exports to Northern America accounted for 233 million litres (32.6%) and were valued at 997 million dollars (37.2%).

The United Kingdom was the major destination country for Australian wine, importing more 268 million litres (37.5%) of all Australian wine exported last year. The volume of wine exported to the United Kingdom was valued at 895 million dollars. The United States of America imported 185 million litres or 733 million dollars worth of Australian wine last year.

DESTINATION OF AUSTRALIAN WINE EXPORTS (a)
Graph: DESTINATION OF AUSTRALIAN WINE EXPORTS (a)



GRAPE AND WINE PRICES

The movement in price received for wine was 0.2%, rising into positive figures from last years value of minus 3.6%. The price of wine increased on average by 1.4% last year according to the consumer price index for wine, after decreasing by 0.6% last year. In comparison the annual All groups consumer price index was 3.4% this year, rising from 2.9% last year.

INDEX OF SALES PRICES RECEIVED BY WINE MANUFACTURERS, Change on previous vintage
Graph: INDEX OF SALES PRICES RECEIVED BY WINE MANUFACTURERS, Change on previous vintage



WINE CONSUMPTION

The apparent per capita consumption of wine by persons aged 15 years and over increased by 3.9% in 2007 to 29 litres per person per year from 28 litres per person per year in 2006. When converted to account for alcoholic content, the apparent per person consumption of wine alcohol remained at 3.1 litres per person per year for 2007.

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 (32.9%), while Northern Territory households spent the lowest (19.2%). Households in New South Wales (28.9%), Victoria (28.7%) and South Australia (27.8%) spent more than one quarter of their total weekly alcohol expenditure on wine.

AVERAGE WEEKLY HOUSEHOLD EXPENDITURE, Alcoholic beverages
Graph: AVERAGE WEEKLY HOUSEHOLD EXPENDITURE, Alcoholic beverages



WORLD COMPARISONS

Of the countries for which 2005 data are available, Australia was the tenth largest producer of grapes. Australia produced 2.0 million tonnes compared to Italy (8.6 million tonnes), United States of America (7.1 million tonnes) and France (6.8 million tonnes). The area of vines planted in Australia (167 thousand hectares) was the thirteenth highest. Spain (1.2 million hectares), France (894 thousand hectares) and Italy (842 thousand hectares) had the greatest areas under vine. The Australian yield (12.1 tonnes per hectare) was higher than the world average yield of 8.5 tonnes per hectare.

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


Italy (5.4 billion litres), France (5.2 billion litres), and Spain (3.6 billion litres) were the largest producers of wine. In 2005 Australia produced 1.4 billion litres of wine and was ranked sixth in the world for wine production. This volume of wine meant that Australia was responsible for 5.1% of all the wine produced in the world. Italy (the world's largest wine producer) was responsible for 19.1% of the world's wine.

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


Australia, with 702 million litres of wine exported, was ranked the fourth largest exporter of wine. The top three countries exporting the largest volumes of wine in 2005 were Italy (1.6 billion litres), Spain (1.4 billion litres) and France (1.4 billion litres). The top three countries accounted for 55.5% of total world wine exports. Australia exported 49.1% of its wine production, which was the highest proportion when compared to the other leading wine producing countries.

Australia’s per capita consumption of wine was 22 litres in 2005, well below the leading countries of France (55 litres) and Italy (47 litres).