5422.0 - International Merchandise Trade, Australia, Dec 2001

ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 20/02/2002

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Australia's Trade in Wine (Feature Article)

Feature Article - Australia's Trade in Wine

INTRODUCTION

This article examines Australia's trade in wine over the past decade. While information on both exports and imports of wine is included, the main focus is on exports, which have grown substantially over the period. The data relate to trade classified to Harmonized System (HS) 2204: Wine of fresh grapes, including fortified wines; grape must other than that of HS 2009 (which is grape must included with fruit juices). HS 2204 is the sum of SITC categories 11211, 11215 and 11217. The SITC classification is used for the classification of commodity data elsewhere in this publication.

TRADE SURPLUS

Since 1988 Australia's trade in wine has been in surplus i.e. the value of its exports of wine have exceeded the value of its imports of wine. The size of the surplus has increased consistently and substantially over the decade. In 1992 the value of Australia's exports was five times the value of its imports, but by 2001 this ratio had increased to nineteen.

RECORD EXPORTS

From 1992 to 2001, the value of Australia's wine exports grew from $263m to $1,929m, an increase of 633%. The volume of Australia's wine exports grew from 88 to 376 million litres, an increase of 327%. In 2001 the average price per litre for exported wine was $5.13, and at it lowest point in the decade, in 1993, the average price was $2.86 per litre.

Since 1996 there has been at least a 25% increase in the value of Australia's wine exports each year. Exports have continued to flourish in recent months. The highest ever monthly exports figure was in September 2001, with 45 million litres exported, valued at $215m. The second highest monthly figure was in October 2001, with 41 million litres exported, valued at $205m.

Outside certain countries of the European Union, Australia is now the largest exporter of wine in the world. France, Italy and Spain together account for over 64% of the world's wine trade, with Australia accounting for just 3 to 4%. While Australia is still a relatively small wine exporter in terms of global trade, wine has been one of its export success stories, with the value of wine exports increasing from 0.45% of its total exports in 1992, to 1.6% of its total exports in 2001.

WINE TYPES

Australia exports still and sparkling wine, as well as small quantities of grape must. In 2001, 98% by value of wine exports were of still wine (which includes red and white table wines, and fortified wines). Sparkling wine exports decreased from 8% of the value of total wine exports in 1992 ($20m), to only 2% in 2001 ($45m).

In the early years of the decade, the value of exports of white table wine consistently exceeded those of red table wine, but this situation was reversed from 1996. In 2001 Australia exported $1.2b of red table wine, compared with $678m of white table wine.

Australia exported 366 million litres of red and white table wines in 2001, of which 85%, or 310 million litres, was in containers not exceeding 2 litres. The average price per litre of red table wine exported in 2001 was $5.84, compared with $4.19 for white table wine.

EXPORT DESTINATIONS

Australia's top 10 export destinations for wine in 2001 were, in order of significance, the United Kingdom (UK), the United States of America (USA), Canada, New Zealand, Germany, Ireland, Netherlands, Japan, Switzerland and Singapore. In 2001 these countries consumed $1.8b (92%) of our total wine exports.

The UK has traditionally been the largest consumer of Australia's wine exports, consistently receiving over 40% by value each year. While the proportion peaked at 47% in 1994, it was still 43% in 2001 ($820m). Exports to the USA averaged 17% of wine exports during the first half of the decade, but increased to 21% in 1997 and grew to 28% in 2001. Wine exports to the USA increased massively over the decade, from $43m in 1992 to $547m in 2001.

Wine exports by Destination

STATE OF ORIGIN

South Australia has consistently produced around 65% of Australia's wine exports over the decade. The value of South Australia's wine exports has grown from $173m in 1992 to $1.2b in 2001. Wine is a major source of export revenue for South Australia, accounting for 14% of South Australia's total exports in 2001. New South Wales accounted for around 20% of all wine exports over the decade.

WINE EXPORTS BY STATE OF ORIGIN


State of origin	1992	1993	1994	1995	1996	1997	1998	1999	2000	2001

					$M

South Australia	173	236	235	280	370	464	620	803	994	1,208
New South Wales	53	68	86	72	101	138	204	263	351	453
Victoria	33	46	55	55	73	106	133	144	181	229
Western Australia	2	4	5	5	6	9	12	15	23	32
Other	2	3	3	2	3	3	3	4	3	7
Total Wine Exports	263	357	383	414	552	720	972	1,230	1,553	1,929

					%

South Australia	66	66	61	68	67	64	64	65	64	63
New South Wales	20	19	22	17	18	19	21	21	23	23
Victoria	13	13	14	13	13	15	14	12	12	12
Western Australia	1	1	1	1	1	1	1	1	2	2
Other	1	1	1	0	0	0	0	0	0	0
Total	100	100	100	100	100	100	100	100	100	100

IMPORTS

The value of imports of wine to Australia increased from just below $50m in 1992 to $102m in 2001, while the volume grew 64% to 13 million litres. The average price per litre of Australia's wine imports in 2001 was $7.96, considerably higher than that achieved for Australia's wine exports.

The main sources of Australia's wine imports have traditionally been France and Italy. Wine imports from France grew 71% over the decade, from $24m in 1992 to $41m in 2001. Imports from Italy grew 60%, from $15m in 1992 to $24m in 2001. Wine imports from New Zealand grew significantly, increasing from $3m in 1992 to $26m in 2001, to place New Zealand slightly ahead of Italy as the second most important source of wine imports.

The ABS includes information on exports and imports of wine in its monthly publication Sales of Australian Wine and Brandy by Winemakers (Cat. no. 8504.0). More information on the data in that publication can be obtained from Daryl Evans on Adelaide 08 8237 7656.

REFERENCE

Australia's Wine Industry: International Opportunities and Challenges, Speech by the Honourable Alexander Downer, MP, Minister for Foreign Affairs, Adelaide, 13 November 2001.