The Australian wine industry is navigating a difficult landscape in the 2023–24 fiscal year, marked by production decreases, shifting consumption patterns, and global economic pressures, according to Wine Australia’s latest report on production, sales, and inventory.
In 2024, the Australian winegrape crush reached 1.43 million tonnes, a 9% increase from the previous year but still 18% below the 10-year average of 1.73 million tonnes. This marks the second consecutive year of below-average harvests. Wine production rose by 8% to 1.04 billion litres, though this remains the second-lowest total since the 2006–07 fiscal year and 16% below the 10-year average.
A notable shift was seen in wine production, with white wine seeing a 20% increase to 531 million litres, overtaking red wine for the first time since 2011–12. In contrast, red wine production fell by 2% to 511 million litres, significantly lower than its 10-year average of 671 million litres.
Peter Bailey, Wine Australia’s market insights manager, attributed these challenges to a mix of adverse seasonal conditions, such as rainfall, flooding, and frost risks, and deliberate production cuts due to economic pressures. “The result has also stemmed from deliberate decisions by grape growers and wine businesses to reduce production or intake, driven by current economic and market conditions,” Bailey said.
Sales Trends and Export Dynamics
Domestic wine sales volume declined slightly by 0.7%, totaling 1.08 billion litres, 11% below the 10-year average. While domestic sales accounted for 42% of total sales, up from 37% in 2017–18, red wine sales fell by 5% to 179 million litres, while white wine saw a 3% growth to 200 million litres.
Exports remained stable at 619 million litres, the lowest in 20 years, but the reopening of the Chinese market in March 2024 following the removal of tariffs provided a boost. Red wine exports to China surged to 32 million litres, a sharp rise from just 1 million litres the previous year. However, exports to other markets showed continued decline, reflecting broader global trade challenges.
Inventory and Revenue Insights
As of June 2024, national wine inventory stood at 1.96 billion litres, down 10% from the previous year but in line with the 10-year average. White wine inventory decreased by 10% to 621 million litres, while red wine stocks remained high, with a stock-to-sales ratio (SSR) of 2.13, indicating over two years of stock on hand.
Revenue in the wine industry saw a positive shift, with domestic wine sales value rising 9% to AU$3.54 billion, driven by a 10% increase in average sales value to AU$7.75 per litre. Exports also saw an uptick, with export value climbing 17% to AU$2.19 billion, resulting in total sales revenue of AU$5.73 billion, a 12% increase year-on-year.
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