Victoria Export Update

Wine exports from Victoria increased by 26 per cent or $51m in 2015-16, driven primarily by an increase in red wine sales which made up 71 per cent of total sales. Victoria accounted for 11 per cent of national wine exports in 2015-16.

Bottled wine exports grew by 16 per cent or $28m to $209m reflecting increasing demand for premium Australian wines. The total value and volume of white, red, sparking and fortified bottled wines in 2015-16 was the highest level in five years, with growth across both bottle and bulk categories. Bulk wine exports in the same period grew by 123 per cent representing a $23m increase.

This season, three developments had a positive influence on the Australian wine export market:

1. Lower Australian dollar making Australian wine more competitive,

2. Realisation of free trade agreements including with Japan, China and South Korea, and

3. Lower production in the northern hemisphere which has eased pressure on bulk wine prices.

The 2015-16 season has been good in regards to quality. Warm temperatures during the early season, followed by a hot summer led to a compressed harvest period, however high quality fruit has provided a good potential for winemaking. White wine varietals have been increasing in demand especially Pinot Gris, Sauvignon Blanc and Pinot Noir as a sparkling wine base with Shiraz increasing from a lower base due to low crop yields in 2014-15. Overall, the national crop level average is up, with tonnage predicted to be between 1.8-1.85m.

Currently, around 60 per cent of the wine produced in Victoria is exported to key international markets. The increase in exports this season was mainly driven by an increase in sales into the largest export market China which grew by 35 per cent or $23m. The United Kingdom (UK) grew by 17 per cent to overtake Hong Kong to become the second largest export market in 2015-16. With Victorian wines being re-positioned for premium markets, exports in bottled wine are expected to increase in value and volume especially in China, the UK, Canada and United States of America over the coming years.