Wine Victoria cautiously optimistic about increase in export volume, value
Tuesday, 21 July 2015 00:00
Wine Victoria has welcomed new national data showing a rise in the volume and value of Australian wine exports, however remains focused on the need to improve recognition of Victoria's premium wine to help overcome the industry's oversupply issues and enable producers return to a state of profitability.
Wine Australia's Wine Export Approval Report 2015 (WEAR) last week showed that the value of Australian wine exports has increased for the first time since 2006-07, rising by 5% to A$1.89 billion.
The Winemakers' Federation of Australia (WFA), however last week released the 2015 Vintage Report, revealing a winegrape crush marginally lower than the seven-year average, at 1.67 million tonne – meaning the industry still had an oversupply of winegrapes.
WFA Chief Executive Paul Evans says a pro-active approach is still essential to restore the lost profit margins in the wine industry.
"We must urgently seize the potential to grow demand for Australian wine and help address the on-going structural mismatch between supply and demand at profitable price points.
"Until this happens we are likely to see poor levels of average profitability continue for both grape growers and winemakers."
Wine Victoria spokesperson James Omond agreed, adding that it is positive news that exports were climbing, however we must capitalise on the recognition of our premium wine offering as a matter of urgency.
"Our focus remains on working with the Victorian government on recent commitments made to the wine industry in order to increase world wide recognition of our premium product offering.
"Thanks to our ongoing advocacy efforts, the government has recognised that Victoria offers an impressive depth of premium winemaking, as witnessed by the 150 international delegates at the Meet the Winemaker trade mission in May," Mr Omond said.
"We certainly welcome the modest gains noted in these national reports, however we will continue to partner with the government to further tap into the export opportunities associated with the FTA agreements in key Asian markets, and taking advantage of our premium advantage," he said.
Wine Australia's WEAR data shows that exports of Australia's highest-priced wines (above A$50/litre) grew for the fifth consecutive year, up 62% to a record A$123 million.
Snapshot of wine industry data from the WEAR by Wine Australia:
- In the 12 months to 30 June 2015, the value of Australian wine exports rose 5 per cent to A$1.89 billion
- The value of wine exports to Northeast Asia was up 29 per cent and Southeast Asia was up 18 per cent
- In the last 12 months, the average value of exports above A$7.50/litre went up 8 per cent to a record A$15.40/litre
- Australia's top five export countries by value were:
- US – down 7.9 per cent to A$415 million
- UK – down 1.5 per cent to A$369 million
- China – up 32.1 per cent to A$280 million
- Canada – down 0.7 per cent to A$182 million
- Hong Kong – up 28.4 per cent to A$112 million
Snapshot of wine industry data from the 2015 Vintage Report by WFA:
- Red crush – 835,523 tonnes
- White crush – 834,041 tonnes
- Top three red varieties: Shiraz, Cabernet Sauvignon, Merlot
- Top three white varieties: Chardonnay, Sauvignon Blanc, Semillon
- Crush by state/region:
- South Australia: 716,592 (47%)
- Murray Darling Swan-Hill: 381,732 (25%)
- New South Wales (excl Murray Darling-Swan Hill) 332,092 (22%)
- Victoria (excl Murray Darling-Swan Hill) 60,258 (4%)
- Western Australia: 30069 (2%)
- Tasmania: 7,197
- Queensland: 610
- ACT: 21
Update from the Chair - Damien Sheehan
Thursday, 09 July 2015 00:00
As we enter a new financial year I am proud to look back on all that Wine Victoria has accomplished in the past six months, and feel energised to tackle the work that still lies ahead.
In the past month alone, we have met with numerous key stakeholders and moved closer to achieving our industry goals. We recently met with Tourism Victoria to progress the new Victorian Wine Tourism Strategy and ensure that all members will benefit from its implementation.
We have also met with the Victorian Government to ensure the interests of the wine industry are considered in the review of bushfire fuel management. Wine Victoria recently welcomed the Inspector-General of Emergency Management's recommendation to shift away from an area-based target and towards a risk-based approach. Wine Victoria advocated for such changes and we are now working with the Victorian Government to ensure the greatest possible transparency in this process, and to establish clear lines of communication for each planned burn season.
Wine Victoria continues to work closely with the Victorian Government and key partners in establishing the new Wine Ministerial Advisory Council, which represents a great opportunity to strengthen our relationship with the Minister for Agriculture, the Hon. Jaala Pulford.
However, there is still much work to be done, and we rely on the support of our members to continue this program of activities. With such momentum towards our goals, now is truly the best time to be a Wine Victoria member.
Our newsletter this month features an update from our new Future Leaders Committee, and a Q+A with Willa Yang, Wine Australia's Regional Manager for China on the new Free Trade Agreement in this market. I was pleased to attend the first meeting of the Future Leaders, and I am confident that the work they do will be of lasting benefit to our industry.
China FTA Talk with Wine Australia
Thursday, 09 July 2015 00:00
Featuring Willa Yang – Regional Manager China, Wine Australia
Wine Victoria (WV): Has Wine Australia reconsidered its strategy in China considering the new FTA in this market?
Willa Yang (WY): We haven't made huge adjustment to our strategy in China but we hope to put more resources in China to grab the potential opportunities. Our priorities include building the premium image of Australia through promotion of a fine wine culture, growing the Australian wine category through multi-channel development - both on and off premise - and increased engagement with key influencers including trade, media and consumers.
WV: When does Wine Australia expect to see a shift in the market as a result?
WY: As a result of the China Australia FTA, the tariff duty (currently at 14%) will be gradually reduced starting from end of this year up to 2019 when it will be reduced to 0%. This will encourage a positive sentiment towards Australian wine, however the reduction of the tariff duty is limited and importers still need to pay 17% VAT and 10% consumption tax. We think the real shift will happen in another year when the tariff duty starts to reduce, but it still won't be a large shift.
WV: What can Australian wine exporters do to best take advantage of these opportunities? What advice can you give to producers considering entering into the Chinese market for the first time?
WY: It's now a good time for Australian wine exporters to enter the China market. In order to take advantage of these opportunities, they need to have a long-term strategy for China, not just trading without supporting their partners in China. They need to work together to present and promote the branding of Australia or their region in a unified form, rather than individual promotion as the latter is more costly and has limited influence. Chinese consumers may only remember a few wine brands from around the world, however regions/countries are more easily remembered. This is why there are a growing number of collective promotions for regions and countries nowadays. Important events in China like key trade shows and consumer activation events organised by Wine Australia will help deliver a strong 'story' to the Chinese audience. For first time exporters, if they want long-term business, it is also important for them to come to China to learn the market and their customers rather than selling to someone who they have never met.
WV: How is Victorian wine perceived in the Chinese market, if at all?
WY: Victoria as a state has limited recognition in China in terms of wine compared with other wine producing states. However, some people do know regions like Yarra Valley or the Mornington Peninsula, often through previous travel to Australia. What Victoria can do is focus on some of the key regions from Victoria rather than all 21 regions to make it easier for consumers to remember. It's a good idea to combine wine with other sectors like food, lifestyle and tourism.
Wine Australia recently released their 5-year strategy. The strategy can be found here
Future Leaders program underway
Thursday, 09 July 2015 00:00
Wine Victoria's new Future Leaders Committee has kicked off its mentoring program and begun planning an industry focused project.
The committee has been established to help talented, ambitious people in the Victorian wine industry grow to their full potential, while ensuring sustainable governance by mentoring and training future leaders for board membership.
The committee's elected Chair, Joel Pizzini, Production Director at Pizzini Wines says the inaugural forum is a fantastic opportunity to be mentored and learn about important industry issues from some of the most respected senior leaders in Victoria's wine sector.
"The activities that we participate in will give us a greater understanding of the issues we face as an industry at both a state and national level," said Pizzini. "Our main aim is to tackle a current issue or program, and implement a strategy to create lasting opportunities for the growing number of wine producers in Victoria."
In addition to the mentoring program and project delivery, the committee will also participate in stakeholder engagement activities such as parliamentary meetings, and receive briefings from industry experts in a wide range of areas, from finance to public affairs.
Committee members will meet bi-monthly and continue their mentorship until the end of the year, when the project is due.
International visitors to Victoria increasing
Thursday, 09 July 2015 00:00
Wine Victoria welcomes the latest International Visitor Survey results, released by Tourism Research Australia, which shows Victoria received 2.1 million international visitors in 2014 – an 8.9 per cent increase on the year prior.
Victoria ranked well above the national average, and also fared better than key competitors New South Wales and Queensland.
Long-term trends show Victoria is outperforming the two states in growth rates for international visitors, overnight expenditure and visitor nights for the 2008 – 2014 period.
Wine tourism is a key component of Victoria's tourism offering. Of Victoria's 800 wineries, 600 have cellar doors and the state enjoys about 1.5 million winery visitors each year.
The survey results reveal Asian visitation has grown by 15.2 per cent for the year ending December 2014. A resurgence among Western markets in Europe, the USA and New Zealand is likely to see more visitors travel to Australia.
"This is positive news for the Victorian wine industry as Asia, the USA and UK are all key markets for Victorian wine," says Wine Victoria Chair Damien Sheehan.
"To capitalise on increased international visitation, Wine Victoria is advocating for more regional wine events to drive cellar door sales."