China’s thirst for Aussie wine soars
CHINA’S growing taste for Australian wine has pushed exports to a new record, industry data shows.
The bumper update from industry body Wine Australia sent shares in major producer Treasury Wine Estates to an all-time high yesterday.
Exports to mainland China soared by 63 per cent to a record $848 million last year.
The surge in exports to China helped lift the value of total exports by 15 per cent to $2.56 billion – the highest level since the global financial crisis in 2008.
The growth in the value of overall exports was the strongest since 2004.
Australia shipped out a record 811 million litres of wine last year, an 8 per cent increase on 2016.
Mainland China accounted for a third of total exports by value in 2017, with the huge growth more than offsetting narrow declines in key export destinations the UK, US and Canada.
Growing demand for premium Australian wine, particularly in China, increased the value of bottled wine exports by 17 per cent to $2.1 billion.
The average price per litre for bottled wine grew by 3 per cent to a record $5.63.
Exports of wines priced above $10 per litre grew 29 per cent to a record $738 million while premium $200plus wines leapt 67 per cent to $54 million.
“Exports to Northeast Asia were the growth driver,” Wine Australia chief executive Andreas Clark said.
“The implementation of the China-Australia Free Trade Agreement in 2015 provided impetus to an already strong market. The export figures for 2017 suggest Australia is well-placed for this trend to continue.”
Mr Clark said China’s demand for Australian wine was across all price points, ranging from entry-level commercial wines through to the most prestigious drops.
China is the nation’s biggest market by value, accounting for 33 per cent of total exports in dollar terms.
The US follows with 18 per cent while the UK is in third with 14 per cent of exports by value.
The UK is the nation’s largest export market when measured by volume with a 28 per cent share.
The US accounts for 21 per cent of exports by volume while China takes 19 per cent.
Red wine continued to dominate exports, with Shiraz generating $601 million in export earnings, Cabernet Sauvignon $341 million, and blends of the two contributing $187 million.
Chardonnay was next with $182 million in export earnings, followed by Merlot at $114 million.
Treasury Wine, whose stable of brands include Penfolds, Rawson’s Retreat and Wolf Blass, has previously told shareholders the market in China is growing so strongly it is hard to keep up with demand. Shares in the wine maker jumped by 4 per cent yesterday to close at an alltime high of $16.57.