Australian wine sales exceed supply for third year

By Michelle Perrett

Published: 30 March, 2021

Australian wine sales during 2019 to 2020 exceeded supply for the third year in a row impacted by drought conditions and bushfires in some regions of the country.

This has led to the lowest stock-to-sales ratio in nine years and strengthening winegrape prices, according to Wine Australia’s Wine Production, Sales and Inventory Report 2020.

Total Australian wine production in 2019 to 2020 was just under 1.1 billion litres, or 121 million nine-litre case equivalents. This was 9% below the previous year’s production, and 10% below the 10-year average.

The inventory of Australian wine, within Australia, as at 30 June 2020 was estimated to be 1.7 billion litres, a decline of 4% compared with the previous year, the report said.

Wine Australia CEO Andreas Clark said that this was not unexpected, as the 2020 crush was the lowest since 2007 at 1.52 million tonnes.

“While quality was generally high in 2020, it was a challenging vintage, with drought conditions affecting much of Australia and bushfires affecting a small number of wine regions”, he said.

The total volume of Australian wine sales in 2019 to 2020 was just over 1.2 billion litres (136 million nine-litre cases), of which 40% was sold on the domestic market and 60% was exported. Domestic sales were down by 1%, while exports were down 9%.

The report period preceded the imposition of interim tariffs on bottled wine exports to China that were introduced in November 2020.

In the 12 months to December 2020, exports decreased by 1% in value to $2.89bn, as Chinese tariffs took their toll on exports, Wine Australia’s Export Report revealed.

Clark said that the small decline in sales to the domestic market was consistent with long-term trends of moderation and premiumisation in mature wine markets, while the decline in exports was in line with lower Australian vintages in 2018 and 2019.

He said that the Covid-19 pandemic had not appeared to have had a "substantial impact" on overall sales volumes during the period covered by the report.

The reduction in overall inventory was driven by a decrease of 100 million litres in white wine stocks, partially offset by increases in red, sparkling, fortified and other products.

“The results of the survey have highlighted a significant challenge for the sector going forward: to balance supply with the demand opportunities”, Clark said.

“This is particularly important as wineries look to divert exports away from China, which predominantly bought our red wine, to other markets such as the USA and the UK, which have a higher demand for white wine.”

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