CHINA could overtake Canada as Australia's third-largest wine export market within a year.
Wine sales to the world's fastest-growing economy surged by 34 per cent over the year to the end of last month.
Figures from the Australian Wine and Brandy Corporation, the federal government's wine marketing body, showed the volume of wine exported over the 12-month period grew by 2 per cent to 772 million litres. However, sales to Australia's two largest wine customers continued to decline, with bottled wine to the US down 5 per cent to 148 million litres and British sales down 23 per cent to 119 million litres.
Australian winemakers have struggled to maintain export volumes as the Australian dollar has reduced its price competitiveness against other "new world" producers in the US and South America.
The impact of exchange rates was evident in a 34 per cent fall in US sales of bottled wine priced at $10 a litre or more, while bottles selling for the equivalent of less than $2.50 a litre were up by 40 per cent.
But Chinese drinkers continued to pick up Aussie plonk with gusto, buying 22.3 million litres over the period, up 34 per cent, at a value of $122m.
At the current pace of growth, China could displace Canada, where sales were up 6 per cent to 36 million litres, as our third-largest wine buyer within 12 months.
Crucially for winemakers struggling to wring a return from production, the average price of bottled Australian wine sold to China was $5.48 a litre -- more than the $3.60 average for the US market and the $3.34 fetched in Britain, where supermarket chains have driven savage discounting.
And unlike drinkers in our more established export markets, the Chinese appear to be trading up, with sales of wine prices at less than $2.50 a litre falling by 16 per cent, but all other price points growing by 15 per cent or more, including a 30 per cent lift in sales of wine priced at $10 or more a litre.
Exports of bulk wine -- which are shipped in plastic drums or rubber bladders carrying hundreds or thousands of litres -- grew by 19 per cent to 333 million litres over the year to the end of September, with 46 per cent of the volume going to Britain. The AWBC said the increase in bulk exports was driven by a shift to bottling at the export destination to save the cost of shipping glass bottles around the world.
by Blair Speedy
