Australia is one of the world’s top wine exporters. But 2021 proved a turbulent year for Aussie wine exports. This article explores export values, top destinations, challenges like China’s sanctions, and the keys to future growth.
As the fifth largest wine exporter globally, Australia’s wine trade is hugely valuable. But 2021 saw export values fall compared to 2020, with the sector facing headwinds. What were the key themes shaping Australian wine exports last year?
Snapshot of Australian Wine Export Values
According to Wine Australia, total wine exports fell by 4 per cent in 2021 to $2.84 billion. The volume of exports also declined, down 2 per cent to 759 million litres.
This contrasts to 2020, where export values rose 4 per cent to $2.97 billion. So 2021 represented a downward turn after growth in 2020.
Driving last year’s declines was a significant drop in exports to mainland China following sanctions imposed on Australian wine. Shipments to what was Australia’s most lucrative wine market plummeted from $1.2 billion to just $20 million.
Top Destinations for Australian Wine Exports
With the Chinese market closed, Australian wine exporters had to accelerate diversification efforts into alternative destinations in 2021.
The UK became the biggest export market for Aussie wine, overtaking the US for the first time in seven years. Exports to the UK grew by 3 per cent to $461 million as demand increased.
South Korea was a standout growth market, with wine exports rising by 27 per cent to $199 million following the Australia-Korea Free Trade Agreement. Vietnam also emerged as an export focus.
Other major markets like Singapore, Malaysia, and Thailand saw elevated shipments in 2021 as Australian exporters expanded their footprint across Asia.
While the US slipped to become the second largest wine export destination for Australia, shipments still grew by 10 per cent to reach $428 million.
Challenges: China Sanctions and the Global Wine Glut
Two key challenges impacted Australian wine exports in 2021: China’s imposition of heavy tariffs, and global oversupply in the wine market.
In 2020, around 40% of Australia’s wine exports went to China, making it the largest and most lucrative overseas market. But crippling tariffs of up to 200% effectively closed this export door in 2021, causing huge disruption.
At the same time, globally there is a wine glut, with oversupply and falling demand during the pandemic. Combined with China’s sanctions, this created a crisis of overstock for Australian wine producers.
In response, many looked for new export opportunities in markets like Southeast Asia and North America. But the wine surplus will take years to rebalance, keeping pressure on the sector.
Keys to Future Growth for Australian Wine Exports
Despite turbulence in 2021, Australia remains well-placed as an internationally focused wine exporter, with opportunities to continue diversifying into new high-potential markets.
Wine Australia has an Export Market Explorer tool helping producers identify and evaluate new opportunities based on consumer demand and ease of doing business. Their Export Ready Hub also provides training to build exporter capabilities.
Markets like Vietnam, Thailand, Malaysia and Canada all offer attractive prospects for Australian wine export growth. Continued promotion and trade partnerships will strengthen these emerging destinations.
In established markets like the UK, USA and Singapore, growing interest in premium Australian wine allows producers to build margins through positioning strategies.
While the China sanctions dealt a major blow, the crisis also accelerated diversification efforts across the sector. Broadening Australia’s wine export markets will support more resilient long-term growth.
FAQ
Q: What is the topic of this FAQ?
A: The topic of this FAQ is “Cheers or Tears? Insights on Australian Wine Exports From 2021 Onwards”.
Q: What are some key terms related to this topic?
A: Some key terms related to this topic are grape, aussie wine, Vietnam, market insights, tariffs on Australian, total exports, export report, 2022, COVID-19, Hong Kong, wine export ready hub, help Australian wine producers grow their wine sales, Australian wine exports fell, export volume, new markets, wine exports grew in 71, Wine Australia said, Wine Australia chief executive, Wine Australia manager, Austrade, Australia produces, wine sector, wine exports from Australia, latest export, China imposed, per cent of Australia’s wine, cent of Australia’s wine production, Wine Australia’s, according to Wine Australia’s, 60 per cent, UK and US.
Q: How did Australian wine exports perform in 2021?
A: Australian wine exports fell in 2021 due to various factors.
Q: What were some factors that contributed to the decline in Australian wine exports?
A: The decline in Australian wine exports can be attributed to the impact of COVID-19, tariffs imposed on Australian wines by certain countries like China, and other market dynamics.
Q: Did Australian wine exports grow in any markets in 2021?
A: Yes, despite the overall decline in exports, Australian wine exports grew in 71 markets.
Q: What is the outlook for Australian wine exports in 2022?
A: The outlook for Australian wine exports in 2022 is uncertain due to various factors including ongoing trade disputes and the recovery of the global economy post-COVID-19.
Q: How can the Wine Australia export-ready hub help Australian wine producers grow their wine sales internationally?
A: The Wine Australia export-ready hub provides resources, market insights, and support to Australian wine producers to expand their presence in international markets and increase their wine sales.
Q: How much of Australia’s wine production is affected by tariffs?
A: Tariffs imposed by China affect a significant portion, around 60 percent, of Australia’s wine production.
Q: Are there any new markets that Australian wine producers are targeting?
A: Yes, Australian wine producers are exploring new markets beyond traditional ones like the UK and US to diversify their export portfolio.
Q: What are some of the challenges faced by the Australian wine sector?
A: The Australian wine sector faces challenges such as trade disputes, market volatility, changing consumer preferences, and the impact of COVID-19 on international trade.
Q: What is the role of Wine Australia and Austrade in supporting Australian wine exports?
A: Wine Australia and Austrade collaborate to provide market insights, export assistance, and promotional activities to help Australian wine producers navigate international markets and increase their exports.
Key Takeaways on Australian Wine Exports
- Australia is the world’s 5th largest wine exporter, but export values declined in 2021 compared to 2020.
- Exports to China collapsed after heavy tariffs were imposed, dropping from $1.2 billion to just $20 million.
- The UK overtook the USA as the largest destination for Aussie wine exports.
- Fast-growing markets include South Korea and Vietnam following recent free trade agreements.
- With China closed, exporters focused on diversification efforts into new high-potential markets across Asia and North America.
- Continued promotion and partnerships will strengthen Australia’s position across both emerging and established export destinations.
For Australian wine exporters, 2021 proved a challenging year full of disruption. But the sector has shown resilience, agility and adaptability as producers pivoted into fresh overseas markets. While the road ahead remains bumpy, Australia is well-placed to grow wine exports through deeper diversification.