14/08/2007 - 22:00

Global quaffing a boost for WA wines

14/08/2007 - 22:00

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The value of Australia’s wine exports broke through the $3 billion mark for the first time last month as consumers from around the globe drank more premium wines from regions such as Margaret River and the Swan Valley.

Global quaffing a boost for WA wines

The value of Australia’s wine exports broke through the $3 billion mark for the first time last month as consumers from around the globe drank more premium wines from regions such as Margaret River and the Swan Valley.

Figures released by the Australian Wine and Brandy Corporation show significant growth in wine exports priced above $5 per litre, which bodes well for WA’s wine industry that was struggling under a glut of grapes just two vintages ago.

July, it would seem, is the milestone month, with wine exports surging to $2 billion in July 2002 after reaching $1 billion in July 1999.

In the year ended July 2007, the value of wine exports increased eight per cent to $3 billion, while volume rose 10 per cent to 805 million litres.

But while the average price per litre dropped two per cent to $3.73 per litre, there was good growth recorded for premium wine segments.

AWBC chief executive Sam Tolley said it appeared overseas consumers were “trading up”, with wine priced above $5 per litre up 25 per cent, or 39 million litres, compared to just a five per cent increase for wines exported under $5 per litre.

The over $5 per litre bracket now represents 24 per cent of exports, up from 21 per cent the year earlier.

The figures bode well for WA’s wine industry. The most up-to-date figures for the WA market put the average export price per litre at $5.72 after close to 9 million litres was exported from WA in 2005-06, attracting a price tag of $51 million.

That was an increase on the $5.29 per litre recorded in 2004-05, but was well short of the $10.77 per litre the industry’s exports attracted back in 1998-1999.

Anecdotally, there are signs that the export price for WA producers will continue to push up because demand is beginning to outstrip supply.

The AWBC figures also show the glut of grapes that plagued the industry a couple of years ago has largely disappeared with bottle wine sales, particularly of red varieties, increasing strongly.

Bottled red wine sales increased by 9.2 per cent, or 30 million litres, on the same period last year. The average value per litre rose two per cent to $5.15 per litre. The year earlier, bottle red wine sales fell.

While bulk wine shipments still grew, the AWBC said the rate of growth was significantly lower than 12 months ago, when then volume jumped 50 per cent.

Bulk wine shipments in July 2007 climbed 18.1 per cent, with the average price at $1.05 per litre, down 4.8 per cent on the previous corresponding period.

“To achieve strong overall growth without relying so heavily on bulk sales is an important trend,” Mr Tolley said. “It shows that consumers are appreciating the diversity of the Australian wine offering and that our marketing messages are getting through.”

The United States has been particularly strong for premium wine makers.

In the year to July 31 2007, US wine exports priced between $5 per litre and $7.49 per litre surged 73 per cent, while wine priced at $7.50 per litre to $9.99 per litre jumped 15 per cent.

But it has been a tough journey for many wine producers, who have invested a lot of time and money in developing the American market.

Margaret River and Denmark producer Howard Park began exporting to the US about a decade ago.

While the strong Australian dollar was currently eating into profits, Howard Park export director John Waldron said the winery was continuing to build on its reputation after enjoying success with its Madfish label, which is in the $5 per litre to $10 per litre export bracket.

But, he said, the winery was placing greater emphasis on its Howard Park label, which sits in the super premium end of the market at above $10 per litre.

The UK and Canadian markets recorded the biggest growth in the super premium sector, with the volume of wines priced above $10 per litre growing 32 per cent in the UK during the 12 months to July 31, while in Canada the volume increased 34 per cent.

In the US, the volume of wine exported above $10 per litre was up three per cent.

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