Australia’s wine industry experienced significant developments in 2024, with notable growth in both export value and volume. This article analyzes key trends in Australia’s wine export markets, price variations, production changes, and future industry outlooks, providing a detailed view based on the latest export data.
1. Overall Export Trends
The year 2024 marked a significant turnaround for Australian wine exports, with total export value increasing by 34% to AU$2.55 billion, the highest level since June 2021. Export volume also grew by 7%, reaching 649 million liters, while the average export value per liter surged by 26% to AU$3.93 FOB—the highest since late 2020.
The most notable driver of this growth was the reopening of the Chinese market. After the removal of import tariffs on Australian bottled wine in March 2024, exports to mainland China soared by 83 million liters, valued at AU$902 million. As a result, China accounted for 35% of Australia’s total wine export value in 2024.
However, outside of China, global markets faced challenges. Exports to the rest of the world declined by 13% in value to AU$1.64 billion and 7% in volume to 565 million liters. This drop was driven by:
- A sharp decline in exports to Hong Kong (-42% in value to AU$171 million) following a surge in late 2023, likely due to stockpiling in anticipation of China’s tariff removal.
- A decrease in unpackaged wine exports to the U.S. (-36% in value to AU$55 million) after an unusually high export period in early 2023.
- Stabilization in the UK market (-3% in value to AU$352 million, -4% in volume to 212 million liters) following Brexit and COVID-related fluctuations, though challenges remain.
Despite these mixed results, high-end wines (priced above AU$5 per liter) saw significant growth, contributing 62% of total export value while only making up 13% of total volume. This suggests a clear shift toward premiumization, particularly in China and Canada.
2. Deep Dive: Key Market Performance and Consumer Trends
China: The Tariff Comeback & Premiumization
China’s role in Australia’s wine export resurgence cannot be overstated. In the nine months following the removal of import tariffs (April–December 2024), Australian wine shipments to China returned to levels seen in early 2018. However, there is a key difference—while volume has not yet reached past highs, the average export price to China has increased to AU$10.79 per liter, which is AU$5 higher than in 2018. This shift indicates a strong move toward premiumization, with higher-value wines driving export gains.
The breakdown of exports to China reveals:
- 93% of shipments were red wine, with Shiraz (55% of red wine exports) and Cabernet Sauvignon (26%) dominating.
- Unpackaged wine accounted for 57% of total export volume but only 7% of total value, further reinforcing the premiumization trend.
- While still a small portion, white wine exports to China grew, increasing from a 4% share in 2018 to 7% in 2024, signaling a potential diversification in consumer preferences.
U.S. & UK: Economic Pressures and Policy Shifts
The United States remains a key market but struggled in 2024. Total wine exports to the U.S. fell by 10% in value to AU$325 million and 21% in volume to 106 million liters. The decline was mainly due to a surplus inventory issue in the U.S. market, which led to a sharp drop in demand for lower-priced, unpackaged wines. Meanwhile, premium wine shipments priced above AU$5 per liter were more stable but could not offset the overall downturn. Additionally, U.S. off-premise wine sales fell by 4% in volume in 2024, while rising prices led to increased consumer price sensitivity.
In the United Kingdom, exports declined by 3% in value to AU$352 million and 4% in volume to 212 million liters. While these figures suggest relative stability, the market faces upcoming challenges in 2025:
- New UK alcohol duty regulations (effective February 2025) will introduce over 30 different tax rates based on alcohol percentage, potentially impacting pricing and consumer choices.
- A shift toward lower-alcohol wines (<11.5%) is already evident, with Australian exports in this category increasing their market share from 28% to 42% in the UK.
Other Markets: Southeast Asia, Canada, and Emerging Opportunities
- Canada was one of the few markets outside China that saw growth, with export value increasing by 9% to AU$156 million. However, total volume fell by 10% to 66 million liters, as demand concentrated on higher-end bottled wines rather than bulk shipments.
- Southeast Asia saw a mixed performance, with Thailand’s export volume increasing by 15% but value dropping by 22%, indicating weaker pricing power in the region. Meanwhile, exports to Singapore (-25%) and Hong Kong (-42%) declined, largely due to stockpiling behaviors from late 2023.
3. Price Variations and Trade Policy Impacts
High-End vs. Low-End Wine Exports: The most notable trend in 2024 was the growth in high-end wine exports. Shipments with an average value of AU$5 per liter and above increased by 65% in value and 39% in volume, driven largely by the return of exports to China. This price segment now represents 62% of the total export value, though it constitutes only 13% of the total volume shipped. In contrast, exports priced below AU$5 per liter grew more modestly, by 4% in value and 3% in volume.
Trade Tariffs and Agreements: The removal of tariffs on Australian bottled wine to mainland China in March 2024 provided a significant boost to Australian exports. However, ongoing geopolitical dynamics, such as the economic uncertainties in the U.S. and the UK, continue to affect global trade patterns. The effects of tariff reductions and trade agreements will likely influence the market share and pricing strategy of Australian wines in the short to medium term, especially in emerging markets.
Packaging Formats: Packaged exports (97% in glass bottles) increased by 45% in value to AU$2.06 billion and 17% in volume to 221 million liters. In contrast, unpackaged wine exports, though slightly increasing by 2% in value, showed a decline in volume. The growth in packaged exports, especially to China and Canada, indicates a shift toward premium wine, aligning with consumer preferences for higher-quality offerings.
4. Production Changes and Wine Variety Trends
Red Wine Dominance: As of December 2024, red and rosé wine accounted for 60% of export volume, increasing from 54% in the previous year. This growth was primarily driven by exports to mainland China, where 93% of the wine exported is red, particularly Shiraz and Cabernet Sauvignon. The rising demand for red wine, especially at higher price points, signals a shift towards premium offerings in global markets.
White Wine Decline: White wine exports, on the other hand, experienced a decrease in both value (-1%) and volume (-9%). Key white varieties, including Chardonnay and Pinot Gris, saw reduced exports, especially to major markets such as the UK, U.S., and Canada. Despite this, sparkling white wines grew in both value (+19%) and volume (+18%), highlighting shifting consumer preferences in some regions, particularly in Asia and Europe.
Varietal and Regional Performance: The most exported red wines were Shiraz (173 million liters, +25%), Cabernet Sauvignon (100 million liters, +15%), and Merlot (40 million liters, +2%). For white wines, Chardonnay was the top exported variety, despite a 8% decline in volume, while Sauvignon Blanc and Semillon also saw reduced exports.
5. Industry Outlook and Future Trends
Growth Opportunities: Looking ahead, mainland China remains a key market, though its long-term growth potential is uncertain due to fluctuating wine consumption levels. The premiumization of the Chinese wine market suggests that Australian wineries may benefit from focusing on high-quality wines. Emerging markets in Southeast Asia, Africa, and Eastern Europe could provide new growth opportunities, especially for mid-range wines.
Global Economic and Climate Challenges: Global economic uncertainties, including inflationary pressures, cost of living increases, and changes in consumer spending, will likely continue to shape wine consumption patterns. Additionally, climate change could impact wine production, potentially affecting grape yields and quality in certain regions. Australian wineries will need to adapt by adopting sustainable practices and ensuring product quality remains competitive in global markets.
Strategic Adjustments: Australian wine producers may need to diversify their export strategies by focusing on a broader range of markets. Investing in brand differentiation, enhancing product quality, and targeting premium segments will be crucial in navigating the evolving global market landscape. Additionally, leveraging technological advancements in wine production and sustainable practices could offer long-term competitive advantages.
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