According to Wine Australia’s export report for the 12 months to December 2025, Australian wine exports fell 8% in value to A$2.34 billion and 6% in volume to 613 million litres. The average price dropped 3% to A$3.81 per litre. These declines are not isolated. They reflect a broader, persistent contraction in global wine demand.
The most telling contrast appears in major markets:
- United States: volume +11%, value –12%
- China: value –17%, white wine share rising from 7% to 15%
- United Kingdom: total value –3%, but premium segment (>A$7.50/L) +15%
The pattern is clear. Volume growth no longer signals market health. In most cases, volume resilience is simply pricing power erosion made visible.
Global wine is undergoing a structural shift – from scale-driven growth to selective consumption. Australia, having already diversified away from its largest historical market and remaining heavily export-reliant, provides the clearest and most immediate view of this transition.
Even if demand eventually stabilises, it will stabilise at a significantly lower level – and with far less tolerance for undifferentiated volume.
Three forces driving the reset
This is not a temporary downturn. Three interlocking trends point to the same outcome: wine is retreating from “default daily drink” status and returning to the position of a situational, chosen luxury experience.
1. Permanent consumer sobriety and overall alcohol displacement Health awareness, inflation, and cost-of-living pressure have reduced total alcohol consumption in most developed markets. Wine no longer benefits from automatic inclusion at the table. It now competes directly against “drinking less” and “drinking something else”.
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2. Long-term contraction of core markets China’s post-tariff restocking proved short-lived; the market has settled at roughly one-third of its peak size. The United States has recorded five consecutive years of volume decline. In the United Kingdom, traditional meal occasions continue to shrink while low- and no-alcohol options gain share. These are not cyclical pauses – they are permanent reductions in everyday drinking occasions.
3. Chronic oversupply and ongoing surrender of pricing power Bulk wine still accounts for 68% of Australian export volume, yet prices remain depressed. High inventory levels and slow red-wine clearance force producers to accept lower returns to maintain cash flow. This is not primarily the result of poor execution or isolated mismanagement, but of a production system and vineyard footprint built for a level of global demand that no longer exists. Much of what appears as “volume recovery” is in reality producers trading margin for liquidity under structural pressure.
Bright spots are selective, not scalable
Some markets showed growth in 2025:
- Canada: value +12% (displacement from US-origin wine)
- Singapore: +18%
- Selected Southeast Asian markets (Thailand, Malaysia): strong white wine demand
- United Kingdom premium segment (>A$7.50/L): +15%
- China white wine category: structural share gain (Chardonnay, Sauvignon Blanc, Riesling)
These are real opportunities. But they reward precision, not production capacity. None of these markets has the scale to absorb global surplus, and none can replace the volume once provided by China at its peak.
The new rules of survival
The 2025 export report is not a cyclical warning. It is confirmation that the old growth model has failed. There will be no rapid V-shaped recovery and no return to easy volume-led expansion. The industry faces another three to five years of uneven bottoming and forced capacity adjustment.
Brands that cross this divide will complete the following shifts:
- From chasing tonnage → to prioritising cash-flow health and inventory turns
- From reliance on single-country markets → to building diversified, higher-control channel portfolios
- From selling vintage and variety → to selling brand memory, occasion, and emotional connection
- From expanding vineyard area → to rationalising low-performing sites and focusing on unit economics
- From following market wind → to actively defining scarcity and pricing authority
The report’s real message is not how bad things are today. It is how clearly it draws the line: the old rules no longer apply. Survival belongs to those who learn the new economics fastest.
