Historically high production figures and booming sales activity have pushed the rebounding Australian wine sector to its healthiest position in more than a decade.
Last year’s grape crush of almost 2 million tonnes delivered a second consecutive year of historically high production and left Australia with increasingly healthy inventory levels at a time when overseas winemakers are dealing with production setbacks.
Australia was the only major wine producing country to have an above-average harvest last year.
Despite a five per cent slide in Australia’s white wine vintage, total wine production increased by 5pc to 1.37 billion litres.
Red production jumped 15pc to 793m litres.
Sales by Australian winemakers also grew strongly in both domestic and export markets according to the industry’s 2016-17 inventory report from Wine Australia, released this week.
The combined increase in sales of $393m (8pc) grew the total value to more than $5.6b.
Australia is well-placed to take advantage of the opportunity, with stocks at reasonably high levels and well-established routes to market in the four largest wine markets
Volume increased by 59m litres (just under 7m cases) to 1.3b litres (142m cases).
About 86pc of the sales growth came from red and rose wines, but white wine exports were also up 4pc to 296m litres.
That was the second highest annual figure ever recorded for the category.
Total inventory in stock grew 3pc to 1.97b litres, with red inventory up 7pc to 1.09b litres, but white wine decreased by 1pc to 739m litres.
Stocks-to-sales ratios decreased slightly for both reds and whites.
Wine Australia chief executive officer, Andreas Clark, said the large local vintage was well-timed given global production in 2017 was estimated to be the lowest since 1961 at 24.6b litres.
“Australia is well-placed to take advantage of the opportunity, with stocks at reasonably high levels and well-established routes to market in the four largest wine markets in the world – the United States, United Kingdom, China and Germany,” he said.
“The additional tariff cuts on Australian bottled wine into China from January 1 will further increase our competitiveness in the world’s fastest-growing major wine market.
“On-going tariff cuts through the Japan–Australia Economic Partnership Agreement will also improve competitiveness in Japan, the second biggest wine market in Asia behind China.”
The latest report on the wine sector’s health status coincided with Treasury Wine Estates (TWE) confirming its sales in Asia were thriving and significantly contributed to its 37.4pc jump in first-half net profit to $187.2m for 2017-18.
Treasury is Australia's biggest wine company.
Sales revenues from Asia leapt 36.4pc to $297.5m on the same period last year.
Chief executive officer, Michael Clarke, said markets in Asia, Australia and New Zealand and Europe were “outperforming expectations”.
TWE sales revenue for the Australia and NZ region lifted 3.4pc to $339.4m, but Europe was down 9.6pc to $160.2m.
- Does this article interest you? Scroll down to the comments section and start the conversation. You only need to sign up once and create a profile in the Disqus comment management system for permanent access to all discussions.