China becomes Australian fourth-largest wine customer in value terms

THE value of Australia's wine exports fell by 10 per cent over the past financial year, the second straight year of decline as the global financial crisis led drinkers to trade down to cheaper tipples.

Figures released by the Australian Wine and Brandy Corporation showed wine export revenues fell by $257 million to $2.427 billion in 2008-09, their lowest level in six years. AWBC senior analyst Peter Bailey said consumers had become increasingly conservative as the global economy soured, boosting demand for lower-priced bulk wine at the expense of bottled.

At the same time, the price of both bulk and bottled wine fell, with the average sale price dropping by 14 per cent to $3.24 per litre, the lowest in more than 10 years.

Export volumes managed growth of 6 per cent to reach 750 million litres, the second-highest figure on record following 2006-07, when 798 million litres were sold offshore.

However, the growth was all at the bottom end of the market, with exports of bulk wine rising 65 per cent to 255 million litres.

In contrast, shipments of higher-margin bottled wine fell by 11 per cent to 484 million litres.

The UK remained our biggest export customer in terms of volume, sucking down 265 million litres to pip the US, which partook of 236 million litres. However the US overtook the UK in terms of value, shelling out $741m on Aussie wine compared to the UK's $723m

China was the fastest-growing export market, with the value of exports surging 51 per cent to $94m, lifting China three places to become our fourth-largest customer in value terms.

Hong Kong was the second-fastest growing market, up 27 per cent.