Australian wine sales exceeded production last year

wine5Sales of Australian wine exceeded production in 2017-18 by an estimated 7 million cases, driven by exports and a stable domestic demand, according to a report by Wine Australia.

A smaller grape crush last year led to a decrease in wine production of 10 million cases.

The last time the margin was this high was in 2010-11, which saw a drawing down of inventories.

“Despite wine production being above the long-term average, it was not sufficient to match sales, so there was an overall 5 per cent reduction in wine inventories,” said Wine Australia Chief Executive Officer, Andreas Clark.

The strong demand and tight supply led to an increase in average value for both grapes and wine. The overall average purchase price for wine grapes in 2018 was $609 per tonne, compared with $565 in 2017.

While demand for Australian wine is expected to remain strong in the medium term, the shortfall in supply has led to supply pressure for some Australian red varieties, particularly Shiraz and Merlot, heading into the 2019 harvest.

Another average-sized crop in Australia this year would mean stocks were likely to be drawn down further in the next 12 months if sales continued at current rates.

Clark warned that the sector could not afford to become complacent.

‘The International Organisation of Vine and Wine (OIV) Statistical Report on World Vitiviniculture 2018 estimates that world wine production in 2018 was 27.9 billion litres, 13 per cent higher than the previous year (which saw record low production) and, if the estimate is realised, 2018 would see the fourth largest production in the past 18 years.

‘The big increases have come from the world’s largest wine producers Italy, France and Spain; between them, they are estimated to have produced an additional 2.4 billion litres during 2018.

‘This is likely to ease the global supply pressure that followed the record low global harvest of 2017 and put downward pressure on wine prices internationally’, Clark said.

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