ExportReport

12monthsto31December2023

wineAustraliaABN8963674992

t+61882282000

f+61882282066

IndustrHouse-Nationalwinecentre,cnrHackneandBotanicRoads,AdelaideSA5000

PoBox2733,kentTownSA5071,Australia

eenquiries@wineaustralia.com@wineAustraliaawineAustraliawineAustraliawwwwineaustralia.com

wine

Australia

Page1

29/01/2024

@wineAustraliaawineAustraliawineAustraliaWwwwineaustralia.com

Executivesummary

.TotalvalueofAustralianwineexportsdeclinedby2percentto$1.90billion.

.Totalvolumedeclinedby3percentto607millionlitres.

.Whiletheselevelsofexportsarestillwellbelowlong-termaverages,theDecember2023quartersawanincreasecomparedto2022.Valuegrewby23percentandvolumeby2percentduringtheperiod.

.HongKongshowedthestrongestvaluegrowthinthe12monthstoDecember2023,withsolidgrowthalsotoSingaporeandNewZealand.Inaddition,theUnitedKingdom,Thailandand

MalaysiashowedgoodgrowthintheDecemberquarter.

.TotalexportvalueintheDecemberquarterwas$600million,thefirsttimesince2020thataquarterhasreachedthatlevel.

.ThevolumeofexportstotheUnitedKingdom,CanadaandHongKonggrewduringthe12-monthperiod,whileDenmarkandJapansawvolumeincreasesintheDecemberquarter.

Overview

Inthe12monthstoDecember2023,Australianwineexportsdeclinedby2percentinvalueto$1.90billion

1

and3percentinvolumeto607millionlitres.Whiletheselevelsofexportsarestillwellbelowlong-termaverages,thisisanincreasefromthe$1.8billionpublishedintheSeptember2023ExportReport.

TotalexportvalueintheDecemberquarterwas$600million(seeFigure1),a23percentincreasecomparedtothesamequarterin2022andthehighestquarterlyvaluesinceDecember2020.Volumeincreasedby2percentto162millionlitresforthequarter(seeFigure2).Asvolumeandvaluemovedsimilarlyoverthe12monthstoDecember2023,averagevalueofexportsstayedlevelat$3.13perlitrefreeonboard(FOB)

2

.

Figure1:ValueofAustralianwineexportsbyquarter

1UnlessotherwisestatedallvaluesaregiveninAustraliandollars.

2Allexportwinevaluesarethe‘Freeonboard'(FOB)valueofthewine,wherethepointofvaluationiswheregoodsareplacedonboardtheinternationalcarrier,attheborderoftheexportingcountry.TheFOBvalueincludesproductionandothercostsupuntilplacementontheinternationalcarrierbutexcludesinternationalinsuranceandtransportcosts.

wine

Australia

Page2

29/01/2024

@wineAustraliaawineAustraliawineAustraliaWwwwineaustralia.com

TheimprovedperformancebyvaluewasmostlydrivenbyanincreaseinexportstoHongKong.Inaddition,exportstoSingapore,theUnitedKingdom(UK),MalaysiaandThailandshowedgoodgrowthintheDecemberquarter.OffsettingsomeofthisgrowthwasadeclineinexportstoCanada,theUnitedStates(US)andSouthKorea.

Totalexportvolumehasgenerallybeenholdingsteady,witharecoveryinexportstotheUKhelpingtostrengthenthepositioninthelatestquarter.PartiallyoffsettingthisgrowthwasadeclineinthevolumeofexportsfortheDecemberquartertoNewZealand,Canada,GermanyandtheUS.

Figure2:VolumeofAustralianwineexportsbyquarter

Overall,tradingconditionsremainextremelychallengingforAustralianexporters.Outofthe112destinationsthatreceivedAustralianwineduringtheyear,only44importedmorevaluethanthepreviousyear.Globally,wineconsumptionisdeclining,duelargelytoacombinationofaglobaleconomictighteningresultinginlessdiscretionaryspendingandconsumersbeingmoreconsciousoftheirhealth.Thishasseenalcoholconsumptionfall,includingforwine.Addingtothesepressuresistheglobaloversupplyofwine,withanaverageexcesswineproductionofjustunder3billionlitreseveryyearsince2012–morethandoubleAustralia’stotalannualwineproduction.

Withregardstohealthandwellness,someconsumersareabstainingfromdrinkingwine,othersaredrinkinglessbutpayingmore,whilesomeareseekingnoorlowalcoholwineoptions.Thistrendhasseenwineconsumptionatpremiumwinesegments(US$10ormoreperbottle)grow,whilethecommercialend(lessthanUS$10perbottle)hasbeendeclining–anindicationthatconsumersaredrinkinglessbutchoosingtopurchasehigherpricepoints,althoughthisisatslightlylowergrowthratesthanrecentyears.ThesetrendsdisproportionallyeffectAustralia,giventhemajorityofAustralianexportvolumesareinthecommercialpricesegments.

Thenegativeconsumptiontrendshavebecomemorepronouncedin2023duetoeconomicfactors.IWSRresearchconductedinthefirsthalfof2023indicateda“significantnegativeshift”inspendingonallalcohol,withallregionsexceptAsiatrendingnegative.Consumerscited“economicmoderation”asthemainreasonandthattheyareprioritisingspendingonessentialitems.

WineAustraliaGeneralManagerMarketingPaulTuralesaid,“Australia’s2023wineexportresultsreflectthechallengesbeingfeltacrossthewinesectorglobally.TheDecemberquarterperformancehasshownsomegrowthbuttherearestillmanyhurdlesforthesector.Weremainclearonthesehurdlesbutareconfidentthattheextensiveactivitiesplannedin2024willassistinbuildingsalesanddistributionacrossemergingandestablishedmarkets”.

wine

Australia

Page3

29/01/2024

@wineAustraliaawineAustraliawineAustraliaWwwwineaustralia.com

Packagingtypes

Inthe12monthstoDecember2023,packagedAustralianwineexportsdeclinedby2percentinvalueto$1.43billionand12percentinvolumeto189millionlitres.Asvolumedeclinedmorethanvalue,theaveragevalueofpackagedexportsgrewby12percentto$7.54perlitreFOB.Thevolumedeclineinpackagedexportswaslargelydrivenbyexportsbelow$7.50perlitretoCanada,theUKandUS.ThisdeclinecontrastedtotheincreaseinpackagedexportstoHongKong,whichalsocontributedtothegrowthinaveragevalueasthemajorityofexportstoHongKongwerepricedabove$10perlitreFOB.

Exportsofunpackagedwine(tobepackagedinmarket)declinedby3percentinvalueto$473millionbutincreasedby3percentinvolumeto418millionlitres.Averagevaluedroppedby5percentto$1.13perlitre.ThevolumegrowthofunpackagedexportswaslargelydrivenbyCanada,theUKandSweden.

Theincreaseinthevolumeofunpackagedexportsandthedeclineinpackagedexportshasresultedintheshareofunpackagedexportsgrowingby4percentagepointstoa69percentvolumeshare.Thishasanimpactonthetotalvalueofexportsasunpackagedexportsdonotincludepackagingcostsandarethereforeinherentlylowerinvalue.

Pricesegments

Inthe12monthstoDecember2023,exportsbelow$5perlitreFOBdeclinedby5percentinvalueto$938millionand1percentinvolumeto545millionlitres.Thevolumedeclinewaslessthanthatforvalueasthedeclineinpackagedexportsinthispricesegmentoutweighedthegrowthinunpackagedwine.Bothpackagedandunpackagedexportsdeclinedinvaluebelow$5perlitre,particularlypackagedexportswhichdeclinedby8percent($40million).

Exportsvalued$5ormoreperlitreincreasedby1percentinvalueto$961millionbutdeclinedby16percentinvolumeto62millionlitres.Thegrowthinvaluedespitethedeclineinvolumewasduetogrowthat$10ormoreperlitreof11percentto$690millionoffsettingadeclinebetween$5and$9.99perlitre)of19percentto$270million.Thiswasthehighestexportvalueforthe$10ormoreperlitresegmentsincethe12monthsendedSeptember2021andwasdrivenbyexportsabove$50perlitre(seeFigure3)thatweredestinedforHongKong,SingaporeandMalaysia.

Figure3:Exportsbypricesegment(MillionAUDFOB)

Pricesegment(A$/litre)

MATDecember2023Valuechange

Growthrate

$2.49andunder

$450

-$6.9

-2%

$2.50to$4.99

$487

-$44

-8%

$5.00to$7.49

$172

-$42

-19%

$7.50to$9.99

$99

-$21

-18%

$10.00to$14.99

$120

-$31

-21%

$15.00to$19.99

$46

-$7.0

-13%

$20.00to$29.99

$93

-$0.5

-1%

$30.00to$49.99

$69

-$3.5

-5%

$50.00to$99.99

$257

$84

49%

$100.00to$199.99

$38

-$7.0

-15%

$200.00andover

$67

$33

96%

Totalvalue

$1,899

-$46

-2%

Winestyle

Inthepast12months,therewasnochangeinthevolumesharesofthemajorwinestyleswithredwineat51percent,whitewineata46percentandroséat3percent.

Stillredwineexportsdeclinedby1percentinvalueto$1.25billionand3percentinvolumeto310millionlitres.Byvolume,a4percentgrowthinunpackagedexportsofredwinewasmorethanoffsetbya14percentdeclineinpackagedredwine.Unpackagedredwineexportstodestinationssuchas

wine

Australia

Page4

29/01/2024

@wineAustraliaawineAustraliawineAustraliaWwwwineaustralia.com

theUK,USA,CanadaandGermanygrew,whilepackagedredwineexportstothesesamedestinationsdeclined.However,redwineexportsathigherpricepointsoffsetsomeofthesedeclinesonavaluebasis,withredwineexportsat$10ormoreperlitrepricesegmentgrowingby13percentinvalue,drivenbyexportstoHongKong.

Thetopfivevarietiesexportedinstillredwineproductsin2023were:

-Shiraz,down9percentto133millionlitres

-CabernetSauvignon,up2percentto85millionlitres

-Merlot,up3percentto39millionlitres

-PinotNoir,down15percentto4.3millionlitres,and

-PetitVerdot,down17percentto3.2millionlitres.

Stillwhitewineexportsdeclinedby3percentinvalueto$547millionand2percentinvolumeto271millionlitres.A1percentincreaseinunpackagedwhitewinewasmorethanoffsetbya10percentdeclineinpackagedwhitewine.Onavaluebasis,theUKwastheonlycountrythatrecordedgrowthforstillwhitewineinthetopsevendestinations,whileCanadawastheonlydestinationwithanysignificantgrowthinvolume–drivenbyunpackagedwhitewineexports.

Thetopfivevarietiesexportedinstillwhitewineproductsin2023were:

-Chardonnay,down9percentto146millionlitres

-PinotGris/Grigio,up21percentto47millionlitres

-SauvignonBlanc,down0.2percentto27millionlitres

-Colombard,up13percentto9.2millionlitres,and

-Semillon,up5percentto6.4millionlitres.

Carbonated/sparklingexportsdeclinedby14percentinvalueto$66millionand15percentinvolumeto12millionlitres.NewZealandrepresentedtheonebrightspotforthiswinestyle,with31percentgrowthinvalueand30percentgrowthinvolume.Mostothersignificantdestinationsdeclined.

Exporters

ThenumberofAustralianwineexportersincreasedto1,298inthe12monthsendedDecember2023,anincreaseof140on2022,butwellbelowthepeakof2,912inthe12monthstoFebruary2020.Thedestinationwiththehighestgrowthinthenumberofexportersamongstthetop20marketswasHongKong,followedbyTaiwan,ThailandandVietnam(seeFigure4).DestinationsthatlostthemostexportersincludedtheUS,Denmark,NewZealand,SingaporeandtheUK.JapanhasovertakentheUSbytotalnumberofexporters.HongKong,theUKandSingaporewerethetopthreedestinationsbynumberofexportersbutastheyaremajortradinghubssomeofthiswineison-shippedtoothermarkets.

wine

Australia

Page5

29/01/2024

@wineAustraliaawineAustraliawineAustraliaWwwwineaustralia.com

Figure4:Top20destinationsbynumberofexporters,changein2023

Destinations

Inthe12monthstoDecember2023,Australianwinewasexportedto112destinations,downfrom120in2022.Forty-fourofthesegrewinvalue.Ofthe15largestdestinationsbyvalue,HongKong,SingaporeandNewZealandrecordedvaluegrowth.

AsiaisnowthemajorregionbyvalueforAustralianwineexportswitha37percentvalueshare,drivenbystronggrowth(34percent)intoNortheastAsia.AlthoughdeclinestoEuropeandNorthAmericaweresmallerthanthoseexperiencedinrecentperiods,thevalueshareofthesetworegionshasnowdroppedto29and27percentrespectively.ExportstoEuropedeclinedby7percentinvalueto$546million,withallthetop15destinationmarketsinthisregiondecliningbyvalue.ExportstoNorthAmericadeclinedby12percentto$509milliondrivenbyadeclineinexportstoboththeUSandCanada.Oceaniagrewby3percentinvalueto$115million,drivenbygrowthinthevalueofexportstoNewZealand.

wine

Australia

Page6

29/01/2024

@wineAustraliaawineAustraliawineAustraliaWwwwineaustralia.com

Figure5:Exportvaluebydestinationregionin2023

Thetopfivemarketsbyvaluewere:

.US(down7percentto$364million.19percentshareoftotalexportvalue)

.UK(down3percentto$361million.19percentshareoftotalexportvalue)

.HongKong(up74percentto$290million.15percentshareoftotalexportvalue)

.Canada(down24percentto$143million.8percentshareoftotalexportvalue),and

.Singapore(up1percentto$133million.7percentshareoftotalexportvalue).

Thetopfivemarketsbyvolumewere:

.UK(up2percentto220millionlitres.36percentshareoftotalexportvolume)

.US(down5percentto134millionlitres.22percentshareoftotalexportvolume)

.Canada(up7percentto73millionlitres.12percentshareoftotalexportvolume)

.NewZealand(down2percentto29millionlitres.5percentshareoftotalexportvolume),and

.Germany(down7percentto27millionlitres.4percentshareoftotalexportvolume).

Europe

UnitedKingdom

Inthe12monthstoDecember2023,AustralianwineexportstotheUnitedKingdom(UK)declinedby3percentinvalueto$361millionandincreasedby2percentinvolumeto220millionlitres,thefirsttimevolumeasgrownyear-on-yearsincemid-2021.Averagevaluedeclinedby4percentto$1.64perlitre.

wine

Australia

Page7

29/01/2024

@wineAustraliaawineAustraliawineAustraliaWwwwineaustralia.com

Figure6:ValueofexportstotheUKbyquarter

Inthepast12months,exportstotheUKhaverecordedtwoquartersofgrowth(seeQ2andQ4inFigure6),withthelatestquarterbeing10percenthigherinvaluethanthesamequarterin2022.Whileitistooearlytobesurethatthemarketisreturningtogrowth,itisapparentthattheintroductionofhigheralcoholdutiesinAugust2023hasnotyethadanegativeimpactonexportstotheUK.

Figure7:ValueofexportstotheUnitedKingdomovertime

wine

Australia

Page8

29/01/2024

@wineAustraliaawineAustraliawineAustraliaWwwwineaustralia.com

Allofthedeclineinvaluewasinpackagedwineexports,whichdeclinedby14percentinvalueto$123millionand18percentinvolumeto22millionlitres,or10percentoftotalexportvolume.TheaveragevalueofpackagedexportstotheUKfellby4percentto$5.50perlitreFOB.

NinetypercentofthevolumeofexportstotheUKareunpackagedandarepackagedintheUKand/orre-exportedtootherEuropeanmarkets.Unpackagedexportsincreasedby4percentinvalueto$238millionand4percentinvolumeto197millionlitres.Theaveragevalueofunpackagedexportsremainedunchangedat$1.21perlitreFOB.

Redwineexportsincreasedtheirvolumeshareofexportsfrom52percentto53percentduringtheyear.Stillredwineexportsincreasedby4percentinvolumeto116millionlitresbutdeclinedby6percentinvalueto$198million.Theredvolumegrowthwasdrivenbyunpackagedexports,upby8percentinvolumeandalikelyresultofhighinventoriesofredwinebeingheldbyAustralianwineries,whilepackagedredwineexportsdeclinedby21percent.

WhitewineexportstotheUKdeclinedinvolumesharefrom46percentin2022to44percentin2023.Stillwhitewineexportsincreasedby1percentinvalueto$148millionanddeclinedby2percentinvolumeto96millionlitres.Unpackagedwhitewineexportswererelativelyunchangedfromyeartoyearwhilepackagedexportsofstillwhitewinedeclinedby12percentinvolume.

Figure8:ExportstotheUnitedKingdombypricesegment(MillionAUDFOB)

Pricesegment(A$/litre)MATDecember2023ValuechangeGrowthrate

$2.49andunder

$224

$10

5%

$2.50to$4.99

$62

-$16

-20%

$5.00to$7.49

$31

$1.3

4%

$7.50to$9.99

$14

-$3.6

-20%

$10.00to$14.99

$12

-$2.2

-15%

$15.00to$19.99

$3.7

-$0.7

-15%

$20.00to$29.99

$3.6

-$0.5

-13%

$30.00to$49.99

$4.6

$0.5

13%

$50.00to$99.99

$3.1

-$0.3

-10%

$100.00to$199.99

$1.2

$0.1

12%

$200.00andover

$1.2

-$0.1

-5%

Totalvalue

$361

-$11

-3%

ExportstotheUKunder$5perlitreFOBdeclinedby2percentinvalueto$286million(seeFigure8)andincreasedby2percentinvolumeto212millionlitres.Thisreflectedgrowthinunpackagedexports(upby4percentinvolume)andadeclineof23percentinpackagedexportsinthispricesegment.

ExportstotheUKvaluedat$5perlitreFOBandabovedeclinedby7percentinvalueto$75millionand6percentinvolumeto8.3millionlitres.Whilethe$5to$7.49pricesegmentgrewby4percentinvalue(seeFigure8),exportsbetween$7.50and$9.99andthosevaluedabove$10perlitredeclinedduringtheperiod.

AustraliaisthenumberonesourceofwineintheUKoff-trademarketandiskeepingpacewiththemarketintermsofgrowth–increasingby2percentinvalueinthe12monthstoDecember2023

3

,whilevolumedeclinedby3percent.Ingeneral,thevaluegrowthforallsourcesofwinecouldbedrivenbyinflation,whichhasbeenexceedinglyhighintheUK.

WineAustralia’sRegionalGeneralManagerUK/EMEALauraJewellMWsaid,“InDecember,theUK’soverallinflationrateof4percentwasinlinewiththegovernment’stargetfortheendoftheyear.However,asaresultofthenewalcoholdutiessystemwhichcameintoeffectinAugust2023,inflationforwineandspiritsiswellabovetheoverallinflationrateatjustunder9.6percent.Itisadifficulttime

3Circana

Page9

29/01/2024

forthehospitalitysectorasitisbeingimpactedbyproposedincreasedbusinessratesandtaxes,andtransportstrikeswhicharesettocontinueinto2024.Off-tradesalesareholdingtheirownasconsumerscontinuetopurchaseforhomeratherthaneatingoutandthemajorbrandswithretailerlistingsarebenefittingfromthis.”

OtherEurope

ExportstoEurope(excludingtheUK)declinedby14percentinvalueto$184millionand7percentinvolumeto89millionlitres.Thetop14destinationalldeclinedbyvalueastheregioncontinuestostrugglethroughhigherinflationratesthanNorthAmericaandAsiaPacificandsupplychainissues.TheRedSeaconflictisexacerbatingthisfurther,withsourcesincludingTheEconomistreportingthattheconflictisincreasingthecostsoftransportalongsomeshippingroutes.ThebiggestcontributorstothedeclinewereGermanyandDenmark,bothdecliningby17percentinvalue.Performancebyvolumewasslightlymorepositive,withSwedenandBelgiumbothexperiencinggrowth.

Figure9:ExportstoEurope(excludingtheUK)bydestinationmarket

Market

Volume

Value

Millionlitres

%change

$Million

%change

Germany

27.2

-7%

$31.7

-17%

Denmark

17.5

-2%

$30.2

-18%

Netherlands

7.8

-12%

$26.1

-9%

Sweden

6.0

16%

$20.8

-4%

Belgium

9.3

2%

$14.9

-3%

France

8.6

-13%

$14.4

-7%

Finland

4.8

-9%

$9.3

-14%

Ireland

2.2

-15%

$8.6

-11%

Spain

1.4

-28%

$7.3

-24%

Norway

1.7

-19%

$6.3

-10%

Others

3.1

-34%

$14.1

-28%

Total

89.5

-7%

$183.6

-14%

NorthAmerica

UnitedStates

AustralianwineexportstotheUnitedStates(US)declinedby7percentinvalueto$364millionand5percentinvolumeto134millionlitresin2023.Averagevaluedroppedby2percentto$2.72perlitreFOB.

Afterdeclininginthefirsthalfoftheyear,exportstotheUSgrewintheSeptemberquarter,beforefallingslightlyagaininDecember,by3percentcomparedtothesamequarterin2022(seeFigure10).Thedeclineinthelatestquarterwasdrivenbyunpackagedwineexports.

wine

Australia

Page10

29/01/2024

@wineAustraliaawineAustraliawineAustraliaWwwwineaustralia.com

Figure10:ValueofexportstotheUSbyquarter

Afterabout18monthsofgrowth(seeFigure11),unpackagedwineexportstotheUSdeclinedby12percentinvalueto$85millionand5percentinvolumeto72millionlitresin2023.Theaveragevaluedeclinedby7percentto$1.19perlitreFOB.Meanwhile,packagedexportsdeclinedby5percentinvalueto$279millionand4percentinvolumeto62millionlitresoverthe12monthstoDecember2023,butgrewby12percentinvolumeinthesecondhalfoftheyear(July–December2023,seeFigure11).Theaveragevalueofpackagedexportsdeclinedby1percentto$4.47perlitreFOB.

Figure11:VolumeofexportstotheUSbypackagingtype

Whitewineholdsa60percentvolumeshareofAustralianwineexportstotheUS,downfrom61percentin2022.Stillwhitewinedeclinedby1percentinvalueto$184millionand6percentinvolume

wine

Australia

Page11

29/01/2024

@wineAustraliaawineAustraliawineAustraliaWwwwineaustralia.com

to79millionlitres.Averagevalueincreasedby5percentto$2.32perlitreFOB.Thedeclineinvolumeandvaluewasdrivenbyunpackagedwhitewineexports,whichdeclinedby7percentinvalue.Packagedwhitewineexportsincreasedby2percentinvalue,mostlydrivenbythe$2.50to$4.99perlitrepricesegment.

Redwineexportsincreasedtheirvolumesharefrom38percentto39percentduringtheyear.Stillredwineexportsdeclinedby12percentinvalueto$168millionand2percentinvolumeto52millionlitres.Averagevaluedroppedby9percentto$3.23perlitreFOB.Thedeclineinredwinewasdrivenmainlybypackagedredwineexportswhichdecreasedby7percentinvolumeand10percentinvalue.

Figure12:ExportstotheUnitedStatesbypricesegment(MillionAUDFOB)

Pricesegment(A$/litre)

MATDecember2023

Valuechange

Growthrate

$2.49andunder

$82

-$6.9

-8%

$2.50to$4.99

$224

$4.4

2%

$5.00to$7.49

$11

-$7.7

-40%

$7.50to$9.99

$9.2

-$2.2

-19%

$10.00to$14.99

$13

-$4.4

-26%

$15.00to$19.99

$7.2

-$1.5

-17%

$20.00to$29.99

$7.3

-$1.9

-21%

$30.00to$49.99

$4.0

-$3.7

-48%

$50.00to$99.99

$2.3

-$2.8

-55%

$100.00to$199.99

$1.6

$0.4

31%

$200.00andover

$1.3

$0.1

4%

Totalvalue

$364

-$26

-7%

WineexportstotheUSvaluedbelow$5perlitredeclinedby1percentinvalueto$306millionand3percentinvolumeto129millionlitres.Volumedeclinedbymorethanvalueduetomostofthedeclinebeinginunpackagedexports.The$2.50to$4.99segment(mainlypackagedexports)declinedby3percentinvolumebutincreasedby2percentinvalue(seeFigure12).Thebelow$5perlitresegmentnowholdsa93percentvolumeshareofpackagedexportstotheUS,comparedto90percentin2022.Exportsvaluedabove$5perlitredeclinedby29percentinvalueto$57millionand32percentinvolumeto4.9millionlitres.

AccordingtoJonMoramarcoofbw166,theUStotalbeveragealcoholservingindex

4

declinedby5percentin2023,drivenmostlybywineandbeer,whichmakes2023theworstyearfortheUSalcoholmarketsince1991.Whileconsumerspendonalcoholwasupyear-on-year,thiswasmostlydrivenbyinflation.Thedeclineinalcoholconsumptionispartiallyduetoyoungerdrinkersconsumingless.AccordingtoGallupsurveys,whichtrackviewsonalcoholandconsumption,62percentof18-to34-year-oldsintheUSconsumealcohol,comparedto72percentin2003.Fifty-twopercentofthisagegroupalsoviewmoderatedrinkingasbeingdetrimentaltohealth(upfrom34percentin2018).PartofthereporteddeclineinalcoholsalescanalsobeattributedtoinventoryadjustmentsafterthesupplychainissuesduringtheCOVID-19pandemic.

WineAustralia’sRegionalGeneralManagerAmericasAaronRidgwaysaid,“ThisisaperiodofenormouschallengesnotjustforAustraliabutallwine-producingcountries.Thecombinationofpost-COVIDsupplyanddemandadjustmentsandshiftsinconsumeractivity–whetherrelatedtohealthortheeconomy–iscontributingtothemostchallengingtradingconditionsforwineinageneration.Butpremiumisationisstillexpectedtoplayakeyroleinwine’sfutureintheUS,andisanareawewillcontinuetofocusonasanopportunitytoshowincrediblequality,storytellingandscalabilityagainstourcompetitors.”

4Abw166calculationusingthevolumeofalcoholenteringtheUSdistributionsystem,multipliedbyservingsizespecifictothetypeofalcohol.

wine

Australia

Page12

29/01/2024

@wineAustraliaawineAustraliawineAustraliaWwwwineaustralia.com

Canada

AustralianwineexportstoCanadadeclinedby24percentinvalueandincreasedby7percentinvolumeinthe12monthstoDecember2023.Averagevaluedeclinedby29percentto$1.96perlitreFOB.

Valuedeclinedduringeachquarterof2023(seeFigure13),finishinguptheyeardown11percentintheDecemberquartercomparedtothesamequarterinthepreviousyear.Thedeclineinvalueisdrivenbypackagedwine,whilevolumecontinuestoincreasethankstostrongexportsofunpackagedwine.

Figure13:ValueofexportstoCanadabyquarter

PackagedwineexportstoCanadahavebeenonasteepdeclineforaboutayear(seeFigure14),down32percentinvalueto$100millionand35percentinvolumeto16millionlitresin2023.Thisdeclineinpackagedexportsfollowsthemarkettrend,withtheAssociationofCanadianDistillersreportingthatthevolumeofwineconsumedinCanadadeclinedby6percentintheyearendedNovember2023,withallmajorsourcecountriesindecline.Meanwhile,unpackagedexportshavebeenonasteepupwardtrendsinceearly2022andisnowshowingsignsofstabilising.IntheyearendedDecember2023,unpackagedexportstoCanadaincreasedby9percentinvalueto$43millionand31percentinvolumeto57millionlitres.Asaresult,averagevaluedeclinedby17percentto$0.75perlitreFOB.

wine

Australia

Page13

29/01/2024

@wineAustraliaawineAustraliawineAustraliaWwwwineaustralia.com

Figure14:VolumeofexportstoCanadabypackagingtype

During2023,redwine’sshareofvolumeofAustralia’sexportstoCanadadeclinedfrom65percent