While the removal of import duties on Australian bottled wine sent to China has resulted in a massive surge for the industry, exports to the rest of the world have declined to the lowest value in ten years and lowest volume in over twenty years, according to Wine Australia’s latest Export Report.
In the 12 months ending March 2025, Wine Australia reported wine exports increased by 41 per cent in value to $2.64 billion and by 6 per cent in volume to 647 million litres. The average value of exports increased by 33 per cent to $4.09 per litre free on board (FOB), the highest average value in almost two decades. This continues the trend that has been seen over the past year of quarterly reports.
Wine Australia market insight manager, Peter Bailey, said the increase in average value is mainly due to the elevated level of premium wine shipments to mainland China, after tariffs on Australian bottled wine were removed at the end of March 2024.
“The 12 months ended March 2025 represented a full year’s worth of exports to mainland China since the tariffs were eliminated – resulting in 96 million litres of exports to the market, valued at $1.03 billion,” said Bailey.
“While the total value of shipments to mainland China is now at a similar level to the years immediately before tariffs on Australian bottled wine came into force, volume in the last 12 months is 23 per cent smaller than the 5-year average between 2016 and 2020 and 44 per cent below the peak in 2018.
“Additionally, the average value of packaged wine shipped to mainland China was $23.00 per litre, much higher than any other major export market. The lower volume and high average value demonstrate that mainland China is a premium market for Australian wine and will therefore not solve oversupply issues in Australia,” he said.
Exports to the rest of the world (excluding mainland China) declined by 13 per cent in value to $1.62 billion and 9 per cent in volume to 551 million litres. This was the lowest value to the rest of the world in ten years and lowest volume in over twenty years.
While the decline in value was mainly driven by Hong Kong, as sales transitioned to mainland China, the volume drop was due to the declines in exports to key destinations such as the United Kingdom, United States, and Canada.
The global wine market is facing considerable headwinds which are impacting on results for other markets aside from mainland China and are unlikely to be resolved in the near-term.
While there has been a long-term trend of consumers drinking less alcohol due to health and wellness concerns, more recent cost-of-living pressures could continue or potentially get worse in certain markets, given the economic and political turmoil taking place globally. Escalating trade wars have the potential to increase prices, complicate supply chains, and rapidly change the competitive landscape in key wine markets in the near-term.
Long-term decline for US exports
On 2 April 2025, US President Donald Trump announced tariffs on all importing countries, including Australia. Australian wine is now subject to a 10 per cent tariff on arrival in the US.
At the time of the export report’s publication, all other nations also had a 10 per cent tariff applied, however the situation is evolving and there is still a lot of uncertainty about what the longer-term position might be.
Because there are a number of factors to account for – how much of the increased cost will get passed on to consumers, the effect of a global trade war on foreign exchange rates, and whether consumers will start to switch to domestic wines – it is hard to predict how this will affect Australian wine exports to the US in the short-to-medium term.
Over the past year, Australian wine exports to the US declined by 17 per cent in volume to 106 million litres and 9 per cent in value to $323 million, making it Australia’s second largest market by volume and third largest market by value. Exports to the United States have been on a long-term decline, with Australian exports now at the lowest level since the early 2000s.
Other key markets
Australian wine exports to the UK, the largest export market by volume, declined by 8 per cent in volume to 208 million litres and 3 per cent in value to $353 million. Despite this decline, the number of exporters shipping to the UK increased to 314 businesses, up by 23 from the previous 12 months. Of the top 20 exporters by value, 15 experienced a growth in export value in the past year.
Exports to Canada declined by 19 per cent in volume to 60 million litres and increased by 3 per cent in value to $151 million. Average value grew by 27 per cent to $2.53 per litre, driven by an increase in packaged exports with an average value of $5 per litre and above, and a decline in unpackaged exports.
The top five destinations by value were:
- Mainland China (up $1.01 billion to $1.03 billion)
- UK (down $12 million to $353 million)
- US (down $32 million to $323 million)
- Hong Kong (down $136 million to $154 million)
- Canada (up $3.8 million to $151 million)
The top five destinations by volume were:
- UK (down 19 million litres to 208 million litres)
- US (down 21 million litres to 106 million litres)
- Mainland China (up 94 million litres to 96 million litres)
- Canada (down 14 million litres to 60 million litres)
- New Zealand (down 3.5 million litres to 26 million litres)
Food & Drink Business spoke with Château Tanunda managing director, Michelle Geber, in April about current wine export trends and opportunities. She discussed the opportunities that would result from diversifying exports to emerging markets, and said continuing to push for premiumisation in established export regions like Europe would be the next move.
