Wine Australia: Stocks lower as sales exceed production

Wine sales have exceeded production in 2019-20, providing positive results for the industry.

Stocks of Australian wine were lower in 2019-20 as global sales outstripped local production.

THE lowest Australian wine stocks in nine years has kept grape prices high and may help the industry recover from unwanted Chinese tariffs.

According to Wine Australia’s Wine Production, Sales and Inventory Report 2020, wine production in 2019-20 was just less than 1.1 billion litres, 9 per cent lower than the previous year and 10 per cent less than the 10-year average.

Sales were 1.2 billion litres for the year, totalling $6.5 billion, with 40 per cent sold on the domestic market and 60 per cent exported.

The resulting decline in stocks was the third in a row, with Wine Australia chief executive Andreas Clark saying it had strengthened wine and wine grape prices.

Europe was the major export destination region, accounting for 45 per cent of all shipments.

The Americas was the second-largest export region, with a 26 per cent share, followed by Asia on 23 per cent.

Mr Clark said quality was high and sales largely unaffected by the coronavirus pandemic.

“While quality was generally high in 2020, it was a challenging vintage, with drought conditions affecting much of Australia and bushfires affecting a small number of wine regions,” Mr Clark said.

“COVID-19 only began to make its presence felt in most countries during the fourth quarter of 2019-20, and while it caused major disruptions to sales channels, overall consumption seems to have been relatively unaffected.”

Mr Clark said the survey results highlighted the challenge facing the wine sector: balancing supply and demand.

“This is particularly important as wineries look to divert exports away from China, which predominantly bought our red wine, to other markets, such as the USA and the UK, which have a higher demand for white wine,” he said.

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