Australian wine glut to worsen – production up but sales down

Posted by Daniel Palmer on 28th November 2008

Wine production has gone up, but lower domestic sales and a drop in exports has led to increased wine stocks, according to figures released today by the Australian Bureau of Statistics (ABS).The total grape crush for 2007-08 came in at 1.8 million tonnes, up by nearly a third (31%) on last year. This produced 1.2 billion litres of wine, up just over a quarter (27%).

The total area of grape vines (166,000 hectares) was slightly higher than last year, and with production up, yield rose to 11.8 tonnes per hectare (from 9.3 last year).

Red/rosé wine production grew by 40% to 673 million litres and white wine production was 553 million litres (up 15%).

While production was up, exports of Australian wine fell 9% (to 715 million litres) and domestic sales dropped by 5% (to 426 million litres). The United Kingdom remained the largest importer of Australian wine, taking 268 million litres valued at $895 million. Despite domestic sales volumes declining, the value of domestic sales still rose by 4.6%.

The drop in volume sales can be explained by a rise in volume sales of imported wine, with a 55.6% increase to 53.3 million litres sold. The value of imported wine escalated by 40.8%.

The combination of higher production and lower sales saw winemaker’s inventories rise 5% to 1.9 billion litres, with red/rosé wines representing nearly two-thirds of the stock on hand.

Australia’s largest winemakers crushed a total of 1.3 million tonnes of grapes (71% of the total crush), averaging 92,000 tonnes each, while the smallest winemakers averaged 97 tonnes each. A third of all winemaking locations were in South Australia, representing 45% of the national crush.

Further information is in Australian Wine and Grape Industry (cat. no. 1329.0) at the ABS website.