The United Kingdom (UK) is the third largest importer of wine in the world and is the biggest destination for Australian wine exports by volume.
Just under 70 per cent of Australian wine exported to Europe lands in the UK. Some 84 per cent of the wine is unpackaged when it leaves Australia, and some of this wine is then re-exported to other European countries, particularly to the Netherlands, Ireland, Germany and the Nordics.
Even with these re-exports, the UK itself remains one of Australia’s most important wine markets; according to Wine Intelligence, out of the estimated 29 million UK wine drinkers, 45 per cent drink Australian wine.
In the 12 months to the end of June 2019, Australian wine exports to the UK experienced a slight decline with value decreasing 3 per cent to $373 million and 4 per cent in volume to 236 million litres (26 million 9-litre case equivalents). The average value of exports increased 1 per cent to $1.58 per litre.
The strongest value growth for Australian wine exports came at $20 to $100 per litre. This segment is showing positive signs on a month-by-month basis with value trending upwards throughout the financial year period and June 2019 volume reaching levels higher than those achieved in 2017.
The overall volume decline reflects that some of the larger brands have paused their strategies of getting additional product into market pre-Brexit to mitigate any potential disruption to exports.
Laura Jewell MW, Wine Australia’s Regional General Manager EMEA, said ‘there continues to be a lack of certainty around the timing, outcomes, implications and impacts on trade from Brexit. Larger brands continue to hold stock above their usual levels, although this was lower in the 12 months to June than in the 12 months to March. The first quarter stockpiled levels saw an increase in exports – particularly in unpackaged wine – as companies and brand owners sought to ensure that stock will be available across Europe.’
Australian wine number one in the UK off trade
The IWSR reported that, in 2018, the market split between on- and off-trade Australian wine sales was 13 and 87 per cent respectively.
Data provided by IRI shows that Australia was ranked number one in still wine off-trade (retail) sales in the UK in the 12 months ended March 2019 with a market share of 24 per cent in volume and 23 per cent in value.
Off-trade sales in the UK for Australian wine grew 1 per cent in the year ended March 2019 to £1.2 billion. The key areas of growth were wine priced between £5.01–7.00 per bottle (up 1 per cent), £8.01–9.00 (up 10 per cent, and £10.01–20.00 (up 4 per cent) (IRI Worldwide). Australia has the highest share (30 per cent) in the £5.01–6.00 per bottle segment. Further to this, Nielsen have just reported that Australia has three of the top five brands in the retail sector.
 Global Trade Atlas YTD May 2019