China drives increase in Australian wine export value while other markets decline

In the 12 months ended December 2024, Australian wine exports increased by 34 per cent in value to $2.55 billion[1], the highest value since June 2021. Total volume also increased, by 7 per cent to 649 million litres. The average value of exports increased by 26 per cent to $3.93 per litre free on board (FOB)[2], the highest average value since late 2020. 

The increase in value was a result of high levels of shipments to mainland China between April and December 2024, after tariffs on Australian bottled wine were removed at the end of March 2024. In those nine months, 83 million litres of wine, worth $902 million, have been exported to mainland China.

Figure 1: Value of shipments to mainland China in 2024

Outside of the unique circumstances relating to exports to mainland China, global alcohol consumption is facing numerous headwinds, and this is impacting the results to other markets. In many established wine markets consumption is declining due to health and wellness concerns and the rising cost of living. This has contributed to a global oversupply of wine and increased competition in already strained supply chains.  Australian wine exports to the rest of the world declined by 13 per cent in value to $1.64 billion and 7 per cent in volume to 565 million litres during the 12 months to December 2024. 

The decline in value was largely driven by Hong Kong, after a large increase in shipments to this destination at the end of 2023 that was likely due to some exporters anticipating the removal of import tariffs in mainland China. A decline in unpackaged wine exports to the United States after a period of heightened exports further contributed to the volume decline. 

Figure 2: Value of Australian wine exports

Wine style and varieties

The increase in exports to mainland China has impacted on red wine’s share of exports as 93 per cent of exports to China are red in colour. 

In the 12 months ended December 2024 the volume share of red and rosé wine increased from 54 per cent to 60 per cent. Meanwhile, white wine lost share – moving from 46 to 40 per cent of volume as Australia’s top white wine destinations declined in exports (see Figure 3).

Figure 3: Volume share of exports by colour

Destinations

In the year ended December 2024, Australian wine exporters shipped wine to 119 destinations, up from 112 in the previous year. As a result of the growth in exports to mainland China, the Northeast Asian region grew by 181 per cent in value to $1.18 billion (a 46 per cent value share). Southeast Asia declined by 23 per cent in value to $210 million, with almost all of these smaller, emerging markets declining year-on-year. The decline in exports to Southeast Asia does not necessarily reflect a material change in demand, rather some exporters choosing to prioritise a re-stocking of their supply chains throughout mainland China, given the rebound of wine exports to the market has exceeded general expectations.  

Europe and North America performed similarly during the year (see Figure 4), declining by 4 and 5 per cent respectively and each region representing around 20 per cent of export value. The decline in exports to North America was driven by exports to the United States, with growth to Canada offsetting some of the decline. There were mixed results by destination in Europe. 

Figure 4: Value of exports by destination region

The top five destinations by value were:

• Mainland China (up $898 million to $907 million)
• UK (down $9 million to $352 million)
• US (down $38 million to $325 million)
• Hong Kong (down $125 million to $171 million), and
• Canada (up $13 million to $156 million).

The top five destinations by volume were:

• UK (down 8 million litres to 212 million litres)
• US (down 28 million litres to 106 million litres)
• Mainland China (up 83 million litres to 84 million litres)
• Canada (down 7 million litres to 66 million litres), and
• New Zealand (down 2 million litres to 27 million litres).

Mainland China

The value of Australian wine exports to mainland China increased from $10 million in 2023 to $907 million in 2024 and from 1 million litres to 84 million litres in volume, after import tariffs on Australian bottled wine were removed on 29 March 2024.

While there has been month-to-month volatility in the value of shipments to mainland China in the nine months since tariffs were removed, the performance is nonetheless very positive. However, Chinese wine consumption is much lower than it was before the import tariffs were imposed, so it will take more time before it becomes clear what the “new normal” level of exports to mainland China will be, after this initial re-stocking period. 

In the period between April and December 2024, export value has climbed to roughly the levels seen in early 2018 (see Figure 5). However, there was a much higher volume, and lower average value, of exports during 2018 than in 2024. The average value of exports to mainland China in the 12 months ended December 2024 was $10.79 per litre FOB, about $5 per litre higher than 2018, illustrating the premiumisation (declining volume and increasing value) of wine exports to the market that started in 2019.

Figure 5: Australian wine exports to mainland China over time

The high average value to mainland China reflects that 83 per cent of the growth in value came from exports valued at $10 per litre and above. This indicates that mainland China will not solve the current over-supply of red wine grapes that is most severe in the Riverland. The Riverland predominantly supplies grapes for wines that are exported at prices below $5 per litre. While there were unpackaged red wine exports with an average value below $2.50 per litre to mainland China in 2024 (42 million litres or the equivalent of 60,000 tonnes), the growth has slowed in the last two quarters of the year after an initial surge, suggesting that this may not represent on-going demand.

United Kingdom

In the 12 months ended December 2024, Australian wine exports to the United Kingdom (UK) declined by 3 per cent in value to $352 million and by 4 per cent in volume to 212 million litres. Average value increased slightly, by 1 per cent to $1.66 per litre. The relatively lower average value shipped to the UK compared to other markets is due to 89 per cent of volume being shipped to the country unpackaged and then packaged in-market.

Australian wine exports to the UK have stabilised somewhat after a turbulent period post Brexit and the COVID-19 pandemic. However, this does not mean the market is without its headwinds going into 2025. While inflation has eased, consumers are still being cautious about their spending on alcohol, with nearly all categories declining across all channels[3]. On 1 February 2025, an increase to the alcohol duty is scheduled, along with the ending of the wine easement – meaning that over 30 different amounts of duty will be payable on wine, depending on the percentage of alcohol in the product. Producers selling their wine in the UK have started adjusting the alcohol level in their products during the last 12 months. According to off-premise data from Circana, there has been an increase in the volume share of wine sold below 11.5 per cent alcohol, while the market above 11.5 per cent has lost share. Similarly, there has been in a shift in alcohol levels in Australian wine being exported to the UK with the volume share of products below 11.5 per cent alcohol increasing from a 28 per cent share to a 42 per cent share.

United States

Australian wine exports to the United States (US) declined by 10 per cent in value to $325 million and 21 per cent in volume to 106 million litres in the 12 months ended December 2024. Average value increased by 13 per cent to $3.06 per litre FOB.

The decline in exports was almost entirely driven by unpackaged wine after a surge in this category of exports in early 2023. Unpackaged exports declined by 36 per cent in value to $55 million and 34 per cent in volume to 47 million litres (a 45 per cent volume share). Meanwhile, packaged exports declined by 3 per cent in value to $270 million and 5 per cent in volume to 59 million litres (a 55 per cent volume share). 

The decline in Australian wine exports to the US comes at a time when the US wine market is struggling to move past a surplus inventory that resulted from the COVID-19 pandemic and its aftermath. According to the US Census Bureau inventory levels remain elevated as consumption levels have not recovered. Total off-premise wine sales declined by 4 per cent in volume in the 12 months to December 2024 [4], and while on-premise sales are slightly more robust, price increases of 20 per cent on average[5] and shrinking wine lists and number of outlets means this channel has its own challenges. Additionally, an increase in wine product approvals from the Alcohol and Tobacco Tax & Trade Bureau (TTB) highlights the increased competition in a market where more producers are seeking placement within gradually consolidating distributor and retail tiers. The number of US wineries has increased by around 2 per cent per year in the past five years, while the number of distributors has decreased at about the same rate[6].

Canada

Australian wine exports to Canada increased by 9 per cent in value to $156 million but declined by 10 per cent in volume to 66 million litres, as a result average value increased by 21 per cent to $2.37 per litre FOB.

The different results by value and volume are due to diverging trends by packaging type. Driving the increase in value was a recovery in the level of packaged exports after a decline at the end of 2023 and early 2024. Packaged exports increased by 19 per cent in value to $119 million in the 12 months ended December 2024. Meanwhile, the decline in volume was driven by declining levels of unpackaged wine exports after a surge in this segment of exports in the previous 12 months. Unpackaged wine exports to Canada declined by 17 per cent in volume to 47 million litres in 2024.

Exports below $5 per litre declined by 14 per cent in volume, with the decline below $2.50 per litre (mostly unpackaged wine) outweighing growth between $2.50 to $4.99 per litre. Shipments with an average value of $5 per litre and above increased by 15 per cent in volume – driven mostly by the $7.50 to $9.99 per litre price segment. There were increased levels of both red and white wine above $5 per litre in the last 12 months.

For more information, please refer to the Export Report.