Market opportunities in the UK and Ireland

As Wine Australia prepares to host the Australia Day Tastings in London, Edinburgh and Dublin, we take a look at the United Kingdom (UK) and Irish wine markets.

Ireland

The Irish wine market, despite some challenges, presents good opportunities for Australian wine businesses. Euromonitor figures show that overall alcohol sales declined by 10 per cent between 2010 and 2015 in line with increases in excise and the after effects of the GFC; however, wine sales didn’t decline by as much as the broader market over this time period and has been the only alcoholic beverage to return to growth in 2015 (Euromonitor, 2016).

In the 12 months to September 2016, imports of wine into Ireland grew by 5 per cent to $386 million, while Australia’s wine imports grew by 4 per cent in value to $45 million. Australia is the third largest direct source of wine into Ireland by value, after Chile ($77 million) and France ($70 million). However, while this article examines customs data, it’s important to remember the importing country isn’t necessarily the producer country. A sizeable proportion of UK imports ($26 million) to Ireland originate from Australia, meaning that Australia’s total share of imported wine consumed in Ireland is higher than these figures suggest.

This growth in imports is reflected in Wine Australia’s export figures, with 23 per cent growth in exports to Ireland in the 12 months to September 2016. While Shiraz is the most popular export, Chardonnay and Chardonnay blends are second with 22 per cent of Australia’s wine exports, compared with 15 per cent across all export markets. Riverina, King Valley and Clare Valley wines (including blends) are the most popular individual region labels.

United Kingdom

The UK market is Australia’s number one export destination by volume – accounting for nearly one third of all our exported wine. More than 80 per cent of wine shipped to the UK is in bulk containers, reflecting the ability of winemakers to bottle their wine in the destination market. A depreciating and volatile pound – a direct result of ‘Brexit’ – has made 2016 a difficult year for wine exporters from all countries. As such, Australian wine exports declined by 4 per cent to 239 million litres in the year to September 2016.

While Australia is the third largest importer of wine to the UK, according to IRI figures Australian wine is the most popular in the UK off-premise trade by a long way, accounting for 23 per cent of the market by value with Italy second at 13 per cent. Although sales of Australian wine declined in the year ended December 2016, the decline was less than that of the market overall. The top-selling Australian variety was Chardonnay, where Australia has a 59 per cent market share, followed by Shiraz, where Australia has a 72 per cent market share. By contrast, in the total UK off-premise market, Sauvignon Blanc, blends and Pinot Grigio were the top three wine styles. (IRI December 2016).