Rabobank ponders the effects of Brexit

Brexit: What effect will it have on Australian food and agricultural exports?

The Rabobank Agribusiness Monthly for June 2016 looks at what Brexit might mean for Australian food and agricultural products, particularly those with a larger share of the UK market, like wine. The report also offers a brief prediction for the 2016 crush figure, as well as some insights into the US market.

Australian exports to United States showing signs of recovery

There continue to be optimistic signs of growth in the United States. In the year ended March 2016, wine exports to the US increased in value by 4 per cent to A$442 million. Volume decreased by 3 per cent to 161 million litres, leading the average value of wine increasing by 7 per cent to A$2.75 per litre. The average value of bottled wine continued its recent upward trend, growing by 12 per cent to A$3.75 per litre, the highest since 2010.

The trend towards Australia’s premium wines in the US continued with the A$10 and above price point, increasing by 20 per cent to A$32 million. This reflects the improved perceptions of Australian wine among the US trade with a growing number of importers more open to taking on premium Australian brands. As discussed in our Export Report, Henry Hudson is one importer experiencing renewed interest in the Australian category in the US. ‘We are seeing an increase in volumes as we roll out with distributors across the country. There is a tentative approach to taking on Australian wines with many of the distributors. A few are starting with a limited number of SKUs and testing the waters. The wines have to meet a certain quality level to get their attention, and most discussions centre on re-vitalizing the Australian category. Some good media from outlets such as Vinous and W&S is helping.’