Opportunities for Australian wine in Malaysia and Singapore

Malaysia

Malaysia is Australia’s eleventh largest trading partner and our eighth largest wine export market by value.

The Malaysian wine market is made up entirely of imports.

Australia is the market leader of imported wine into Malaysia with more than double the value of imports of our nearest rival importer, France, and nearly four times the volume (see the latest Import Monitor).

Exports of Australian wine to Malaysia grew by 24 per cent in value in the year ended September 2016, while volume grew by 18 per cent (see Malaysia Export Market Snapshot). This is not a ‘flash in the pan’ moment for Australian wine, our five-year average shows double-digit growth rates.

Malaysians love our red wine, with 72 per cent of exports being red and Shiraz/Shiraz blends dominating.

There are also promising trends for fine Australian wine in Malaysia, with the average value of our wine exports at A$11.85 per litre, compared with A$2.95 in all markets.

Australian wine exports over A$10 per litre FOB make up 70.9 per cent of exports by value, compared with 23.8 per cent of Australia’s exports world-wide.

Wine consumption in Malaysia is increasing as consumers become more affluent and look to adopt western trends. Wine is seen as being sophisticated and having health benefits – as well as being cheaper than spirits.

Australia and Malaysia have close bilateral relations and signed the Malaysia-Australia Free Trade Agreement (MAFTA) on 22 May 2012. Our bilateral relationship is diverse, with active and cooperative relations across a broad range of sectors. However, wine does not feature in the free trade agreement due to sensitivities surrounding alcohol in Malaysia. For more information about Malaysia’s specific export requirements, duties and taxes, download Wine Australia’s Export Market Guide, which is available for free for wine grape and export levy payers, and also for licenced wine exporters.

Singapore

The port of Singapore is the second busiest port in the world and considered a hub of entrepôt (or transhipment) trade to other Asian markets.

Singapore is another wine market made up entirely of imports. Australia is its second largest importer of wine after France (see the latest Import Monitor) with nearly 10 per cent of the market by value, and Singapore is Australian wine’s seventh largest market.

While total wine imports into Singapore declined by eight per cent in value and five per cent in volume over the 12 months to July, the Singapore Export Market Snapshot shows that the value of exports to Singapore grew by nine per cent to A$62 million in the 12 months to September 2016. Our five-year average growth rate is also at a steady seven per cent.

Trends for Australian fine wine exports are encouraging; 94 per cent of our exports are bottled wine and 42 per cent are in the A$10 per litre FOB and above price segment. And, in the last 12 months, the average value of our exports to Singapore was A$12.37.

Average per capita consumption for Singapore is 2.1 litres per annum – just ten per cent of Australian per capita consumption and 47th in the world in 2015 (Wine Intelligence). However, growth in the value of wine consumption is expected to continue until at least 2019.

Most alcoholic beverages in Singapore are sold through the more traditional on-trade channels such as bars, hotels and restaurants. In recent years, wine has become the exception to this and off-trade sales of wine now account for 70 per cent by volume (Euromonitor)

Australia has a good trading relationship with Singapore and the Singapore-Australia Free Trade Agreement (SAFTA) entered into force on 28 July 2003. However, alcohol is one of the few imports to which a duty is attached in Singapore, making it an expensive commodity.

Download Wine Australia’s Export Market Guide for more information about Singapore’s export requirements, duties and taxes.