Tough times for Australian wine as exports to UK and US tumble

Australian wine exporters are facing incredibly tough conditions, with an economic slowdown and increased competition from other beverages hurting sales to its biggest markets in the UK and US. 

Exports to the UK posted a 20% decline in value in the year to end-March, data from government marketing and research body Wine Australia show. Shipments to the US fell 8% from a year earlier. Overall exports were down 7%. 

The industry has sought to diversify its export destinations after China’s trade curbs decimated what was once its most lucrative market. Australia ramped up sales to the UK in 2020 as demand soared at the start of the Covid pandemic and was boosted in the lead-up to Brexit. Now sales to the UK are dropping. 

In traditional markets for Australian wine, the decline in demand is being felt the most in lower price segments while premium wine is still finding growth, Wine Australia said. Consumers purchase wine less frequently but are choosing to spend more on each wine product they buy.

This has a disproportional impact on Australia, as a large share of exports to key markets such as the UK and US are currently in lower-priced products.

A silver lining is that Australia’s diversification into emerging markets is starting to bear fruit. Southeast Asia grew strongly at both the commercial and premium ends of the price spectrum, as well as in key markets such as Thailand, Malaysia, Indonesia, Vietnam and the Philippines.