Wine Industry Report

Headlines:
• Volume Growth 10%
• Record Volume Shipped
• Bulk shipments dominate growth
• The US drives volume growth
• Canada drives value growth

Export volumes for the year ended February 2006 grew 10% to a record shipment of 711 million litres. On the back of a 7% price decline, to A$3.93 (FOB) dollars per litre, the value of the shipments grew a more modest 2% to A$2.8 billion.

The United States was the major driver of volume growth. An increment of 20 million litres in the volume shipped to the US resulted in a total US shipment of 207 million litres. The US increment accounted for around a third of the overall increment in Australian wine shipments for the year. Canada followed the US as a contributor to volume growth with an additional 11 million litres, to reach a total of 51 million litres. Due to higher average dollar-per-litre values of the Canadian shipments, Canada was by far the biggest contributor to value growth. An additional A$30 million was shipped to Canada meaning the total value shipped to this destination reached A$263 million. The Canadian increase in value accounted for almost two-thirds of the total increase in the value of Australian wine shipments.

Bulk wine shipments dominated growth this year. While still only representing 23% of the total mix, bulk wine shipments grew 40% to reach 165 million litres this year compared to 118 million litres in the previous year. By contrast, bottled shipments grew 3% to reach 531 million litres, up from 516 million litres.

The biggest contributor to the increase in bulk shipments was the US with bulk volumes almost trebling to reach 28 million litres. The US was followed by Germany, up by a half to 24 million litres, and the UK up 13% to reach 62 million litres. Bulk shipments to Canada and Denmark both more than doubled to reach 12 million litres and 9 million litres respectively. Off a low base, bulk shipments to China grew six-fold to reach 2.1 million litres. While growth in bulk shipments dominated the overall increases to the previously mentioned destinations, the increased shipments to China also featured bottled shipments which at 62%, grew strongly to reach 380 000 litres.
Lawrie Stanford, Manager-

Source: Australian Wine and Brandy Corporation