Australian wine sales rose by 11 per cent despite the lowest wine production in 15 years, according to the Wine Production, Sales and Inventory Report 2023 by Wine Australia.
In the fiscal year 2022-23, 964 million litres of wine were produced, while sales remained steady at 1.07 billion litres, with a small increase in domestic sales offsetting the decline in exports.
Peter Bailey, manager of marketing insights at Wine Australia, said this is the first time in five years that the total sales volume remained steady year-on-year.
“Sales of Australian wine have been decreasing in our domestic market and export markets over the past five years due to declining wine consumption combined with increased cost-of-living pressures and the effects of the significant duties on Australian wine to China,” Bailey explained.
The national wine inventory decreased by four per cent to an estimated 2.2 billion litres in June last year due to sales exceeding production. However, inventory levels remain high, particularly for red wine.
“This is a move in the right direction for the sector as it responds to the challenge of rebalancing supply and demand,” Bailey added. “However, it is only a small reduction after the lowest vintage in 20 years, and stocks of red wine remain at historically high levels.”
The report noted that the stock-to-sales ratio for red wine was still 45 per cent above the 10-year average despite decreasing by seven per cent due to the decrease in inventory.
While supply and demand for white varieties appeared to be more balanced, Bailey pointed out that sales of white wine in 2022-23 were considerably lower than the 10-year average production.
“Rebalancing supply and demand remains a real challenge for the sector,” Bailey said. “Our situation reflects the global environment, as world wine production has exceeded yearly consumption for at least the past ten years. This prolonged oversupply, equivalent to more than twice Australia’s production yearly, has put increasing pressure on all wine-producing countries.”
This story first appeared on our sister publication Inside FMCG
