Aussie wine exports plunge as drinkers cut back worldwide

Australian wine exports have dropped to their lowest level in 22 years amid a global decline in alcohol consumption, a new report has found.The amount of local wine sent overseas has fallen below 600 million litres for the first time since 2004, with exports to Australia's three largest markets — China, the United States and the United Kingdom — all dropping, according to the report from peak body Wine Australia.Worldwide wine consumption fell to its lowest level since 1961, the report said.Paul Turale, general manager of market development at Wine Australia, said everybody in the supply chain across Australia was "feeling the pinch".Australia wine exports compared to global wine consumption. (Supplied: Wine Australia)"Around 60 per cent of the wine that we produce here in Australia is exported so as the market becomes tougher and those opportunities become more limited it's a squeeze right throughout," he said.Australian winemakers took an overall $183 million hit as exports dropped seven per cent last financial year to $2.3 billion.In Perth's Swan Valley wine region, Faber Vineyard owner and winemaker John Griffiths said his business was suffering.Faber Vineyard & Winery Owner John Griffiths pictured in the vineyard in Baskerville in the Swan Valley, in Perth's outer north-east. (ABC News: Lucy Murray)"It's ridiculously tough," he said."If there's less wine being sold, we're trying to sell into a market that's shrinking, so that's never going to be good."Someone is going to start discounting their wine. If they're not selling it they'll start discounting it and if they're discounting it then it puts pressure on us."Benefit from US tariffsIn a silver-lining, Australia managed to pick up buyers in the Canadian market due their battle over tariffs with the United States, according to the report. That issue has reduced the availability of US wine in Canada and allowed Australian producers to pour in.There was a 20 per cent increase in exports to Canada, in the last financial year, to $188 million.Mr Griffiths said all winemakers were trying to take advantage of the opportunity in Canada.Faber Vineyard & Winery in Baskerville in the Swan Valley, in Perth's outer north-east. (ABC News: Lucy Murray)"Australia's been selling wine in Canada for a longtime quite successfully," he said."But the opportunity is exploding. If you take the Californian wines out of the Canadian market there's a huge opportunity."A global trendAustralian wine producers are not alone in battling falling exports, with the decline broadly matching a drop internationally in wine sales.Global wine consumption currently sits at about 20 billion litres, down from almost 30 billion litres in 2018."The decline mirrors a broader global trend of declining wine consumption over the past decade," the Wine Australia report noted."Worldwide wine consumption has fallen to its lowest level since 1961, as consumers increasingly moderate alcohol intake, face cost-of-living pressures and shift towards alternative beverages."To accommodate changing tastes, Faber Vineyard's John Griffiths said they were adapting to lighter-bodied wines."We're making more grenache, pinot wines, which are lighter-bodied than the shiraz's we've made for a long time," he said.'But we're not stopping making shiraz."Winemakers are developing techniques to produce zero-alcohol and low alcohol wines. (ABC RURAL: David Claughton)Wine Australia's Mr Turale said there were also big opportunities in low alcohol wines."In particular what we've termed the mid-strength, or that 7-9 per cent alcohol," he said.'It plays to the benefits around the moderation, in particular, that we think is an important and growing sector."Margaret River was one of a small number of Australian wine-growing regions to buck the national trend, with exports up five per cent over the past 12 months.Wineries in the Margaret River wine growing region have bucked the national trend. (Supplied: Domaine Naturaliste)Penny Dickeson, chief executive officer of Margaret River Wines, said sustainable wines were playing an important role."Wine customers are happy to pay more for wines when they understand the effort and consideration that has gone into making such a wonderful product," she said.China still dominates exportsChina remains Australia's biggest export market by value at $756 million, despite a 15 per cent drop in wine sent there.China remains Australia's biggest export market based on value. (ABC News: Lucy Murray)In terms of volume, the United Kingdom is still the biggest market for Australian wine, followed by the US. But Wine Australia said exports to the two countries was at its lowest level in 25 years.Australia's 2026 vintage came in at 1.3 million tonnes of grapes harvested, which Mr Turale said was well below the 10-year average."The market is already adapting and moving to where the market is," he said.