Areas of Interest

The Australian Wine Industry

Overview

The Australian wine industry is one of Australia's most exciting agribusiness industries. Dramatic growth in the wine industry over the past five years is unprecedented in the recent history of the primary industry sector. Current projections indicate strong growth will continue for some years to come.

Exports Continue at Record Levels

Australian Wine has been recognised by Australians for some time as offering amongst the best value for money in the world today. Indeed, Australian wine is now recognised in its international markets as being exceptionally great value and over the past five to ten years the popularity and therefore sales of Australian wine have exploded. (Brian McGuigan, Annual Report 2000). Australian has made tremendous progress with its share of the world wine market, increasing penetration to between 3 - 4 % of total world sales.

This unparalleled growth has been stimulated by the acceptance of Australian wine in major export markets, particularly in the United Kingdom and more recently in the United States of America.

Australian wine exports continue to establish new records with growth at unprecedented levels. In the twelve months ending February 2001, sales exceeded A$1.53 billion, up 24% on the preceding year, and 319 million litres, up 20% on the preceding year. Collectively, sales by both value and volume continue to improve.

In addition to growing demand in export markets, strong evidence suggests the domestic market continues to expand resulting in higher quality wines.

"The Domestic market for premium wines is currently very strong. While total consumption on the Australian market grew around 2% in the last year (1998), consumption of white bottled table wine rose 8% and red by 12% over the same period. Australians are drinking more premium wines." IER Strategies, May 1999

Industry with Vision

The Australian wine industry may be a small player, but it has a big vision - a vision to achieve 6.6% market share of the global wine market by 2025. Recent reports indicate the industry is well on the way to realizing this goal. However, strong growth in market share will need to be balanced with very significant growth in production capacity.

Because of the relative size of the market, a movement upward in the rate of consumption would require a massive increase in world wine production.

Natural Advantages

New vineyards, planted since the early 1990's differ, in general, from earlier plantings. There has been major advancements in trellising and irrigation techniques and also in the size and economics of vineyards. Australia is world leader in viticultural research and many of the advantages the country enjoys on the international market can be directly attributed to the willingness of the industry to innovate and adapt to new techniques and technologies.

Compared to many of the traditional European wine nations, Australia has significant natural advantages in terms of wine production, including large tracts of suitable land and a variety of viticultural climates.

The Australian wine industry shares the natural advantage of a continent perhaps better suited to the production of wine grapes than any other crop because of the relatively low fertility, structured and drained solid and it's clean dry air.