Australian wine prices hold firm despite global softening

Global prices have come under pressure from the rebound in world production from the previous year, as well as a reduction in imports from China and slowing growth rates in the US, but the report said Australian prices were above those of other major exporters.

With signs the Australian wine grape harvest will come in lower than expected because of the impacts of the prolonged dry period in many producing regions, the report said present Australian prices levels were also being supported by the sustained interest in Australian wines.

Meanwhile grape volumes for the 2019 harvest look to be coming in lower than initially anticipated in Chile, South Africa and New Zealand although supply remains abundant in Argentina.

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Demand remains firm in Australia with wine exports growing by five per cent in volume and 10 per cent in value during 2018.

Bottled wine exports, which account for 42pc of total volume and 79pc of total value, were up by 3pc in volume and 7pc in value, while bulk wine sales increased by 12pc in volume and 27pc in value.

Exports were up to Greater China by 7pc in volume and 18pc in value - with much of this increase occurring in the last quarter of 2018, as the market recovered from a weaker third quarter ahead of the Chinese New Year.

Meanwhile exports to the United States were down by 7pc in volume and 5pc in value, although this trend also improved towards the end of the year.

But investment into Australia's wine industry is continuing to grow with the Australian Grape and Wine Inc welcoming Wine Australia's announcement of the $10m Cellar Door Grant applications opening on July 1.

The grants were a part of the changes introduced in the Wine Equalisation Tax amendments for the 2018-19 year, which reduced the producer WET rebate from $500k to $350k.

Wine Australia will be administering this grant and the timeframe to submit applications is from July 1 to September 30.

Australian Grape & Wine chief executive officer Tony Battaglene said he encouraged all eligible producers to submit their application within the allocated timeframe.

"We remain concerned that many producers who should be eligible for the top-up will not have the appropriate accounting systems in place to take advantage of the grant. It is important that producers check the eligibility criteria carefully and ensure they take full advantage of the grant," he said.