The latest ABARES for wine and winegrapes was released this week. Their sobering projections reflect the long-term decline in global wine consumption and a wide-spread oversupply crisis. ABARES predict the value of Australian wine exports will continue to decline in 2023−24 to $1.9 billion, a decrease in value of 5%. Grape prices will also fall as oversupply of wine persists, particularly for red varietals.
We often hear the winegrape market being referred to as two separate markets. The performance of these two markets tends to be measured by drawing a distinction between warm and cool regions as a proxy for premium and commercial. However when we contemplate where our production sits in this two speed market, it is important to note that both regions have the ability to produce premium and commercial wine styles. In premium winegrape markets, prices for both red and white varietals were strong in 2022-23. Production in cool climates was comparatively far less constrained by the seasonal conditions, buffering the overall grape price decreases reported in 2022-23. However next year, the average wine grape price is forecast to fall by 7%, again driven by lower red wine grape prices (down by 10%) and an increase in overall production. White wine grape prices are also forecast to fall, albeit by much less (down by 2%), reflecting a relatively stronger demand for white wine compared to reds. Click here to read the full report.
Does this signify a need for more Australian grape growers to target the premium market and/or graft reds over to white grapes? It’s always worth considering a change carefully, keeping in mind that although the market for white varietals and premium wines are reportedly relatively balanced at present, they are not destined for overall growth. Wine Australia has an excellent suite of market bulletin reports to assist growers and producers to read the market. But don’t expect too much good news there either. You can search the latest export figures by any combination of variety, region or price point on their market explorer dashboard, providing for endless hours of analysis and insight.