Dip in Aussie imports as Brexit stockpiling comes to an end

By Jo Gilbert

Published: 22 July, 2019

Sales of Australian wine in the UK have declined in the past year – partly due to brand-hesitancy surrounding Brexit.

The blip, both in volume and value, saw value sales decrease 3% to AUD$373 million and volume decline of 4% to 236 million litres (the equivalent of 26 million 9-litre cases) in the year to March 2019.

Wine Australia CEO Andreas Clark said the volume decline reflected a slowdown of brand stockpiling ahead of the UK finally leaving the EU.

Some of the larger brands were focused on getting “additional product into market pre-Brexit to mitigate any disruption to exports”, he said.

But with the Brexit deadline being pushed back and back, these strategies have now come to an end.

“It’s important to retain perspective on the UK market. Research by IRI shows Australia was ranked number 1 in still wine off-trade [retail] sales in the 12 months ended March 2019, with a market share of 24% in volume and 23% in value,” he added.

The figures come at a time when supplies of Australian wine are tightening.

According to last week’s preliminary crush report, the national wine grape crush for 2019 decreased 1% to an estimated 1.73 million tonnes.

This is likely to put further pressure on the country, which is seeing increased demand from China – although volumes were down slightly over the past year.

Wine exports to China (including Hong Kong and Macau) reached a financial year record of +7% in value to AUD$1.2 billion, while volume decreased 16% to 154 million litres.

The US also made a return to growth.

While total sales were down, off-trade sales in the UK for Australian wine grew 1% in the year ended March 2019 to £1.2 billion.

The key areas of growth were wine priced between £8.01–9 (+10%), and £10.01–20 (+4%) (IRI Worldwide).

Australia has the highest share (30%) in the £5.01–6.00 per bottle segment, which was up 1%.

In terms of varietals, some of the big winners were the Italian grapes, Montepulciano (+73%) and Fiano (+39%), while Tempranillo saw a leap of +101%.

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