Wine providing insights on Australian : Production, sales and inventory 2017–18 February 2019

Summary

The Australian Wine: Production Sales and Inventory Report 2017-18 presents the results of the annual Wine Production, Sales and Inventory Survey, conducted by Wine Australia.

This report aims to provide an overview of the supply and demand situation for Australian wine using data from the 2017–18 financial year.

Key takeaways • Australian wine production decreased in 2018 in line with the reduced winegrape crush but was above the long-term average. • Sales of Australian wine increased to a record volume, driven mainly by exports. • Sales exceeded production by the largest margin since 2010–11, leading to a reduction in inventory and stock-to-sales ratio. • Demand for Australian wine remains strong while supply is tight. • Internationally, the supply constraints that resulted from the record low global 2017 are easing, and the market is likely to become increasingly competitive in the medium term.

Overview of statistics • The 2018 Australian was 1.79 million tonnes – down by 10 per cent on the record 2017 crush and in line with the long-term average. • Wine production was 1.29 billion litres – down 89 million litres (7 per cent) on the previous year −− reds down 12 per cent to 669 million litres −− whites up 1 per cent to 616 million litres. • Domestic sales were down by less than 1 per cent to 496 million litres −− reds (including rosé) up 3 per cent to 208 million litres −− whites down 4 per cent to 215 million litres. • Exports were up by 10 per cent in volume to a record 852 million litres – an increase of 75 million litres compared with 2016–17 −− reds and rosé up 14 per cent to a record 529 million litres −− whites up 4 per cent to a financial year record of 307 million litres. • Inventory is estimated to have decreased by 94 million litres (5 per cent) −− inventory down by 9 per cent −− inventory down by 1 per cent. • Sales exceeded production in 2018 by an estimated 63 million litres (5 per cent of production). • Stock-to-sales ratios decreased to below or close to the long-term averages.

Production, sales and inventory report 2017-18 Wine Australia 1 AustralianOverview Wine: Production, sales and inventory 2017–18

Wine production Vintage 2018 1.79m tonnes 1.29b litres grapes crushed wine produced -10% -7%

Wine sales 2017–18 Total sales $6.25 billion 11%

Export 63% volume Domestic 37% volume Volume Volume 852m litres 10% 496m litres -1% Value Value $2.8b 20% $3.5b 6%

Red and rosé 62% Red and rosé 42% White 36% White 43% Sparkling 2% Sparkling 11% Fortifi ed 0% Fortifi ed 4%

33 million glasses of Australian wine enjoyed worldwide everyday

Wine inventory 30 June 2018 Million litres Production Sales Inventory 2000

1500 1.89b litres 1000

500 -5% 06 07 08 09 10 13 14 15 16 17 18 Year ending 30 June

© Wine Australia 2019 • For more information please visit: www.wineaustralia.com

Production, sales and inventory report 2017-18 Wine Australia 2 Survey results summary

Table 1: Grape crush by colour (thousand tonnes)

2017 2018 Change

Red grapes 1096 932 -15%

White grapes 896 862 -4%

Total grape crush 19921 1794 -10%

Table 2: Wine production by colour (million litres)

2017 2018 Change

Wine from red grapes 764 669 -12%

Wine from white grapes 609 616 1%

Total wine production 13742 1285 -7%

Table 3: Extraction rates (litres of wine per tonne of grapes)

2017 2018 Change 10-year Difference average Red 697 717 3% 712 1%

White 680 715 5% 686 4%

Total 690 716 4% 699 2%

Table 4: Domestic wine sales by wine style (million litres)

2016–17 2017–18 Change

Red and rosé 202 208 3%

White 224 215 -4%

Sparkling (inc carbonated) 54 55 2%

Fortified 20 19 -5%

Total 500 496 -1%

Table 5: Domestic wine sales value

2016–17 2017–18 Change

Total value ($ million) 3302 3493 6%

Average value ($/litre) 6.60 7.05 7%

1. Grape crush figures for 2017 have been updated with the latest Department of Agriculture and Water Resources levies unit figure.

2. Wine production estimates for 2017 have been revised slightly since last year’s report was published, based on the updated crush figure.

Production, sales and inventory report 2017-18 Wine Australia 3 Table 6: Export wine sales by wine style (million litres)

2016–17 2017–18 Change

Red and rosé 465 529 14%

White 296 307 4%

Sparkling (inc carbonated) 15 14 -7%

Fortified 1 1 20%

Total 777 852 10%

Table 7: Export wine sales value (A$ million FOB)

2016–17 2017–18 Change

Export sales 2307 2757 20%

Table 8: Total sales volume (million litres)

2016–17 2017–18 Change

Red and rosé 667 737 10%

White 520 522 0%

Sparkling (inc carbonated) 69 69 0%

Fortified 21 20 -6%

Total sales 1277 1348 6%

Table 9: Total sales value (A$ million)

2016–17 2017–18 Change

Total sales 5609 6250 11%

Table 10: Wine inventory by colour (million litres)

30 June 30 June Change 2017 2018 Red and rosé 1085 990 -9%

White 739 731 -1%

Total still wine 1824 1721 -6%

Sparkling 76 73 -4%

Fortified and other products 70 82 17%

Total inventory 1970 1876 -5%

Table 11: Stock to sales ratios (excluding sparkling and fortified)

2016–17 2017–18 10-year average Red 1.63 1.34 1.63

White 1.42 1.40 1.31

Total 1.54 1.39 1.50

Production, sales and inventory report 2017-18 Wine Australia 4 Wine grape crush

The 2018 Australian wine grape crush is estimated to be was the only red variety in the top 10 to record 1.79 million tonnes, slightly (1.8 per cent) above the long- an increase, up 2 per cent on 2017. term average of 1.76 million tonnes and a return to normal The decline in tonnes was greatest in percentage terms cropping levels after an exceptionally large crop in 2017 from the cool/temperate regions, which were only down (see Figure 1). by 20 per cent overall, while the warm inland regions Lower yields were widely reported across most regions as (Riverina, Murray Darling–Swan Hill and Riverland) were a result of a dry winter, lower cropping after a big crop in down by 5 per cent. This led to an increase in the warm 2017, and some seasonal events such as hailstorms and inland regions’ share of the crush from 69 per cent in 2017 January heatwaves. to 72 per cent in 2018.

The crush was 198,000 tonnes lower than the 2017 harvest, Most of the largest winegrowing regions recorded a with most of the reduction coming from red varieties decrease in tonnes crushed, with regions in the Limestone (Figure 1). The red crush was down 15 per cent to 932,000 Coast (Padthaway and Wrattonbully) as well as Currency tonnes, while the white crush was down 4 per cent to Creek being the hardest hit in percentage terms. Of the top 862,000 tonnes. This saw reds return to a more typical 20 regions, only Tasmania, the Yarra Valley and Gundagai 52 per cent share of the total crush compared to showed an increase in tonnes, while the Adelaide Hills and 55 per cent in the 2017 vintage. Margaret River had a very similar crop to 20173.

Tonnes Yield Red White Yield 10 year average (1.76 million tonnnes) (million) (t/ha) 2.0 16.0

1.8 14.0

1.6 12.0 1.4

10.0 1.2

1.0 8.0

0.8 6.0

0.6 4.0 0.4

2.0 0.2

0 0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Figure 1: Wine grape crush by colour – historical Source: Australian Bureau of Statistics, Levies Revenue Service and Wine Australia 1400

1200

1000

3. National800 Vintage Report 2018 Red

Total 600 $ per tonne

Production, sales and inventory report 2017-18 Wine AustraliaWhite 5 400

200

0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2500 Production Sales Inventory

2250

2000

1750

1500

1250

Volume in million litres Volume 1000

750

500

2010–112011–122012–132013–142014–152015–162016–172017–18 2005–062006–072007–082008–092009–10 published, basedonthe updatedpublished, crush. 4. Wineproduction estimates for 2017have been revised slightlysince last year’s report was survey results indicate thatthese and othergrape products. Thisyear’s production of wine-basedbeverages The extraction rate excludes the above the10-yearaverage. higher thanin2017and2percent was 716litres pertonne, 4percent and whites. Theoverall extraction rate higher extraction rates for bothreds only down by7percent asaresult of 10 percent, wineproduction was While thegrape crushwas down by (10 millioncases)lessthanin20174 Wine production was 89millionlitres of white wine. million casesof red wineand69 million equates to 143million9-litre cases:74 is estimated to be1.29billionlitres. This Total Australian wineproduction in2018 Wine production Figure 2:Comparisonof red andwhite average winegrape purchasevalue 1999–2018 purchase price for winegrapes increased. it was thefourth consecutive vintage where theaverage calculated in2017. Thisfigure isthehighest since 2008and was $609pertonne, upby8percent ontheprice of $565 The overall average purchaseprice for winegrapes in2018 Production, salesandinventory report 2017-18 (million) Tonnes 0.8 0.6 0.4 2.0 0.2 1.8 1.0 1.6 1.4 1.2

Volume in million litres $ per tonne 0 2500 2000 2250 1000 1500 1400 1000 1200 1250 1750 800 600 500 400 200 750 2005–06 0 2006 1999 2006–07 2000 2007 2007–08

2001 Red

2008–09 Production 2002 2008 2009–10 2003

2009 White 2010–11 . 2004

2011–12 2005 was 27.9 billionlitres. Thisis13per that world wine production in2018 World Vitiviniculture 2018estimates and Wine(OIV)Statistical Report on The International Organisation of Vine this report. wine grapes have beenexcluded from and othergrape products madefrom Wine-based beverages, concentrate ‘other’ products. reduction intheproduction of these (see below) mayberesponsible for a Strong demandfor Australian wine for wine–particularlywhite wine. to anincrease intheextraction rate to ‘other’products would contribute of the2017amount.Less diversion 4 percent of total production, half ‘other’ products accounted for around 2010 2012–13 2006 Sales

2007 Yield 2013–14 2011 2008 2014–15 2009 2012 2015–16 2010 Figure 2). driven bystrengthening relative demandfor red wine(see and white average price hasincreased steadily since 2011, from $421 to $444pertonne. Thedivergence between red the average price of white grapes increased by5percent by 11percent from $692 pertonne to $768 pertonne, while The overall average purchaseprice of red grapes increased 10 yearaverage (1.76 milliontonnnes)

2016–17 Inventory 2011 2013 2017–18 2012

Source: WineAustralia 2014 2013

2014 internationally. put downward pressure onwineprices record low 2017globalharvest and global supplysituationfollowing the production. Thisislikely to easethe Australia’sdouble total 2018wine additional 2.4billionlitres –roughly are estimated to have produced an France andSpain.Between them,they world’s largest wineproducers: Italy, The bigincreases have come from the the past 18years. will bethefourth largest production in cent higherthan2017and(ifrealised) 2015 2015

2016 2016 2017

2018 2017 Wine Australia 2018 White Total Red (t/ha) Yield 0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 6 Fortified Sparkling Fortified 4% 2% 0%

Sparkling 11%

Red 42% White Red 36% 62%

White 43%

Australian wine sales 800 Exports Domestic Domestic Total sales of Australian wine in 700 2017–18 are estimated to be 1.35 billion Exports litres (150 million cases), an increase 600 of 6 per cent compared with 2016–17. The increase in volume was 71 million 500 litres (8 million cases). 400 Almost all of the growth in sales came from red and rosé , which 300 increased by 70 million litres overall Volume (million litres) Volume to 737 million litres (82 million cases). 200 Whites increased by 2 million litres to 522 million litres (see Figure 3). Reds 100 accounted for an estimated 55 per cent of total sales compared with 52 0 per cent of production. Red and rosé White Sparkling Fortified

The total sales figure of 1.35 billion Figure 3: Total sales volume by wine style litres is 63 million litres higher than Other Other the estimated production of 1.29 years, withinpackaging the context of an overall White wine accountedpackaging for 44 per billion litres, indicating that the 2018 1% 1% static alcohol market. Per capita cent of Australian wine sold on the production will not be sufficient to consumption of still wine in Australia domestic market in 2017–18. Sales replace stocks. It should also be noted has declined by around 1 per cent per decreased by 9 million litres (4 per that the volume of wine available for Unpackaged annum for the past 5 years to 26.2 cent) to 215 million litres, while red sale is likely to be 2–5 per cent lower 18% litres per adult per annum in 2017Glass5. and rosé wines were up by 6 million than the reported production figure bottle Glass Recent trends6 indicate that younger litres (3 per cent) to 208 million litres. due to losses in processing, wastage, 44% bottle regular wine drinkers are significantly Reds (including rosé) increased their 81% promotions etc. less likely to drink wine ‘most days/ share of domestic sales volume to 42 The total estimated value of Australian everyday’Unpackaged compared with older regular per cent (see Figure 4) compared with wine sales in 2017–18 was $6.25 billion. drinkers and55% are more likely to drink a 40 per cent in 2016–17. This equates to an average of $4.63 range of different alcoholic beverages per litre, (41.73 per case) in revenue to rather than sticking to a single winemakers. category. These trends are likely to Fortified Sparkling Fortified put further downward pressure on per 2% 0% Growth in value in both the domestic 4% capita wine consumption in future. and export markets led to a combined increase in sales value of $641 million Australian wine is estimated to account Sparkling (11 per cent), building on an 8 per cent for 84 per cent of the domestic market 11% increase last year. with imported wine accounting for 16 per cent. This is low compared Red 42% White Red Domestic wine sales with other major wine markets, 36% 62% where imported wine accounts for a Domestic sales of Australian wine in much larger share. For example, the 2017–18 are estimated to be 496 million White imported share of total consumption in litres or 55 million cases, and to have 43% the United States of America (USA) is decreased by less than half a million 25 per cent, and even in France, one of cases (1 per cent) in the past 12 months. the largest wine-producing countries in The volume of domestic wine sales has the world, the share of imported wine Figure 4: Domestic sales volume share by been generally flat for the past five consumption is 22 per cent7. wine style

5. International Wine and Spirit Record (IWSR) 2018

6. Australia Landscapes 2018 report - Wine Intelligence

7. International Wine and Spirit Record (IWSR) 2018

800 Exports Domestic Production, sales and inventory report 2017-18 Wine Australia 7 Domestic 700 Exports 600

500

400

300 Volume (million litres) Volume 200

100

0 Red and rosé White Sparkling Fortified

Other Other packaging packaging 1% 1%

Unpackaged 18% Glass bottle Glass 44% bottle 81%

Unpackaged 55% Shiraz was the top-selling Australian $3.5 billion. This represents a mix (by production volume) having the wine variety in the off-trade by value8, of wholesale, retail and direct-to- greatest reliance on DTC sales and the accounting for around 18 per cent of consumer sales, and the increase is least reliance on retailers/wholesalers. sales. Sparkling white was the second higher than the reported increase in producing fewer than 1000 largest category with 10 per cent of off-trade retail sales value (up 4 per cases received 68 per cent of their the value and cent in 2017–189), suggesting strong wine sales income from DTC channels. third with 9 per cent. Of the top 20 growth in the other channels and/ Cellar door was the largest DTC wine varieties, the strongest growth or an improvement in margins for category, making up an average of was in rosé (up 32 per cent) and Pinot winemakers. 44 per cent of DTC sales, with wine/ Noir (up 24 per cent). Shiraz and loyalty clubs second at 14 per cent. Wine Australia’s Cellar Door and Cabernet Sauvignon both increased Direct to Consumer Survey report The calculated average value of wine by 7 per cent in value. 2018 found that retailers/wholesalers sold on the domestic market was $7.05 While volume was down by 1 per cent accounted for 88 per cent of domestic per litre – an increase of 7 per cent on the domestic market, the value sales in 2017–18 and direct-to- compared with 2016–17. This indicates of sales to Australian winemakers consumer sales (DTC) accounted for the continued effect of premiumisation increased by 6 per cent to reach 10 per cent, with the smallest wineries in the domestic market.

8 & 9. IRI MarketEdge July 2018

Production, sales and inventory report 2017-18 Wine Australia 8 Fortified Sparkling Fortified Fortified Sparkling Fortified 4% 2% 0% 4% 2% 0%

SparklingExports of Australian wine the valueSparkling growth exceeding volume 11% 11% Fortified Sparkling Fortified growth, the average value increased by In 2017–18,4% Australian wine exports 2% 0% Red 9 per cent to $3.24 per litre. Red reached a record 852 million litres White 42% White Red 42% Red or 95 million 9-litre case equivalents. 36% 62% Strong demand for Australian wines 36% 62% SparklingGrowth in volume was 74 million litres was evident in both commercial and 11% premium categories. Historically low White(over 8 million cases) compared with White the previous financial year. in European countries in 2017 43% Red 43% White Red helped drive Australian unpackaged Growth was driven42% by red wines, 36% 62% wine exports to record levels. Volume which increased by 65 million litres increased by 11 per cent to 467 million (7 million cases) – accounting for White litres, while value increased by 22 per 87 per cent of the growth. However, 43% cent to $504 million. white wines also grew – up by 11 million litres (1.2 million cases). Demand for premium wines also Although this growth in whites is increased, with the volume of bottled relatively small, it has seen exports wine exported at $5.00 and above Figure 5: Export sales volume by wine style of white wine increase to 307 million increasing by 22 per cent to 113 million litres – the highest on record for a litres and the value increasing by 33 financial year. Red wines also grew by 17 per cent and by 8 per per cent to $1.36 billion. to a record volume of 529 million cent in the 2017-18 financial year. A long-term trend towards packaging litres. The additional growth in this There was strong growth in some of in market is also evident – driven by 800 category saw the red proportionExports of theDomestic smaller varieties: Durif (up 45 per 800 Exports Domestic pressure on wine businesses to be exports increasing to 62 per cent in cent), (up 89 per cent) Domestic Domestic more environmentally sustainable 700 2017–18 (see Figure 5) compared with and (up 44 per cent). 700 and reduce transport and packaging an average of 59 per cent over the Exports Exports 600 In the whites, the strongest growth was costs.600 This trend is evident in the previous five years. 800 Exports recordedDomestic by Muscat Gordo Blanco decline in bottled wine’s share of 500 The top variety exported was Shiraz, (up 19 per cent) and export500 volumeDomestic compared with that 700 which accounted for 249 million litres (up 12 per cent). and Muscat of unpackaged wine. Bottled wine 400 (29 per cent of exports). This was Blanc both grew by 11 per cent and accounted400 forExports 44 per cent of the 600 followed by (182 million Chardonnay grew by 2 per cent. volume and 81 per cent of the value of 300 litres), Cabernet Sauvignon (139 million Australian300 wine exports in 2017–18 (see 500 The value of Australian wine exports Volume (million litres) Volume Volume (million litres) Volume litres) and Merlot (66 million litres). Figures 6 and 7), whereas in 2007–08, (free-on-board) grew by $451 million 200 200 wine in glass bottles accounted for 77 400 Of the top red varieties, Shiraz grew (20 per cent) to $2.76 billion, the highest per cent of the volume and 92 per cent 100 by 13 per cent, Cabernet Sauvignon growth rate in 15 years. As a result of 100 of the value of Australia’s wine exports. 300 0 0 Volume (million litres) Volume 200 Red and rosé White Sparkling Fortified Red and rosé White Sparkling Fortified

100 Other Other Other Other packaging0 packaging packaging packaging 1%Red and rosé White Sparkling 1%Fortified 1% 1%

Other UnpackagedOther Unpackaged packaging packaging18% 18% Glass Glass 1% bottle 1% Glass bottle Glass 44% bottle 44% bottle 81% 81% Unpackaged Unpackaged 18% Unpackaged Glass 55% 55% bottle Glass 44% bottle 81%

Unpackaged Figure 6: Export value by container type Figure 7: Export volume by container type 55% 2017–18 2017–18

Production, sales and inventory report 2017-18 Wine Australia 9 Australian wine inventory

Total Australian wine inventory at decreased by 1 per cent to 731 million A decrease in this ratio generally 30 June 2018 is estimated to be 1.88 litres. This reflects the relatively strong reflects a move towards under-supply billion litres, and to have decreased growth in red wine sales and the and increased pressure on pricing. by 94 million litres (5 per cent) greater decrease in production for red A comparison of bulk wine prices for compared with the previous year. This wines compared with whites in 2018. Australian varieties for the past two is consistent with the shortfall of 63 years (see Figure 8) shows that prices As a consequence of the above, the million litres between sales in 2017–18 for red varieties have strengthened stock-to-sales ratio (SSR) for reds and production in 2018 – allowing for further since last year, while prices decreased from 1.63 to 1.34 and the wastage and processing losses as well for white varieties – except for Pinot SSR for whites decreased slightly, as timing differences in processing and Gris/Grigio – have also increased, from 1.42 to 1.40. The SSR for red wine disposal of wines from year to year. which was not the case last year. This in 2017–18 is well below the 10-year is likely to be a result of the increased Red wine inventory is estimated to average of 1.63, while the ratio for global demand following the low 2017 have decreased by 9 per cent to white wine is still slightly above the harvest. 990 million litres in 2017–18. White long-term average of 1.31. wine inventory is estimated to have

June 2016 June 2017 June 2018

1.2

1.0

0.8

0.6

Bulk price (USD) Bulk price 0.4

0.2

0.0 Cabernet Generic Merlot Shiraz Chardonnay Generic Muscat Pinot Sauvignon Sauvignon Red White Gris/ Blanc Grigio

Figure 8: Comparison of average Australian bulk wine prices 2017–201810 Source: Ciatti Global Market Reports

31 Supply Demand

29

27

25

23

21

10. Prices in million litres Volume in19 June 2018 refer to wines from the 2017 vintage. Prices in June 2017 and June 2016 both refer to wine from the 2016 vintage. 17

15 Production, sales and inventory report 2017-18 Wine Australia 10 2011 2012 2013 2014 2015 2016 2017 Est 2018 June 2016 June 2017 June 2018

1.2

1.0

0.8

0.6

Bulk price (USD) Bulk price 0.4

Outlook0.2

A large0.0 global wine harvest in 2018, According to the OIV Statistical Report the additional wine production in economic uncertaintyCabernet andGeneric static Merloton WorldShiraz VitivinicultureChardonnay 2018, worldGeneric 2018.Muscat While consumptionPinot Sauvignon is growing consumptionSauvignon are softening Redglobal wine consumption in 2017 rose slightlyWhite in developing Gris/countries, itBlanc is largely demand as Australia heads into to 24.4 billion litres. However, this offset by declinesGrigio in mature markets. harvest 2019. is nowhere near enough to absorb This means that the world has returned quickly to a situation where supply exceeds demand (see Figure 9).

Despite the global situation, demand 31 Supply Demand is expected to remain strong for 29 Australian wine in the medium-term, thanks primarily to strong export 27 growth to China. China (including Hong Kong and Macau) imported 25 20.5 million cases of Australian wine in 2017–18. This equates to around 23 260,000 tonnes of winegrapes, or 21 15 per cent of Australia’s 2018 crush. Growth in exports to China in the

Volume in million litres Volume 19 past year was 59 million litres – the equivalent of approximately 84,000 17 tonnes.

15

2011 2012 2013 2014 2015 2016 2017 Est 2018

Figure 9: Historical global supply and demand Source: OIV

Production, sales and inventory report 2017-18 Wine Australia 11 Tonnes Yield Red White Yield 10 year average (1.76 million tonnnes) (million) (t/ha) 2.0 16.0

1.8 14.0

1.6 12.0 1.4

10.0 1.2

1.0 8.0

0.8 6.0

0.6 4.0 0.4

2.0 0.2

0 0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

1400

1200

1000

800 Red

Total 600 $ per tonne White 400

200

0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Australia’s 2018 harvest was close to 2500 Production Sales Inventory long-term averages but 10 per cent below the record 2017 crop. Sales 2250 exceeded production for the first time since 2010–11 (see Figure 10). 2000 The shortfall in supply in 2018 has 1750 led to supply pressure for Australian red varieties, particularly Shiraz and 1500 Merlot, heading into the 2019 harvest.

1250 Another average-sized crop in Australia in 2019 would mean stocks

Volume in million litres Volume 1000 are likely to be drawn down further in the next 12 months to support 750 anticipated further increases in exports and stable domestic demand. 500 Australian wine prices are holding

2010–112011–122012–132013–142014–152015–162016–172017–18 up thanks to strong demand and 2005–062006–072007–082008–092009–10 a favourable exchange rate, but Figure 10: Production, sales and inventory for Australian wine - historical international competition is likely to increase in the medium term as supply pressures ease.

Production, sales and inventory report 2017-18 Wine Australia 12 Appendix 1: Historic production, sales and inventory statistics

Red 2005–06 2006–07 2007–08 2008–09 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 Crush (thousand tonnes) 1056 680 959 913 866 766 830 898 866 857 965 1096 932 Extraction Rate (litres per tonne) 735 695 703 689 718 732 728 733 703 703 715 697 717 Wine Production (million litres) 776 472 674 629 622 561 604 658 609 602 690 764 669 Inventory (million litres) 1165 956 1022 1011 961 910 899 987 1014 1027 1010 1085 990 Exports (million litres) 455 497 446 442 468 447 435 406 385 406 424 465 529 Domestic sales (million litres) 154 166 161 171 176 173 186 182 182 183 191 202 208 Total sales (million litres) 609 664 607 612 644 620 621 588 567 589 615 667 737 SSR (years) 1.91 1.44 1.68 1.65 1.49 1.47 1.48 1.70 1.82 1.78 1.64 1.63 1.34

White 2005–06 2006–07 2007–08 2008–09 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 Crush (thousand tonnes) 846 718 873 819 707 837 828 851 797 850 879 896 862 Extraction Rate (litres per tonne) 735 662 651 662 715 644 733 659 725 693 692 680 715 Wine Production (million litres) 622 475 568 543 505 539 607 561 578 589 609 609 616 Inventory (million litres) 769 593 663 670 581 586 629 633 615 677 743 739 731 Exports (million litres) 265 283 243 292 291 267 268 281 296 304 292 296 307 Domestic sales (million litres) 213 222 212 212 219 219 235 230 230 223 225 224 215 Total sales (million litres) 478 504 456 504 511 486 503 511 526 527 518 520 522 SSR (years) 1.61 1.18 1.46 1.33 1.14 1.21 1.30 1.29 1.20 1.33 1.44 1.42 1.40

Total 2005–06 2006–07 2007–08 2008–09 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 Crush (thousand tonnes) 1902 1397 1832 1733 1573 1602 1658 1748 1663 1707 1845 1992 1794 Extraction Rate (litres per tonne) 735 678 678 676 716 686 730 697 713 698 704 690 716 Wine Production (million litres) 1398 947 1242 1172 1127 1100 1211 1219 1186 1191 1299 1374 1285 Inventory () (million litres) 1934 1549 1685 1681 1542 1496 1528 1620 1629 1704 1752 1824 1721 Inventory (total*) (million litres) 2107 1784 1878 1879 1723 1662 1694 1776 1785 1850 1905 1970 1876 Exports table wine (million litres) 720 780 690 734 759 714 703 687 681 710 716 761 836 Exports sparkling and fortified (million litres) 16 18 19 17 18 17 15 15 14 14 12 16 15 Domestic sales table wine (million litres) 367 388 373 383 396 393 421 412 411 406 416 426 423 Domestic sales (other*) (million litres) 66 68 66 67 75 72 77 76 75 74 73 74 74 Total sales (million litres) 1169 1254 1148 1201 1248 1195 1216 1191 1180 1204 1218 1277 1348 SSR (years) 1.80 1.42 1.64 1.56 1.38 1.39 1.39 1.49 1.51 1.56 1.56 1.54 1.39

* includes fortified and sparkling

Production, sales and inventory report 2017-18 Wine Australia 13 Survey methodology

Data sources a final figure is not available at the Exports time that the National Vintage Survey Wine Australia’s 2018 Production, Export sales figures are obtained report is published (June). Revisions Sales and Inventory survey was sent from the Wine Australia Wine Export are made to the LRS figure on a to the top 150 wineries based on grape Approval system, which records the monthly basis as returns are received. crush size in 2018. Wine Australia volume and value of all exported The most accurate figure available received responses from 85 wineries, shipments of Australian wine over 100 is provided in this report and varies including 29 of the top 30 by volume, litres. slightly from the earlier published accounting for an estimated 88 per report. Inventory cent of the total grape crush in 2018. Extraction rates The inventory figures published in this In addition, a number of other data report are obtained from the survey, sources were used to inform the final Extraction rates are calculated as with a raising factor applied to allow figures, including: Australian Bureau beverage wine produced divided by for the estimated non-response rate. of Statistics, IRI Market Edge Liquor, total tonnes crushed. Wine-based IWSR, Department of Agriculture and beverages and other grape products The calculated figure has been Water Resources levies unit (LRS), are excluded from the calculation of validated by checking the balance Wine Intelligence, Winetitles and Wine extraction rates. calculation (production minus sales Australia. equals change in inventory). While Domestic sales value the alignment is not perfect due to a Notes on calculations Domestic sales value is based on number of variables such as change winemaker receipts comprising mostly in use from red grapes to white wine, Grape crush wholesale transactions but also cellar production of sparkling and fortified The most accurate estimate of the door and direct sales and is therefore from different vintage grapes and grape crush is provided by the a mix of wholesale and retail prices. allowance for wastage etc, it is Department of Agriculture and Water Total domestic sales value has been considered to be within an acceptable Resources levies unit (LRS), which estimated by multiplying the average tolerance. receives levy returns accounting for all value per litre (calculated from the winegrapes crushed in each vintage. survey results) by the total estimated The timing of the returns means that sales volume.

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Production, sales and inventory report 2017-18 Wine Australia 14