Wine industry cautious about free trade headwinds
Posted
The value of Australian wine exports continues to surge, with the latest round of export statistics showing export values climbed to $2.22 billion in the year to December 2016.
Export value growth has been skewed to the more expensive end of the market, with growth in premium wines outpacing cheaper price points.
Even in the United Kingdom, Australia's largest market by volume, consumers are gradually shifting up the value chain, something Wine Australia chief executive Andreas Clark believes is part of a global shift to the premium end of the market.
"It's happening in a range of markets, including the UK. Consumers are very interested in understanding where products come from," he said.
"This includes wanting to know about the stories that sit behind the wine, the provenance."
The past 12 months have seen the unratified Trans-Pacific Partnership killed off and the UK vote to leave the European Union, moves that Mr Clark describes as headwinds for wine exporters.
"Ultimately, Australian exporters and Australian wine producers are heavily reliant on free trade and opening up markets," he said.
"We always produce more than we consume, so we have always been reliant on our key markets, where we export more than 50 per cent of our production."
Global shifts shake up markets
In a recent publication, rural lender Rabobank noted the increased uncertainty in the trading environment.
"The UK's Brexit vote and the recent US elections, among other factors, are creating significant shifts in foreign exchange rates, and notable shifts in the competitiveness of suppliers and the attractiveness of different markets," the report read.
While exports to China continue to grow in value, the fortunes of other commodities have not been so bright.
Mr Clark said the industry was optimistic about China but was taking nothing for granted.
"Exporters need to understand how to work in that market. They need to understand the nuances there and plan for a long-term future," he said.
"China has been a particularly strong market for us over the past 12 months, but nothing is assured into the future."
Topics: agribusiness, viticulture, trade, agreements-and-treaties, melbourne-3000, sydney-2000, adelaide-5000, perth-6000, brisbane-4000, darwin-0800, hobart-7000
