Wine industry emerges from slump with post-GFC highs for exports

The country's wine industry, beset by a high dollar and decades of oversupply of grapes, may be on the mend, with the value of bottled wine exports the highest recorded since the global financial crisis.

In response to the high dollar and cheap foreign wines from Europe and South America, Wine Australia told wine producers to move towards premium top-notch wines that could compete internationally.

Wine Australia acting chief executive Andreas Clark yesterday said the latest wine export figures showed the strategy was starting to work.

"It's been a pretty challenging period over recent years and what this signals is the start of a turnaround," Mr Clark said.

"Clearly, though, there is a long way to go."

Lavina Wines chief executive Sam Daw in one of the company's vineyards in McLaren Vale, South Australia.

While the overall value of wine exports rose by 0.4 per cent in the past year, there was a 3 per cent rise in the value of bottled wine exports.

The volume of wine being sent overseas decreased by 3 per cent.

The export figures show emerging wine markets in China and Hong Kong are leading growth, with the average value of premium wine exports selling for $10 a litre -- the highest on record.

Lavina wines chief executive Sam Daw started work to enter into the premium Chinese wine market in 2009 by avoiding traditional Chinese distribution networks and focusing on the wealthy elite.

China now accounts for about 55 per cent of his business, with the US at 45 per cent.

"What we saw was there was so much competition coming in at the entry level to low premium, and other countries were being subsidised on their exports to China," Mr Daw said.

"We needed to focus on not the masses but the growing number of high-net-worth or wealthy Chinese people with what you would call non-traditional networks of distribution."

While competing against heavily subsidised top-end French wines, Mr Daw said the look of an Australian premium wine counted in China.

The Adelaide businessman imports French bottles to Australia and etches his labels into the glass.

While China was an important emerging market, Mr Clark said exporters needed to focus on traditional markets, particularly the US. "The growth in China has been significant and it's growth at high levels in terms of prices," he said.

"The US is the largest market for premium wine in the world and we're underrepresented there so we believe there is a strong opportunity ahead."

Source: The Australian, 24 October 2013