Export Of Australian Wines Witnessed Strong Growth Offsetting US Impact 

  • Oct 24, 2018 AEDT
  • Team Kalkine
Export Of Australian Wines Witnessed Strong Growth Offsetting US Impact 

On October 24, 2018, Wine Australian released data of the exports of Australian wine and broadly the momentum was positive. The robust growth momentum was visible in the exports in regard to volume as well as value. For the 12 months ended September 30, 2018, the value of exports rose to $2.71 billion implying the growth of 11% whereas, in terms of volumes, the exports rose to 842 million litres representing a rise of 5%. During the same period, shipments related to the bottled wines encountered a rise of 8% in the value and stood at $2.16 billion. The robust momentum was also visible in the shipments in regard to unpackaged wine.

The chief executive officer or CEO of Wine Australia also reflected favorable views for the growth witnessed in the 12 months ended September 30, 2018. The management also mentioned the hard work which has been done by the exporters of wine. Of the total wine that Australia produces, over 60% is exported by them. 

However, it seems like Australian exporters need to work hard in order to bring the US into the growth party. For the 12 months ended September 30, 2018, the exports of the Australian wine to the US has witnessed a decline of 8% and stood at $423 million. A possible reason for the decline could be that the local producers are having a tough time in overcoming the consolidation which has been done by the large distributors. The fall in the exports to the US comes amid the falling Australian dollar which could have made the Australian wines competitive with the retailers operational in the United States. However, the exports of the Australian wine which have been done to China have witnessed the rise of 24% and stood at $1.06 billion. However, the market trackers are of the view this increase is still weak when compared with the historical performance. For the twelve months ended June 30, 2018, the export value to China witnessed the growth of 55%.

However, it would not be wrong to say that robust growth momentum in the Asia region has offset the decline in the sales which have been encountered in the United States. The primary focus needs to be on the markets which are present in the US as well as China. The top management of Wine Australia stated that the significant growth momentum is witnessed in China and they have also increased the efforts to cater to the US markets.

What happened to the stock price Treasury Wine Estates?

The stock price of Treasury Wine Estates (ASX: TWE) has witnessed a negative today morning as the stock price have been witnessing downward momentum. A possible reason for the fall in the company’s share price could be the fall in the US exports. At the time of writing, TWE’s stock price is trading at A$15.665 per share which implies that the stock has fallen A$0.535 per share or 3.302%. It has been trading in the lower level of the range and has a market capitalization of $11.64 billion.


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