1329.0 - Australian Wine and Grape Industry, 2006

ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 29/01/2007

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ABOUT THIS PUBLICATION

This publication presents a summary of statistics on grape and wine production and related activities collected by the Australian Bureau of Statistics (ABS) and from other sources.

CHANGES IN THIS ISSUE

This publication includes a Feature Article describing changes to the collection of inventory data.

SOURCE MATERIAL

With the exception of the tables and graphs relating to world comparisons, all sources cited refer to ABS publications and/or ABS data available on request.

ACKNOWLEDGMENT

The continuing collection of varietal data is supported by Australia’s grape-growers and winemakers and the Australian government through the Grape and Wine Research and Development Corporation.

ROUNDING

Where figures have been rounded, discrepancies may occur between sums of the component items and totals.

INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Damian Sparkes on Adelaide (08) 8237 7425.

SUMMARY OF FINDINGS

INTRODUCTION

There were 1,901,560 tonnes of grapes crushed in 2005-06, a decrease of 23,930 tonnes (1.2%) on the record crop of last year. Beverage wine production was 1,434.5 million litres, a drop of 0.6% on the record high from 2004-05. There was continued growth in the export of Australian produced wine, which reached 722.2 million litres during 2005-06, an increase of 7.8% from last year. The value of these exports increased 1.6%, to $2.8b. Domestic sales of Australian wine increased slightly, rising by 0.2% to 431.1 million litres.

WINE AND GRAPE INDUSTRY - 2005-06

	Value	% change from 2004-05

Area of bearing vines (ha)	158 167	3.2
Total grape production (t)	1 981 198	-2.2
Fresh grapes crushed (t)	1 901 560	-1.2
Beverage wine production (million L)	1 434.5	-0.6
Beverage wine inventories (million L)	2 106.9	2.1
Domestic sales of Australian wine (million L)	431.1	0.2
Domestic sales value of Australian wine ($m)	1 899.9	-9.4
Exports of Australian wine (million L)	722.2	7.8
Exports of Australian wine ($m)	2 757.9	1.6
Imports of wine (million L)	27.2	22.7
Imports of wine ($m)	234.2	24.4

AREA OF VINES

The area of vines being cultivated increased again, from the record area last year of 166,665 hectares, to 168,791 hectares in 2006. The total area of vines bearing grapes increased from 153,204 hectares to 158,167 hectares, a rise of 3.2%. The area of non-bearing grapes fell 21.1% in 2006 to 10,624 hectares from 13,462 hectares in 2005.

The net increase in area planted under vines for 2005-06 (derived from vines planted and vines lost during the year) was 1,103 hectares, which was 39.5% less than the net increase recorded in 2004-05 (1,823 hectares).

Vine Planting, Net change by state
Graph: Vine Planting, Net change by state

VINEYARD IRRIGATION

There were 6,583 vineyards that irrigated in 2006. This was 83.5% of the total number of vineyards in Australia (7,861). The area of grapevines irrigated was 148,660 hectares, with South Australia (65,597 hectares) accounting for 44.1%. New South Wales (35,876 hectares) and Victoria (33,575 hectares) collectively had 46.7% of the area of grapevines irrigated nationally. The average usage of water was 3.66 megalitres per hectare. Victoria averaged 5.10 megalitres per hectare, New South Wales 4.38 megalitres per hectare and South Australia 2.91 megalitres per hectare.

The most common watering method continues to be drip or micro spray with 116,822 hectares, or 78.6% of the total area irrigated. There were 56,487 hectares of vineyard land watered by this method in South Australia.

Spray excluding micro spray was the second most utilised method with 17.4% of irrigated vineyards (25,928 hectares). In Victoria, 32.4% (10,872 hectares) of all area irrigated was watered by spray excluding micro spray. The third most common method of watering was furrow or flood (12,017 hectares) with New South Wales accounting for 7,462 hectares, or 20.8% of their total area irrigated.

Surface water from either state owned or private irrigation schemes was the most common source of water used by vineyards in Australia. There were 87,761 hectares drawing from this source. South Australia (30,493 hectares), New South Wales (28,349) and Victoria (26,047) collectively have 96.7% of the vineyard land sourcing water from state owned or private irrigation schemes. Nationally, the next most important water source for vineyards was underground water supply (32,587 hectares), followed by other surface water (29,820 hectares).

GRAPE PRODUCTION

The weight of grapes harvested in 2006 was 1,981,198 tonnes which was a 2.2% decrease on 2005. Red grape production was down 2.0% to 1,026,301 tonnes, but still represented more than half (51.8%) of the total grapes harvested. The production of white grapes was 954,897 tonnes, a 2.5% decrease on the tonnage harvested in 2005.

There were 1,781,668 tonnes of grapes harvested for winemaking, a decrease of 2.0% on the 1,818,426 tonnes harvested in 2005. The production of grapes for drying decreased by 13.0%, to 117,819 tonnes which was almost counter-balanced by the 12.5% increase in the amount of table and other grapes harvested (81,710 tonnes).

Grape Production and Intended Usage
Graph: Grape Production and Intended Usage

WINEMAKING LOCATIONS AND GRAPES CRUSHED

For the 2006 vintage there were 435 locations around Australia which crushed 50 tonnes or more of grapes owned by 392 winemaking businesses, compared with the 2005 vintage which had 413 locations owned by 366 winemaking businesses. There were 1,901,560 tonnes of grapes crushed in 2005-06, a decrease of 23,930 tonnes (1.2%) from last year.

Almost 30% of all locations were in South Australia and they accounted for 48.0% of the national wine grape crush, a slight rise from the 47.3% recorded in 2005. New South Wales/Australian Capital Territory (NSW/ACT) had 21.1% of the total number of locations with 34.6% of the total wine crush, followed by Victoria (24.8% of all locations and 13.6% of all grapes crushed) and Western Australia (18.9% of locations and 3.5% of the grape crush).

The 392 winemaking businesses, in terms of crush capacity, are diverse in size. There were 215 businesses that each crushed from 50 to 400 tonnes of grapes, producing a combined crush of 34,309 tonnes. Of these smaller businesses, the 115 smallest winemakers accounted for only 0.6% of all grapes crushed and averaged 93 tonnes each.

The 177 businesses that each crushed more than 400 tonnes of grapes crushed a total of 1,867,251 tonnes (98.2% of the national total) of grapes. There were 16 winemakers that crushed more than 20,000 tonnes each, accounting for a total of 1,411,396 tonnes of grapes or 74.2% of the total crush. These 16 businesses averaged 88,212 tonnes each.

BEVERAGE WINE PRODUCTION

There were 1,410.5 million litres of beverage wine produced by winemakers that crushed more than 400 tonnes of grapes, or had sales of more than 250,000 litres. This beverage wine production figure was 9.9 million litres (0.7%) less than the total for 2004-05.

Production of unfortified wine accounted for 99.1% of the total beverage wine produced by these winemakers. Red/rosé wine made up 776.0 million litres (55.0%) of the beverage wine produced in 2005-06. This was an increase of 15.3 million litres (2.0%) on the Red/rosé wine produced in 2004-05. White wine accounted for 621.7 million litres, a fall of 17.6 million litres (2.8%) on the previous year.

The fortified wine production total of 12.7 million litres was 37.2% lower than the figure for 2004-05 (20.3 million litres).

BEVERAGE WINE PRODUCTION
Graph: Beverage Wine Production

WINE INVENTORIES

Inventories of Australian beverage wine held by winemakers continued to grow in 2006, reaching 2,106.9 million litres at 30 June 2006. This was a 2.1% increase on the record high of last year (2,063.2 million litres) which rose 11.3% on the inventories held at 30 June 2004 (1,854.5 million litres).

Table wine inventories rose 2.1% to 1,934.3 million litres at 30 June 2006. Once again, stocks of white table wine showed the largest increase of 9.0% (63.4 million litres) giving a total of 768.9 million litres of white wine held as stock by winemakers. White table wine made up 36.5% of the stock of total beverage wine stored by winemakers this year compared to 34.2% last year.

Red/rosé table wine fell by 2.0% (23.7 million litres) from 1,189.1 million litres in 2005 to 1,165.4 million litres at 30 June 2006. Red/rosé table wine still represented more than half (55.3%) of the beverage wine stock held by winemakers.

INVENTORIES OF AUSTRALIAN TABLE WINE - At 30 June
Graph: Inventories of Australian Table Wine — At 30 June

BRANDY

The domestic sales of Australian brandy have continued to fall, dropping to 535,000 litres of alcohol in 2005-06. This was the fifth consecutive year to show a downward movement since the high in 2000-01 (901,000 litres of alcohol).

The volume of imported brandy cleared for home consumption decreased for the fourth consecutive year, falling a further 4.8% to 494,000 litres of alcohol. Exports of Australian brandy rose sharply to 38,000 litres of alcohol (a rise of 111.1%), continuing the positive movement shown last year.

DOMESTIC SALES, IMPORTS AND CONSUMPTION (a) OF BRANDY
Graph: Domestic Sales, Imports and Consumption(a) of Brandy

DOMESTIC WINE SALES

Domestic sales of Australian wine in 2005-06 were 431.1 million litres, a slight increase (0.2%) on the previous year's total of 430.1 million litres. In terms of volume, the components that recorded the largest increases were white table wine (2.6 million litres) and bulk fermented sparkling wine (1.3 million litres). The domestic sales for Red/rosé table wine fell by 1.9 million litres. Fortified wines also continued to fall, dropping to 18.5 million litres in 2005-06, which was 1.4 million litres less than last year and 7.4 million litres less than ten years ago.

The quantity of table wine sold in glass containers of less than two litres continued to increase. In 2005-06, 183.5 million litres of table wine were sold in glass containers less than two litres, comprising 91.2 million litres of red/rosé wine (up 0.1%) and 92.3 million litres of white wine (up 3.1%). The amount of table wine sold in soft packs fell again to 179.3 million litres, 2.5 million litres (1.4%) less than 2004-05. Other containers accounted for 2.7 million litres, higher than the total for 2004-05 (2.4 million litres).

DOMESTIC SALES OF AUSTRALIAN RED AND WHITE TABLE WINE
Graph: Domestic Sales of Australian Red and White Table Wine

WINE EXPORTS

Australian wine exports continued to grow in 2005-06 with 722.2 million litres of wine exported to world markets, a rise of 7.8% on last year. The value of these exports rose by $42.6m (1.6%) to $2,757.9m. However, the average price per litre fell 5.7% from $4.05 in 2004-05 to $3.82 in 2005-06. For the 2005-06 period Australia imported 27.2 million litres of wine, significantly less than the volume exported.

EXPORTS OF AUSTRALIAN WINE AND IMPORTS OF WINE
Graph: Exports of Australian Wine and Imports of Wine

DESTINATION OF AUSTRALIAN WINE EXPORTS

The European Union continued to be the major regional destination for Australian wine exports in 2005-06. It accounted for 388.3 million litres (53.8% of total exports by volume), valued at $1,302.9m (47.2% of total exports by value). Exports to Northern America accounted for 253.9 million litres (35.2%) and were valued at $1,110.6m (40.3%). The United Kingdom was the major country of destination for Australian wine, taking more than one third (36.2%) of the Australian wine exported during 2005-06. There were 261.5 million litres (valued at $945.8m) of Australian wine exported to the United Kingdom, followed by the United States of America which imported 204.9 million litres ($864.2m) and Canada with 48.9 million litres of wine valued at $245.7m.

DESTINATION OF AUSTRALIAN WINE EXPORTS (a)
Graph: Destination of Australian Wine Exports (a)

GRAPE AND WINE PRICES

The wine grape price index showed another significant fall in 2005-06, down 19.8%. The index of prices received by winemakers also fell in 2005-06, dropping 0.5%. The price received for wine for domestic consumption remained steady, while the price received for wine for export decreased by 1.7%. The consumer price index for wine increased by 0.8% in 2005-06, compared with the annual increase of 3.2% in the All groups consumer price index.

PRICE INDEX OF GRAPES USED IN WINE PRODUCTION, Change on previous vintage
Graph: Price Index of Grapes used in Wine Production, Change on previous vintage

Graph: Price Index of Grapes used in Wine Production, Change on previous vintage

WINE CONSUMPTION

Apparent per capita consumption of wine has continued to increase, rising to 28.1 litres in 2004-05. In 1998-99 per capita consumption was 25.2 litres. The level of per capita consumption rose to 26.0 litres in 1999-2000 and remained relatively unchanged for three years until 2002-03 when it rose to 26.8 litres. The level of per capita consumption continued to rise in 2003-04 to reach 27.5 litres. This latest increase is more in line with the movements of the past decade and to the longer term trend which has seen per capita consumption of wine climb steadily over the last 50 years.

PER CAPITA CONSUMPTION OF WINE (a)
Graph: Per Capita Consumption of Wine (a)

HOUSEHOLD EXPENDITURE

The most current details of household expenditure show that during 2003-04 Australian households spent an average of $6.33 per week on wine. Households in the Australian Capital Territory spent the most with $8.04 and those in Queensland the least with $4.65. Australian Capital Territory households spent the highest proportion of their total weekly alcohol expenditure on wine (33.0%), while Northern Territory (NT) households spent the lowest (19.2%). Households in New South Wales (29.0%), Victoria (28.7%) and South Australia (27.8%) spent more than one quarter of their total weekly alcohol expenditure on wine. From 1998-99 to 2003-04 there was a 19.9% increase in weekly expenditure on wine nationally.

AVERAGE WEEKLY HOUSEHOLD EXPENDITURE, Alcoholic beverages
Graph: Average Weekly Household Expenditure, Alcoholic beverages

WORLD COMPARISONS

Of the countries for which 2003 data are available, Australia’s ranking for area of vines planted (157 thousand hectares) was twelfth, the same position as the previous year. Spain (1,207 thousand hectares), France (887 thousand hectares) and Italy (868 thousand hectares) had the greatest areas under vine. Australia was ranked eleventh in terms of total grape production (1,497 thousand tonnes). The top two countries with the highest grape production were Italy (7,484 thousand tonnes) and Spain (6,817 thousand tonnes), followed closely by France (6,307 thousand tonnes). France (4,636 million litres), Italy (4,409 million litres) and Spain (4,280 million litres) were the largest producers of wine. Australia produced 1,019 million litres of wine and was ranked seventh in the world for wine production.

PRODUCTION OF WINE, Principal countries
Graph: Production of Wine, Principal countries

The top seven countries exporting the largest volumes of wine in 2003 were France, Italy, Spain, Australia, Chile, United States of America and Portugal. These seven countries accounted for 77.1% of total world wine exports. Australia, with 536.5 million litres of wine exported, was ranked the fourth largest exporter of wine. Australia exported 52.6% of its wine production, which was the second highest proportion, when compared to the other leading wine producing countries. The highest proportion was recorded by Chile which exported 60.3% of the wine it made. Australia’s per capita consumption of wine in 2003 increased to 21.3 litres (20.5 litres in 2002), but was still well below the leading countries of France (55.4 litres), Portugal (52.6 litres) and Italy (51.1 litres).

EXPORTS OF WINE, Principal countries
Graph: Exports of Wine, Principal countries