Recently, some industry insiders revealed to the WBO that due to the impact of China's cancellation of the "double anti-dumping" policy and the subsequent good market conditions, the price of low-end grape wine in Australia has doubled in the past two months.
At the same time, however, boutique wineries are still generally on the sidelines when it comes to pricing new vintages, underlining the general caution that the Australian wine industry retains in the midst of optimism after several years of downturn.
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The price of low-end raw liquor has doubled in the past two months
According to the data given by the Wine Australia Association, the production of Australian grape wine in 2023 will be 1.3171 million tons, while the average selling price will be 642 Australian dollars/ton, of which the largest proportion is 350-400 Australian dollars/ton, reaching 18%.
According to relevant sources, the average price of raw wine this year has started a round of sharp rise after March.
Wang Yuan, export director of Australia's QVS Wine Group, said that this round of rise is mainly due to the continuous heating up of the Australian grape wine market after China's cancellation of the "double reversal", which directly led to the doubling of the average price in the past two months. "The entry-level South Australian Syrah monovarietal spirit, for example, has now risen to $0.6-0.8/litre," it said. For the current trend of price increases, we are also a little afraid to act. ”
At the same time, Australian wine farmers, who have just finished harvesting the new vintage this year, have missed out on this round of price increases, and for wineries and wine companies, the purchase cost of wine grapes has not changed significantly, and even the purchase price of low-end wine red grapes this year is lower than last year.
According to relevant overseas media reports, due to the general high temperatures during the Australian harvest season, Australia has entered the 2024 grape harvest in advance from January.
This year's harvest came much earlier than usual, with most varieties coming about three weeks or more earlier than normal, so that the main harvest was largely completed in March. At that time, China's policy of canceling the "double anti-dumping" policy for Australian wine had not yet been officially determined and implemented, so the purchase price of the new vintage grapes remained at the previous low level.
According to the Australian Wine Association, the annual crush of grapes in Australia in 2023 will be 822,000 tons, and the average purchase price per ton of grapes will be 357 Australian dollars per tonne, which is the lowest point in the past five years and a further decline of 11.5% from 2022.
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The future pricing of the new vintage is still uncertain, and most wineries are still waiting to see what to expect
For boutique wineries, although price increases are still a general trend in the long run due to the overall increase in raw materials and labor costs every year, most wineries are still cautious and wait-and-see in terms of pricing for the new vintage this year.
Chen Xun, the founder of Chengdu Dumeitang, who visited Australia last month, said that what he saw, for example, the ex-factory price of fine wine at the regional level and above in South Australia is basically stable, and there is no obvious price increase momentum.
"Except for the fact that a leading brand like Penfolds may increase its price, I went to some red five-star wineries and Langton classification wineries, and basically there was no price increase. Because the market is not good enough to dare to raise prices, and these wineries are currently very cooperative with customers. Chen Xun said.
A domestic wine importer who has also been to Australia recently also said: "Although the overall labor cost in Australia has risen very significantly, the cost of wine is still at a low level. Therefore, from the perspective of comprehensive cost, boutique wineries have basically not changed much in the cost of winemaking, and the main influencing factor of whether the price increase is the market. Despite the cancellation of the 'double reversal', in addition to the head brands, there are still great differences between other boutique wineries in the market level, and some wineries have indeed not been positively affected, so there is no way to talk about price increases. ”
For Australian wine as a whole, there is still significant inventory pressure. Wine Australia calculates that the industry still has more than 2 million bottles of wine in stock. At the same time, demand in its domestic market has been declining for the past four years. According to the association, wine consumption will be 445 million litres this year, below the 10-year average of 480 million litres.
Jenny REN, sales and marketing manager for Asia at Kirrihill Winery in Australia, said that most of her winery's old vintage inventory has been sold out in the past two months. At present, the price of low-end wine has increased by 20%, but sales are not as expected, while the price of mid-to-high-end wine is still slowly recovering, with less inventory, but demand is on the rise.
Wang Yuan also believes that from the perspective of market demand, it is difficult for the ex-factory price of low-end wine at the regional level to increase too high before the balance between supply and demand is reached. Because the inventory of Australian wine is still large after the accumulation of several years, and the overall demand for wine in the global market is declining.
In terms of fine wines, with the increase in annual costs of well-known boutique wineries, the general trend of price increases is basically determined. However, specific to each winery, whether the price increase is closely related to the winery's own brand, product positioning, market trends and sales, so it can be seen that some wineries may increase the price, but some wineries dare not raise the price for the above reasons.
Some of the figures are from respondents