TAYLORS WINES MANAGING director Mitchell Taylor has spoken out, saying a slow and steady decline in the value of the Australian dollar is needed to enable the wine industry to better compete in offshore markets.
Official figures released yesterday showed Australia’s wine exports slipped by 5 per cent to $1.76 billion for calendar 2013 compared with 2012.
The value of exports declined to all four major export markets – the US, Britain, China and Canada.
The impact of a strong Australian dollar and fierce competition in overseas markets has been substantial for the Australian industry since exports hit $3 billion in calendar 2007.
But Taylor said the decline in the Australian currency over the past few months has been a plus for the Taylors Wines brand and brought some much-needed optimism to the industry.
“The high dollar makes exports very difficult because you have to keep lifting your prices,” he said.
“A sustained fall will be very advantageous for us.”
Taylors Wines exports around 25 per cent of its wines and Taylor said that figure dropped to around 15 per cent when the dollar was at its strongest.
Figures released by industry body Wine Australia showed total wine exports in 2013 to the US were down 2.5 per cent to $440 million, while exports to Britain were 8.2 per cent lower at $369 million.
Exports to China slipped by 7.6 per cent to $223 million as a combination of austerity measures imposed by the Chinese government to limit spending by government officials and organisations on luxury products and a higher dollar hit sales.
But Australia was in the same boat as other major wine exporters, with France also suffering a substantial downturn in exports to China of 12 per cent by volume, compared with Australia’s 6 per cent drop in volume.
Exports to Canada decreased 4.7 per cent to $174.5 million.
Hong Kong was one of the few bright spots with exports up 19.7 per cent to $77.3 million, with the Chinese government’s austerity measures not applying to Hong Kong.
Exports to New Zealand also rose 6.8 per cent to $70 million.
Among the biggest falls were exports to Sweden, which dropped 25.3 per cent to $21.9 million and Ireland, where exports slumped by 33 per cent to $14.2 million.
Total volume of wine exported fell by 6 per cent to 678 million litres.
Wine Australia’s acting chief executive Andreas Clark said while wine exports to the US were lower, the average value increased by 9 per cent to $2.53 per litre which marked the first increase in average value since 2007.
By grape variety, Shiraz was the most popular with a value of $383 million although it suffered a drop of 5.5 per cent, Cabernet Sauvignon came in second with $172 million of exports, down 0.7 per cent, and Chardonnay was next at $172 million, down 5.3 per cent.
*The original article was published on the North Queensland Register website by journalist Simon Evans on 21 January 2014.