Strengthening bulk wine prices have been welcomed as a positive sign by growers in the Murray Valley region.
The latest wine export report from Wine Australia provides further evidence of industry recovery after almost a decade of depressed market conditions that caused hundreds of growers to leave the sector.
In the 12 months to the end of December, Australian wine exports increased by 15 per cent to $2.56 billion – the highest annual growth rate in 13 years. Volume grew by eight per cent to 811 million litres, achieving a calendar-year record.
The performance of bulk wine exports lifted, with value increasing by 10 per cent to $440 million. The average value per litre of bulk wine reached $1.03 – the highest in five years.
“Growers who supply a winery that’s signed up to the Wine Industry Code of Conduct can easily dispute the prices currently on offer”
Wine Australia said strengthening bulk wine prices is an early sign of global under-supply putting upward pressure on prices.
For the Murray-Darling and Swan Hill regions, in the price point of $2.49/litre and under, sales grew by 18 per cent to more than $511 million – an increase of $76 million.
In the price category of $2.50/litre to $4.99/litre, sales grew five per cent to just under $830 million.
In these same price points, the growth in value of wine sales to mainland China has been staggering – 96 per cent and 45 per cent respectively to exceed $282 million.
Murray Valley Winegrowers Executive Officer, Mike Stone, said that while 2018 winegrape prices had improved, rising up to around 20 per cent for red grapes, some wineries with growers under long-term contracts had been slow to respond to improving market conditions.
“Demand is high, particularly for red varieties, and prices of more than $500/tonne are being offered, but the issue for many growers is that they’re contracted to a winery with prices well below those being offered elsewhere,” Stone said.
“Growers who supply a winery that’s signed up to the Wine Industry Code of Conduct can easily dispute the prices currently on offer.
“Other growers should check their contracts carefully for dispute resolution provisions.”
Stone said Murray Valley Winegrowers will be there to help should the need arise.