In 2016 there has been a significant change in wine prices across the world, particularly in Australia. The wine market in the UK is very competitive, primarily in regards to fluctuations in importation from international markets, and countries such as China have recently been impacting wine prices.
The Emerging ‘Red Dawn’
With the increasing exportation of red wine in China, Australian red wine grapes have grown exponentially in demand. For the first six months of 2016, the export of Australian wine to China has grown by 41% in comparison to the same time period in 2015. Similarly, the value of the imports by China rose 39.2% to a value of 1819.9 million yuan (approximately £215 million).
According to a Wine Quarterly report from Rabobank, the Australian wine industry has been recovering since its low results in 2011 with the increase particularly associated with grape varieties in premium growing areas. Reports on the changing market have called this the ‘red dawn’ It has occurred, predominantly, in temperate regions such as Coonawarra, Barossa Valley, and McLaren Vale, and cool regions such as Tasmania and Mornington Peninsula. Wines from Chile, Portugal, Spain, and France are also being imported to China in order to supply the growing demand.
Rising Price of Grapes
Contributing to the rising price of wine is a 14% increase in the average price paid for grapes in Australia. Each tonne was purchased at an average of approximately £327, or AUD$526. Red wine grapes were sold at a 13% increase at around £404 (AUD$651) and white wine grapes sold at a 12% increase at around £247 (AUD$398). This data was showcased in the Vintage Report 2016, indicating a national crush rise of 6% to a projected 1.1 million tonnes.
Wines priced at more than AUD$10 a bottle have seen the most dramatic change due to the international demand. Shiraz and Cabernet Sauvignon wines have, respectively, seen a national average price increase of 14% and 17%. These changes in price have marked a positive progress in Australia’s wine industry.
In the UK, inflation rose to 0.6% partly due to the increase in the price of wine. The UK is very susceptible to wine price changes due to being a small producer but a big importer, with 98.5% of 1.8 billion bottles imported. The rising price of grapes in premium areas correlate to better production rates and increased grape quality. The UK might see more expensive wines hitting the market soon, but with better quality in taste and aroma. The domestic market of sparkling wines could benefit from these changes and see a considerable growth in English producers’ sales.
Wine cellars are ideal for storing your wine throughout the year and at Spiral Cellars we offer a wide range of wine rooms and cellars sure to suit your wine storage needs. Contact our team on 0203 815 3329; we are always happy to answer any query you might have.