Wine stocks are at their highest levels in 15 years, following a bumper vintage and a reduction in overall sales.
Wine Australia's Wine Production, Sales and Inventory Report showed the national wine inventory levels for the 2020-21 financial year were the highest since 2005-06.
Wine Australia market insights manager Peter Bailey said this result was not unexpected after the record-sized vintage crop, the sharp reduction in exports to mainland China and global shipping difficulties that made it more difficult to get wine into markets.
"As we have previously reported, Australian wine exports in the year ended 30 June 2021 have been impacted by reduced wine availability for the past two years, as well as the tariffs imposed on Australian wine to mainland China in November 2020," he said.
"The combination of these factors caused exports to decline by 5 per cent over the 2020-21 financial year."
He said there was also some impact from the domestic trade.
"Within our domestic market, we are seeing a gradual long-term decline in the volume of wine consumption that is in line with other mature markets globally, combined with short-term COVID-related disruptions and some competition from imported wine," he said.
Total sales volume are estimated to have decreased by 4pc from 2019-20 to 1.17 billion litres or 130 million cases.
Total wine production is estimated to have been just under 1.5bL or 165m cases - a 34pc year-on-year increase after near-perfect growing and ripening conditions in most regions delivered a record 2021 vintage crush of 2.03m tonnes.
Production of red wine from the 2021 vintage was 854mL or 95m cases, making up 58pc of production and increasing its share by one percentage point since 2020.
White wine production was 628mL.
Mr Bailey said these figures indicated Australia was the fifth largest wine producer in the world, accounting for 5.7pc of the global 2021 harvest.
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"The large volume of grapes harvested around Australia in 2021 compensated for two low vintages in 2019 and 2020, with the average of the three being just above the 10-year average of 1.74m tonnes," he said.
As a result of the increase in production and reduction in sales, the national wine inventory as at June 30 increased by 24pc to 2.1 billion litres. The stock-to-sales ratio overall increased to 1.8, 23pc above the 10-year average of 1.46.
"The increased production combined with a reduction in sales is likely to put pressure on tank capacity for some wineries heading into the 2022 vintage," Mr Bailey said.
He said while every business was different, there was "no doubt" this was a "particularly challenging time" for the local wine industry.
"The report underlines the importance of market diversification as the key to long-term sustainability, while good communication between all players in the supply chain is critical to manage the short-term issues," he said.
Wine Australia's Wine Production, Sales and Inventory Report 2021 is available at wineaustralia.com.
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