Wine Inventory Soars Following Record Vintage

Following a record vintage and a drop in overall sales, wine stockpiles are at their peak point in 15 years. According to Wine Australia’s Wine Production, Sales, and Inventory Report, the national wine inventory levels for the 2020-21 financial years were the highest since 2005-06. After a record-sized vintage harvest, a steep fall in exports to mainland China, and global transportation challenges that made it more difficult to get wine into markets, Wine Australia market insights manager Peter Bailey said this result was not surprising.

“As we previously stated, reduced wine availability for the past two years, as well as tariffs placed on Australian wine to mainland China in November 2020, hampered Australian wine exports in the year ending 30 June 2021,” he said. “The mixture of these variables resulted in a 5% drop in exports in the 2020-21 fiscal year.” He also mentioned that domestic trade had an impact. The wine industry is witnessing a long-term reduction in wine consumption in our home market, which is in line with other mature markets across the world, as well as short-term COVID-related interruptions and even some competition from imported wine. From 2019-20, total sales volume is expected to drop by 4% to 1.17 billion litres or 130 million cases.

After near-perfect growing and ripening circumstances in most regions resulted in a record 2021 vintage crush of 2.03 million tonnes, total wine production is anticipated to have been just under 1.5 billion litres or 165 million cases, up 34 percent year on year. Red wine output for the 2021 vintage was 854mL or 95 million cases, accounting for 58 percent of total production and up one percentage point since 2020. The amount of white wine produced was 628mL.

According to these figures, Australia is the world’s fifth largest wine producer, accounting for 5.7 percent of the global harvest in 2021, according to Mr Bailey. “The enormous number of grapes harvested across Australia in 2021 compensated for two low vintages in 2019 and 2020,” he noted, “with the average of the three being just above the 10-year normal of 1.74 million tonnes.” The national wine inventory climbed by 24 percent to 2.1 billion litres as of June 30 as a result of greater output and lower sales. Overall, the stock-to-sales ratio grew to 1.8, up 23 percent from the 10-year average of 1.46. The report emphasised the importance of market diversification as a key to long-term viability, while good communication among all supply chain players is critical for managing short-term issues.

Article by: Hari Yellina (Orchard Tech)