Magic figures – Australian wine exports

There are figures and figures. Ten per cent is a magic figure. One could be simplistic and say 10 is better than any of the numbers that precede it. At TKR we believe it’s more likely that only those attuned to the hard edge of figures will say 11 per cent is better than 10 per cent, but 11 doesn’t resonate like 10.

To increase Australian wine exports by 10 per cent, or by $201 million to $2.31 billion, is a fine achievement. It is one that will resonate with consumers and industry alike.

But just as 10 per cent resonates louder than 11 or 11.87 per cent, figures have their own magical worth. They are open to interpretation and manipulation. As one would expect, volume grew as well, by 7 per cent to 778 million litres. Average value was up 3 per cent to $2.97 a litre.

Volume and value are interesting companions, as the following chart shows:

Australian wine exports by price

Splitting the chart into three, we think it safe to assume that exports at $10 a litre and above are profitable. One also hopes that wines in these price categories are also giving exceptional value for money.

The $7.50 to $9.99 sector only dropped $7 million, and $7 million out of $201 million, or one sector out of 11, is well within bounds. Of course, if the lost volume went into the more expensive sectors this would be a cause for celebration.

The biggest increase was in the $2.49 and below sector, which was up $70 million, or 17 per cent. We accept this is both bottle and bulk. We also accept that an increase, in theory, is better than a decrease, but are there profits being made in this sector? An increase in value combined with a decrease in volume is what’s needed.

There is a lot to look at in the unsaid commentary. Perhaps more than in what is published.

The average value of bottled exports increased by 1 per cent to $5.40 a litre FOB, and the average value for bulk exports also increased by 1 per cent, to $0.98 a litre FOB.

Both these amounts are pleasing, though bulk needs to top $1.

1 thought on “Magic figures – Australian wine exports”

  1. Tony your news is not only personally tragic but also marks a loss for the entire wine industry. The application of a combination of your experience, commitment and questioning of aspects of the industry will be sorely missed. You have contributed a perspective that can be so important for complex organisations, namely, challenging the status quo from the perspective of trying to stimulate positive change, of benefit to all participants. Rest well for a job that mixed spice with guts and yet managed to maintain proportionality.

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