Australian wine exports slumped 10% in the 12 months to the end of June, driven by a fall in shipments to its biggest markets — the US and UK — as inflationary pressures crimp demand.

The total value of wine shipped dropped to A$1.87 billion ($1.26 billion), while export volumes fell 1% to 621 million liters, according to data from government export and marketing group Wine Australia.

The results reflect broader global trends, with wine consumption declining 3% in volume in 2022 as people look to curb spending, Wine Australia said, citing market research from IWSR.

“The global softening of wine demand and consumption from almost all origins and the increasing trend of moderation in lieu of downtrading to combat economic headwinds is resulting in high levels of volatility within markets and across regions,” Wine Australia’s general manager of marketing, Paul Turale, said in the report.

The value of shipments to the UK dipped 14% to A$364 million, while exports to the US declined 18% to A$359 million, as demand for lower-price wine fell. The value of exports to mainland China fell a further 67% to A$8.1 million, with trade restrictions still in place.

One bright spot was a 29% uptick in shipments of to Hong Kong, the third-biggest market, which received A$220 million of wine, representing 12% of exports. The increase was driven by a one-third jump in the value of shipments of higher-priced wines — above A$10 per liter — during the period.

“Hong Kong is a major trading hub and therefore some of the wine is on-shipped to other Asian markets,” it said. The longer-term trend for the Asian region remains positive, it added.

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