Australian Wine Market Imbalance Set To Continue

29 Jan Australian Wine Market Imbalance Set To Continue

2025 saw total wine production in Australia reach 1.13B litres, increasing by 9% on last year but remaining 7% (89B litres) below the 10-year average. Over the same period, the national winegrape crush reached 1.57M tonnes, increasing by 11% but remaining 8% below the 10-year average of 1.71M tonnes. This recovery was led by red wine, with output rising 15%, compared to a 2% increase in white wine, which saw red account for 52% of all wine made.

Whilst total sales in 2024–25 were largely unchanged at 1.08B litres (120M cases), production exceeded sales for the first time in three years, leaving a surplus of around 52M litres, or 6M cases.

Whilst exports grew 3% to 638M litres (mostly driven by rising exports to mainland China which reached 85M litres), domestic sales fell by the same percentage to 443M litres.

This period represents the first full financial year of normal trading since China’s tariffs on Australian wine were lifted, however it is significant to note that the volume exported to mainland China was less than half that its 2017-2018 peak, which can be attributed to changing market and global conditions.

Australia’s national wine inventory rose to 2.06B litres as at 30 June 2025 – 5% higher than both the previous year and the 10-year average of 1.96B litres. The stock-to-sales ratio (SSR) increased by 4% to 1.9, placing it 15% above its long-term average of 1.66. On current sales, this equates to 262M litres of excess wine above what would be expected for a balanced market.

This ever-widening imbalance between supply and demand is a result of ongoing challenging conditions across the globe for the wine market. Furthermore, it is anticipated that global consumption will continue to decline over the next five years, which will amplify the challenges around high stock levels that are carried forward from 2024-2025 as reduced future demand or stagnant sales means grape prices are unlikely to improve in the next few years.

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