Production increased 18% to 418 thousand tonnes however for the third consecutive season the crush was well below average (19% below the 10-year average). ¹⁵⁴ Whilst growing conditions were variable across NSW’s wine growing regions, they were broadly supportive of increased production. However, the overall crush was below average primarily because of deliberate decision made by producers to reduce production, especially in the warmer, inland regions. As noted by Wine Australia, “these decisions include reduced purchasing of uncontracted fruit and the imposition of yield caps by wineries, and management of vineyards to reduce crops, harvesting of grapes to the ground, resting of vineyards and vine removals by grape growers”. ¹⁵⁴ Over 85% of NSW’s wine production comes from warmer inland regions such as the Riverina and Murray Darling – Swan Hill regions and it is these regions which are suffering the most from the global wine oversupply. The Riverina grape crush was up 15% year on year but 16% below the 10-year average and the second lowest on record. Despite years of below average production the wine stock to sales ratio (a measure of inventory relative to consumer demand) remains historically high, especially for red wine. ¹⁵⁴ As the oversupply of lower value wine in Australia is being mirrored in other large wine producing countries such as France, South Africa, Italy and Chile, reducing inventory has been difficult for wine producers.

NSW wine exports increased 7% to $442 million. ⁷⁹ Exports to the United States increased 15% to $209 million and accounted for 47% of total exports. ⁷⁹ Exports to the United Kingdom, which is NSW’s second largest export market by value and largest by volume, fell 9% to $86 million. ⁷⁹ Although the volume of exports fell average unit price increased 8% to $2.70/litre. ⁷⁹ Given the significant oversupply of wine, overall Australian exports are very important for helping to clear the excess inventory. Australian exports were up 15% to $2.3 billion primarily due to the reopening of the Chinese market during the year as China agreed to drop punitive tariffs on Australian wine. ⁷⁹ Although exports to China only recommenced in April 2024, significant restocking by Chinese buyers meant China was Australia’s second largest export destination for the year. In the last three months of the year exports were up 58% compared to the same period in 2022-23, thanks to higher Chinese exports. ⁷⁹ Exports to China made up 45% of total exports over the last 3 months of the year. ⁷⁹ Although NSW does not export significant quantities of wine to China, anything which helps clear excess overall inventory helps NSW wine producers. Whilst the reopening of the Chinese market is unlikely to solve the current wine over supply issues on its own, it is an important step in better matching supply with demand. Australian export prices for bulk wine are now the lowest in the world which should further support exports. ⁴⁴