While there’s little doubt that wine importers to Australia have enjoyed a wonderful ride on the back of the once-strengthening Australian dollar, the ‘correction’ of recent weeks has been rather more brutal than anyone could ever have envisaged. With the Australian dollar hovering around 61 US cents at time of writing, and with expectations to dive further, anyone who has not already paid for their shipments of wine into Australia is likely to be in very serious trouble. The most recent figures on wine imports provide a stark insight as to why it seems every second Australian has become a wine importer of late. To the end of August this year, the annual volume of wine imports was 56 million litres out of a total Australian consumption of 482 million litres, a staggering 11.6%, a level up by 55.3% on the previous year by volume and 36.1% by value. It’s now safe to assume that these numbers are about to take a thrashing. Anyone who ordered imported wine when our currency bought 97.97 US cents (way, way back on July 15) will certainly want to have paid for it by now. In terms of the market, the likely outcome is this. Importers will try to increase prices as soon as they can, but most have probably sold much of their wine on indent, at prices (but not exchange rates) fixed long ago. Several have already seen their entire year’s margin go up in smoke. Next year they will all increase prices, but the top end of the market is likely by then to be significantly less able to afford the wines they have been buying at current price levels, let alone the likely inflated ones of the near future. I sincerely hope circumstances change and prove me wrong, but it is likely to be a tough three years for wine importers, especially those at the pointy end of the market.
