Australian wine exports have plummeted to their lowest level in 22 years, pushing the industry below 600 million litres shipped overseas for the first time since 2004 and squeezing workers and small producers across the supply chain. The $183 million hit comes as worldwide wine consumption has collapsed to levels not seen since 1961, threatening livelihoods in regional communities that depend on the industry.
Workers Throughout Supply Chain Affected
Paul Turale, general manager of market development at Wine Australia, said everybody in the supply chain across Australia was "feeling the pinch." Around 60 per cent of the wine produced in Australia is exported, meaning tighter markets directly threaten jobs from vineyard workers to bottlers to freight handlers. Exports dropped seven per cent last financial year to $2.3 billion, with sales falling to Australia's three largest markets — China, the United States and the United Kingdom.
In Perth's Swan Valley wine region, Faber Vineyard owner and winemaker John Griffiths said his business was suffering. "It's ridiculously tough," he said. "If there's less wine being sold, we're trying to sell into a market that's shrinking, so that's never going to be good. Someone is going to start discounting their wine. If they're not selling it they'll start discounting it and if they're discounting it then it puts pressure on us."
The pressure on small producers like Griffiths reflects a broader structural challenge. Global wine consumption currently sits at about 20 billion litres, down from almost 30 billion litres in 2018. The Wine Australia report said the decline mirrors a broader global trend of declining wine consumption over the past decade, as consumers increasingly moderate alcohol intake, face cost-of-living pressures and shift towards alternative beverages.
Trade Tensions Create Opportunity
Australia did pick up buyers in the Canadian market because of its battle over tariffs with the United States, according to the report. That issue has reduced the availability of US wine in Canada and allowed Australian producers to sell more there. Exports to Canada rose 20 per cent in the last financial year to $188 million.
Griffiths said all winemakers were trying to take advantage of the opportunity in Canada. "Australia's been selling wine in Canada for a long time quite successfully," he said. "But the opportunity is exploding. If you take the Californian wines out of the Canadian market there's a huge opportunity."
Adapting to Survive
To accommodate changing tastes, Griffiths said Faber Vineyard was adapting to lighter-bodied wines. "We're making more grenache, pinot wines, which are lighter-bodied than the shiraz's we've made for a long time," he said. "But we're not stopping making shiraz." Turale said there were also big opportunities in low alcohol wines, particularly what Wine Australia has termed mid-strength wines at 7-9 per cent alcohol. "It plays to the benefits around the moderation, in particular, that we think is an important and growing sector," he said.
Margaret River was one of a small number of Australian wine-growing regions to buck the national trend, with exports up five per cent over the past 12 months. Penny Dickeson, chief executive officer of Margaret River Wines, said sustainable wines were playing an important role. "Wine customers are happy to pay more for wines when they understand the effort and consideration that has gone into making such a wonderful product," she said.
China remains Australia's biggest export market by value at $756 million, despite a 15 per cent drop in wine sent there. In terms of volume, the United Kingdom is still the biggest market for Australian wine, followed by the US. But Wine Australia said exports to the two countries was at its lowest level in 25 years.
Australia's 2026 vintage came in at 1.3 million tonnes of grapes harvested, which Turale said was well below the 10-year average. "The market is already adapting and moving to where the market is," he said.
Why This Matters:
The wine industry's contraction threatens employment across regional Australia, where vineyard work, processing facilities, and related tourism provide essential jobs in areas with few alternative employers. When small producers like Griffiths face pressure to discount, it's workers' wages and job security that get squeezed first. The $183 million export decline doesn't just represent lost revenue for companies — it means reduced hours, fewer seasonal positions, and potential closures in communities built around wine production. While some regions like Margaret River show resilience through sustainable practices and premium positioning, the overall trend reveals how global market forces and changing consumer habits can devastate export-dependent industries without adequate support systems. The shift toward lower-alcohol and sustainable wines offers a path forward, but requires investment and adaptation that smaller producers may struggle to afford without assistance.