Jump in Australian Wine Exports to Russia a Taste of Trade to Come

The Australian wine industry is finding new customers for quality wines in Russia, with the value of wine exports increasing by more than 40per cent in 2007. Wine sales to Europe’s largest emerging market grew to A$6.28 million in 2007, up from A$4.36 million in 2006.

The value of premium wine exports from South Australia to Russia jumped by almost 130per cent over 2006 figures, with the state’s wine producers contributing 60per cent cent of total export value.

Marco Tiggelman, the Australian Wine and Brandy Corporation’s Regional Manager for Continental Europe, said the price point achieved was the most promising feature of recent success in Russia.

“The value of South Australian wine sold was $6.29 a liter, well ahead of the average for Australian wine exports overall, giving Russia the second highest average unit price in our top 20 wine markets,” Mr Tiggelman said.

“The AWBC believes the wine industry’s export future lies in improved margins, not necessarily greater volume, so this is an excellent beachhead position in a priority market,” he said.

“The success in Russia is the result of forward-looking wine companies, Wine Australia’s strategic push to develop key emerging markets, and the support of partner organizations including the South Australian Government and Austrade,” he said.

One example of a company building a presence in the new Russia is Two Hands, a premium winery based in the Barossa Valley in South Australia. The label formed an alliance last year with Moscow’s Simple Wine, a distributor specializing in rare, expensive and elite wines. The first shipment of Two Hands red arrived in Moscow early this year.

Two Hands’ Sales and Marketing Director Andrew Tierney is optimistic that the company’s efforts to develop a presence in Russia will yield long-term benefits.
“Initially our distribution partner focused on Moscow and so far we have been encouraged by strong early sales. The next step will be to build on our success in the capital to reach consumers in other parts of the country,” Mr Tierney said.

Two Hands has received support from the Export Market Development Grant (EMDG) scheme in the past, and also achieved success in the US, New Zealand, Asia, Canada, the UK and other EU markets.

Austrade’s Moscow based Senior Trade Commissioner Dan Tebbutt said the success of wine in Russia reflected strong overall growth in merchandise exports to an emerging economic powerhouse.

“In 2007 Australia’s exports to Russia grew by 35.9per cent to A$658 million. The fact that a boutique product like premium wine is part of that growth is a strong indication of the diversification of exports and Russia’s increasingly sophisticated consumer base,” Mr Tebbutt said.

“Russia’s US$1 trillion economy is now the ninth largest in world, and its retail market the eighth largest. Russia is a country of 140 million people where social drinking is an accepted part of the culture. It has an affluent consumer segment ready to spend and a growing middle class.

“That’s great news for wine producers, and we’ve seen labels such as d’Arenberg, Wirra Wirra and Fox Creek establish a foothold, as well as prominent Australian industry names such as Yalumba and Penfolds,” Mr Tebbutt said.

Boutique McLaren Vale winery Fox Creek have been selling into Russia for four years. Fox Creek General Manager Paul Rogers said success in Russia was the result of deliberate strategy to target emerging markets.

“Out of the 20 countries we export to, Russia is now our largest market - and one that still offers a lot of room for growth. We shipped over a thousand cases in 2007, with another shipment of 500 already dispatched this year,” Mr Rogers said.

“Austrade helped us maintain our momentum by working with our distributor to organize tastings of Fox Creek Wines in Moscow last year.

Fox Creek Wines have even made it as far as Turkmenistan, where our bottles were presented at official meetings during the first Australian trade delegation there,” Mr Rogers said.

In 2006-07, Austrade assisted 112 companies make deals in Russia worth $694 million. Twenty-one of these companies were new or irregular exporters.

Source: Austrade

Net News Publisher