Wednesday, November 23, 2005

What Does The Average Wine Drinker Pay For Australian Wine?
Its very instructive to consider what the average wine drinker pays for a bottle of Australian wine. In a presentation to the Australian Winegrape Conference on November 17, 2005 Jamie Odell, Managing Director, Foster's Wine Estates, provided data on the breakdown of consumer spending on Australian wine in the USA and the UK.

The vast majority, 89% to be precise, of Australian wine sold in the USA sells for $6-8 a bottle. Six percent of wine sales are for wine in the $4-6 range, another 3% cost $8-10 and 1% of wine sales account for bottles costing $10-15. While its not stated in the presentation I assume that the remaining 1% are for wines that cost more than $15 a bottle. The average price paid by the consumer in the USA is about $7 in 2005, but that has fallen from $8 in 2001. The overall price the American consumer pays for bottled wine was about $5 in 2005.

What about the UK? It’s a similar story. Twenty-six percent of sales are for wine costing less than 3 pounds, 40% cost 3-4 pound, 22% 4-5 pound and 8% 5-6 pound. That leaves 4% of sales costing more than 6 pound ($10.32USD).

Joe Public obviously likes his wine cheap. Is it possible to get consumers to pay more for their wines? Educating people to appreciate quality wine is the key. But growing the top end of the market (above $25 a bottle) to any significant degree will not be easy.

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