Who Buys Australia’s Fortified Wines?

The recent sale of Seppeltsfield and its stocks of fortified wines to Kilikanoon got me wondering about who buys these extraordinary but amazingly inexpensive wines.

As recently as 1966 fortified wines accounted for some 62 percent of wine sales in Australia but by 1984 it was only 16 percent. Sales fell even further to around 7% by 1993, and have continued to fall to the present day. In the 1993-94 financial year fortified wines were 8.4% of domestic wine volume and 2.3% of export volume. By 2005-06 domestic volume was 4.2 % and export volume accounted for 0.35%. Much of this drop in market share has been the result of enormous growth in sales of table and sparkling wines, although the volume of fortified wine sold in Australia has fallen steadily from 27 million liters in 1993-94 to 18.5 million liters in 2005-06.

Eighteen and half million liters seems like a large volume but with a population of 20,434,176 (July 2007 est.) that is less than a liter per person. That 18.5 million liters looks even more insignificant when its broken down by wine styles (Sherry, Port, Other) and wine containers (glass less than2 liters, soft packs, other). For 2005-06 fortified wine in glass (of less than 2 liters) made up 1.36% of domestic sales by volume with Sherry at 0.4%, Port at 0.87% and Other accounting for 0.085%. I’m assuming that "Other" includes Muscat and Tokay which (in glass of less than 2 liters) sold 366, 000 liters in 2005-06. Divided amongst 20 million people that is less than 20 milliliters/person. That is not even a fluid ounce!

With numbers like that its no wonder that the Chairman of the Muscat of Rutherglen group, Colin Campbell recently announced a $1.4 million (Aust) dollar project to transform all sectors of the Australian fortified wine industry. Campbell stated “We expect the outcome of the project will be a totally new approach to presenting our wines – in bottle shops, restaurants and cellar doors. The renewed focus on fortified wines will permeate all sections of the wine industry – distributors, retailers, restaurants, wine producers, and vocational and tertiary training institutions. We believe consumers will also embrace the changes.”

Part of the funding for the project includes a grant of $500.000 (AUD) from the Australian Government to aid the Australian fortified wine industry re-brand its products and increase access to European markets. But how much fortified wine is exported? Unfortunately not a lot but in contrast to the steady fall in domestic sales the volume of exported fortified wines has remained remarkably constant between 2 and 3 million liters; 2.873 in 1993-94 and 2.587 in 2005-06.

Where is Australia exporting these wines today?

In 2005-06 over 70 percent of exported fortified wine went to four countries; USA 20.8%, UK 19.6%, Canada 16.7%, France 15.2%. However in the first three countries fortified wines do not constitute a large segment of total exports. Fortified wines only accounted for 0.26% of exports to the USA even though they consumed 28.4% of total exports. Its worse in the UK where 0.2% of wine imported from Australia was fortified and they received 36.2% of total exports. Canadians have a greater appreciation for Australian fortified wines with 0.89% of the wine being fortified; Canada receives 6.8% of exported Australia wine. Perhaps surprisingly France shows the greatest attraction for fortifieds. Even though France consumes only 1% of exported Australian wine, they accounted for 5.2% of the fortified wine exports.

I'm not even going to try to figure out the consumption per person in these countries, but if you want to do part of the exercise put these numbers in your calculator. 539,000 divided by 300 million. Yes that right its less than 0.0018 liters per person in the USA. But let's look on the bright side. It can only go up from there, can't it?

Note: The definition of fortified wine used to collect these numbers is: Wine to which grape spirit, brandy or both has been added, thereby adding alcoholic strength and precluding further fermentation. Fortified wine must contain at least 150 millilitres/litre and not more than 200 millilitres/litre of ethanol at 20° Centigrade.