How Do Australian Wine Exporters Manage Oversupply?

The scale of the surplus

Wine Australia's production, sales and inventory report put national stock at 2.06 billion litres at 30 June 2025, up 94 million litres or 5% in a year and above the ten-year average of 1.96 billion litres. Production of 1.13 billion litres ran ahead of sales of 1.08 billion litres, so the pile grew again.

The more useful number is the stock-to-sales ratio. At 1.9, Australia held roughly 23 months of sales in stock, against a ten-year average of 1.66, or about 20 months. The ratio for red wine was 2.12; for white, 1.59. The surplus is not spread evenly. It sits overwhelmingly in red, and within red in the warm-climate Shiraz and Cabernet that export markets once took in volume.

The industry is cutting intake

The clearest response came at harvest. The 2026 national crush was 1.27 million tonnes, 19% below 2025, 25% below the ten-year average and the smallest since 2000. Red grapes fell 29% and white grapes 9%, so whites now make up 53% of the crush. Wine Australia described the fall as mainly a deliberate adjustment to market conditions, with flooding in some inland regions adding to it, and said there was no sign of recovery for reds and that white prices were also falling. The average grape purchase value fell 6% to $570 a tonne.

A smaller vintage slows the build-up. It does not clear what is already in tank. The 2025 and earlier reds still have to be sold, blended, repositioned or written down.

Exports are not clearing it

In the year to June 2026 Australian exports fell 6% to 598 million litres, the first time below 600 million since 2004, and 7% in value to $2.30 billion. The market picture is uneven:

• Mainland China fell 8% in volume to 77 million litres and 15% in value to $756 million, as the 2025 restocking after tariffs were lifted wore off.
• The United States fell 15% in volume and 27% in value, and since 24 July 2026 Australian goods entering the US pay a 12.5% Section 301 duty.
• Canada rose 13% in volume and 20% in value, one of the few growth markets, at a time when most Canadian provinces had stopped selling US alcohol.

For an exporter sitting on surplus red, that means the markets that could take volume are not the ones that historically did, and each has its own price point, lead time and buyer calendar.

If you want to work through your own stock against these markets, book a 30-minute conversation through the Vintaflow contact page.

How the better-placed exporters are handling it

They manage parcels, not litres. A national or even company-wide litre total says nothing about which wine is the problem. The exporters with the most options know which parcels, by variety, vintage and location, are committed to a buyer, which are in active negotiation and which are genuinely uncommitted.

They set coverage targets by market. Instead of holding whatever the last vintage produced, they decide how many months of cover each market and style should carry, and treat anything above the maximum as surplus to be moved, reblended or priced.

They move early. The difference between a planned sale and a distressed bulk sale is usually timing. A surplus parcel identified six months ahead can be redirected to a different buyer, blended into a stronger line or rescheduled. The same parcel found two weeks before a delivery date usually costs a price concession.

They cut intake to match. The 2026 crush shows this happening at national scale. At company level it means aligning grape contracts and processing plans with realistic sales by style, rather than with vineyard capacity.

What to watch through 2027

Three signals will show whether the correction is working. The first is the 2026 stock-to-sales ratio when Wine Australia publishes its next inventory report: a smaller crush should pull it down, but only if sales hold. The second is red wine pricing, since the vintage report found no sign of recovery for reds even after a 29% cut. The third is the mix of export destinations, as volume shifts toward markets such as Canada while the US absorbs a new duty.

Where Vintaflow fits

The planning discipline above is what Vintaflow's inventory management supports. Exporters can set safety stock multipliers, minimum order quantities, target coverage and maximum coverage for each product, so surplus is defined by a rule rather than by instinct. Vintaflow calculates reorder points and target inventory from demand and shipping constraints, and raises inventory alerts and replenishment suggestions when a position moves outside its range. It can operate from xlsx or csv uploads without requiring an ERP.

Freight documents, customs and bulk-wine brokerage stay in the systems and relationships responsible for them. For how an estate allocates a fixed vintage across markets, see our guide on demand forecasting for Yarra Valley producers; for the export shipping side, shipment tracking for Australian wine exporters.

To test coverage targets against your own parcels and markets, book a conversation with Vintaflow.