Australia's wine lovers are embracing European bottles as never before, worsening a decline in their local industry, already suffering from plummeting exports.
The Australian dollar is at record levels against the euro, and imported wine has rarely been more affordable. Prices for some labels have dropped by 30 per cent. LVMH Moet Hennessy Louis Vuitton SA's Moet & Chandon champagne is now sometimes cheaper than the French company's locally produced Domaine Chandon sparkling wine.
"It's absolutely fantastic," said Jeremy Oliver, a Melbourne-based wine critic. "If you have A$100 ($129) in your pocket, that will get you a top bottle of Australian cabernet or shiraz. Today it also buys you a pretty serious Bordeaux, a very good Italian from any region or a sensational Spanish red."
The shift is harder on local wine producers. Australia, the world's largest wine exporter by volume outside of Europe, saw the value of exports decline to their lowest level in a decade last year, falling 10 per cent from a year earlier to A$1.89 billion, said government export agency Wine Australia.
At Melbourne-based Treasury Wine Estates (TWE), the world's second-biggest publicly traded vintner and owner of the Lindemans and Penfolds brands, sales in the US, its largest market, fell 15 per cent to A$803 million in the year through June. The effect is more pronounced in Europe, where the euro has fallen 7.8 per cent over the past three months to make it the worst-performing major currency against the Australian dollar, compared with a 1.4 per cent decline in the greenback.