You know things are bad when a press release from the key industry body calls trading conditions 'tough'.

But there is no escaping the bad news from Wine Australia about the shape of the Australian wine export market. Volumes are down, values are down, and it's mainly among our historically biggest trading partners (The UK, US & Europe) where things are struggling.

What makes these stats particularly challenging is that it comes off the back of a largish vintage last year too, with production 4% above the long-term average. In turn, it means that the inventory volume (ie wine available) in June last year rose to 2.27 billion litres, which is almost 23% over the long-term average.

Do you want the good news? The tariffs on Australian wine into China could be lifted within months, opening back up a market that was once worth a billion dollars per year.

Want even more good news? While lower-priced wine is going backwards, premium wine is almost unaffected by this export slump, with exports about $10 per litre stable (and rising in some markets). In other words, the 'drink less but better' ethos of lower volumes but higher prices is being reflected in export markets and taps into the desires of how a younger generation is changing wine consumption.