A new free trade deal that eliminates tariffs on Australian wines exported to the United Kingdom has been applauded by Australian Grape & Wine.
The organisation said it welcomes the announcement that Australia and the United Kingdom have reached an in-principle agreement on a bilateral Free Trade Agreement [FTA].
“This announcement is a key milestone on the path towards a truly liberalising agreement that will see more wine lovers in the UK enjoying Australia’s finest drops,” it said.
The UK government noted that the free trade deal “will eliminate tariffs on Australian favourites like Jacob’s Creek and Hardys wines, swimwear and confectionery”.
According to the UK’s Wine & Spirit Trade Association, the equivalent of 230 million bottles of Australian wine were sold in UK shops and supermarkets in 2020, worth £1.5billion in sales.
“The United Kingdom is an incredibly important market for Australia’s grape and wine businesses, and British consumers are some of the most enthusiastic Australian wine aficionados,” said Tony Battaglene, Chief Executive of Australian Grape & Wine.
“The value of Australia’s wine exports to the UK grew by 33% to $461 million in the year to March 31, 2021, representing more than 17% of the total value of our exports over this period, and there is plenty of room to grow in the coming years.”
The agreement is positive news for Australian grape growers and winemakers looking to diversify their export footprint and expand in the years ahead.
“What we’ve seen today is a commitment by the Australian and UK Governments to finalise a trade agreement that will drive benefits to the economies of both countries and make exporting our world class wines to the UK easier for Australian wine businesses,” Battaglene noted.
“Today’s deal means British consumers will be provided with an even greater choice of Australian wines when they visit their local supermarket or off-licence, or enjoy a meal at a pub or restaurant in the months and years ahead.
“We’re hoping the final text of the agreement will address a range of costs and barriers Australian wine exporters currently face in the UK. We know there is more work to do on the detail, but the elimination of tariffs is critical for our sector. Other areas we are hoping to see progress on, include simpler certification requirements, and improvements in our ability to further process and package Australian wines in the UK market, which will drive innovation, create jobs here and in the UK, and reduce our carbon footprint”.
“We congratulate the Prime Minister on today’s announcement, and thank Ministers Tehan and Littleproud for all the work they and their departments have done to reach this milestone.
“We look forward to working closely with the Australian Government on the home stretch as they work through the final technical details of the agreement.”
Bryan Fry, CEO of Pernod Ricard Winemakers, said the announcement was “excellent news”.
“Not only is the UK a key stronghold market for Australian wine, especially for great brands such as Jacob’s Creek, where we need to continue to support and invest into the future, it is also a great source of Scotch whisky and gin, two key growths categories in the Australian domestic spirits market,” he noted.
“Pernod Ricard Winemakers warmly welcomes this agreement, and the positive economic implications for our business in both markets.”
Good news for whisky & gin lovers
According to WSTA, the deal is also good news for exports of Scotch whisky and gin, as it should see the removal of the 5% tariff on spirits exports.
“The benefits of a tariff-free, quota-free UK-Australia trade deal are great news for British producers exporting English wine and spirits to Australia,” said WSTA CEO Miles Beale.
WSTA figures confirm that £27million worth of gin was exported to Australia in 2020, with it being one of the few markets continuing to grow during COVID-19.
“It’s also good news for importers as it will enhance the UK as a global hub for wine trading, and will ultimately benefit UK consumers too,” Beale added.
“This historic announcement is well worth celebrating, with a glass of your favourite Australian wine.”
The Scotch Whisky Association (SWA) has welcomed the agreement, which eliminates a 5% tariff for the industry’s eighth-largest market.
Karen Betts, SWA chief executive, said: “It’s very good to see the removal of the 5% tariff on Scotch Whisky in the Agreement in Principle between the UK and Australia.
“This will help Scotch whisky distillers continue to expand exports to Australia, which have almost doubled over the last decade, making Australia our eighth-largest market by value.
“We await further details of the agreement in principle. A framework for addressing regulatory barriers to trade with Australia, to ensure greater legal protection and tax fairness for Scotch whisky, is also important to us, and – if delivered in this agreement – will be a real boost for the industry.”
Scotland exported £126million worth of beverages to Australia in 2020.