Wine and spirit businesses have welcomed yesterday’s news that the UK has agreed a free trade agreement (FTA) with Australia, which is expected to reduce costs for both exporters and importers, and provide greater choice for consumers.
In 2020, the UK exported £116m of Whisky and £27m worth of British gin to Australia, which was one of the few markets to continue growing during a year in which exports were heavily hit by the pandemic. UK distillers are expecting to see those exports continue to grow, with an agreement likely to remove the 5% tariff Australia levies on the spirit.
As well as benefits for UK spirits exports, an FTA should also see tariffs removed on wine imports from Australia. Wine is the largest agricultural export from Australia to the UK and in 2020 the equivalent of 230 million bottles were sold in UK shops and supermarkets, worth £1.5bn in sales.
With 80% of Australian wine arriving in bulk, the trade also supports a significant industry in the UK, from bottling plants and logistics networks to marketing and promotion services. Removing the tariffs and cutting regulatory barriers is expected to support a wide range of jobs across the UK’s wine industry.
The FTA should also provide benefits to wine merchants and the hospitality sector that will be able to offer greater choice and better value wine to consumers.
“The benefits of a tariff-free, quota-free UK-Australia trade deal is great news for British producers exporting English wine and spirits to Australia,” said Miles Beale, Chief Executive of the Wine and Spirit Trade Association (WSTA).
“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.”
Julian Dyer, COO for Australian Vintage, the owner of the McGuigan wine brand, added: “AVL is a strong supporter of the free trade deal with Australia, especially as both nations embark on our post-COVID economic recovery. There would be huge benefits to both the Australian wine industry and the British consumer.
“The deal will allow Australian business like ours to compete and innovate more successfully, which will ultimately reduce the cost and increase the number of higher-quality wines for British drinkers.”
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