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| 22 January, 2018
In a submission to the Trade Select Committee last week the WSTA called for new bilateral agreements to be a priority after Brexit.
Currently the tariffs on wines imported from Australia and New Zealand into the UK work out at around 10-12p added to a bottle of still wine and 22p on sparkling wine.
In return British spirits being exported to our Antipodean cousins pay an extra 5% of the value of their products to get them into the country.
These barriers push up the price for consumers who already pay a huge whack when the UK’s excessively high duty levies are added on. Britain has some of the highest duty rates in the world pushing the price of a bottle of still wine up a further £2.16 and £2.77 on a bottle of sparkling.
The tariffs also stifle the vibrant UK wine and spirit businesses who rely on huge volumes of wine imports coming to the UK and vast exports of British spirits going the other way.
Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said:
“In her speech in Davos this week the Prime Minister said the UK intends to be at the forefront of championing new trade deals. We welcome this and call on government to take the opportunity post Brexit to enhance trade with Australia and New Zealand by removing all unnecessary regulatory barriers and allowing goods to flow more freely between the markets. Australian wine is the most popular wine drunk in Britain and growth of New Zealand wine sales are outpacing any other country. Australia and New Zealand import more spirits from Britain than any other country.
“A tariff free trade deal is therefore a win-win for industry and consumers on both sides of the world and it is something we have been talking to our trading partners and politicians down under about since the vote to leave the EU. There is strong support on both sides for this sort of bilateral trade agreement which should become a blueprint for our future trade agreements with other countries outside the EU.”
Theresa May addressed the World Economic Forum in Davos, Switzerland, on Thursday where she told delegates that the “UK will continue to be a global advocate of free trade”.
In 2016, Australian wine exports to the UK were worth £1.5bn in sales, whilst UK spirits exports to Australia were worth £613m in sales.
In the same period sales of New Zealand wine in the UK were worth £618m and sales of UK spirits exports in New Zealand were worth some £50m. Helping New Zealand to become the fifth largest wine exporter to the UK by value.
The WSTA estimate that customs tariffs on wines entering the UK from Australia and New Zealand amounted to some £35m in 2016.
Over 80% of Australian wine, and over 40% of New Zealand wine, exported to the UK is shipped in bulk where it is bottled and some of it re-exported to the EU and Norway.
The removal of tariffs would allow Britain to maintain its position as the international hub in the world wine trade further boosting the UK economy and providing more jobs.
The Australian and New Zealand wine and spirit sector contributes to around 37,000 jobs directly and a further 22,000 jobs indirectly.
The UK is the world’s largest spirits exporter, with approximately 45% of exports going to the EU. On leaving the EU, UK spirits will need to increase exports to developed markets and Australia and New Zealand are a target market.
The number of distilleries in Britain has more than doubled in the past five years and there are now 315 distilleries, up from 152 in 2013, according to figures from HM Revenue & Customs. To sustain new and innovative brands, developed markets such as Australia and New Zealand will be key to their survival. The removal of spirits tariffs applied to UK exports will be a huge boost for British spirit makers.
The WSTA is calling on government to take advantage of the groundwork that has been done for them by the WSTA and to secure a free trade deal with Australia and New Zealand.