UK & Australian free trade agreement welcomed by industry

June 16, 2021
By Ioni Doherty

Australia’s Free Trade Agreement with Britain is being welcomed by the Australian wine industry and producers of Scotch and gin in the UK.

On Wednesday, Prime Ministers Boris Johnson and Scott Morrison reached an in-principle agreement following Britain’s exit from the EU. It means that 99 per cent of Australian goods, including wine, will enter the UK duty-free when the agreement comes into effect in July 2022.

The deal, it seems, is good news for Australian wines – currently the single biggest agricultural export from Australia to UK – and for Australians who love their Scotch and London gins.

Prime Minister Scott Morrison said, “A new free trade agreement with the UK will deliver more Australian jobs and business opportunities for exporters, bringing both countries closer together in a changing strategic environment.

He says that it will provide both countries with greater access to a range of high-quality products and greater access for businesses and workers, driving economic growth and job creation for both.

“Australian producers and farmers will receive a significant boost by getting greater access to the UK market. Australian consumers will benefit from cheaper products, with all tariffs eliminated within five years, and tariffs on cars, whisky, and the UK’s other main exports eliminated immediately,” he said.

The UK Government put the value of the trade relationship with Australia at AUD$25 billion and suggested that figure is set to grow for businesses and producers throughout the United Kingdom.

Prime Minister Johnson said, “The free trade deal will eliminate tariffs on Australian favourites like Jacob’s Creek and Hardys wines, swimwear and confectionery, boosting choice for British consumers and saving households up to £34 million a year.

“Our new free-trade agreement opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world.”

Australian working holiday visa makers in the UK will get expanded rights and will now be able to stay for three years with an increased cut off age of 35.

The agreement has been welcomed by the Australian wine industry, particularly at a time when is looking to increase its presence in the growing UK market and an abundance of stock with China gone for now.

“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 per cent to $461 million in the year to 31 March 2021,
representing more than 17 per cent of the total value of our exports over this period, and there is plenty of room
to grow in the coming years.”

Battaglene said that while the elimination of tariffs is critical, there is more work to be done on the detail which Australian Grape & Wine hopes will include simpler certification requirements, and improvements in the processing and packaging of Australian wines in the UK market.

Conversely, Australian import tariffs of 5 per cent on spirits distilled in the UK, such as whisky and gin, will be removed. According to Wine & Spirit Trade Association (WSTA) figures, $50 million worth of gin was exported to Australia in 2020.

Spirits and Cocktails Australia chair Angus McPherson said, “We congratulate the U.K. and Australian governments on a deal that will give consumers more choice of Scotch Whisky and English gins and support the wider hospitality sector,” said

Spirits and Cocktails Australia also hopes to see more support for the promotion and distribution of award-winning Australian spirits within the UK.

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