Deal benefits gin, whisky exports

THE freetrade agreement struck between the UK and New Zealand is expected to benefit gin and whisky exporters on both sides, although it is unclear whether consumers here will notice any change in retail prices.

Industry group, Spirits New Zealand, said as part of the deal local whisky and gin distillers were expected to have tariffs removed on exports to the UK.

In return, the same access will be granted for British gin in New Zealand. UK gin at present faces a 5% duty, New Zealand importing $15.7 million worth of the product in 2020.

There would be no change for UK whisky exporters, who were already enjoying tarifffree trade.

Spirits New Zealand chief executive Robert Brewer said the dropping of tariffs for British gin would not necessarily result in cheaper retail prices, as about 70% to 75% of the retail price of a bottle of imported spirits was made up of GST and excise tax.

‘‘Tariffs and the duties form a small part [of the retail price], so whether or not you’ll see price fluctuations as a result of this is a sort of a complex calculation that it’s hard to determine whether or not this is going to play out at the retail end.’’

Mr Brewer said although the detail behind the agreement in principle still had to be worked through, he believed the deal was balanced and would deliver benefits for both sides.

New Zealand’s spirits industry was small but growing like crazy, he said. Just 10 years ago there were only a few commercial distillers, now there were almost a hundred, he said.

‘‘At the moment, most of the New Zealand distillers are well served by the domestic market, and by markets such as Australia. However, it is obvious that the UK as a major, major trading nation, and a major trading destination of our houses would be something that New Zealand producers would happily increase their exports to.’’

Just as New Zealand wine had taken the UK and Europe ‘‘by storm’’, Mr Brewer believed the spirits industry could do the same. New Zealand’s exported about $30 million$40 million of spirits each year, but the popularity of those products was growing rapidly, he said. — RNZ