Free Trade Agreement between the United Kingdom and Australia

IWSC news

Fri 2 Jul 2021

By Brooke Flegel

Recent announcement of the Free Trade Agreement between the United Kingdom and Australia brings good news for UK merchants and consumers of wine and spirits.

UK Prime Minister Boris Johnson and Australian Prime Minister Scott Morrison met earlier this month to agree on the first post-Brexit free trade agreement, which will see an elimination of tariffs over 15 years. Subject to parliamentary scrutiny, the agreement should see the elimination or reduction of wine and spirits exports and imports between the two countries.

The UK government announced, “The free trade deal will eliminate tariffs on Australian favourites like Jacob’s Creek and Hardys wines, swimwear and confectionery.”

National Chair of the Federation of Small Businesses, Mike Cherry, said: “A trade deal with Australia will come as great news for many of our members who have long been exporting there as well as those who are hoping to expand their trade ambitions.”

The announcement on 15 June was welcomed by Australian wine producers, who export more wine to the UK than to any other country. Australia sends 80% of its wine exports to the UK, shipping en masse and bottling upon arrival.

According to the WSTA, current wine imports from Australia have been subject to tariffs averaging 10-22p per bottle. Prior tariffs of imported Australian wine were estimated to cost UK wine businesses £16 million. The agreement will allow the UK’s 900+ independent wine merchants to offer greater choice and better value to UK customers.

Julian Dyer, Chief Operating Officer for Australian Vintage, said: “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.”

News of the agreement comes amidst a period of growth for gin, which was one of the few exports to see growth during the pandemic. The UK exported 27 million of British gin to Australia and expect these exports to continue to grow. The agreement is likely to eliminate the spirit’s current 5% tariff.

UK wine exports totaled 646 million in 2019, making it the sixth largest sector in food and drinks. Wine and spirit connoisseurs are encouraged by this recent agreement, which is likely to improve the UK’s international standing in the industry. 

Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said: “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. 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.

“This historic announcement is well worth celebrating, with a glass of your favourite Australian wine! We hope further free trade deals with other countries are hot on its heels.”

Read more IWSC gin recommedations: