Sales of Scotch whisky and Cognac to South Korea are set to rise strongly after the country signed a trade deal with the European Union.
The European Spirits Organisation (CEPS) welcomed the Free Trade Agreement, which was signed in Brussels yesterday (6 October). Around EUR1.6bn-worth (US$2.2bn) of customs tariffs will be removed and import duties on spirits in South Korea will be eliminated within three years, CEPS said.
“It is excellent news for the European spirits industry,” said CEPS’ director general, Jamie Fortescue. CEPS has for years argued that local spirits producers in South Korea, which make up 97% of market volume, have an unfair advantage over importers.
Scotch whisky distillers were particularly pleased by the trade deal, which could help them to claw back lost ground in South Korea. The country has slipped from fifth to seventh in the Scotch export league table, with exports having fallen by 24% to GBP112.5m (US$179.2m) in 2009.
“Tariff elimination in South Korea has been a key SWA trade priority for a number of years and an issue we’ve pursued both in Brussels and Seoul,” said a spokesperson for the Scotch Whisky Association.
As part of the trade agreement, South Korea has agreed to respect the protected name status of Scotch whisky and Cognac. “This agreement goes beyond taking down trade barriers,” said CEPS’ Fortescue. “It also lays down fundamental intellectual property rules to crack down on counterfeit spirits and to protect geographical indications.”
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By GlobalDataHe added that the deal could set a precedent. “It sets a first-class benchmark for future commercial agreements with key global players, including India – an important export market for European spirits,” he said.
European spirits exports total EUR5bn (US$6.97bn) annually, according to CEPS.
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