A free trade agreement between Australia and the United Kingdom is set to be a boon for the Hunter wine industry after a rough few years, local vignerons say.
Australia and the United Kingdom this week reached an in-principle free trade agreement, which will involve the UK liberalising Australian imports with 99 per cent of Australian goods, including wine, entering the UK duty free when the agreement enters into force.
Tyrrell's Wines managing director Bruce Tyrrell said the United Kingdom was one of the markets he had been looking at to take the place of China, which introduced tariffs on Australian wine of up to 212 per cent amid escalating trade tensions between the two countries.
Mr Tyrrell believes the agreement could recoup up to 20 per cent of sales he had lost from the China market.
Current UK tariff rates vary, depending on the strength of the product, from about 10-15 pence per bottle (18-27 cents), according to the national association of wine-grape and wine producers, Australian Grape & Wine.
Last year the tariffs totaled about $50 million in costs to Australian wine exporters.
"This is terrific," Mr Tyrrell said.
"For the last 20 years Australia has been a major supplier of wine to the UK.
"The UK was the number one market for Australian wine before China came along. This puts us further up the list."
The announcement comes off the back of the China tariffs and the Black Summer bushfires wreaking havoc on the 2020 wine vintage through smoke taint.
"We've had a very difficult 18 months," Brokenwood Wines general manager Geoff Krieger said.
This will make it more commercially competitive for us.Bruce Tyrrell on the UK free trade agreement
"So any sort of support at a governmental level for us is greatly appreciated."
While Mr Krieger believed the agreement was "a very good thing", he said the devil would be in the details, with deal not yet signed and the timeline for the tariff removals remaining unclear.
He said he thought the initiative could lead to UK sommeliers and restauranteurs considering Australian wine more highly.
"Australian wine has had a hard time getting listed in fine dining restaurants and gastropubs," Mr Krieger said.
"This isn't about discounting our wine, it's about making our wine more competitive."
Australia's top export market as of December 2020 was China with 31 per cent of total export value, while the UK was second with 17 per cent.
The value of Australia's wine exports to the UK grew by 33 per cent to $461 million in the year to March 31.
Mr Tyrrell said the free trade move didn't come as too much of a surprise after Brexit.
"The European Union didn't like the Australian wine industry too much because we'd stolen a lot of their market," he said.
Australian Grape & Wine CEO Tony Battaglene said the announcement was a commitment from Australia and the UK "that will drive benefits to the economies of both countries and make exporting our world class wines to the UK easier for Australian wine businesses".
"We're hoping the final text of the agreement will address a range of costs and barriers Australian wine exporters currently face in the UK," Mr Battaglene said.
"We know there is more work to do on the detail, but the elimination of tariffs is critical for our sector."
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