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A Not-So-Rosy View On The UK FTA

By Sunday 20 June 2021No Comments

Responding to a report in WBM e-bulletin The Week That Was on Friday, Giles Cooke MW of Thistletown Wine Company urges caution on the Free Trade Agreement between Australia and the UK…

 

As someone with a foot in both camps, I’d love to believe the hype about the Australian/UK FTA but it’s a fair assessment that when one side of the negotiation feels they have won, they either don’t understand the implications, or the other side capitulated – and then you have to ask why?

The FTA is, undoubtedly, a better result for Australia than it is for the UK, a country now so bereft of economic allies that it is selling out pretty much every traditional industry in the land.

Both sides are making much of duty free access and the accompanying benefits to wine sales but seriously, do we really believe that?

The tariff on Australian wine coming in to the UK market is dwarfed by the duties and taxes that the UK government applies to wine and is that very, very minor saving going to be passed on the consumer to encourage sales?

Moreover, that negligible saving will be entirely consumed by the huge increases in freight costs that all deep-sea routes are now incurring.

Couple this to the perception in the UK that Australia, without the China market, is desperate for sales and actually the situation doesn’t look quite so rosy.

Despite Johnson’s slurred praise for the deal, much of the UK, including those who voted for the isolationism of Brexit, are very suspicious of the agricultural precedent set by this deal, and it is not out of the question that sentiment towards Australia will actually sour as a result of this deal.

A sad outcome indeed, brought on by two desperate politicians, eager for wins at any cost.

Therefore, I’d say ignore the FTA (look what good it did with China) and don’t begin soliciting emails with the line, “Due to the FTA we are now interested in the UK market,” as I got this morning.

The UK is suffering, from the effects of Covid and Brexit, and the wine business is no exception.

Australian wine has never been more dynamic, more exciting, more innovative, so don’t go to the UK because of China or the FTA, go to the UK because you want to make everyone you meet, as excited and energised about Aussie wine as you are, as I am.

Short-term opportunism is just that, and it hasn’t served the Australian wine industry well.

A renewed commitment to the UK market will be hard work, you may have to start small and build but, as I can vouch for, those that are committed for the long term, that are versatile, creative, resilient and bold will do well.

Photo by Viktor Forgacs on Unsplash

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