Free Trade Agreements and the South Korean and Japanese markets
Market Bulletin | Issue 25
The Australian Wine Grand Tasting, co-hosted by Wine Australia and Austrade, takes place this week in Seoul and Tokyo. These events showcase Australian fine wine to the Korean and Japanese trade and media ahead of the peak autumn/winter wine drinking season.
Country in focus: South Korea
Australian exports to South Korea increased by 29 per cent in value to $13 million in the last financial year. The average value of bottled wine increased by 7 per cent to $7.30 FOB per litre. The South Korean wine market is in a gradual growth pattern, growing at 3 per cent in value per annum. Eighty-four per cent of the wine consumed is imported and Australian bottled imports rank sixth by value.
The Korea–Australia Free Trade Agreement (KAFTA) came into force on 12 December 2014, and eliminated the 15 per cent tariff on all wine. Australian export value is now at its highest point since 2008, thanks to the rapid growth in the last two years.
For more information on opportunities offered for Australian wine exporters in South Korea, please see Wine to Korea on Austrade’s website.
Country in focus: Japan
While KAFTA reduced all tariffs on wine immediately, the Japan-Australia Economic Partnership Agreement (JAEPA) cut all tariffs on bulk wine when it came into force on 15 January 2015 and tariffs on bottled wine are gradually reducing. Before JAEPA, Australian exports had been in a general decline. The agreement immediately boosted bulk exports, however now most of the growth is being driven by higher price points.
In the 12 months to June 2016, Australian exports to Japan increased by 4 per cent to $45 million. Exports above $10 a litre increased by 24 per cent while the average value of bottled wine increased by 2 per cent to $5.28.
The Japanese wine market is currently valued at $8 billion and growing at 6 per cent per annum. In a market that is mostly imported wine, Australia sits sixth in countries of origin.
For more information on opportunities offered for Australian wine exporters in Japan, please see Wine to Japan on Austrade’s website.