Abstract
By eliminating the 15% import tariff, the imminent Korea-Australia Free Trade Agreement (KAFTA) will bring about opportunities for Australian wine exporters to enhance its competitiveness in the domestic Korea market. This project triangulated qualitative findings from Korean wine businesses with quantitative surveys with Korean consumers to distil the changing nature of the Korean wine market in the new era of bilateral trade relations. The findings suggest that Australian exporters need to capitalise on a small window of opportunity leading to, and shortly beyond, the signing of the KAFTA to increase importers and consumers’ preference for Australian wine. Six key recommendations serve to guide Australian exporters’ engagement with Korea in the post-KAFTA era.
Summary
The imminent emergence of new trade relations between Australia and Korea raises a number of significant implications for wine trade with Korea. Grown by over Australia Free Trade Agreement (KAFTA) will significantly improve the competitiveness of Australian wine in Korea. But to derive maximal benefits from the KAFTA would require a strategic repositioning of how the Australian wine industry does business in Korea.
The project harnesses the researchers’ acquired expertise of the Korean market and network of connections to shed light on the Korean wine market trend, the structure of the distribution channel, the regulatory environment and Korean consumers’ wine perceptions and preferences. Using a combination of in-depth interviews with Korean distributors, opinion leaders and relevant government agencies as well as surveys with Korean consumers, key information are collected in four areas: 1) Australia’s key competitors (France, Chile, and the US); 2) distribution channel (both on and off premise markets); 3) non-tariff barriers/regulatory environment on imported wine, including labelling, licenses, policies, regulations/inspections on food and safety; 4) insights of Korean consumers towards Australian and other foreign wines.
This study proposes the following six key and actionable recommendations on Australian wine producers’ engagement with Korea:
1. Developing better engagement with industry
2. Positioning of Australian wines in Korea
3. Pricing and value propositions
4. Meeting consumer preferences
5. Marketing to consumers
6. Doing business in Korea
Australia has a small window of opportunity leading to, and shortly after, the signing of the KAFTA into law. We believe that the six recommendations that follow from this study’s findings will enable Australian producers to sharpen their competitiveness and obtain a stronger foothold in the Korean wine market in the new trade era.