Removing tariffs may not prove the tonic for Kiwi drinkers of British gin

by | Nov 11, 2021 | News

The free trade deal agreed by the UK and New Zealand is expected to benefit gin and whisky exporters in both countries but it is not clear whether consumers in will notice any difference in retail prices, RNZ reports.

Industry group, Spirits New Zealand, said as part of the agreement local whisky and gin distillers expected to have tariffs removed on exports to the UK.

In return, British gin will be granted the same access to New Zealand. UK gin currently faces a 5 percent duty, with New Zealand importing $15.7 million dollars worth of the spirit in 2020.

UK whisky exporters, who were already enjoying tariff free trade, would see no change.

Spirits New Zealand chief executive, Robert Brewer, said that the dropping of tariffs for British gin would not necessarily result in cheaper retail prices, as at least 70 percent of the retail price of a bottle of imported spirits was comprised of GST and excise tax.

“Tariffs and the duties form a small part [of the retail price], so whether or not you’ll see price fluctuations as a result of this is a sort of a complex calculation that it’s hard to determine whether or not this is gonna play out at the retail end.”

New Zealand’s spirits industry was small but growing quickly, Brewer said. Just 10 years ago there was only a handful of commercial distillers, now there was almost a hundred, he said.

“At the moment, most of the New Zealand distillers are well served by the domestic market, and by markets such as Australia. However, it is obvious that the UK as a major, major trading nation, and a major trading destination of our houses would be something that New Zealand producers would happily increase their exports to.”

Just like New Zealand wine had taken the UK and Europe “by storm” Brewer believed the spirits industry could do the same. At the moment New Zealand’s exported about $30-40 million of spirits each year, but the popularity of these products was growing rapidly, he said.

“New Zealand gins and increasingly, our New Zealand whiskies are specifically and and wonderfully New Zealand in their taste and appearance and the production methods.”

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