Jason O’Dea, a family member for Windowrie Wines, has just recently returned from a trip to Korea where the Free Trade Agreement with Korea is about to be signed. Although the agreement was originally announced around 2 and a half years ago because of the internal intricacies of governments there is always a long time frame between announcements and actual signoffs. This agreement means that any relevant Australian business that exports can benefit from this reduction in tariff.
Jason has been meeting with Korean importers in light of the imminent signing of the free trade agreement which will mean there is a 15% trade tariff about to be wiped from prices.
Jason said, ‘Due to the time lag it has actually had a negative impact on sales in this market, because the importers have been wanting to wait to buy for 15% less. The agreement in China will mean a drop of between 14-15% in China and let’s hope that there is not a lag between announcing this agreement and signing. The main benefit will be that it puts us on a level playing field with other countries who have already signed, including Chile, south Africa and New Zealand, who are our main competitors.’
“As a result of this agreement, we will be hoping for an increase in volume – currently we are exporting approximately 40% of our output, with sales centred around Japan, followed by China, and hopefully Korea will be on board soon.’
On the other hand, Rosnay wines who produce mainly organic wines have said that this will not benefit them due to the lack of interest in their type of product and the current oversupply in the Chinese market.
By Cheryl Newsom