Wine company toasts UK trade deal

A Marlborough wine company is in line for a $1.2 million boost when the United Kingdom free trade deal takes effect.

The deal, announced last Thursday, will remove tariffs on 97 per cent of goods once a final agreement is settled, including wine. All tariffs on New Zealand exports will be removed within 15 years.

Yealands Wine Group chief executive officer Tiffani Graydon said any kind of tariff removal or reduction was welcome, ‘‘so that is fantastic news’’.

‘‘New Zealand sauvignon blanc is very popular in the UK, and it was one of the earliest markets to adopt a passion and a love for New Zealand wines.’’

Graydon said the UK was about a quarter of Yealands’ total business, with 2.5 million litres of wine sent to the British market each year.

New Zealand wine exporters currently face tariffs of $50 per 100 litres of wine.

The tariff removal will allow Yealands to save more than $1.2m per year.

While it would take up to five years for dairy and 15 years for sheep meat and beef tariffs to be completely removed, the wine industry is among the immediate winners from the trade deal, with tariffs being removed from the date of settlement.

‘‘How much of that flows through to the consumer is yet to be seen,’’ Graydon said.

‘‘I am sure that some of that will, whether we reinvest that into marketing the brands or into our distribution channels.

‘‘Because we are not selling direct to consumers in the UK, we go via our distributor, then there are some conversations that we need to have around that.

‘‘We’ll wait and see what the details are before we make decisions.’’

New Zealand Winegrowers chief executive Philip Gregan said the deal would bring significant progress, including a specific annex for wine.

‘‘This will help remove technical barriers to trade and minimise burdens from certification and labelling requirements.

‘‘The UK is New Zealand’s secondlargest export market for wine, with exports valued at over $400 million over the past 12 months,’’ Gregan said.

Under the free trade agreement, there will also be an easing of visa requirements between New Zealand and the UK for business contractors, professionals and visitors.

The UK is currently New Zealand’s seventh-largest trading partner, with two-way trade worth $6 billion in the year to March 2020.

Details of the new deal are being finalised.

Once the deal is signed, it is expected to boost exports by 40 per cent and New Zealand’s gross domestic product by $970m.