UK free trade agreement brings big opportunity for Australia’s smaller wineries

UK consumers are likely to see greater variety of more premium Australian wines from lesser-known and cooler climate regions, according to Australia’s trade & investment commissioner, Ana Nishnianidze.

Speaking to the drinks business recently about the impact of the new free trade agreement (FTA) that was signed by the UK and Australia in March, Nishnianidze said that while there was a lot of Australian wine in the UK market from the Barossa Valley in South Australia, and other well-known regions, the opportunity would be most felt by some of Australia’s lesser known regions and smaller producers.

Australia had a wide ranges of wines “that are a little bit different, a little bit more unique”, she said. “For example, when it comes to Pinot Noir from a cooler climate, you have a slightly different sort of unique taste and flavour to them. They are also some great white wine varietals from cooler climates, including some really nice Rieslings and sparkling wines.”

While this obviously won’t displace producers who are already strong in the UK, which boasts big names such as Accolade, Australian Vintages and Treasury Wine, the FTA will to make it more competitive for smaller, more niche producers from a greater variety of regions through the elimination of the current “significant” tariffs.

The WSTA estimated that current wine imports from Australia have been subject to tariffs of around 10-22p per bottle, with tariffs of imported Australian wine estimated to cost UK wine businesses around £16 million.

Currently, the Australian government are working with 11 wineries from different regions who are interested in expanding into the UK market and looking for partners and customers.

“At the moment, they’re not really present in the UK market and that’s because a lot of those wines are produced by small to medium wineries and it’s really hard for them to compete on price where they’re looking to export smaller volumes. But once the once the tariffs are removed, that will certainly open up that opportunity.”

Although these smaller scale wines sit towards the premium end of the market, they are still affordable, she explained. “More and more people enjoy drinking more premium quality wines. And that’s really where Australia has strength -in this middle range where it has a good quality wine that have a unique taste.”

She pointed out the award winning 2020 sparkling wine from House of Arras in Tasmania, which is currently not available in the UK, but was was named the best Australian sparkling.

“There are some great wines that come from Australia but they are not really available in the UK market,” she said. “I think that’s where the opportunity is really, is to introduce those new varietals.”

Tasmania is a key area set to benefit, but other cooler climate and lesser known regions such as Macedon Ranges,  Geelong, Mornington Peninsula, King Valley, Henty and Gippsland may also benefit.

But it’s not only a benefit for the producers, she pointed out.

“UK consumers already like Australian wine, so I don’t think it’s just going to benefit Australian exporters, it’s actually going to benefit consumers who can get some of those premium varietals, without horrible prices, going forward.”