Whisky distillers have their sights set on ending a crippling 45% tax on Scotch and other imported spirits after yesterday toasting an “ambitious” free trade agreement (FTA) between the European Union (EU) and Vietnam.
Experts think that the framework provided by the EU’s deal could pave the way for the restrictive tariffs to be tackled.
Figures from the Scotch Whisky Association (SWA) showed Vietnam was worth £3.5million in direct exports in 2014, having grown by 9% year-on-year.
David Frost, the SWA’s chief executive, welcomed the signing of the agreement.
“However, there were issues to be addressed in the market, including the 45% import tariff on spirits,” he added.
“The FTA will help as it will gradually phase out the tariff and it will tackle other trade restrictions.”
A spokesman for Diageo, Scotland’s largest distiller and the maker of Bell’s and Johnnie Walker, highlighted the benefits the deal would bring for other drinks as well as whisky.
“Vietnam is a very attractive market for Scotch whisky and spirits more broadly with great potential for the future,” he said.
“As the market begins to open up this can only be good news for Scotch and for Scotland.”
Gerry O’Donnell – corporate affairs director at Edrington, the distiller behind whisky brands including Famous Grouse, Highland Park and The Macallan – also welcomed the deal.
“Vietnam is an attractive market for Edrington’s recently-opened Asia-Pacific regional headquarters in Singapore,” he explained.
“We hope that the EU can speed through the approval processes so that the current 45% tariff is eliminated as quickly as possible, enabling The Macallan to compete more effectively.”
Billy Walker – whose company owns the BenRiach distillery near Elgin, as well as GlenDronach near Huntly and Glenglassaugh at Portsoy – said: “Barriers to entry into a market are one of the main issues Scotch whisky producers are facing today.
“With a large population of around 90 million people, Vietnam is an exciting country with a thriving economy.”
As well as providing a boost for the whisky industry, business bodies think the deal could also help other food and drink exports in Vietnam.
A spokeswoman for trade body Scotland Food & Drink said: “The country has a huge appetite for whisky and I am confident this will extend to other Scottish products.”
The Scottish Office described the agreement as the most ambitious and comprehensive FTA that the EU has concluded with a developing country.
Trade Minister Lord Maude hailed the deal as “great news for British businesses”.
“Having just returned from a trade trip to Vietnam, I have seen first-hand the opportunities the market holds,” he said.
“This will be a real boost to the protected status of food and drink in the UK, and means that the best of European produce – including Scotch whisky – will thrive in South East Asia.”
The EU imported £15.4billion of goods from Vietnam last year, including coffee, clothing, electronic equipment, rice and seafood.
In return, Vietnam imported £4.3billion of aircraft, drugs and machinery.