The UK has been accepted to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in July 2023. This has opened up opportunities for British drinks exporters in the region with UK drinks exports increasing in anticipation of completing domestic ratification procedures in 2024.
As the first European member of this Asia-Pacific trade bloc, the UK is already reaping the rewards of reduced trade barriers in a region poised to become increasingly significant in the global economy.
What is the CPTPP?
Der Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement between 12 countries including the UK. It was established in 2018 to lower trade barriers between member nations, however, it must be noted that the UK already had trade agreements with 9 of the 11 other countries before entering the CPTPP. The other nations in the agreement are:
- Brunei Darussalam
So, although currently there is minimal overall impact for the UK, other countries like China and Costa Rica have applied to join. Also, South Korea and Thailand have expressed interest in joining the agreement.
If China, South Korea and Thailand do eventually join the agreement these will become standout markets for wine and whisky. In particular, China has seen an 18% increase in scotch whisky imports in 2022 and is seen as a market with a lot of potential for the industry.
Explosive Growth in Sparkling Wine Exports to Japan
One of the standout success stories emerging from this development is the surge in sparkling wine exports to Japan, which skyrocketed by an impressive 140% in 2023.
This surge, totalling over £26 million, reflects the immense potential the CPTPP region holds for the UK's food and beverage industry.
Whisky and Chocolate: New Frontiers in CPTPP Markets
While wine producers celebrate their success, it's not just the vineyards that are benefiting.
Luxury British staples, including Scotch whisky and chocolate, are experiencing unprecedented demand from CPTPP countries such as Singapore, Japan, Mexico, and Malaysia.
Scotch Whisky Finds Favor in Malaysia
The appeal of Scotch whisky in CPTPP countries is undeniable, with Malaysia witnessing a remarkable 43% increase (£11 million) in Scotch whisky exports. This surge demonstrates the growing appreciation for this iconic British spirit in international markets.
Tariff-Free Trade Boosts Exports
Although the UK already has bilateral trade agreements with nine CPTPP members, the impending formal inclusion into the CPTPP next year is set to bring about even more favourable conditions.
Under the agreement, tariffs on 99% of UK goods exports will be reduced to 0%, further fueling the exports to countries like Mexico and Malaysia.
Singapore: A Hotspot for UK Exports
Among the CPTPP countries, Singapore stands out as a remarkable success story for UK exporters. Scotch whisky continues to dominate the Singapore market, with over £380 million worth of Scotch exported, marking a significant 31% (£90 million) increase over the previous year.
Singapore proves to be a promising market for UK spirits. The UK gin industry witnessed a 56% (£3 million) increase in current prices in UK gin exports. The growing enthusiasm for gin and tonics, coupled with the iconic Singapore Sling, contributes to the rising demand for this quintessentially British spirit in the region.
Read More: Scotch Whisky trägt im Economic Impact Report für 2022 7,1 Milliarden Pfund zur britischen Wirtschaft bei
What Does the Future Hold?
The full benefits of the trade deal with the CPTPP are not currently in effect with full benefits of the deal starting in 2024. However, early signs in these markets are excellent, with growth in Asia, despite high import and export taxes.
Once free trade between the countries in the CPTPP starts, we expect greater growth for British wine and whisky. If, in the near future, China and Taiwan join the trading bloc there could be an explosion of interest in luxury British products.
This is why it could be beneficial for investors to invest in wine and whisky now.
UKV International AG is a wine and whisky broker. We assist our clients with investing in Wein Und Whiskey for long-term gains.
Our experts discuss with our clients what is the best investment for them, clearly explaining the benefits and holding regular events so investors can meet like-minded people.
Kontaktiere uns heute and discuss how you can start your investment journey with us.