SWA welcomes EU-Thailand trade talks

08 Mar 2013

Scotch Whisky exports to mature and emerging markets across the world continue to grow. But such success is the result of much hard work to create fair and stable trading conditions. For an industry exporting well in excess of 90% of production, it's vital to ensure that Scotch is not subject to discriminatory practices in overseas markets.

That's why we welcome this week's launch of Free Trade Agreement (FTA) negotiations between the European Union (EU) and Thailand. Thailand is a significant market for Scotch Whisky, as is much of Asia, although Thailand itself exports more alcohol than it imports. But we do not enjoy a level playing field there, not least due to the punitive 60% import tariff on imported spirits.  This is high by regional standards, compared with 10% in China, 10% currently in Korea and 0% in Taiwan. 

Thailand has also for many years maintained an excise tax regime that discriminates against imported spirits, notably Scotch Whisky, in breach of its World Trade Organisation obligations. The FTA represents an opportunity to address this and other regulatory issues.

Scotch Whisky, like other internationally traded spirits, is a premium product.  It will never account for a large share of alcohol consumption in any market.  Indeed, as Thailand's Minister of Commerce Boonsong stated recently in connection with the FTA, imported alcohol makes up less than 1.8% of overall consumption in Thailand.  That market share is unlikely to increase significantly should an FTA be concluded.  But the FTA will enable Thai consumers to trade up to premium Scotch Whisky brands, building on current trends in the market.

Martin Bell, SWA Deputy Director, Asia Pacific and WTO