The Comprehensive Economic and Trade Agreement (CETA) is welcomed by SpiritsEUROPE (which represents the spirits industry in the region) and Spirits Canada (the national trade association for manufacturers, exporters and consumers).
The EU Canada Summit in Ottawa is announcing the conclusion of the CETA today. The agreement includes the elimination of all import tariffs on spirits and wines; abolition of the obligation to blend bulk spirit imports with local content; and recognition and protection of both Canadian and European signature drinks.
Spirits Canada told BeverageDaily.com it sees the potential to double exports, and has recently been targeting Eastern Europe. Meanwhile SpiritsEUROPE sees the opportunity for more growth in an established market in Canada.
SpiritsEUROPE welcomes protection of geographical indicators
Canada is the fifth largest market for European spirit drinks, generating €285m ($363 USD) for the European economy each year.
“For European exporters Canada is a mature market, where we have already invested lot,” SpiritsEUROPE told BeverageDaily.com.
“The focus will be therefore less on targeting new provinces in Canada, but rather on assessing how the guarantee of a level playing field between local and European spirits will unlock growth opportunities for EU spirits.”
The agreement builds on a longstanding EU / Canada wine and spirits agreement, which ‘needed some fresh air,’ the industry association adds. The CETA is expected to strengthen past agreements.
“From the EU perspective we are pleased that the CETA deal has gone beyond tariffs liberalisation and contains provisions that will bring more transparency for EU spirits exported to Canada,” it said.
“The agreement creates a wine and spirits committee, where both parties have the opportunity to discuss the implementation of CETA provisions.”
“It also offers protection of geographical indications, which will help producers of these quality, well-known products, and continue to ensure consumers' demand for signature products.”
Spirits Canada wants to double exports
CETA: key points for Spirits EUROPE and Spirits Canada
- Full elimination of all import tariffs on spirits and wines;
- Better enforcement of previous agreements with the CETA dispute settlement mechanism;
- Abolition of the obligation to blend bulk spirit imports with local content;
- Increased transparency in the way provincial liquor boards operate in Canada and abroad;
- Restrictions on new discriminatory private liquor stores;
- Canada has agreed to recognize and protect European products with specific geographic characteristics – e.g. Scotch Whisky, Irish Whiskey, Cognac, Grappa.
- Entrenched European recognition and protection for Canada’s signature alcohol drinks, Canadian Whisky and Canadian Rye Whisky.
Spirits Canada says the deal will allow exporters to grow sales: in fact, the trade association believes “a doubling of exports over 10 years would not be unreasonable, e.g. from $30m ($27 USD) to $60m ($54 USD).”
The body said, “The agreement brings enhanced investor confidence, that investments will not be nullified or impaired through policy decisions in the future.
“In addition, some Canadian companies may decide to bottle bulk EU spirits if a business (or environmental) case can be made for local bottling.”
Canadian consumers may benefit from reduced prices on some EU spirits, thanks to adjustment of import cost-of-service fees, the association added.
“Canada's principle export interest is for Canadian whisky and Canadian rye whisky. Our recent growth and new investment has been focused largely on the 2004 accession countries (e.g. Czech Republic, Hungary, Lithuania, Slovenia). Future accession may provide additional growth opportunities as well.”
Distribution networks are essential for export growth, and access to these gives producers the scale to succeed internationally, it says.
The agreement will now go for ratification by respective parliaments.
Other opportunities
Meanwhile, spiritsEUROPE is supporting an ‘ambitious’ EU trade agenda to bring further market access for EU spirits exports. “We are certainly encouraged by the progress of negotiations with Vietnam - a major ASEAN market for our sector - that may be finalised next year,” it said.
“Negotiations with other Asian markets are less progressed, but we believe Thailand and Malaysia are growing and we need to build a strong trade relationship. Given the potential of the Indian market, we are also keen to see EU and India coming back on the negotiation table.”