The National Business Review: Monday August 01, 2011
Spirits and liqueurs are proving a boon to the country’s export effort.
Though well short of the billion-dollar wine export industry, their value is up 28% in the past year to $52.6 million.
Distilled Spirits Association chief executive Thomas Chin says the strongest performing categories by volume are vodka, liqueurs and ready to drink beverages.
Export volumes shipped increased by 32% to 1.8 million litres of alcohol, the equivalent of 513,000 cases (1 case equals 12 x 750ml).
“Despite the recession there is still good demand for premium quality New Zealand-made spirits,” Mr Chin says. “Our exports are continuing to find success in Australia, North America, Asia and the Pacific Islands. They go to markets in 40 countries from Antarctica to Turkey.”
While the spirits and RTD industry is dominated by Lion, Independent Liquor and Bacardi’s 42 Below, a number of boutique operations are succeeding, such as Tauranga’s VnC mixed cocktails.
Mr Chin says negotiation of various trade agreements and lowering of import duties in overseas markets could further help drive export business and future revenues.
“Emerging but highly protected markets such as India with a tariff barrier of 150% duty and Korea, at 20%, could yield good future prospects as well as the important and recovering US market,” he says.
But the association has warned proposed restrictions on the strength of RTDs – making them a maximum of 5% – could hurt the export trade.
While the strength of RTD exports will not be controlled, Mr Chin says the move could restrict product innovations.
“If we as a nation are to heed the call to diversify and boost exports the government needs to do its part by not stifling the drinks industry,” Mr Chin says.
The wholesale value of all spirits and liqueurs sold in New Zealand are $850-900 million a year.