Following the UK’s exit from the European Union, the British government has been negotiating a number of new trade agreements with various nations. In a previous article we have discussed how the India - UK trade deal will benefit the scotch whisky industry through the removal of tariffs. In this article we will examine the latest Australian trade agreement to see how whisky cask investors can reap the rewards.
The deal was agreed between Australian Prime Minister Scott Morrison and UK Prime Minister Boris Johnson, unlocking over £10.4 billion of additional trade. Furthermore the deal also includes the 100% removal of tariffs across all UK exports, giving Australian consumers increased access to scotch.
Before the deal scotch was tariffed at 5% causing much fiercer competition with the strong local Australian whisky industry, however, demand for scotches is still high among discerning enthusiasts. Now with scotch being released from these oppressive measures, Australian general consumers have a greater access to whiskies in supermarkets. For anyone who has invested in scotch whisky casks, this is a huge boon. When consumer demand for whisky rises, typically so does the value of your whisky cask portfolio.
This trade deal is the start of something much bigger, it provides a launch pad for the UK to join the enormous Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), one of the largest free trade agreements in the world. The partnership is worth at least £9 trillion in exports with signatories including 11 nations from across the Pacific including Australia, Canada, Japan, Mexico and Singapore. When the UK joins the CPTPP it will open the entire Pacific region up to scotch, allowing consumers to gain easy access to whisky.
If you are interested in finding out more about why scotch whisky investing represents a great alternative asset investing due to the government support the industry receives, get in touch with us using the form below.