Free trade for Scotch whisky in Latin America

New free trade agreements have been introduced to boost exports of Scotch whisky to Latin America.

The agreements will help create a more level playing field for Scotch whisky in this growing market by removing tariff and non-tariff barriers to trade, the Scotch Whisky Association said.

Countries covered by a new Association Agreement include Honduras, Nicaragua and Panama. There are plans to extend the agreement to Costa Rica, El Salvador, and Guatemala later this year.

The European Union’s Free Trade Agreement (FTA) was also extended to include Col0mbia. In March it included Peru.

Key benefits of these agreements include:

  • Immediate end to the import tariff in Panama
  • Gradual tariff elimination in Colombia and Central American countries
  • Colombia to reform its discriminatory excise tax on spirit drinks by August 2015
  • Colombia’s provincial liquor monopolies required to treat imports, including Scotch Whisky, in the same way as domestic products
  • Scotch Whisky to be recognised as a geographical indication (GI) in each country – recognition that it must be made in Scotland
  • National treatment rules to help secure the end of discriminatory tax arrangements, including in Panama

Direct Scotch Whisky exports to Central and South America reached £505 million in 2012, up 3% from £489m in 2011.

There is potential for much more growth according to the Scotch Whisky Association, which points out that its members still hold a relatively small share of the spirits market across the region.

David Williamson, Scotch Whisky Association deputy director of international affairs, said the body had worked hard with the UK Government and the European Commission to get these agreements in place and was confident they will “make a significant difference to the trading environment for Scotch Whisky.”