Wine in South Korea news. Red wines and white wines in South Korea.
Vino producers celebrate this free-trade that supposes the reduction of the taxes.
South Korea and the European Union have finally signed their free-trade deal and Korean wine lovers will certainly raise their glasses to that. Also delighted are fashionistas, whose days of sweating it out at duty free shops for shoes, leather and perfume look to be coming to an end, judging by the details of the deal that went through Wednesday (KST).
Although Korea is quickly becoming a wine-drinking nation, vinophiles have been complaining about the heavy tax imposed on imported bottles that force them to pay a premium for mediocre Bordeaux.
However, with the free trade agreement (FTA) with the EU having Korea immediately lifting its 15 percent tariff on wines, consumers here can expect to get more bang for their buck. Granted, this doesn’t mean that the European bottles will be getting precisely 15 percent cheaper.
Aside of the duty, imported wines are also tagged with a 30-percent liquor tax and 10-percent education surtax, all before importers and retailers look for their margins. This complicated pricing structure often has the prices bloat to three-fold or more when they reach consumers.
Wine importers, nonetheless, believe that that the effect of the FTA will be visible in the price tags. Although there are varying estimations, the consensus seems to be that European wines will get around 13 percent cheaper on average. Thus, a mid-level Mouton Cadet red, currently selling for around 38,000 won (about $34) to 40,000 won, will soon be available at 32,000 won or lower.
It remains to be seen whether the Korea-EU FTA will lead to a serious jolt in the sales of European wine here and allow France to regain its status as Korea’s most popular wine source, a title that is now owned by Chile. The sales of Chilean wine have been growing significantly in Korea since the inking of the FTA between the two countries.
The FTA between Korea and EU, its first with an Asian nation, is expected to go into effect on July 1, 2011. Policymakers here believe it could potentially double trade between them and inspire other Asian states to enter trade pacts with the 27-nation EU.