Kentucky distillers toast Korea trade pact
on 12/12/11 at 9:09 amIndustry
Koreans spend $10 billion a year on alcohol, including about $4 billion for whiskey. But bourbon and Tennessee whiskey accounts for only about $7 million of the total, according to Brown-Forman spokesman Phil Lynch — whose company is looking now to change that.
He and other Kentucky distillery representatives say recent passage of a free trade agreement with South Korea could make Heaven Hill’s Evan Williams bourbon, Brown-Forman’s Jack Daniel’s Tennessee Whiskey and other American liquors bigger players in the world’s 10th-largest liquor market.
“We’ve got lots of room to grow,” Lynch said.
Before the new trade agreement, which still needs the approval of the South Korean parliament, American distillers had to pay an extra 20 percent tariff to sell their goods within that nation.
In part because of that, American whiskeys currently make up 2 percent of the South Korean market, according to industry groups. The more popular liquors in South Korea are soju, a local drink similar to vodka, and Scotch whisky, upon which tariffs won’t be reduced as quickly.
“It’s not a huge market for us, but we think it has significant potential,” Lynch said. “It’s not going to grow overnight, but we will increase our marketing and sales efforts in Korea as a result of this free trade agreement.”