THE LIQUOR PRODUCTS ACT, ACT 60 OF 1989 REGULATORY FRAMEWORK AND AGREEMENTS THAT RELATE TO TRADE IN WINE

Transcription

1 THE LIQUOR PRODUCTS ACT, ACT 60 OF 1989 REGULATORY FRAMEWORK AND AGREEMENTS THAT RELATE TO TRADE IN WINE

2 SCOPE of the LP Act? ALL liquor products with an alcohol percentage of more than 1 percent, except for medicine and beer. NOTE: LP Act currently under review to INCLUDE beer, ale, traditional African beer and other fermented beverages and alignment with 0.5 percent of Foodstuffs, Cosmetics and Disinfectants Act 2

3 REGULATORY FRAMEWORK Liquor Products Act, Act 60 of 1989 Export country legislation - compliance to EACH export destination before wine can be exported International bodies like the OIV (International Wine Office in Paris, France) and the WWTG (World Wine Trade Group) play an important role in setting international guidelines and enhancing trade Bi-lateral and multilateral agreements with the European Union (EPA agreement on GI s) impact trade 3

4 SOUTH AFRICA S AGRICULTURAL EXPORTS: MAJOR PRODUCTS 2014

5 SOUTH AFRICA S WINE EXPORTS (HS 2204) Major Destinations 2014 Rest of Africa 3% Other 17% SADC 12% EU 27 54% Russia 2% USA 5% China and HK 2% Canada 5% Source: SARS

6 SOUTH AFRICA S WINE EXPORTS (HS 2204) R- MILLION Source: SARS

7 TRADE AGREEMENTS: SACU EU ECONOMIC PARTNERSHIP AGREEMENT Implemented on 1 November Products include: Sugar: zero tariff quota of ton. Wine: zero tariff quota increased from 50 to 110 million litre/year Ethanol: zero tariff quota of ton Oranges: duty free quota free time period expanded from 1 October to 15 November Other: Cut flowers, table grapes, various fruit at zero tariff, also improved canned fruit quota, fruit juices, quotas for yeasts and reduced tariffs for various processed agricultural products. Concern: Various dairy products and meat cannot be exported due to SPS challenges. 7

8 ROLE OF WINE AND SPIRIT BOARD IN THE PROTECTION OF GI S UNDER EPA STATUTORY Body establish under section 2 of LPA Administers Wine of Origin Scheme, IPW (sustainable production of wine) and Estate Brandy Scheme Reports directly to the Minister of DAFF- advisory body Members of the Board is appointed by the Minister Control and protection of GI s adds value to wine premium wine Administration of GI protection as required by the EPA agreement 8

9 VERIFICATION OF FOLLOWING 3 CLAIMS FORMS BASIS OF GI PROTECTION Guarantees the following claims on wine labels: Origin (STELLENBOSCH OR PAARL) Vintage (YEAR 2011) Cultivar (CABERNET SAUVIGNON)

10 TYPICITY AND QUALITY OF WINE VARIETIES FORM BASIS OF GI WINES Tasting panels taste wine certified for a GI in terms of the requirements of the WINE OF ORIGIN Scheme Taste for cultivar/terroir (origin/area) typicity Ensure quality and safety compliance (healthy/drinkable)

11 WHY A WINE OF ORIGIN SYSTEM? To prevent fraud Chardonnay? International requirement in terms of the EPA agreement

12 SA TRADE AGREEMENTS/NEGOTIATIONS World Trade Organization (WTO) Agreement on Agriculture (Rules for tariffs & subsidies) SPS Agreement (Protection of human, animal & plant health) TRIPS Agreements (Protection of intellectual property such as trademarks & GIs) TBT Agreement (Technical Barriers to Trade) DSU (Settlement of Disputes) Various other agreements Doha Development Agenda initiated in 2001 to continue the reform process, amongst others in agriculture, is seemingly stuck with very limited movement since At the 2015 Ministerial in Nairobi, Kenya, the elimination of export subsidies was decided. 12

13 REGIONAL AND BILATERAL AGREEMENTS Southern African Customs Union (SACU) (from 1910, latest revision in 2002) free movement of goods, trade essentially free with some interventions, common customs pool, joint negotiations of trade agreements. Countries involved are Botswana, Namibia, Lesotho & Swaziland. Southern African Development Community (SADC) Free Trade Agreement (FTA), substantially all goods free, with the exception of sugar (Sugar Protocol), 12 members participate in FTA, currently some exceptions in free trade of goods due to economic conditions: fee exceptions for countries such as Zimbabwe or Malawi have requested to increase tariffs due to economic difficulties. Exports to SADC countries major source of export growth for agricultural products. 13

14 EFTA AND MERCOSUR AGREEMENT EFTA (European Free Trade Association) FTA, SACU with Switzerland, Lichtenstein, Norway & Iceland, FTA, Review of agreement currently underway. Mercosur Agreement SACU with Brazil, Argentina, Uruguay, Paraguay (Venezuela not part of agreement): Preferential agreement, only a few tariff lines to be liberated, implementation from 1 April

15 CURRENT NEGOTIATIONS Tripartite Agreement, SADC, Comesa & EAC - 26 countries with the intention to create an FTA, envisaged conclusion of negotiations in Regional Integration is a priority agenda. SA is engaged in the Tripartite FTA negotiations between the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC). The Agreement was launched on 10 June Outstanding work includes concluding on product specific rules of origin as well as the conclusion of tariff negotiations between the regional groupings and/or individual members of the grouping. 15

16 CURRENT NEGOTIATIONS India (Preferential Trade Agreement) SACU, India, negotiations are continue CFA (Continental Free Trade Agreement) Includes all countries on the continent, negotiations were initiated in 2015, substantial work remains to be done. One of the objectives of the CFTA is to overcome dependence on exportation of primary products. It is also an objective to resolve the challenges of multiple and overlapping membership and expedite the regional and continental integration processes. 16

17 COMESA-EAC-SADC TRIPARTITE FTA Three Regional Economic Communities and members of Tripartite FTAs 17

18 UNILATERAL PREFERENCES Unilateral Preferences AGOA (African Growth and Opportunity Act) Unilateral preferences offered by the USA to African countries on certain products. For South Africa this includes tariff preferences on wine, certain fresh fruits and nuts. GSP (General System of Preferences) Certain tariff preferences offered by developed countries to developing countries. South Africa benefits from GSP in countries such as Japan and Canada. GSP plays a fairly small role in RSA external trade for agricultural products. 18

19 WORLD WINE TRADE GROUP (WWTG) The WWTG is an informal group of wine producing countries with the following objectives: Facilitate the trade in wine Reduce barriers in the wine trade Share information/collaborate on trade and wine issues Share and exchange laws & regulations related to wine making practices and wine labelling 19

20 WORLD WINE TRADE GROUP Benefits? World Wine Trade Group (Australia, New Zealand, Georgia, South Africa, Canada, USA, Chile & Argentina) the objective to facilitate trade in wine and remove obstacles in the trade of wine. The agreements do not address tariffs. The group has achieved major successes in addressing trade barriers for wine and has a very active outreach program with APEC economies (Asian Pacific Economic Cooperation). Agreement on Mutual Acceptance of Oenological Practices Agreement on Requirements for Wine Labeling MoU on Certification (still to be signed by South Africa) Protocol on Labeling (still to be signed by South Africa) 20

21 SUMMARY MANY constraints remain when exporting wine International wine arena is complicated Challenge to remain informed of ever changing export country and certification requirements change daily Difficult to remain competitive with Duty Free agreements on wine being agreed between EU/ASIA with our direct competition: Australia, USA and Chile SA should focus on making QUALITY wine and selling in the premium wine category Despite the constraints - SA remains under the top 10 wine producers and exporters in the world!! 21

22 THANK YOU!!