FTA US & Oz...

[BarItemsPlus1]

Here is something that I think most will find interesting...

Free Trade Agreement between US & Australia

I thought it would be good to post it here since a number of people have wondered why we have here in Oz Bourbon below 80Proof(40%Alc/Vol). Now with the FTA all Bourbon entered in Australia must comply with US law.

Cheers!

I had to put this in here too...http://www.discus.org/pdf/Distilled_Spirits_Exports_Volume_sep2006.pdf

I am amazed at the figures!!

[HighTower]

Very interesting Troy, they're either going to have to rewrite the Beam labels or go back up to 80 proof

If only we could get the 90 proof Maker's Mark too!

Scott

[BarItemsPlus1]

I'd say they would just use the standard labels they use in the US, so it's actually somewhat of a cost bonus...the only label addition needed is that of the importer and that is usually handled by the importer or sometimes it's in conjunction with the producer.

It also only applies since the FTA was released so any product here already would be exempt.

If only we could get the 90 proof Maker's Mark too!

Do you mean the black wax version??

I don't know why pernod don't release it here...it would be a top seller!!! Probably due to the price factor...??

[HighTower]

Do you mean the black wax version??

I don't know why pernod don't release it here...it would be a top seller!!! Probably due to the price factor...??

Nah I believe they stopped the Japan Black Wax, just the normal red wax in the states (or duty free) is 90 proof, opposed to our 86 proof we have here.

I do love those black wax bottles, they look great.

Scott

[TNbourbon]

...I don't know why pernod don't release it here...it would be a top seller!!! Probably due to the price factor...??

Pernod, although it purchased Maker's Mark along with the Allied Domecq brands last year, no longer owns it. It -- and some other things -- went to Fortune Brands/Jim Beam, which provided cash that allowed Pernod to complete the deal.

[cowdery]

Perhaps the FTA isn't in effect yet, or something, but the document Troy posted is several years old and you still have underproof and other non-standard bourbons on the market there, do you not?

[HighTower]

Damn straight we do Chuck, too many of them....

Scott

[BarItemsPlus1]

and you still have underproof and other non-standard bourbons on the market there, do you not?

Yes we do, but as I stated I would expect that these products have been exempted from the FTA...I can't see them taking product off the shelf.

I am quite certain that all Bourbon now entered into Australia must comply with the FTA, and if it doesn't comply then...there seriously needs to be a 'Bourbon Association'. If no one is prepared to fight to protect a national product, then why go to the lengths of making a law surrounding the said product??

[BarItemsPlus1]

Scott something which I have been pondering...what is the %Alc/Vol of the new 'Iron Horse'??

I have also found a distributer selling a Bourbon at 37%...so much for the FTA?!

I would be interested to know whom actually controls it, i.e. makes certain that the FTA is adhered to.

I am going to make enquiries to our polly's here and ask them what the story is...

[straightwhiskeyruffneck]

regular red wax makers mark is 90 proof

[cowdery]

I'm beginning the believe the FTA doesn't mean what we think it means. I think it mainly prevents, say, Australia from labeling a locally-distilled whiskey as "bourbon" and also requires Australia not to import "bourbon" from anyplace except the USA. It apparently does not require the American producers to send Australia only products that can be sold as "bourbon" in the United States.

We (the USA, that is) have similar agreements with Canada, Mexico and the European Union, and yet a correspondent has reported to me that, in Germany, the Bulleit Bourbon label contains the phrase "Enthalt Zuckerkulor."

Hopefully, someone here knows more German than I do, but a literal translation leads me to believe that says "contains spirit caramel." (zucker=sugar and kolor, I'm guessing, means color) Spirit caramel is a coloring agent used in scotch but prohibited in bourbon, at least it's prohibited in the USA.

[cowdery]

To elaborate, spirit caramel is a common coloring agent, permitted in scotch, but added coloring of any kind is prohibited for bourbon. I don’t mean to suggest anything illegal. U.S. law only regulates what is sold in the United States. However, there is an argument, at least, that to preserve the integrity of the product, producers shouldn’t sell anything outside the U.S. that they can’t sell inside. The most common example of this is underproof products, but this would be another example.

That's really the subject about which I would like to stimulate some discussion.

This is not about brands or brand expression that are sold in some markets but not in others. This is about product variations sold outside the U.S. that cannot, by law, be sold inside the U.S.

[BarItemsPlus1]

Chuck I agree with you empthatically!! and wholeheartedly!! on the protection of product!!!

That is why I strongly believe there needs to be an association for Bourbon and to control the product on a global scale. Obviously, unlike the SWA(Scotch Whisky Association) the body wouldn't be concerned with Name protection but seeing that the U.S. law for Bourbon is upheld on a global scale. This would unfortunately result in a significant cost rise for importers but I think there is a little give in an industry which in Victoria(Aus) alone is worth approx. AU$1.3b....??!! And rising...

[barturtle]

The interesting question here is whether the bourbon producers want to actually raise the proof in the bottle for these markets. Seems they already manage to sell their product at a profitable markup and the trade agreements protects their trademarks and makes it illegal to label any other products as bourbon...sounds like they already got all they want.

What you actually need is a consumers advocate organization fighting for the product to be held to the USA standards in your market.

This is not to disrespect the integrity of any of the producers, they are just making profitable business decisions some or the farther reaching ramifications of which may not have spread from top to bottom of the companies involved yet.

[BarItemsPlus1]

Chuck I also wanted to add...I think your interpretation of the FTA is right on the money.

[BarItemsPlus1]

The interesting question here is whether the bourbon producers want to actually raise the proof in the bottle for these markets. Seems they already manage to sell their product at a profitable markup and the trade agreements protects their trademarks and makes it illegal to label any other products as bourbon...sounds like they already got all they want.

What you actually need is a consumers advocate organization fighting for the product to be held to the USA standards in your market.

This is not to disrespect the integrity of any of the producers, they are just making profitable business decisions some or the farther reaching ramifications of which may not have spread from top to bottom of the companies involved yet.

That is true on all points Tim.

My personal feeling is...Bourbon is a great product, from the less expensive products right through to the most premium! Now from a consumers point of view, since I have been able to learn so much about the product(Thanks Jim!! :grin: ) I feel somewhat cheated when I learn that we(Aussies) don't actually get the same product by US standards as obviously what the US consumers are privy to.

I also realise from a business point of view, why certain products are changed in such a way, i.e. %Alc/Vol...we have just had another increase in duties/excise :smiley_acbt: But I don't feel that any colouring is needed...it's supposedly only used to provide consistancy in the 'look' of the spirit :skep:

[BarItemsPlus1]

I have had a thought overnight for a suggestion to the Bourbon producers...

As Australia is probably the fastest growing market for RTD's, i.e. RTD consumption based on capita per head, not overall volume, I put forward a suggestion to lower the %Alc/Vol in RTD's and bring the bottled spirit in-line with US standards and have it at 40% Alc/Vol(80Proof).

Some points in support...

- from a business viability point of view, no need to lower the price on the lower %Alc/Vol RTD's, thus creating a profit increase and possibly the extra capital gained could be used to offset the small increase in the bottled spirit...??!!

- from a health and social impact point of view, any lowering of %Alc/Vol in liquor products(especially ones that have a higher consumption rate among lower age groups, e.g 18-25's) is going to be seen as a positive and responsible action from such health associations, etc towards producers...??!!

I am only suggesting this for Australia as I don't know of what the other global markets are like for RTD's.

[cowdery]

Good suggestions.

While many have mentioned the need for an group along the lines of the SWA, there is already a Kentucky Distillers Association and a Distilled Spirits Institute of the US.

Unfortunately, the behaviors of which many of us disapprove are being done by the major producers, who do and are naturally going to control any kind of industry association. What needs to happen, I think, is for consumers outside the U.S. to educate themselves about the issue and, if they are displeased, make their displeasure known to their local retailers, wholesalers and to the producers themselves. Ultimately, this is something where the producers will respond to consumers. Typically, when producers go into a new country, they partner with locals and rely on those local business people to determine and tell the producers what the consumers in that market want.

In other words, demand real bourbon and patronize the companies that give it to you.

As for RTDs, they are a very small factor in the US and most of them are the so-called "malternatives" (i.e., flavored beer) that contain no actual spirits. While this may be okay for something like Smirnoff Ice, it doesn't work for a bourbon RTD so the only one, Jack Daniel's Hard Cola, was a failure. There are a few actual, spirits-based RTDs, including products by Daniel's, but they have a very small market share.

Their popularity in Oz is a bit of a mystery to us.

[ILLfarmboy]

....

In other words, demand real bourbon and patronize the companies that give it to you.

quote]

Damn Straight!!

As for the RTDs, I tried a JD hard cola once. It tasted like flat pop. At the time I did not know such things were just de-flavored /re-flavored beer. I'm generally not one for more government regulation but why do producers get away with such deceptive labelling? I swear 20+yrs ago wine coolers were a wine based beverage.

[BarItemsPlus1]

Chuck, another suggestion worth discussing with producers is that of an inclusion on the labelling...

"Bottled according to Strict US standards & law"

Any product not bottled accordingly, doesn't get the label!!

It could even prove viable as a global label addition(hmm, which makes me think - wonder if I can get intellectual rights?? ...I would actually rather see something put into motion to be honest!)

[cowdery]

Trust me on this, the very fact that we're talking about it makes a difference.

[BarItemsPlus1]

Just how big a difference though Chuck...?

I myself, can categorically say I will not import product which is not to that of US standards, however I don't think that current importers are going to be so easily persueded...Some of the bigger importers are not going to like the idea of having to pay more in excise duties...of which the excise rate only increased quite slightly this time...from $64.21 to $64.72.

Chuck, I am in full support of what we have been discussing and I am more than happy to lend my services where I can, if necessary. I suppose my main contribution will be when it comes time to import product :grin:

[cowdery]

Importers, of course, don't really pay the duties, their customers do. Some of this manipulation is done to keep imports price competitive with domestic products.

Here's a thought. In your store, segregate the products that are exactly like their counterparts sold in the U.S. from the ones that aren't, put a sign up to that effect, and see if it makes a difference in what consumers buy. I'm not suggesting you denegrate the products that aren't U.S.-standard, just identify the ones that are and see what happens.

[BarItemsPlus1]

Here's a thought. In your store, segregate the products that are exactly like their counterparts sold in the U.S. from the ones that aren't, put a sign up to that effect, and see if it makes a difference in what consumers buy. I'm not suggesting you denegrate the products that aren't U.S.-standard, just identify the ones that are and see what happens.

That is indeed a good suggestion Chuck and I will take it on in some form...Although I won't have a retail presence just yet as I will be a wholesaler first and so I can intergrate your suggestion into my suggestions to retail stores and their marketing of the products I will be carrying.

Oh and just to clarify...I am not in the habit of degrading any product or brand for that matter, I just believe in giving the consumer the 'Whole' truth :grin:

Cheers!!