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RESEARCH from the University of South Australia is set to help the Australian wine industry understand the changing nature of the South Korean wine market as it enters a new era of bilateral trade relations with Australia.

A free-trade agreement between Australia and South Korea (KAFTA) was announced in February and will see the current 15 per cent tariff on Australian wines removed by early 2015.

Titled ‘Understanding and opportunities in the South Korean wine market’, the project is funded by the Australian Grape and Wine Authority (AGWA) and led by Dr You-il Lee, associate professor of international business in the School of Management, University of South Australia and deputy director of the Australian Centre for Asian Business.

Assisting Dr Lee as co-investigator on the project is Dr Richard Lee, senior lecturer of marketing at the School of Marketing, University of South Australia.

By value, Australia’s wine exports to South Korea sit behind France, Chile, Italy, the US and Spain and Australian wine had almost experienced a 30 per cent drop in exports since its peak in 2007.

“Wine generally is perceived as a luxurious product and, while still at an embryonic stage, it has been the fastest growing alcohol segment in South Korea over the past five years,” Dr Lee said.

The six-month research project would help shed light on the current Korean wine market trends, the structure of the distribution channel and the regulatory environment.

“We will be using a using a combination of in-depth interviews with Korean distributors, opinion leaders and relevant government agencies as well as surveys with Korean consumers,” he said.

Key findings of the project would be made in four areas:

  • Australia’s key competitors (France, Chile and the US) market access strategies in Korea
  • A detailed assessment of the distribution channel (both on and off premise markets)
  • Non-tariff barriers/regulatory environment on imported wine- price, labelling, licenses, policies,regulations/inspections on food and safety
  • Insights of Korean consumers towards Australian wine.

The Department of Foreign Affairs and Trade have produced a brochure on the Korea-Australia free trade agreement and it is available online.

This article first appeared on the Australian Grape and Wine Authority (AGWA) website: http://research.agwa.net.au/australia-prepares-to-grow-korean-wine-market/