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Canberra-based Underground Spirits is taking Australian craft spirits onto the global stage.

In 2017, Claudia Roughley, CEO of Underground Spirits, was excited to hear that her brother had just created a new technique for creating vodka. With the aid of cryo-filtration – or extreme cooling – the novel method yielded an unusually smooth and ultra-pure vodka.

Roughley and her brother promptly patented the technique and Underground Spirits was born, just outside Canberra. With three employees, the craft distillery began making premium vodka and then developed the brand to include distinctive gins, which the company sold into the local market.

‘We want our hand-made spirits on stylish bar counters right across the world – from Tokyo and Hong Kong to London and New York – and we want to see them on those bar shelves within the next few years,’ she says.

FTAs Critical for Craft Exporters

Australia’s FTAs are key to Roughley’s global vision. Many of Australia’s FTAs have either eliminated foreign tariffs on exports of Australian spirits or have reduced them. This gives Australian producers a price advantage in FTA partner countries’ markets over other countries’ exporters, for example UK-based gin makers.

Under the Korea-Australia Free Trade Agreement (KAFTA) the tariff on Australian exports of gins, vodkas and liqueurs has fallen from the base rate of 20 per cent to 8 per cent in 2019, and it will be eliminated by 2023.

The recent entry into force of the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP) will help open up markets in Canada and Mexico for Australia’s craft brewers and craft distillers. Under the CPTPP, all tariffs on Australian exports of gin and vodka to Canada and Mexico have been eliminated.

Export Grants Smooth Market Entry

Underground Spirits is also a recipient of an Export Market Development Grant (EMDG). Administered by Austrade, the grant reimburses up to 50 per cent of eligible export promotion expenses.  

‘The EMDG was a big help in getting our export business started,’ says Roughley. ‘We started exporting to the UK last year and the export grant is a huge thing for us.

To learn more about FTAs and Export Market Development Grants please visit the Austrade website here

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