Tariff-free tequila flow from Mexico to Japan under FTA

Japan Times

Tariff-free tequila flow from Mexico to Japan under FTA

16 September 2004

By NOZOMI KOBAYASHI

GUADALAJARA, Mexico (Kyodo) Mexico’s tequila industry is expecting a sudden surge in shipments to Japan when the tariff of 25.2 yen per liter is completely removed under a Mexico-Japan free-trade pact that takes effect April 1.

Workers sort bottles of El Jimador at a plant owned by Herradura, one of Mexico’s largest tequila exporters, in Amatitan, Jalisco State, in this file photo.

Mexico and Japan reached a basic deal on the free-trade agreement last March, and the pact will be signed Friday by Prime Minister Junichiro Koizumi and Mexican President Vicente Fox in Mexico City.

Exports of tequila to the Japanese market "will immediately increase to 30 percent more than we export now and will be double in three years," said Eduardo Orendain, president of the National Chamber of the Tequila Industry. The chamber is based in Guadalajara, Jalisco State, about 400 km northwest of Mexico City.

Orendain, 45, said that Japan will quickly become one of the world’s five largest importers of tequila. Japan is currently No. 7, after the United States, Germany, Greece, England, Canada and Italy.

According to the Foreign Ministry, Japan imported some 680 million yen worth of tequila in 2003, compared with 380 million yen worth in 2002.

Orendain feels "100 percent positive" about the future of tequila in the Japanese market.

"Why not with Japan?" Orendain asked, citing the FTA with the European Union that Mexico signed in 1997, which expanded exports of tequila to the EU by 50 percent.

Another factor to boost exports is recognition by the Japanese government of geographical indicators of tequila’s origin to prevent imitation tequila from penetrating the market.

In 1974, the Mexican government designated Jalisco and four other Mexican states as the only recognized regions producing tequila in order to establish quality standards.

"Japan has been a very healthy market," said Ramon Gonzalez, 44, director general of the Tequila Regulatory Council.

Since the council was established in 1994, only two cases of imitation tequila were reported in Japan. However, last year, some 2.5 million liters of imitation tequila were found worldwide.

In return for protecting genuine tequila, Japan has asked Mexico to accept imports of three Japanese liquors only from regions that have been government designated.

"Just as Mexicans enjoy sake, so the Japanese could enjoy our tequila," Orendain said.

Herradura, one of the largest tequila exporters, based in Amatitan, 45 km from Guadalajara, exported 45,000 liters to Japan in 2003, and this year will export around 72,000 liters.

"The Japanese market is a very interesting one for us. They prefer better quality," said Ruben Aceves, the company’s international sales director.

Herradura is the only tequila company that does not depend on chemicals for fermentation, and "the products have authentic taste," Aceves said.

Currently, one of its original brands, El Jimador, costs around $25 per bottle in Japan, and "the price can be reduced to $19.20, but we don’t sell a cheap taste," the 47-year-old Aceves said.

"We will export 20 percent more in five years. It would be only around 7 percent if there were no FTA," he said.

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keywords: Japan, Mexico