Although Ecuadorian distributors have yet to receive their first shipments of duty free liquor under the new EU trade agreement, prices on store shelves have already began to drop.
Liquors and wines, as well as fertilizers and other agricultural products, will be among the first duty free European imports to show up in Ecuadorian stores.
Felipe Cordovez, president of the Ecuador Liquor Importers Association said prices will drop slowly as old stock, purchased with duties, is exhausted. “In the short term, I see a 15% to 30% price reduction and more later,” he said.
On Saturday in Guayaquil, at bottle of Ballantine’s Scotch was priced at $32, down from $42 in November. Johnny Walker Red was $44, down $58 from November, while Something Special was $41, down from $55.
As the new duty free stock arrives, Cordovez says, Johnny Walker Red should settle at about $25 a bottle. “This is not quite as low as in Colombia, but it is close,” he says. Overall, he says prices on all imported liquor will drop by 25% to 50%.
Even though they are not directly affected by the EU agreement, Cordovez says that prices will also drop on U.S. liquors. “To be competitive, North American products will also have lower prices,” he says. “Liquors like bourbon compete directly with European products in Latin America, so they will have to adjust to be competitive.”
Cordovez said that even after import surcharges on liquor are dropped in June, prices in Ecuadorian stores will still be higher than in Peru and Colombia. “Domestic liquor taxes still apply,” he said.