Next week Cambodian palm wine producer Confirel will make its first shipment into Vietnam, the company’s president said Tuesday.
Because there is no agreement for low-tariff access between Cambodia and Vietnam on palm wine, Confirel will pay a 65-percent tariff on the product, Ly Aun Hay said.
“We will not make a profit on the shipment,” he said. “It is part of our strategy to gain market penetration, but we cannot continue the shipments unless a better tariff agreement is made.”
The single container will be shipped overland via the Bavet border checkpoint.
The company president said he also wishes to ship palm wine to China, but would have to pay a 93- percent tariff, thereby losing money on the deal.
“Commerce Minister Cham Prasidh signed a letter to have palm wine on the inclusion list,” he said.
But since the letter was signed, he said, others in the Commerce Ministry have told him that palm wine cannot be included on the list of low-tariff items going to China for balance-of-trade reasons.
Ly Aun Hay rejects the argument.
“Palm wine is a unique, niche product. China does not have palm wine and neither does Vietnam…. There is no risk of palm wine flooding the domestic market here,” he said.
Commerce Ministry Undersecretary of State Mao Thura said, in fact, it was China that has refused to include palm wine on the list of 297 products it unilaterally granted low-tariff access.
“China won’t allow any wine to be exported to their market without tax,” he said.
Phnom Penh-based Confirel employs 65 people and, in addition to producing palm wine, produces palm sugar.
Ly Aun Hay said the company makes 75 percent of its profit selling to France and other EU countries, where the product receives zero tariff access because of Cambodia’s Least Developed Country status.