Palm Wine Spiked With High Tariffs

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.