The Department for International Trade has been causing something of a stir on social media, after tweeting about Tuesday’s Great British Bake Off.
It was Japanese week on the programme – and the DIT account tweeted: “The bakers used a lot of soya sauce in the first challenge on #GBBO, so it’s a good thing it will be made cheaper thanks to our trade deal with Japan.”
But many users on social media pointed out the UK currently benefited from a trade deal between the EU and Japan that prevented any tariffs, or taxes, on imports of soy sauce – so it would not be made cheaper when the UK switched to its new deal with Japan, on 1 January.
The DIT later clarified: “Thanks to the UK-Japan trade deal, soya sauce will be cheaper than it otherwise would be under WTO [World Trade Organization] terms, on which we would be trading with Japan from 1 January if we had not secured the UK-Japan trade deal.”
In the UK’s list of tariffs it will charge on imports from countries with which it does not have trade deals, the figure for soy sauce is 6% – less than the 7.7% the EU charges.
So without the UK-Japan trade deal, imported Japanese soy sauce would have become more expensive from January.
But there is another problem with the original tweet – most soy sauce in the UK does not come from Japan.
Amoy, owned by Heinz, has 58% of the £29m market according to research company Euromonitor International. Its soy sauce is made in China and bottled in the UK so the UK-Japan deal will have no impact. But the tariff payable on soy sauce imported from China will come down slightly from the 7.7% it was as part of the EU to the UK’s new rate of 6%.
The second biggest brand is Kikkoman, a Japanese company, with 20% of the market. However, most of its sauces found in the UK are made in the Netherlands and only some is imported from Japan.
If the UK does not do a trade deal with the EU, then from 1 January, imports of soy sauce from the Netherlands will go from having no tariff to having a 6% tariff.
The remaining 22% of the market is made up of supermarket own brands and smaller brands, some of which are indeed made in Japan.
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