Wine to Taiwan

Trends and opportunities

The market

With a population of over 23 million, Taiwan is a large and growing market for the imported alcoholic beverages. In the past six years, overall wine consumption has grown at a rate of 8.6 per cent per annum (p.a.), with spirits and liqueurs at 8.8 per cent p.a. (Source: Customs Administration, Ministry of Finance, Trade Statistic Search, Dec 2014)

In 2014, the total value of alcoholic beverages imported into Taiwan totalled US$942.7 million, with imported wine constituting only 15.6 per cent of this value at US$147 million. Whisky is the most-imported liquor, accounting for around US$405 million, with Taiwan becoming the world’s second-largest premium whisky importing country in 2013. Compared with whisky, wine has relatively smaller market but is expected to grow in the coming years (Source: Customs Administration, Ministry of Finance, Trade Statistic Search, May 2015).

Australia accounted for about 6.4 per cent of Taiwan’s imported wine market in 2014. France accounted for 54 per cent market share, while the USA accounted for 8.9 per cent and Italy accounted for 8.7 per cent (Source: Customs Administration, Ministry of Finance, Trade Statistic Search, May 2015).

Taiwan is amongst the top five wine-consuming markets in Asia (Source: Accidental Travel Writer, Hong Kong: Wine Consumption Soars 200% in Five Years! 13 Mar 2012).

Market share of wine imported by Taiwan 2009-2014, by country of origin

Market share of wine imported by Taiwan 2009-2014, by country of origin

*All figures have been rounded to the nearest per cent
(Source: Customs Administration, Ministry of Finance, Trade Statistic Search, Jan 2015)

The average price of Australian wine exports to Taiwan is about US$6.3 per litre, which is considerably lower than that of exports from France at US$14.5 per litre and Italy at US$9.5 per litre, but higher than that of wines imported from Chile at US$4.82 per litre and Spain at US$3.54 per litre. (Source: Customs Administration, Ministry of Finance, Trade Statistic Search, Jan 2015)

Opportunities

A number of opportunities exist for Australian wine growers:

  • An emerging group of wine consumers amongst young urban dwellers and women.
  • Strong demand for wine amongst a rapidly increasing number of tourists from mainland China (wine sold in Taiwan is not subject to the same high-level of import tax and duty as in China).
  • Drinking habits are changing: most new consumers have yet to develop a fixed preference for the source of wine.

Competitive environment

Australia remains one of the largest suppliers of wine in Taiwan. However over recent years, Australia’s share of the market and volume of exports has decreased.

Australia faces increased competition from a number of markets. France dominates the ultra-premium price segment, with a strong demand for French wine from Bordeaux and Burgundy amongst more affluent consumers. Wine publications also provide key support for French wine producers, with consumer drinking preferences and habits being heavily influenced by wine publications such as Wine Advocate, Decanter and Wine Spectator. On the other hand, a depreciating Euro has gifted French wine suppliers with a comparative advantage over Australian wine exporters.

At the lower-end of the price range, wines from Argentina, Chile and Spain have grown in popularity. With weak global economic conditions and an oversupply of wine production, Argentina, Chile and Spain have squeezed Australian suppliers out of the lower-end market, with only a few brands such as Jacobs Creek, Banrock Station and Yellow Tail remaining.

Tariffs, regulations and customs

All imported wine must follow the Tobacco and Alcohol Administration Law. Tax and tariffs imposed on imported wine is as follows:

  • Alcohol tax – NT$7 for each percentage point of alcohol per litre.
  • Import tariff – 10 per cent for still wine, 20 per cent for sparkling wine and port.

Other re-processed alcoholic beverages, of an alcoholic strength by volume exceeding 20 per cent are subject to higher rates of tax and tariff:

  • Alcohol tax – NT$185 per litre.
  • Import tariff – 40 per cent.

(Source: Taxation Administration, Ministry of Finance, Tobacco and Alcohol Tax Act, 9 Feb 2015)

All wines exported to Taiwan need to meet the chemical standard test provided by recognised laboratories, such as the National Association of Testing Authorities (NATA).

Marketing your products and services

Market entry

The wine market in Taiwan is clearly segmented and successful exporters have adjusted their product range accordingly to meet buyer and importer preferences. Every distributor has different marketing and pricing strategies and is active in different price segments.

Most wine importers in Taiwan are small importers who may only import from countries other than Australia or have yet to import Australian wines. The few large importers are well established and already possess a comprehensive Australian wine portfolio.

The market in Taiwan can be roughly classified into three segments according to price ranges:

  1. Lower-end - Free on Board (FOB) A$30 to $80 per case
  2. Middle to premium - FOB A$80 to $250 per case
  3. Ultra-premium and collectables range - FOB A$250+ per case.

General wine body and structure preferences in Taiwan are:

  • Red is more popular than white, 48 per cent of the import volume is cabernet sauvignon (and blends).
  • Full bodied and big, then medium, then light body.
  • Warm climate instead of a cooler climate, however appreciation for cool climate wines is increasing.
  • French oak is preferable to American oak.

Wine bottle and label design preference:

  • Slim or reserve taper (Italian and Bordeaux) rather than a short, light bottle.
  • Natural cork opposed to a synthetic cork / DIAM / screw cap, but acceptance of the latter is growing.
  • Metal bottle wrap rather than plastic bottle wrap.
  • Wood box, then a lay down paper case, lastly stand up paper case.

Distribution channels

Wine is distributed through importers by various means. Wines in the ultra-premium price range are mostly sold directly to consumers without going through any channels or at certain boutique wine shops. Middle- and lower-priced wines are mainly distributed by wine retail shops, some premium supermarkets, restaurants and pubs.

Other alcohol consumption

Wine constitutes less than 25 per cent of the total value of alcohol consumption in Taiwan. Other popular alcoholic beverages include whisky, beer, Japanese sake, cognac, Armagnac and other liquors and spirits, mainly used to make cocktails. Taiwan is a big whisky-drinking market, with most whisky imported from Scotland.

Trade events

As the Taiwan market is not a volume-driven market, there is no major wine exhibition for Business-to-Business, although there are many Business-to-Customer wine shows targeted at final consumers. Wine seminars and tasting events are frequently held in Taiwan.

Importers from Taiwan may visit wine shows in the region, to source wines.

Vine Expo Asia which is held in Hong Kong annually, normally in May. Most Taiwanese importers attend this event for an opportunity to look for new wine brands and to discuss future orders with their suppliers from various countries.

The Hong Kong International Wine and Spirit Fair, is an annual wine event normally held in November. This event is less attractive to Taiwanese importers, with minimal attendance from Taiwanese wine industry representatives.

Links and industry contacts

Wine Australia

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