Wine to Japan
(Last updated: 21 August 2013)
Trends and opportunities
The market
Wine consumption in Japan has increased by approximately 12 per cent from 2011 to 2012, with 32 million cases sold (Source: Jozosangyo Shinbun). Wine consumption per head increased from 2.28 litres in 2011 to 2.69 litres in 2012. Sales of wines have expanded predominately from small retail and mass merchandise stores to specialty wine shops. Behind the 2012 increase in consumption is the expansion in floor space dedicated to wine sales in merchandise outlets and convenience stores. Despite wine sales being only 10 per cent of total alcohol purchases across wider Japan, convenience stores alone increased their sales of wine more than 99 per cent in 2012 (compared with 2011). New retail stores are increasingly stocking wine in order to compete. Supermarkets also increased their volume of wines sold by more than 18 per cent, from 2011 to 2012. The number of new concept wine bars or casual, standing wine bars has also increased. (Source: Syuhan News VOL 1806, 21 April 2013)
Australian wine imports in 2012 increased by 12.3 per cent from 2011, with about 896,000 cases sold.
Japanese importers, wholesalers, buyers, sommeliers, and consumers now understand that Australian wines do not compete with low-priced Chilean or Spanish wines which sell for under JPY500 (about A$5) per 750ml. Australian wine sales are now pitched at price points in the JPY500-1000/750ml (A$ 5-10) retail price category. Sales of Australian wine in the JPY500-1000 retail price category increased in 2012 by more than 37 per cent from 2011 (WANDS Review June 2013). In the JPY1000-1500 (A$10-15) retail price range, Australian sales increased 17 per cent compared to 2011. This price range consists of almost 50 per cent of the Australian wine exported to Japan. Further success of Australian wine will rely on Australian exporters/Australian wine importers in Japan to aggressively maintain shelf space in supermarkets, convenience stores and other retail outlets at the JPY500-1000 and JPY 1000-1500 price points, as well as promoting middle to premium Australian wine brands.
Opportunities
Among total wine consumption in Japan, the biggest volume category remains at the retail price of JPY500-JPY1000 for a 750ml bottle, which has increased dramatically to 10,697,000 cases (Source: WANDS Review, May 2013). Imported wines hold 48 per cent of this price range with fierce competition between France, Italy, Spain (with the influence of the strong yen against the Euro), Chile, and the US. These wines are mainly distributed through large-scale retail outlets such as supermarket chains and ‘casual’ food service outlets. The ongoing deflationary environment in Japan is influencing consumers to purchase lower priced products.
The export of Australian sparkling wine to Japan has shown consistent growth and reached 134,700 cases in 2012 - an 11.7 per cent per cent increase from 2011 (Source: WANDS review, May 2013).
Premium wines for special occasions, when supported by established reputation, ratings, and/or awards, retail at A$18-$37 and are distributed through specialised wine outlets, online shopping, mail-order/catalogue, upper-tier hotels and restaurants. The super-premium wine segment (more than JPY10,000/A$100 retail price per bottle) has increased in volume to 61,000 cases annually, 29.8 per cent more than 2011. Successful premium wines must have an outstanding and unique reputation and boast highly regarded international awards.
For further information please see 'Wine to Japan: preparing for the Japanese market' (PDF, 1.94MB).
Competitive Environment
Australia remained the sixth largest exporter to Japan in 2012 (increase of 12.3 per cent), and the fourth largest exporter in sparkling wines (increase of 11.7 per cent). The wine market in Japan is still dominated by Old World wines (both still and sparkling) with more than 60 per cent of total volume shared by France (30 per cent), Italy (18 per cent) and Spain (14 per cent). Chile has recorded a dramatic increase in exports by volume and is currently the third largest exporter to Japan in still wines.
Several factors adversely affected Australian wine exports to Japan in 2012. The depreciation of the US dollar and Euro against the yen provided a pricing advantage to wines from those countries compared with Australia.
Tariffs, regulations and customs
Wine imports must adhere to the Food Sanitation Law. Customs duties and liquor tax apply, depending on volume, product category, type of container and place of origin. Customs counsellors can answer questions and offer advice via email.
Customs duty and liquor tax on general Australian wine are as follows. (These should be confirmed with Customs and the National Taxation Agency through a Japanese importer).
- Customs duty:
- Still wine – ¥125 per litre or CIF 15 per cent, whichever is less
- Sparkling wine – ¥182 per litre
- Liquor tax:
- Wine – ¥80,000 per kilolitre
Marketing your products and services
Market entry
To successfully market wine into Japan, the following points must be considered:
- Define the target market segment(s) for your wine, and research that market and associated price points.
- Appoint a partner in Japan. Select a local partner, either an importer or distributor, with a competitive advantage in the distribution channel which suits your product segment. Please note that the importer must hold an import license approved by the Japanese government.
- Be creative, unique and have a long-term commitment to the market.
- Market strategies need to differentiate your product against other Australian, local and international wine brands, which are being introduced in growing numbers. Other popular alcoholic beverages, such as beer, also compete with wine.
- Keep in mind Japanese consumers are increasingly price and quality conscious so it is important to support your locally based partner and maintain constant communication.
- Participate in targeted wine promotions in department stores and retail outlets and/or attend wine tasting events with your distributor. Credentials such as awards and stories about your wines, including pictures of vineyards and wineries are also powerful promotional tools in Japan.
Distribution channels
The Japanese distribution system is becoming more efficient, but wholesalers still play an important role in making frequent small-lot deliveries to retail shops with limited storage space.
Sales volume objectives, together with the positioning of your product, will be key factors when considering suitable distribution channels. Some major retail chain stores source wine directly from overseas or domestic wine suppliers to increase efficiency in distribution. In recent years, retailers with a large number of stores are considering importing wine directly to reduce distribution costs, but will only sell these wines at their stores.
Common distribution structures are:
- Importers to wholesalers to retailers or the food service industry
- Specialist wholesalers with strength in particular channels and regions
- Major national wholesalers covering various channels and regions
Links and industry contacts
Government, business and trade resources for Japan
Japan Customs – www.customs.go.jp/english/index.htm
Ministry of Agriculture, Forestry and Fishery – www.maff.go.jp/e/index.html
Ministry of Health, Labour and Welfare – www.mhlw.go.jp/english/topics/foodsafety/
Ministry of Finance – www.mof.go.jp/english/index.htm
Japan External Trade Organization – www.jetro.go.jp/australia
Contact details
The Australian Trade Commission – Austrade – is the Australian Government’s trade, investment and education promotion agency.
Through a global network of offices, Austrade assists Australian companies to grow their international business, attracts productive foreign direct investment into Australia and promotes Australia’s education sector internationally.
For more information on how Austrade can assist you, contact us on:
Australia ph: 13 28 78 | Email: info@austrade.gov.au
A list of Austrade offices (in alphabetical order of country) is also available.