Beef to Taiwan

(Last updated: 9 May 2013)

Trends and opportunities

The market

Taiwan imports 96 per cent beef for consumption as Taiwan does not produce much beef locally. Australian beef is well received in Taiwan because of its ‘clean and green environmental image’. Imports are mainly from Australia, USA, New Zealand and Canada.

Traditionally Taiwan consumers have preferred US beef over Australian beef and consider it higher grade, for instance cuts of tenderloin, rib eye, striploin and short rib are always imported from the US. In recent years, Australia has started to promote its high value and quality beef (instead of the traditional cuts – shin shank and intercostal) such as grain-feed beef and pure blood wagyu beef. By raising the profile of Australian beef and increasing market share, it is expected that these attitudes will change over time.

Beef from the US is considered of higher quality, and is classified as ‘special grade’ for tariff purpose, whereas Australian and New Zealand beef and domestically produced beef are classified as ‘general grade’.

The quality of beef determines where the products are sold. For example, the US and New Zealand beef tends to go to the Western-style restaurants and modern supermarkets. On the other hand, Australian beef (mostly shin shank and other lower value cuts) is used mainly in Chinese restaurants and local wet markets for predominantly local dishes, in particular ‘beef noodles’.

Opportunities

Along with New Zealand, Australian beef is at an advantage because it has been unaffected by bovine spongiform encephalopathy (BSE, or mad cow disease). In comparison, the sale of US and Canadian beef has been badly impacted by the media and has to be continually monitored in response to threats of the disease.

From Australia, the most popular and stable cuts in terms of demand are shin shank, knuckle, chuck tender and intercostal. In recent years, due to the increased number of Taiwan businesses investing in mainland China, particularly in the food processing and food service sectors with China’s increasing popularity and acceptance of Taiwanese cuisine, imported beef demands are great but required through China.

Since 2008, the economic recession has resulted in a decrease in dining out and consumers are instead turning to supermarkets to purchase foodstuff for cooking at home. This action has increased the beef sales of 10 per cent on average. With more general consumer education on beef cooking and health benefits, it could increase the sales of beef as well.

Competitive environment

Australia is the largest supplier of beef to Taiwan, followed by New Zealand and the US. This is in terms of the market share and volume of frozen beef imports. Australian beef has also traditionally been cheaper than New Zealand and USA, and its market share, import quantity and price are more stable than other suppliers.

In general, the Taiwan market for total beef and beef variety meat shares are:

• Australia – 41 per cent
• New Zealand – 28 per cent
• USA – 24 per cent
• Nicaragua – 2.6 per cent
• Domestic self-sufficiency – 4.7 per cent

Tariffs, regulations and customs

Industry standards

Taiwan's Department of Health (DOH) is responsible for managing food safety and all associated laws, regulations and standards. All imported food items are inspected at the point of entry in Taiwan by the Ministry of Economic Affairs' Bureau of Standards, Metrology and Inspection, on behalf of the DOH.

In addition, the DOH commissions the Bureau of Animal and Plant Health Inspection and Quarantine of the Council of Agriculture to inspect all fresh fish and seafood products, including aquatic plants.

Processed foods are inspected for correct labelling, food hygiene and food additives. The importation of food additives is prohibited without prior authorisation from the DOH. A complete list of applicable standards and regulations can be purchased in Mandarin Chinese, directly from the DOH.

Marketing your products and services

Market entry

Although Australian beef is well received and established in Taiwan, exporters need to develop long-term strategies to create greater demand in the market.

This could include:

• Increasing the market penetration of Australian beef in the retail and food service sectors by introducing new beef cuts to match specific Chinese food preparation techniques.
• Operating/marketing environment and trade/distribution issues, due to shrinking beef sales margins, retailers and food service operators and are reluctant to make significant investment in promoting Australian beef. Therefore, ongoing marketing plan is essential in maintaining the market share.
• Continuing to raise the profile of Australian beef by highlighting quality, nutrition and health advantages is also a priority to help drive overall beef consumption. Exporters can utilise public relations and advertising to promote Australia’s beef image.

Distribution channels

Taiwanese retailers use a variety of different methods to purchase products including direct sales, distributors and wholesalers as well as agents and representatives.

The hotel and restaurant industry primarily relies on importers, distributors, wholesalers, wet markets and retailers for imported food supplies. Some independent small-sized establishments have begun making volume purchases of imported goods at local hypermarkets in order to avoid the hassle of more traditional import channels. Institutional players, meanwhile, are reliant on importers and distributors for the most part, but may also source products directly from foreign producers.

In the hotel segment, food purchase decisions are usually made by food and beverage managers or the respective executive chefs. Hotels that serve western food or employ western chefs are subsequently more likely to require imported food products on a regular basis, commonly sourcing through distributors and wholesalers.

Fast-food and family-style restaurant chains frequently maintain their own distribution centres, which manage purchases and supplies for the entire chain, island-wide. In addition, some chain restaurants will prepare meals at a central location and distribute the meals to their various locations around Taiwan. Smaller eateries most commonly source their food supplies from traditional or wet markets.

Agents and representatives also have the advantage of superior market intelligence and improved communication for customer service. Sales representatives play an important role in the direct sale of products. Generally speaking, foreign firms are better served by local agents with whom they have close ties.

Links and industry contacts

Government, business and trade resources for Taiwan

Bureau of Animal and Plant Health Inspection and Quarantine – www.baphiq.gov.tw
Council of Agriculture – eng.coa.gov.tw
Department of Health – www.doh.gov.tw
Ministry of Economic Affairs – www.moea.gov.tw