Dairy to Taiwan
(Last updated: 17 Sep 2013)
Trends and opportunities
The market
In 2012, Taiwan’s total dairy import volume was 143,778 tonnes, with a value of A$479.1 million. This represented a 4 per cent decrease in volume and a 12 per cent decrease in value compared to 2011.
In 2012, yoghurt drinks and yoghurt held the largest share of the dairy market as measured by market value, with milk following in second place. In Taiwan, locally produced raw milk is used mainly as fresh milk and in yoghurt drinks, whereas milk powder, cheese and butter is predominantly imported.
New Zealand was the largest supplier of dairy products to Taiwan in 2012, representing 46 per cent of the market share. The second largest supply source in 2012 was Australia, accounting for 16 per cent of the market share, down from 18 per cent in 2011. The volume of Australian dairy exports to Taiwan in 2012 was 22,945 tonnes, a decrease of 15 per cent from 2011. The USA was the third largest supplier with a 9 per cent share, similar to that from previous years.
(Source: Council of Agriculture, Executive Yuan, R.O.C., 2012)
Market share of total dairy products imported by Taiwan 2011-2012, by country of origin
(Source: Directorate General of Customs, Executive Yuan, R.O.C., 2012)
Consumption of dairy products in Taiwan
* not concentrated or not containing added sugar or other sweetners
** concentrated or containing added sugar or other sweetners
# Other: buttermilk; curdled milk and cream; yogurt, kephir and other fermented or acidified froms of milk and cream, including added sugar or sweetners
(Source: Directorate General of Customs, Executive Yuan, R.O.C., 2012)
Opportunities
The demand for Australian dairy products is always high in Taiwan, and the following items offer good potential for Australian exporters:
- Cheese
- Milk powder
- Butter
Competitive environment
Australian dairy products have a high profile in Taiwan with local consumers confident in the quality of imports from Australia. New Zealand’s dairy products are also held in high regard, making it Australia’s biggest competitor. With a trade agreement between New Zealand and the Separate Customs Territory of Taiwan (ANZTEC) signed in July 2013, a majority of the dairy products from New Zealand will enjoy zero tariffs upon ANZTEC’s entering into force in 2014. Accordingly, Australian dairy products are expected to face more serious challenges from New Zealand exporters in the future.
US dairy products also continue to perform strongly in Taiwan, dominating the cheese market. Although total dairy imports from the US represent a smaller share of the market compared with imports from New Zealand, the US is closing the gap: active promotion of US dairy products by the US Dairy Export Council has successfully lifted the market share of US dairy imports over the past 5 years. As a result, figures released in 2012 show that within the space of 5 years the US has become the largest source of imports for cheese in Taiwan. Against increased competition from the US, Australian dairy companies are facing a number of challenges in expanding their market share.
(Source: Directorate General of Customs, Executive Yuan, R.O.C., 2012)
Tariffs, regulations and customs
The tariff rates for milk powder are:
- 04021090 - SMP: 10 per cent
- 04022190 - WMP: 10 per cent
- 19011000 - Infant milk powder: 5 per cent
- 19019021 - Prepared milk powder: 12 per cent
- 19019022 - Other milk powder: 12 per cent
Tariffs for other dairy products are:
- 04061000 - Fresh cheese, including whey, cheese and curd: 5 per cent
- 04062000 - Grated or powdered cheese, of all kind: 5 per cent
- 04063000 - Processed cheese, not grated or powdered: 5 per cent
- 04064000 - Blue-veined cheese: 5 per cent
- 04069000 - Other cheese: 5 per cent
- 04011090 - Cream and other milk, not concentrated and unsweetened, of a fat content, by weight, not exceeding 1 per cent: 20 per cent
- 04012090 - Cream and other milk, not concentrated and unsweetened, of a fat content, by weight, exceeding 1 per cent and less than 6 per cent: 20 per cent
- 04013090 - Cream and other milk, not concentrated and unsweetened, of a fat content, by weight, exceeding 6 per cent: 20 per cent
- 04041090 - Whey and modified whey, not concentrated or concentrated, whether or not containing added sugar or other sweetening matter: 5 per cent
- 04012010 - Fresh milk (excluding raw milk and milk of goat and sheep), not concentrated and unsweetened, of a fat content, by weight, not exceeding 1 per cent: NT$15.6/kg (TRQ)*
- 04012020 - Long-life milk (excluding raw milk and milk of goat and sheep), not concentrated and unsweetened, of a fat content, by weight, exceeding 1 per cent but not exceeding 6 per cent: NT$15.6/kg (TRQ)*
* Tariff Rate Quota (TRQ) means that the product is permitted under a normal tariff up to a certain annual quota volume, at which point a ‘prohibitive’ tariff is given on any additional imported quantities.
(Source: Ministry of Finance, Directorate General of Customs, 'Tariff Database')
For the most up-to-date tariffs visit www.customs.gov.tw.
Industry standards
Australian exporters need to meet the Food Sanitary Standards defined by the Department of Health.
Australian exporters also need to meet Taiwan’s nutrition labelling regulations.
Marketing your products and services
Market entry
Australian dairy suppliers should have a well-planned marketing strategy and provide an assurance of quality in order to build a solid reputation with buyers. This is fundamental to taking advantage of the diverse range of opportunities available in Taiwan. Before exporting, you should:
- Assess current demand for the product or service in Taiwan
- Identify levels of local production and imports of the product
- Identify major players in the market and potential agents and distributors
- Understand the regulatory processes, import tariffs and trading regime relevant to the product or service
- Identify competing products or services in the market and the organisations servicing this competition
Taiwan buyers remain extremely price-conscious and have a preference for stable and well-proven products, turn-key solutions, and a strong reliance and expectation on the supplier to provide after-sales service support.
It is also important to be aware of significant cultural differences in Taiwan. As well as having a general understanding of the historical and cultural background of Taiwan, you need to understand and practice the day-to-day business culture if you are to foster alliances.
Australian dairy is well known and well regarded in the Taiwan market and has an image of being consistently of high quality, healthy and natural. To export successfully in Taiwan, you should:
- Develop a good marketing plan with a long-term vision
- Provide high-quality and consistent produce
- Establish strong relationships with supermarkets and importers with good distribution channels
- Visit Taiwan frequently to support your agent and participate in trouble-shooting proactively
- Follow up on issues raised in your visits
Distribution channels
The majority of Australian dairy products exported to Taiwan are used in food processing factories and the food service channel. Some of the large food manufacturers deal with Australian dairy manufacturers directly. For the food service channel, importers deal with large food stores or bakery chains directly, and use wholesalers to sell the produts to regional or smaller shops.
Links and industry contacts
Government, business and trade resources
Council of Agriculture – www.coa.gov.tw
Department of Health – www.doh.gov.tw
Taiwan Customs – www.customs.gov.tw
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.