Food and beverage to Taiwan

(Last updated: 17 Nov 2011)

Trends and opportunities

The market

Taiwan has one of the highest per capita food spends in the region, with relatively high disposable incomes and a strong preference for convenient, healthy, quality and premium food and beverage products. Although the local food manufacturing industry is well established, Taiwan is still heavily reliant on imports.

Australian food and agricultural exports to Taiwan are significant. Australia is one of the major source for agricultural and food imports. In addition, the liberalisation of Taiwan's food and agricultural goods trade will create considerable potential for Australia to increase its market share, taking advantage of Australia's counter-seasonal supply, appealing varieties and reputation for clean, quality food. Major export items include meat, grain and dairy products.

There are several major market influences that will increase the prospects for Australian food supply to the Taiwan market:

• Australia is free from disease, particularly BSE and foot-and-mouth disease. 
• Australia offers counter-seasonal supply – a competitive advantage for exporters. 
• The increasing number of high-end supermarkets increases the demand of high quality imported food and beverage products.

Opportunities

Opportunities for Australian suppliers of food to Taiwan include:

• Seafood – abalone, scallop, King prawn and oyster 
• Meat – frozen beef (flank, shin, shank and offal), chilled beef (shortloin, rib eye and tenderloin, Australian wagyu and organic beef), frozen goat meat, chilled lamb and frozen lamb rack 
• Grains – wheat, barley and oats (rolled oats and organic oats)
• Dairy produce – milk powder, UHT milk, UHT cream, cheese, butter and value added dairy ingredients 
• Fruit – nectarines and peaches (white flesh), tangerines, cherries, and table grapes 
• Vegetables – carrots, potatoes, asparagus, and onion 
• Organic food 
• High quality packaged food
• Demand for food ingredients for food processing, bakery use and food service  
• Wine – ultra premium wine for high spending power customers

Competitive environment

Due to the lack of nature resources and limited land, Taiwan is heavily reliant on the import of a wide range of agricultural and food and beverage products from different countries.

USA is the leading supplier for major agricultural products while Japan is strong in packaged food. Taiwanese consumers tend to be fond of Japanese products because of its taste and fancy packaging. Besides the US and Japan, Taiwan traders are sourcing products from all over the world. Hence, Australia is facing fierce international competition.

There are a number of established local food manufacturers such as Uni-President, Wei-Chuan and I-Mei, which produce good quality and price competitive food and beverage products. Some of these companies have expanded their operation to China.

Australian companies need to be aware of both international and local competition when considering exporting to Taiwan.

Tariffs, regulations and customs

Customs regulations and procedures are administered by the Directorate General of Customs within the Ministry of Finance, Republic of China. Tariff rates vary depending on the product imported.

Industry standards

Taiwanese law requires all products (except those destined for use by the food service sector) to have a Mandarin Chinese language label using traditional characters affixed before products can clear customs.

The Taiwan authorities strictly enforce food and beverage labelling requirements. Improper or altered labels risk rejection by the local inspector at the port of entry.

The label must indicate the following information in Chinese:

• Product name
• Name, weight, volume or quantity of the contents (if a mixture of two or more components, they must be listed separately)
• Name of food additives
• Name, telephone number, and detailed address of manufacturer
• Name, telephone number, and detailed address of importer, for imported foods
• Country of origin (effective January 1, 2008, based on manufacturing date)
• Expiration date (year, month, date) must be printed in that order. To distinguish the month from the date, the Chinese characters for ‘month’ and ‘date’ may be included on the label. If the normal shelf life exceeds three months, the expiration date may be indicated by year and month only. Date of manufacture, shelf life, and conditions of storage may also be used, if required by the health authorities
• Dairy products in liquid form must also indicate shelf life and conditions of storage

The ‘Regulation on Nutritional Labelling for Packaged Food’ and the ‘Regulation on Nutrition Claims for Package Food were in effect from September 1, 2002. The ‘Regulation on Nutritional Labelling for Packaged Food’ was amended in July 2007 and implemented on January 1, 2008.

For further details, please visit the Food and Drug Administration, Department of Health’s website: www.fda.gov.tw/eng/index.aspx

Bureau of Food Safety
Department of Health
12th Floor, 100 Ai Guo East Road
Taipei, Taiwan
Tel: +886 2 2321 0151
Fax: +886 2 2392 9723

Marketing your products and services

Market entry

Australian food 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 this market and will assist companies to:

• 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 more day-to-day business culture if you are to foster alliances.

Australian food 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 need to consider:

• Developing a good marketing plan with a long-term vision
• Providing high-quality and consistent produce
• Establishing strong relationships with supermarkets and importers with good distribution channels
• Visiting Taiwan frequently to support your agent and participate in trouble-shooting in a pro-active fashion
• Following up on issues raised in your visits

Distribution channels

Depending on the product there are various distribution chains or channels that are used by traders. Over the past 10 years, the following changes have occurred in the unprocessed food distribution system:

• Introduction of large retail chains such as Carrefour and RT-Mart
• Development of distribution firms to service the large retail chains
• Increasing direct sales between importers and retailers and wholesalers
• Development of direct purchasing channels between retailers and wholesale markets

For meat products the traditional distribution route is importer to wholesaler, then distributor to retailer, caterer or food service industry. However, the importer, wholesaler and distributor are often the same company for imported meat. Also, imported meats are only available in Western-style supermarkets and hypermarkets with adequate refrigeration facilities, where they are butchered into different cuts and packaged. By comparison, in traditional local markets, consumers select the cut of meat they require from a large piece.

For fruit, vegetable and seafood produce, there are three major channel options:

• Direct sales – exporter to retailer such as a supermarket and hypermarket
• Two-level – exporter to importer to retailer (ie. the food service industry)
• Three-level – exporter to importer to wholesaler to retailer (ie. the food service industry)

For other general food produce, supermarkets, hypermarkets and convenience stores are the major retail outlets. Major coffee shop chains are a promising new route for dairy products.

Links and industry contacts

Food–related resources

Bureau of Animal and Plant Inspection and Quarantine – www.baphiq.gov.tw/index/index.html
Fisheries Administration Taiwan – www.fa.gov.tw/eindex
Food Industry Research and Development Institute – www.firdi.org.tw

Media

China Post – www.chinapost.com.tw
Taipei Times – www.taipeitimes.com