Wine to Taiwan
(Last updated: 17 Sep 2013)
Trends and opportunities
The market
With a population of over 23 million, Taiwan is a large and growing market for alcoholic beverages. According to the Bureau of Foreign Trade in Taiwan, the total volume of imported wine was 12.42 million litres from January to September in 2012. Over the same period, the value of wine imports increased by 10 per cent. The market sales revenue of wine is expected to exceed $US480 million by the end of 2013.
Taiwan is Asia’s fifth largest consumer of wine. Growth in wine imports in Taiwan can be attributed to a rise in living standards and increased cosmopolitanism. The market for wine in Taiwan is expected to continue to grow as young professionals and women join the ranks of high income earners in consuming wine.
France was the largest supplier of wine to Taiwan in 2012, representing close to 56 per cent of the market share. The United States has become the second largest wine supplier, accounting for over 8 per cent of the market share, followed by Chile with 7.4 per cent and Australia with 7.2 per cent.
In 2012, the volume of Australian wine exports to Taiwan was 1,510,685 litres, a decrease of 8 per cent from 2011 levels. Similarly, the value of Australian wine exports to Taiwan shrunk by US$321,000. Australian wine exports to Taiwan have weakened because of increased competition, foreign exchange rates, global oversupply and consumer habits.
(Sources: Directorate General of Customs, (Executive Yuan, R.O.C, 2012) | Wine & Gourmet Taipei, 2013)
Market share of wine imported by Taiwan 2008-2012, by country of origin
*All figures have been rounded to the nearest per cent
(Source: Directorate General of Customs, (Executive Yuan, R.O.C, 2012))
Price Indication and Segmentation
In 2012, the average price of Australian wine exports to Taiwan stood at US$5.9 per litre, considerably lower than that of exports from France (US$10.5 per litre) and Italy (US$6.5 per litre). However, the average price of Australian wines was higher than that of wines imported from Chile (US$4.4 per litre) and Spain (US$3 per litre).
Opportunities
A number of opportunities exist for Australian wine growers to make inroads into the Taiwan market:
- 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. 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 affluent and older consumers of wine. Wine publications also provide key support for French wine producers. Consumer drinking preferences and habits are 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.
(Sources: Directorate General of Customs, (Executive Yuan, R.O.C, 2012) | Wine Australia, 2012)
Tariffs, regulations and customs
All imported wine must follow the Tobacco and Alcohol Administration Law published in 2000.
Tax and tariff for wine is as follows:
- Alcohol tax – NT$7 (A$0.25) 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 (A$6.2) per litre
- Import tariff - 40 per cent
(Source: Directorate General of Customs, Republic of China)
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.
Market segmentation
The market in Taiwan can be roughly classified into three segments according to price:
- Lower-end price range (FOB A$30-A$80 per case)
- Middle to premium price range (FOB A$80-A$250 per case)
- Ultra-premium price range and collectables range (FOB A$250+ per case)
Market preference
General wine body/structure preferences (“>” indicates stronger preference) in Taiwan are:
- Red >> white , 48 per cent of the import volume is cabernet sauvignon (and blends)
- Full bodied and big > medium >> light body
- Warm climate > cooler climate, however appreciation for cool climate wines is increasing
- French oak > American oak
Wine bottle and label design preference:
- Slim or reserve taper (Italian and Bordeaux) >> short, light bottle
- Natural cork > synthetic cork / DIAM / screw cap, but acceptance of the latter methods is growing
- Metal bottle wrap > plastic bottle wrap
- Wood box > lay down paper case > 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 are sold 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 of the 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 small wine shows targeted at final consumers. Wine seminars and tasting events are frequently held in Taiwan. For example, James Halliday was invited by Austrade Taipei to Taiwan to conduct a master class in 2008.
Importers from Taiwan may visit wine shows in the region, to source wines.
The most important wine event is VineExpo 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, which is an annual event normally held in November. This event is less attractive to Taiwanese importers and the majority choose to not attend.
Links and industry contacts
Wine Australia – www.wineaustralia.com
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.