Wine to Japan
Japan’s wine market has decreased. Opportunities remain, but the market presents challenges for many Australian exporters.
Australia is the sixth largest supplier of wine to Japan. Australia’s total import volume was 6 million litres in 2020, a 4% year-on-year decrease. The total value decreased by 5% year on year, to A$33.2 million. (Source: Trade Statistics of Japan, Commodity by country, Japan Customs trade data 2019-2020, HS: 220421020, accessed July 2021.)
Still wine market
Japan’s still wine market size by volume was 352.2 million litres in 2020. This was a 7% drop from 2019. Imported wine totalled 226.1 million litres or 64.2% of total wine sales. This was a 12% year-on-year decrease. (Source: Japan National Tax Administration Agency, Monthly Tax Data, accessed July 2021. Statistics based on Japan FY 1 April to 31 March.)
Off-premise sales accounted for 77% of still wine sales. The other 23% were on premise. COVID-19 restrictions impacted on-premise businesses. Their sales reduced more than 35% year on year.
Demand for home consumption increased in 2020. This brought increases in sales volumes through supermarkets (14.4%) and e-commerce platforms (17.3%).
Off-premise sales occurred through:
- supermarkets (more than 40%)
- liquor shops (30%)
- convenience stores (7%)
- discount stores (5.9%)
- department stores (less than 2%)
(Source: WANDS, April 2021, 424.)
Sparkling wine market
Japan’s imported sparkling wine market size by volume was 35.4 million litres in 2020. This was a 20% decrease year on year. The top 5 countries of origin were:
- France (36%)
- Spain (32%)
- Italy (19%)
- Chile (6%)
- Australia (4%)
(Source: Trade Statistics of Japan, Commodity by country, Japan Customs trade data 2019-2020, HS: 220410000, accessed July 2021.)
Off-premise sales accounted for 62% of sparkling wine sales. The other 38% were on premise ¬– a 7% drop from 45% in 2019. The decrease came mostly from COVID-19’s impact on the food service industry.
E-commerce and catalogue sales increased 3%, comprising 10% of all sparkling wine sales.
In retail outlets, sparkling wine sales occurred through:
- supermarkets (26%)
- general liquor stores (10%)
- discount shops, department stores and convenience stores (4%)
(Source: Imported sparkling wine in Japan 2020, WANDS, June 2021.)
Japanese importers, wholesalers, buyers, sommeliers and consumers do not see Australian wines as competitors of Chilean or Spanish wines.
Chilean and Spanish wines typically sell for under JPY1000 (about A$12) per 750mL bottle. Australian wines have retail price points of JPY1000-1500 (A$12-19).
About 77% of Japan’s still wine sells for less than JPY1499 ($A19) per bottle. About 56% of imported still wine sells for less than JPY999 ($A12) per bottle.
The price points that had significant increases across imported wine in 2020 were:
- less than JPY500 (A$6) (+6%)
- over JPY5000 ($A62) (+10%)
Mid-range Australian wines lost 35-40% by volume, while only entry-level wines saw a slight increase:
- JPY1500-1999 ($A19-25) (–41%)
- JPY2000-2999 (A$25-38) (–33%)
- JPY1000-1500 (A$12-19) (+6%)
(Source: WANDS, April 2021, 424.)
Opportunities and trends
Health and sustainability are front of mind, driving more demand for:
- organic, biodynamic and natural wines
- wines with no artificial additives
Austrade has received requests during 2021 for:
- wine at entry-level price point
- cask wine
- award-winning wines (gold medal)
- ‘natural wine’
- skin-contact white wine
- organically certified wine
- non-alcoholic or very low-alcohol wine, beer and ready-to-drink cocktails.
Half and quarter bottles are becoming more popular in supermarkets. This stems from a rise in one-person households.
‘Old world’ wines dominate the market in Japan, across both still and sparkling wines. Close to 60% of total volume comes from:
- Chile (30%)
- France (28%)
- Italy (17%)
- Spain (11%)
- USA (4%)
Chile was the only country with an increase in exports by volume in 2020. It is currently the largest exporter of still wine to Japan.
Australian wine import volumes have dropped since early 2019, after the Japan-EU Economic Partnership Agreement took effect. The agreement immediately removed all tariffs on wine imports from EU members. These included tariffs on still, sparkling and bulk wine. Wine import volumes increased from France (49%), Italy (52%), Spain (11%) and Germany (19%). Meanwhile, Australia’s wine import volumes declined by 45%.
The Japan-Australian Economic Partnership Agreement (JAEPA) removed tariffs on Australian wine imports in April 2021. This enables Australian wines to remain competitive. However, the full benefits that Australian exporters were expecting are unlikely to occur. The market has been slow to respond to changes. This may be due to the gradual removal of tariffs and COVID-19 causing disruptions to the market.
Consumers’ understanding of wine varies in Japan. This shows in increased sales in supermarkets, convenience stores and online. Consumers with good knowledge of wine follow vintage reports, world-famous competitions or critics. These consumers look for specific wines through online channels that are less price sensitive.
Bulk wines and private labels
Private-label products are capturing more market share through:
- major retail chains such as AEON and Seven & I Holdings
- mid-sized supermarket chains
- some convenient stores
Most private-label products come from imported bulk wines and are bottled in Japan.
Bulk wine imports from Australia increased when the JAEPA removed tariffs in 2015. Many players in Japan reacted quickly. This boosted bulk wine imports to 5.2 million litres in 2015, a 191% increase over 2014. (Source: Trade Statistics of Japan, Commodity by country, Japan Customs trade data 2014–15, HS 2204290.)
Tariffs, regulations and customs
Imports account for most of Japan’s wine, so prices are high compared to other kinds of liquor. Retail prices are 2 to 4 times higher than in Australia. This stems from a combination of import duties, taxes, high distribution costs and mark-ups. The tariff and tax system is as follows:
- Import Tariff – 0% (since April 2021)
- Liquor Tax – JPY90,000 per 1000 litres
- Consumption Tax (VAT) – 10%.
Marketing your products and services
Consider the following to market wine into Japan:
- Define the target market segment or segments for your wine. Research that sector and associated price points.
- Appoint an importer or distributor as a partner in Japan. Choose one with a competitive advantage in the distribution channel that suits your product segment. Note that the importer must hold an import licence approved by the Japanese government.
- Be creative and unique and have a long-term commitment to the market.
- Use market strategies that set your product apart from other wine brands. Other popular alcoholic beverages, also compete with wine. These include beer, ready-to-drink products and sake.
- Price and quality are becoming more important to consumers in Japan. Support your local partner and stay in constant communication.
- Take part in targeted wine promotions in department stores and retail outlets. Also attend wine-tasting events with your distributor.
- Credentials such as awards and stories about your wines are powerful promotional tools. This includes pictures of vineyards and wineries.
Japan’s distribution system is becoming more efficient, but it still follows the traditional route. Wine travels from overseas vineyards to Japanese wine importers, wholesalers or trading houses. From there, the wine goes to restaurants or retail stores.
Wholesalers remain a critical link in the supply chain. Wholesalers:
- meet needs of retail stores and restaurants that prefer small or mixed wine orders
- help retail stores and restaurants with logistics for storing wines
- provide facilities, such as local warehouses throughout Japan
- connect networks of contacts in local or regional markets.
Retailers that pursue a cost-reduction strategy prefer to deal directly with suppliers. Some high-end supermarket chains have set up their own subsidiary companies to import products. There are also small-scale importers that provide small orders directly to independent restaurants.
In response to COVID-19 restrictions, some importers are selling wine direct to consumers through e-commerce platforms.
E-commerce channels are becoming more important for Australian wineries. Wineries can showcase their products to consumers with fewer intermediaries in the distribution channel.
Suppliers should take care to choose the most suitable channel to market their product. Wine in Japan is a ‘brand business’. The online distribution channel has some positive aspects. However, it can also lead to price competition and destroy brand integrity.
Government and trade resources
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.
The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:
- develop international markets
- win productive foreign direct investment
- promote international education
- strengthen Australia's tourism industry
- seek consular and passport services.
Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.
For more information on how Austrade can assist you
Call 13 28 78
Submit your enquiry