Premier Chang Chun-hsiung (張俊雄) yesterday ordered government authorities to investigate the hoarding of "red-label" rice wine in anticipation of a substantial price hike next year, government spokesman Su Tzen-ping said (蘇正平) yesterday.
"Within one week, a report on illegal hoarders will have to be submitted [to the Cabinet]," Su quoted Chang as saying after a weekly Cabinet meeting yesterday.
The average household in Taiwan uses two to three bottles of rice wine a month. The wine is a commonly used ingredient in many Chinese and Taiwanese dishes.
The price of the wine is expected to soar from NT$21 (US$0.60) per bottle to about NT$120 (US$3.80) next year, following Taiwan's accession to WTO.
The local Chinese-language media said yesterday that about 1.2 million bottles of rice wine were sold on Monday alone through the Taiwan Tobacco and Wine Monopoly Board's (公賣局) 119 distribution outlets, with people enduring two to three-hour long queues.
Su, however, said the increasing demand for rice wine was purely speculative.
Any increase in the wine's production "will [prove to] be a waste," he added, citing a Ministry of Finance report.
Since the ministry has decided not to increase production, Su said the government decided that the rationing measures were the fairest way to make the wine available.
The new quotas are in effect until the end of December.
Households with three or more adults can purchase up to six bottles at one time; households with fewer adults are only eligible to purchase three. Customers must present their household registration (戶口名簿) before they make their purchase.
While the government's rationing measure is a short-term solution, one analyst said the black market might be the real winner.
"The black market could even take over most of the rice wine market once Taiwan enters the WTO," said Sun Ker-nan (孫克難), a research fellow at the Chung-Hwa Institute for Economic Research.
"Since the demand is much higher than the supply, a shortage in rice wine is a given," Sun said.
"As people expect the price of the wine to rise five-fold, people will hoard [it] to make a profit. That's how a black market is born," he said.
The monopoly board said it expects to sell two million cases of rice wine by the end of the year under the quota system. The board sold 22 million cases of rice wine in 2000, about 5 million more than in 1997. Each case has 12 bottles.
However, the situation will be changed from the beginning of next year. According to Minister of Finance Yen Ching-chang (
But Sun is less optimistic.
"Since the price of rice wine is going to go up five-fold, the inventory held by the black market will be released into the market. With a retail price lower than the new price, say, NT$80 a bottle, if the volume of the black market is large enough, it could take over most of the market currently held by the board," he said.
Sun estimated it would take one to two years for the black market to deplete its inventory.
Rice wine is currently being sold on the black market at prices between NT$35 and NT$50.
Chang warned retailers that their licenses to sell rice wine may be suspended or permanently revoked if they are found to be hoarding the product.
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