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Government moves on deregulation of wine, liquor market

The Ministry of Finance has decided to deregulate the production and sale of alcoholic beverages ahead of schedule, Chinese-language media reported over the weekend.

"The reason that the ministry decided to deregulate the spirits market two years ahead of our previous plan is to put competitive pressure on the Taiwan Monopoly Tobacco and Wine Board, which will be pressured to improve its service quality," Minister of Finance Yen Ching-chang (顏慶章) said in the reports.

Vice Minister of Finance Wang Der-shan (王得山) said the deregulation scheme has been changed from a three-stage to a two-stage plan.

The first stage will allow the private sector to produce and sell liquor after Jan. 1. In 2004, the government will allow the private sector to produce tobacco products.

The ministry's original three-stage plan would have deregulated various types of alcohol at painfully slow intervals.

The KMT-controlled government has forbid the private sector to produce wine and cigarettes since 1949. Only the state-run Taiwan Monopoly Tobacco and Wine Board (菸酒公賣局) was permitted to produce tobacco and liquor products.

Since Taiwan is going to become a WTO member in January, the finance ministry has finally decided to start making some adjustments. By making the delayed changes, the government has done great harm to the private sector's ability to quickly compete in the post-WTO market place.

Meanwhile, the government may be continuing to hamstring entrepreneurs by imposing severe limitations. The limit for small beer producers is a mere 60,000 liters and for rice wine producers it is only 20,000 liters.

The minimum capital requirement for companies that to produce alcoholic beverage products is NT$1 million, the ministry said. Annual licenses will be NT$20,000.
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