Tariffs, regulations continue to hamper local liquor imports

Domestic liquor importers yesterday expressed disappointment with the government's go-slow approach to opening its markets to direct imports of clear spirits, primarily kaoliang, from China.

"The government's containment measure will neither help protect local industry nor benefit consumers," said Calvin Wang (王希武), marketing director of the Taichung-based China Liquor Co (台灣中酒).

Wang said that the WTO's newest member would be better off playing by the rules.

"The protection measure clearly violates WTO rules, which should transcend the laws of its member countries including Taiwan," Wang said.

Wang has already waited five years for the ban to be lifted. Entry to the global trade club is supposed to introduce more than 400 brands of Chinese clear spirits including Sichuan Province brand names Luzhou Laojiao Liquor (瀘州老窖), Jiannanchun Liquor (劍南春) and Wuliangye Liquor (五糧液) to Taiwan's market. However, the company's plans may still have a long way to go since the Cabinet-level Mainland Affairs Council has not yet set a specific timetable to allow Chinese clear spirits to enter.

If the Chinese alcoholic beverages are to be introduced, the hardest-hit Taiwanese brand will be Kaoliang Liquor (高梁酒) -- produced by Kinmen island authorities and distributed by state-run Taiwan Tobacco and Wine Board (菸酒公賣局).

Kaoliang liquor products account for 70 percent of the local clear spirits market and has an estimated value of more than NT$10 million per year.

While brands from China are prohibited in Taiwan, two years ago authorities began allowing brands that bear different names than those in China. These modified-label spirits enter Taiwan through a third location, usually Macau.

Forcing importers to jump through so many hoops, "adds unnecessary costs and results in low-quality liquor imports," Wang said.

Crystin Chiang (江敏惠), general manager of Drink, Wine & Spirits Ltd (橡木桶), also called the practice problematic.

"It has resulted in too much fake Chinese liquor," she said.

Chiang said that counterfeit liquor will remain a problem even after direct imports from China are allowed. Connoisseurs of Chinese liquor will not see any major price drop since the tariff is expected to rise to as high as 40 percent.

Though retail prices may not drop, Chinese liquor will still enjoy advantages over local brands.

"With raw material costs in China 10-times lower, retail prices of Chinese liquor are nearly 20-times lower than their Taiwanese counterparts," said Isao Chen (陳國勛), president of Fabric De Vinhou Kinka in Macau (澳門金花酒廠).