Sat, Dec 14, 2002 - Page 10 News List

MOF approves sales of rice-wine kit

DO IT YOURSELF The ministry settled the controversy over the attempt to skirt the WTO tax on rice wine by saying there exists no legislation against selling the kits

By Joyce Huang  /  STAFF REPORTER

The Ministry of Finance (MOF) yesterday gave its approval to sales of Taiwan Sugar Corp's (Taisugar, 台糖) do-it-yourself (DIY) rice-wine kit, settling the controversy over the entrepreneurial attempt to skirt the WTO rice-wine tax.

"After a thorough review, we found that no laws currently forbid Taisugar's sales of rice-wine kits, so the MOF cannot ban its production," Finance Minister Lin Chuan (林全) told a press conference yesterday afternoon.

In terms of taxation, Lin said that any product labeled "rice-wine" will be hit with an NT$185-per-liter tax in 2003, while those with "80 proof alcohol" on the label -- like the DIY kits -- will only get taxed with an NT$11 alcohol tax.

Taisugar, which plans to begin selling the DIY wine on Dec. 20, will only pay an NT$7-per-bottle tax, while the standard red-label rice wine will continue to be taxed to the tune of NT$90 per bottle.

But Vice Finance Minister Sam Wang (王得山) yesterday advised Taisugar to slightly revise its packaging to indicate the contents is a rice-wine mix, or else an NT$24.75 rice-wine tax will be levied.

Lin, however, added that the government will, in the long term, develop measures to adequately regulate manufacturers and seek revisions to wine-related laws to resolve the huge discrepancy between the taxes on the two similar products.

"Our goal is to put more responsibility on the manufacturer, who will be charged with ensuring consumer safety and providing adequate insurance coverage, should any mishap occur," Lin said, adding that Taisugar's product met the required government health standards.

The rules will apply to all other copycat rice-wine kits, including the newly launched 80-proof Kinka rice spirits (金花米酒) -- which retails at NT$60 -- and a similar product planned by Fortune Brewery International Co (福祿壽酒廠), Lin added.

While allowing price competition to prevail in the local rice-wine market, the MOF, however, will strictly demand clear labeling of bottles to warn consumers of the risk of bottling highly flammable alcohol separately.

The MOF's final ruling yesterday has not only triggered stiff rice-wine price competition among local players, but also greatly disadvantaged the state-run Taiwan Tobacco & Liquor Corp's (TTL, 台灣菸酒公司) red-label rice wine, priced at NT$111 per bottle.

"Many local players, including the TTL, will be gradually edged out of the market since their prices are not competitive," said Chen Kuo-shiun (陳國勳), distributor of China-made Kinka rice spirits.

With cheap raw materials and Chinese labor, Chen said that Kinka should cost less than NT$20 per bottle, compared to locally manufactured competing products that sell for at least NT$40 per bottle.

In response, Lin said that the market is open to competition and the MOF, as the state-run company's supervising body, won't forbid the TTL from producing similar kits.

TTL officials yesterday refused to comment on the MOF's decision or to say whether the company would compete with other rice-wine makers.

The finance minister, however, is skeptical of the public's acceptance of rice-wine kits of 80-proof alcohol.

"The market for rice-wine kits should be limited," Lin said, "because people prefer to drink quality wine, instead of crude alcohol."

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