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Mon, Jan 01, 2007 - Page 11 News List

Plans brewing at Taiwan Tobacco and Liquor Corp

With a doctoral degree in business administration from National Taipei University, Martin Tsai was chosen by the cabinet last September to head Taiwan Tobacco and Liquor Corp, a state-controlled company he has worked in for two decades. He sat down with 'Taipei Times' staff reporter Jackie Lin last week to share his observations

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Taiwan Tobacco and Liquor chairman Martin Tsai during an interview with the Taipei Times last Wednesday.

PHOTO: GEORGE TSORNG, TAIPEI TIMES

Taipei Times: As the first Taiwan Tobacco and Liquor Corp (台灣菸酒公司) employee to be promoted to the position of chairman, you definitely have a good understanding of the company's flaws and merits. What are the main things you've noticed in this century-old firm?

Martin Tsai (蔡木霖): I've been at Taiwan Tobacco for more than 20 years. I entered the firm on July 1, 1986. From what I've seen, Taiwan Tobacco's biggest advantage is that it enjoys the trust of consumers. This trust was built at the time when the company was known as the Taiwan Tobacco and Alcohol Monopoly Bureau (菸酒公賣局). With two missions -- affordability and accessibility -- the monopoly bureau established a comprehensive nationwide retail network, making it easy to safeguard its turf when foreign brands of wine and liquor came into the local market.

But the duty of offering affordable products has also limited our development of high-end merchandise, for in the public's mind Taiwan Tobacco's price tags must be consumer-friendly -- even if some of our products are of better quality than that of our competitors. How to break this stereotype has become a key issue. Solutions include developing biotechnological products to create a high-quality image.

TT: But despite Taiwan Tobacco's legacy of being a traditional brand, young people seem a bit detached as they generally associate Taiwan Beer -- Taiwan Tobacco's star product -- with the elderly. How do you plan to change this impression?

Tsai: It is our responsibility to improve our product line to win young people over. We cannot simply ask consumers to love "Made in Taiwan" products. In this regard, we've successfully transformed our beer, making the new Gold Medal Taiwan Beer (金牌台灣啤酒) a young brand. Its market share has increased from 17.57 percent last year to 19.42 percent this year, becoming the second-biggest brand after Taiwan Beer in the nation's beer market.

Many international friends in Taiwan have also fallen in love with Gold Medal [launched in April 2003]. If you visit our Taipei Brewery [also called Taipei Beer Factory, which includes a bar, garden and KTV room] on Bade Road at night, you'll find that 60 percent of the customers are foreigners.

Our new series of "Gentle" (尊爵) cigarettes is another example of reaching young customers. Its sales volumes last year grew 18 percent from a year ago.

TT: With all these image-transforming efforts underway, what are some of Taiwan Tobacco's weaknesses you think should most importantly be addressed?

Tsai: One of our priorities is to transform part of the production workforce into marketing staff.

Personnel demand has dropped as our production lines have been computerized. Also in the era of the monopoly, marketing was not deemed important. Our products didn't need marketing. But after the market opened up to foreign competitors, you naturally need to put more investment into marketing to safeguard your market dominance.

In the past, the proportion of production line personnel to marketing staff was eight to two. It has changed to seven to three, with over 2,000 marketing crew out of the firm's total 6,722 workers. My ultimate goal is to adjust the ratio to six to four.

TT: You mentioned at a previous event that adjusting employees' mentality is one common issue among many government-owned businesses. How's the reform progress so far?

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