Study on Alaska Distilleries and Breweries Products Export

Transcription

Export
opportunities
for Alaska
Distilleries and
Breweries
Study of Foreign
Market
Opportunities
University of Alaska Center for
Economic Development
Picture 1, 2 and 3 are retrieved from
http://f.tqn.com/y/cruises/1/S/q/5/6/Juneau-7113.JPG,
http://www.yourlittlebeachtown.com/sites/default/files/styles/640x_fra
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http://4.bp.blogspot.com/Qgjjf4TIFaU/Tl227m8mLdI/AAAAAAAAAJQ/JZlZT8PJ8uk/s1600/IMG_4815
a.jpg
Executive Summary....................................................................................................................................... 5
1.1 Canada ................................................................................................................................................ 6
1.1.1 Distribution channels ................................................................................................................... 6
1.1.2. Importance of Hiring an Agent.................................................................................................... 8
1.1.3 Market trends: Beer ..................................................................................................................... 9
1.1.4. Market Trends: Distilled Spirits ................................................................................................. 14
1.1.5 Market associations and guilds .................................................................................................. 19
1.1.6 Local industry regulations .......................................................................................................... 20
1.1.7 Recommendation on ways to advertise Alaska distilled spirits ................................................. 22
1.2 Republic of Korea .............................................................................................................................. 24
1.2.1 Distribution channels ................................................................................................................. 24
1.2.2 Beer Market Trends ................................................................................................................... 26
1.2.3 Distilled Spirits Market Trends ................................................................................................... 30
1.2.6 Export/import tariffs and Pricing ............................................................................................... 38
1.2.7 Packaging and labeling rules ...................................................................................................... 39
1.2.8 Recommendation on ways to market Alaska distilled spirits .................................................... 40
1.3 Germany............................................................................................................................................ 41
1.3.2 Distilled spirits market trends. ................................................................................................... 42
1.3.3 Market trade shows and fairs. ................................................................................................... 48
1.3.5 Export/import tariffs and regulations ........................................................................................ 50
1.3.7 Recommendation on ways to market Alaska distilled spirits .................................................... 52
1.4 China ................................................................................................................................................. 53
1.4.2 Market trends: Beer ................................................................................................................... 55
1.4.5 Export/import tariffs and regulations ........................................................................................ 65
1.4.7 Recommendations on ways to market Alaska distilled spirits................................................... 66
Methodology of Choosing the Countries .................................................................................................... 67
Appendix 1: Licensed Importers of Beer in South Korea (requested on May 5th, 2015). ........................... 74
Appendix 2: Licensed Distilled Spirits Importers in South Korea (requested on May 5th, 2015). ............... 76
Appendix 3: Official Beer Importers in China. ............................................................................................ 81
Appendix 4: Parameters Examples. ............................................................................................................ 82
Executive Summary
“Export Opportunities for Alaska Distilleries and Breweries” is a report that is part of an initiative by the
Division of Economic Development (DED) aimed at identifying new markets for Alaska beer and distilled
products. The overarching goal is to help beer and liquor producers triple sales in five years,1 and there
are several immediate goals aimed at achieving this result: providing an overview of four chosen foreign
markets, import and internal market regulations, main distribution channels, tariffs and taxes applied to
alcoholic beverages, and making recommendations for how Alaska products should be marketed.
In order to choose target countries CED staff developed a methodology to rank as many as 20 countries
which import the most US products based on the dollar amount of trade (please see chapter
“Methodology of Choosing the Countries.”) The framework includes several parameters: import volume
of each product, share of import to a specific country, import growth rate, export volume of a product
from the US, share of exports to a specific country compared to total exports from the US, export growth
rate, country trade volume with Alaska, “key trade partner” parameter, and existence of a free trade
agreement (FTA) between the country and the US. These parameters serve as indicators to help measure
the opportunity for export partnerships.
As a result of this ranking system, Canada, China, and Germany were identified as ideal partners for beer
exports. Canada, Germany, and South Korea (Korea) were chosen as the best markets for distilled spirit
exports. Because Germany is a member of the European Union, most import regulations are derived from
EU regulations and apply to all member states. Canada is the largest beer importer, accounting for more
than $620 million of imports in 2013, 26% of which come from the US. China is in second with more than
$230 million traded – 4% from the US – and Korea counts for $89 million, with 7.5% from the US.
Germany is the overwhelming leader for imports of distilled spirits (gin, vodka, and whiskey combined),
with more than $755 million of distilled spirits imported in 2013. 14.56% came from the US. This figure is
almost twice as much as was imported to Canada, $347 million in 2013, with 23.8% coming from the US.
Korea had more than $196 million of imports, and 3.89% from the US.
When looking at each category of distilled spirits, Canada leads the dollar amount of vodka imported from
the US, with total imports in 2013 equal to $41,218,283, equal to 30% of overall vodka imports to Canada.
Canada is also the largest importer of gin from the US among the chosen countries. In 2013, imports from
the US totaled more than $519,000, 2% of the total gin import to Canada. Germany is the leading whiskey
importer among the chosen countries with more than $109 million trade volume with the US, which
equals 19% of whiskey imported into Germany.
US distilled spirits and beer are well-positioned in the explored markets. Beer imports from the US rank
first among all trade partners for Canada, sixth for South Korea with 7.53%, and sixth in China with 3.55%
of imports. The US has a free trade agreement with Canada which guarantees zero import tariffs on
alcoholic beverages, and there are also zero import tariffs on alcoholic beverages imported to China. Korea
imposes a 12.8% tariff on beer imports.
As for distilled spirits, all researched countries except Korea have zero import tariff on US distilled spirits.
Korea has a 3% import tariff on whiskey and gin, and 4% on vodka. The US is the largest exporter of vodka
to Canada, the second largest importer of gin and whiskey to Korea, the second largest importer of
1
Retrieved from Executive Summary of DED Report.
whiskey to Germany, and the second largest importer of whiskey to Canada. In almost every country
mentioned, the United Kingdom is the leading producer of gin. Canada, for example, takes up to 98% of
gin from the UK. The only exclusion is Korea, although the total volume of imports is relatively small in
comparison with the United Kingdom. Alaska distilleries may consider focusing on markets where the US
is leading in imports and has low import tariffs.
Based on research conducted by CED staff most mentioned countries, especially Germany, have trends
toward consuming healthier products even within the alcoholic beverages segment. Beer and liquor made
from natural components, and low fat and alcohol content are highly-valued. Innovative products are also
valuable at present, as millennials are among the most important consumption groups.
When looking for export opportunities in foreign markets, US suppliers should consider making
connections with local import agents, professional brokers, distributors, and local distilled spirits and beer
manufacturers. Local stakeholders have strong knowledge of industry regulations and can walk the
exporter through processes and procedures. In some countries, China and Korea in particular, building
strong relationships with local distributors is a key aspect of business.
This report contains detailed information on the current market conditions for chosen countries, including
market trends and segmentation, competition, local and import regulations, pricing and tariffs, as well as
recommendations on how to market product in every chosen country, which gives Alaska producers an
insight on exporting process.
1.1 Canada
1.1.1 Distribution channels
A unique characteristic of the alcoholic beverage industry in Canada is that alcoholic products cannot be
shipped across provincial borders without approval from provincial liquor boards.2 The provincial liquor
board is responsible for distributing alcoholic beverages, and therefore has a monopoly on selling them.
Beverage alcohol must be imported into Canada through a liquor board or commission in the province
where the product will be sold or consumed. There are three major importers of vodka (220860):
1. Liquor Control Board of Ontario, Toronto.
2. Liquor Distribution Branch of BC, Vancouver.
3. Treasury Department Government of Alberta, Edmonton.
These importers are responsible for about 78.19% of vodka imports by dollar value, or $111,036,996 CAD
(total imports in 2013 equaled $142,017,664 CAD.)
Three major importers of beer:
2. Societe Des Alcools Du Quebec, Montreal, Quebec.
2
Food Supply Chain – Beverage Sector. Retrieved from
http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=6226525&Mode=1&Parl=41&Ses=1&Language=
E&File=141. Retrieved on 03.15.2015.
These importers are responsible for about 72.52% of beer imports by dollar value, or $554,932,504 CAD
(total import in 2013 - $765,168,446 CAD.)
Three major importers of whiskey:
2. Societe Des Alcools Du Quebec, Montreal, Quebec.
These three importers are responsible for about 76.33% of whiskey imported by dollar value, or
$141,189,992 CAD (total import in 2013 - $184,969,452 CAD.).
In Canada, the “Importation of Intoxicating Liquors Act” gives provincial liquor boards and commissions
the ability to purchase and distribute alcohol.3 Until recently, the act restricted interprovincial movement
of alcohol, but in 2012 an amendment changed restrictions to allow interprovincial transportation if
permitted by the province. Many provinces still have strict regulations, meaning that companies wishing
to sell alcoholic beverages must deal with provinces directly.4 Each province has its own importing
regulations and standards, and it is best to contact them directly for their guidelines.
In all provinces except Alberta, the liquor industry is government-owned. Alberta has completely
privatized its liquor industry, which now operates as a “Consignment Program.” Even if the regulations
differ in each province, the process of importing alcohol is more or less the same. The description below
is based on best practices in British Columbia and Ontario (see Graph 1.) Alberta regulations will be
mentioned, as they are an exception from the general rule. These specific provinces were chosen for
regulatory analysis due to their standing as Canada’s primary importers of beer, whiskey, and vodka.
Step 1: Find a distributor or agent. All imported alcohol products must go through the local agent or
distributor, who represents the supplier. Usually liquor boards located in every province have a list of
recommended agents, so it is possible to find a new agent and to apply for an agent license through the
board. In Alberta, all liquor stores are privately-owned, and there are currently 1,300 licensed retail liquor
stores and more than 400 registered agents. Under the consignment program only registered liquor
agencies are authorized to import and market a supplier’s product, which is either the supplier or agent
who owns the product.
Step 2: The supplier works with an agent or distributor to make sure products meet requirements for
quality, pricing, labeling, transportation, and packaging.
Step 3: The distributor or agent places a purchasing order with the liquor board in order to buy products
from a supplier. Usually evaluation or registration of the product by the liquor board is required, but it
3
Overview of the Wine and Spirits Sector in Canada. Retrieved from
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Overview%20of%20the%20Wine%20and%20Spirits%20
Sector%20in%20Canada%20_Ottawa_Canada_8-26-2013.pdf. Retrieved on 04.10.2015.
4
Overview of the Wine and Spirits Sector in Canada. Retrieved from
Sector%20in%20Canada%20_Ottawa_Canada_8-26-2013.pdf. Retrieved on 04.10.2015.
must be arranged by the agent as well. One agent can represent only one product or product line. A
supplier may authorize an agent to set price quotations or payment terms on its behalf (please see the
“Pricing” section for details.)
Step 4: The liquor board begins placing orders for the supplier under terms and conditions confirmed by
the agent and supplier.
Step 5: Import procedures and customs clearance is made by the liquor board, with the agent paying all
required fees and duties. After that the order proceeds to the board warehouse, where it is stored until
being transported to the final destination – a liquor store.
Find a distributor or
agent.
Check products
requirements for quality,
pricing, labeling,
transportation and
packaging
Distributor or agent
places a purchasing
order to the liquor board
Liquor board takes care
of customs clearance;
the product is placed at
board warehouse
Liquor board placed
orders for the supplier
Graph 1: The process of importing distilled spirits and beer.
Source: Based on best practices in British Columbia and Ontario.
Interesting practice – LCBO – Liquor Control Board of Ontario – The LCBO establishes sales targets for all
products based upon annual sales contribution levels by product category or grouping. All products are
expected to meet or exceed sales targets, and suppliers or agents are accountable for achieving sales
targets. For new products, sales targets will be specified in the Notice to Purchase. Failure to meet sales
targets within the time frames required by the LCBO may lead to delisting by written notice.5
1.1.2. Importance of Hiring an Agent
Being a supplier's agent requires extensive resources, as agents are responsible for marketing, promoting
and sales distribution of products they represent. Agents need to spend time and resources making sure
customers choose their products. LCBO Product Management Policy and Procedures contains the list of
agent’s duties:
• Making applications to sell products to the liquor board;
• Ensuring supplier information is accurate and provided in a timely fashion;
5
LCBO PRODUCT MANAGEMENT POLICY & PROCEDURES
• Receiving samples from suppliers that will be forwarded to the liquor board as part of the application
process;
• Liaising with suppliers regarding packaging and pricing;
• Determining participation in the liquor board merchandising programs;
• Executing supplier advertising, public relations, and other promotional campaigns;
• Liaising with liquor board store managers regarding product knowledge and promotional activities.6
Basically, the agent functions as the main representative of the product in a province and is required to
act on behalf of the supplier in most cases. The liquor board typically can provide a list of registered agents
upon request of a supplier, but if none of the agents fit a supplier’s needs and requirements there is a way
to register a new agent. Searching for a local agent willing to represent the product in a specific province
and taking the agent through the registration process requires additional work.
1.1.3 Market trends: Beer
General Beer Market
Operating revenues in the retail beer, wine, and liquor industry, which is 99.1% reliant on sales, grew over
the last 10 years.7 The remaining 0.9% includes commissions, manufacturing sales, labor revenues,
revenues from rental and leasing, and so on. Operating revenues reached $18.9 billion in 2012, up from
$18.4 billion in 2011. Sales increased from $13.1 billion in 2003 to $18.7 billion in 2012, representing
almost 43% growth.
Expenses also increased during the same period, from $9.3 billion in 2003 to $13.1 billion in 2012. (The
structure of expenses is represented in the table below.)
Expenses Value in $ billions
Expenses out of revenues ranged from 70.9% in 2003 to 69.3% in 2012, e.g. retail stores have on average
a 30% retail margin. This should be taken into account by Alaska distilleries when pricing vodka and beer
for export to Canada, as it is important to have a competitive price at local markets.
In Canada, chain stores are the primary way of selling beer, wine, and vodka, which represents 89.7% of
total revenues generated in the industry, with 10.3% generated by non-chain stores. In the last 10 years
6
LCBO PRODUCT MANAGEMENT POLICY & PROCEDURES
Beer, Wine and Liquor Stores. Retrieved from
https://www.ic.gc.ca/app/scr/sbms/sbb/cis/revenues.html?code=44531&lang=eng#rdp4. Retrieved on
03.15.2015.
7
the share of non-chain stores was decreasing (in 2003, 89.3% of revenues in the sector were generated
by chain stores, and 10.7% by non-chain stores.)8
Beer is one of the most popular alcoholic beverages in Canada. In 2015, revenues from beer sales are
projected to reach $5.7 billion with an annual growth rate equal to 1.8%, 85% of which was domestically
produced.9 The beer market in Canada continues to grow, but growth rates have been decreasing in recent
years, as the wine industry continues to grow. Wine is the main substitute to beer in Canada and therefore
intense competition exists between these two products. Based on IBIS World research, the beer market
in Canada is highly-regulated and highly-concentrated. Industry revenue is forecast to expand at 0.7% fiveyear annualized rate, reaching $5.9 billion by 2020.
Since nearly every province regulates and distributes beer through provincial liquor control boards,
regulatory costs associated with establishing a new microbrewery are far greater for Canadian breweries
than for US breweries.10 This has allowed greater competition in the marketplace, and a wave of newlylaunched US microbreweries, adding competition to the market. In Canada consumers traditionally place
a high value on locally-brewed craft beer, although the novelty of Alaska brands may allow craft beer from
the state to compete with Canadian brands.
Beer Purchasing Habits
In recent years, the Canadian beer market has seen a shift away from traditional light and premium beer
brands, though they still currently represent the majority of sales generated by the industry’s largest
brewers. However, consumers are increasingly electing to buy less beer in exchange for higher-quality
brands, or in some cases reducing purchases of alcohol.11 A decrease in alcohol consumption in the last
five years (1% per year) was another factor contributing to declining industry growth.
Canadian consumers are primarily interested in craft and premium beer, although beer has been
increasingly perceived as less healthy than wine and spirits in recent years. Revenue is projected to
experience a modest increase of 0.5% in 2016, as marketing spending by major companies bolsters
industry performance. Marketing is one of the largest expenses for local breweries. Key players in the
market, such as Anheuser-Busch InBev (AB InBev) and Molson Coors, use sophisticated marketing tools
including high-profile celebrity endorsements, major advertising campaigns, novel packaging materials,
and vintage logos.
According to statistics from the Brewers Association of Canada, 48% of domestic beer is sold in bottles.
During the past five years, however, IBISWorld observed a shift away from bottled beer consumption. As
a result, this segment has contracted. Brewers Association statistics show that about 44% of beer is sold
in cans, and 8% of domestic beer is sold on tap (draught beer.)
Major market segments include men age 19 to 30 (19.9%), men age 31 to 50 (15.6%), and men age from
51 to 70 (14.3%, please see the graph below).
8
https://www.ic.gc.ca/app/scr/sbms/sbb/cis/revenues.html?code=44531&lang=eng#cn-tphp
www.ibisworld.ca/gosample.aspx?cid=124&rtid=101
10
Ibid.
11
www.ibisworld.ca/gosample.aspx?cid=124&rtid=101
9
Men aged 71 years
old or older
9.70%
Women aged 71
years old or older
7.90%
Man aged 19 to 30
years old
19.90%
Women aged 31
to 50 years old
10.10%
Men aged 31 to 50
years old
15.60%
Women aged 51
to 70 years old
10.40%
Women aged 19
to 30 years old
12.10%
Men aged 51 to 70
years old
14.30%
Graph 2: Beer Market Segmentation in Canada, 2015.
Source: Based on Data from Statistics Canada.
Beer consumption continues to be male dominated, with men drinking about 59.5% of beer in terms of
volume. Because women consume less beer regularly and make up a smaller share of the adult population,
they represent a smaller market. Although consumption by women has increased during the past five
years, women are estimated to drink 40.5% of beer sold in Canada. Statistics Canada divides the
population into three main age groups: 0-14 years old, 15-64 years old, and older than 65 years old. As
the largest share of the consumption age fits in the second group (15-64 years old), we can look at the
gender structure in this specific group (please see the Graph below.)
Based on the data, Ontario had the highest population in 2014 for ages 15 to 64, followed by Quebec,
British Columbia, and Alberta (populations are 4,638, 2,805, 1,583 and 1,495 respectively.) The share of
male population in the mentioned territories is about 50%.
Share of the Population vs. Share in Beer Sales by Province
40%
35%
30%
25%
20%
15%
10%
5%
0%
Share in Total Beer Sales 2013, %
Share of Population, %
Graph 3: Share of the Population vs. Share in Beer Sales by Province.
Source: Based on Data from Statistics Canada.
The largest beer sales are in Ontario (35.20%), Quebec (26.63%), British Columbia (2.79%), and Alberta
(12.13%) with total sales around Canada equal to 2.3 million liters in 2013. Among all provinces, Quebec
is the one that is “most into beer,” with 23.04% of the population in this province consuming 26.63% of
all beer sold in Canada. In Prince Edward Island, Nova Scotia, Manitoba, Yukon, Northwest Territories, and
Newfoundland and Labrador, the same tendency exists, but the difference between the share of
population and the share of beer sales is less than half a percentage point.
Based on trends identified above it may be recommended to choose Quebec as one of the provinces for
beer exports. Canada has historically been a net importer of beer. In the five years leading to 2015, the
value of industry imports has increased by an annualized rate of 0.1% to $715.4 million.12 Total imports
are expected to increase at an annualized rate of 5% over the next five years, reaching $914 million in
2020. Premiumization, the prevailing trend of consumers purchasing premium products, is also expected
to lead to increased competition from foreign brands, especially as the Canadian Dollar remains strong
and makes foreign products relatively less expensive.
12
Breweries in Canada. Retrieved from www.ibisworld.ca/gosample.aspx?cid=124&rtid=101. Retrieved on
03.13.2015.
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
122,496
83,613
40,477
2,681
8
262
264
449
Canadian products, liters
9,460 2,194
43,438
174
5,336
Import products, liters
Graph 4: Import vs. Locally Produced Spirits, 2013.
Source: Source: Based on Data from Statistics Canada.
As a result, imported beer sales have held steady, increasing at a 0.1% annually since 2010, reaching
$715.4 million in 2015. Canadian beer imports come from many different countries, though imports from
the United States, Netherlands, Mexico, and Belgium consistently rank as the most popular. Brands such
as Budweiser, Bud Light, Coors Light, Miller Lite, Heineken, Grolsch, Modelo, Dos Equis, and Duvel are
popular and widely-available across Canada.
Due to high transportation costs required to ship a heavy product such as beer, breweries are commonly
located near major markets they serve most. As a result, industry establishments are overwhelmingly
concentrated in provinces with dense metropolitan areas: Ontario, Quebec and British Columbia. Such
areas as New Brunswick, Prince Edward Island, Manitoba, Saskatchewan, and the Yukon do not possess
sufficient means of transportation or large enough populations to sustain a significant number of
breweries. Consequently, the industry continues to be represented by a large number of small brewers,
and a select few major international brewers.
Beer Market Competition
For several years, Anheuser-Busch InBev (AB InBev) and Molson Coors have generated the overwhelming
majority of industry revenue. That is expected to continue in 2015.13 Merger and acquisition activity by
the two companies is expected to limit new entrants to the industry, causing the number of enterprises
to grow only marginally during the five years leading to 2015, with a 1.3% annualized rate reaching 216
companies. These major companies are particularly pressured because they depend on high-volume sales
of their respective flagship value products -- Budweiser and Molson Canadian -- in which consumers have
demonstrated declining interest. Due to economies of scale that come with major brewing operations
across the country, the industry’s largest players have accumulated tremendous market share by
spreading fixed costs across numerous facilities.
13
Breweries in Canada. Retrieved from www.ibisworld.ca/gosample.aspx?cid=124&rtid=101. Retrieved on
03.13.2015.
Foreign investment over the past decade led to fundamental restructuring of the industry in the form of
intense consolidation and rising market share for international beverage companies.
Major imported brands such as Heineken present the largest source of competition to domestic brewers.
Because the brewing industry produces many types of beer that cater to a wide range of customers, smallscale breweries often emphasize seasonal flavors, limited-edition styles, and new brands rather than
competing exclusively on price. Therefore, industry competition is based primarily on brand, quality, and
pricing. Consumers show significant loyalty to beer brands, making it difficult for new entrants to capture
market share from established brands. Competition for brand loyalty has intensified on a regional level,
and as a result many regional players have aggressively sought to expand their geographic market reach.
Competition has also increased with the rise of craft brewing in the past five years. International
competition is expected to continue growing over the next five years. Imports rose during the five years
leading to 2015, as consolidation among the industry’s largest beer brands compelled consumers to
increase purchases of major foreign brands.
1.1.4. Market Trends: Distilled Spirits
General Market Trends
The distilled spirits industry is ranked second after breweries in market volume in Canada, and it
historically has served as a major contributor to the nation’s economy. While Canada is known as a
producer of distinct high-quality whiskey, at the same time, it is in one of the main importers of whiskey.
In 2012, whiskey imports to Canada totaled approximately $169 million, and experienced a slight increase
to $177.8 million in 2013. With this figure, Canada boasts 1.66% of the total world whiskey import. Canada
takes second place in global vodka imports after the United Kingdom, reaching a total import value of
$140.8 million. In 2013, however, Canada experienced a 5.7% decrease in vodka imports. Canada also
stands as the third largest world importer of gin: volume in 2012 and 2013 reached $30.1 and $36.5 million
respectively, which was roughly 4.1% of world gin imports in 2013. Even though Canada stands in a solid
worldwide position as an importer of gin, this market is still relatively small in comparison to the vodka
and whiskey import markets (please see graph below).
As a whole, sales of spirits accounts for approximately one-quarter of overall alcoholic beverage sales in
Canada in recent years. Although vodka has gained popularity recently, whiskey has consistently proven
to be the most popular spirit for consumption in Canada. $1.4 billion of whiskey was sold in 2012, which
represents 27.3% of the overall spirit market in Canada. Vodka sales for the same period were around
$1.3 billion, with 35.2% of overall sales volume being imported and 64.8% produced locally. Flavored
vodkas in 2013 accounted for 7.2% of sales, similar to its share in the previous year.14 Overall, whiskey
and vodka collectively accounted for more than half of Canada’s spirit sales. The market for other spirits
is small, but other spirits continue to compete and may present some niche opportunities for Alaskan
producers. American and Irish whiskies, including bourbon, are a generational drink preference.15
14
http://www.ginvodka.org/factsheets/Vodka_Market_Global_Picture.asp
15
Sector%20in%20Canada%20_Ottawa_Canada_8-26-2013.pdf
$200,000,000
4.00%
$180,000,000
3.50%
$160,000,000
3.00%
$140,000,000
$120,000,000
2.50%
$100,000,000
2.00%
$80,000,000
1.50%
$60,000,000
1.00%
$40,000,000
0.50%
$20,000,000
$0
0.00%
Vodka
2012 Dollar Amount
Whisky
2013 Dollar Amount
Gin
2013 Share in World Import, %
Graph 5: Distilled Spirits Import in Canada, 2012-2013
Source: Based on UN Comtrade Database.
Canada is a key partner for vodka trade with the United States: in 2013, 24.82% of Canada’s vodka imports
came from the US. The main contributing factors for US performance are popularity of US distilled spirits
in Canada, and the free trade agreement between two countries which helps keep prices competitive with
local products. The US also accounted for 20.67% of whiskey imported to Canada in 2013. The US takes
second place among whiskies trade partners, behind the United Kingdom (72.34% of import to Canada
comes from UK.) Gin does not have a strong position, with the US providing less than 1% of imports.
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Share in Total Spirits Sales, %
Share of Population, %
Graph 6: Share of the Population vs. Share in Spirits Sales by Province
Source: Based on Statistics Canada.
Ontario is home to the largest sales volume of distilled spirits in Canada (89,017 thousand liters), followed
by Quebec (28,772 thousand liters), British Columbia (36,738 thousand liters) and Alberta (27,157
thousand liters). At the same time, if comparing it to the share of each province’s population out of total
Canadian population, it is noticeable that British Columbia is among the provinces where share of
population is lower than the share of spirits sales. It means this province is “more into spirits” than any
other. In Ontario, Saskatchewan, and some other smaller provinces there is the same trend, although the
difference between share of spirits sales and share of population is less than 2 percentage points.
Import vs. Locally Produced Spirits, 2013
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
30,753
12,171
11,286
1,006
253
2,266
466
Canadian products, liters
10,928
2,860 2,177
106
123
8
Import products, liters
Graph 7: Import vs. Locally Produced Spirits, 2013
Source: Based on Statistics Canada.
Distilled Spirits Purchasing Habits
The distilled spirits market can be dissected in a number of ways to determine purchasing habits of typical
Canadian consumers. One Canadian Club Whiskey senior brand manager describes a typical whiskey
customer in Canada: “The Canadian Club drinker is typically 25 to 30 years old, more likely male, and they
don’t take themselves or life too seriously. They have a good social network and are out a lot.”16 Taking
into account all spirits, the primary market includes Canadians from two age groups: 18-35 and 55-64.
Around 12.49% of the population falls into the group “male aged from 18 to 35 years old,” while only
6.61% falls into the group “male aged from 55 to 64 years old.” The total share of both is 19.1%, equal to
6.7 million potential distilled spirits consumers.
Canadian distilleries are focusing on a new generation of whiskey drinkers – millennials who are the
“demographic cohort” reaching adulthood in the 2000s. People from this generation are ready to try new
products.17 Therefore, innovations in tastes and flavors are welcome not only for whiskey but for all
16
Getting into the Spirit. Retrieved from
http://www.drinkstrade.com.au/ContentFiles/Documents/Drinks%20Trade/Public/Library/reports/spirits/Issue%2
017%20JunJul%2010%20Getting%20into%20the%20spirit%20In%20Focus%20Whisky%20and%20Bourbon%20reports.pdf.
Retrieved on 04.29.2015.
17
http://beverageworld.com/articles/full/16573/dram-right
distilled spirits. With this in mind, Alaska whiskey and vodka distilled in a variety of ways and with
traditional and creative flavors may have a greater chance for success within this demographic.
According to the “Spirits Industry in Canada” report, in the past six months, of the population drinking
spirits, 10.4% consumed 1-2 drinks per month, 11.8% consumed 3-5 drinks per month, and 5.7%
consumed 6-9 drinks per week. 8.8% have 10 or more drinks per month.18
Distilled Spirits Market Competition.
Canadian distillery operations, especially whiskey, have traditionally enjoyed a positive worldwide
reputation for quality. Canadian beverage alcohol plants have sufficient size to access competitivelypriced inputs such as corn, rye, distiller malts, and packaging. This allows internationally-competitive on
production costs. Most large Canadian distilleries are owned by foreign investors who keep production in
Canada to capitalize on the reputation. Overall industry production is highly-concentrated, with three
companies holding 68.2% of the total market: Pernod Ricard, Diageo, and Bacardi Limited. Recent years
have seen an increase in the number of niche distilling companies.19
At the local market there are several main sources of competition: craft and micro distilleries, large-scale
distilleries, and competition from other imports.
Between major and craft distilleries combined, the Canadian distilling industry generates nearly $1 billion
each year.20 Craft and micro distilleries are getting more and more popular in Canada, with most located
in British Columbia. Despite strict regulations and harsh taxes that make it difficult for craft distilleries to
profit, Canada’s craft spirit industry is growing.21 More than 25 craft distilleries launched in the past
decade.
As mentioned before, there are three main players in the Canadian distilled spirits market:



Pernod Ricard, which owns Absolut Vodka, Malibu and Beefeater: 29.2% of the market.
Diageo Plc, owner of Smirnoff, Captain Morgan, Crown Royal and Tanqueray: 29.1% of the market.
Bacardi Limited, owning Bacardi, Grey Goose and Bombay Sapphire: 9.9% of the market.
Another major player is Beam Inc., which owns Jim Beam, Maker’s Mark, and Canadian Club, accounting
for 4.1% of the market, with 27.7% of the market left for all other producers and imported products.22
Pernod Ricard is a decentralized French company manufacturing spirits such as Chivas, Ballantine's,
Jameson, Havana Club, Martell, Beefeater, Ricard, Malibu, and Absolut.18 Decentralization plays a unique
role, enabling diversity among various markets.
18
The Spirit Industry in Canada. Retrieved from https://laurenarmstr.files.wordpress.com/2014/04/the-spiritindustry-final.pdf. Retrieved on 04.29.2015.
19
http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/by-productsector/processed-food-and-beverages/the-canadian-distillery-industry/?id=1171995761751#prov
20
“The Canadian Distillery Industry.” Agriculture and Agri-Foods Canada. Agriculture and Agri-Foods Canada, 29
March 2013. Web. 12 April 2014.
21
http://www.microdistillerybooks.com/2014/2014CanadianFactSheet.pdf
22
The Spirits Industry in Canada. Retrieved from https://laurenarmstr.files.wordpress.com/2014/04/the-spiritindustry-final.pdf. Retrieved on 04.29.2015.
Diageo is a British company manufacturing spirits for brands such as Smirnoff, Johnnie Walker, Captain
Morgan, Baileys, J&B, Jose Cuervo, Tanqueray, Buchanan, Windsor Premier, Ketel One, Ciroc, Bushmills,
and Crown Royal.20 As the leading premium spirits business in the world by volume, net sales, and
operating profit, the company relies on brand equity, large-scale operations, innovation, and an array of
products at various prices.21
Bacardi Limited is the world’s largest privately-owned spirits label. Headquartered in Bermuda, brands
include Bacardi rum, Grey Goose vodka, Dewar's Blended Scotch whiskey, Bombay Sapphire gin, Eristoff
vodka, Cazadores tequila, and Martini vermouth. 22 The company is aligned with organizations and causes
campaigning against under-age and irresponsible drinking and environmental leadership. 25
Beam Inc., known earlier as Fortune Brands, is an American company producing spirits for such brands as
Jim Beam, Maker’s Mark, Sauza, Courvoisier, Canadian Club, Teacher’s, Laphroaig, Knob Creek, Basil
Hayden’s, Kilbeggan, Cruzan, Hornitos, EFFEN, Pucker, Skinnygirl, Sourz Liqueurs, Pinnacle, and Calico
Jack.26
Among Canadian distilleries, there are:

















Forty Creek Distillery (Ontario, whiskey production);
Urban Distilleries (British Columbia, vodka, gin, whiskey production);
The Liberty Distillery (British Columbia, whiskey, gin, vodka production);
Glenora Distillers (Nova Scotia, whiskey production);
Highwood Distillers (Alberta, gin, rum, vodka, whiskey production);
66 Gilead Distillery (Ontario, gin, rum, whiskey production);
Hiram Walker & Sons distillery (Ontario, vodka, whiskey and gin production);
Ampersand Distilling Company (British Columbia, gin);
Ironworks Distillery (Nova Scotia, rum, vodka, apple brandy);
LB Distillers (Saskatchewan, rum, gin, vodka);
Central City Brewers & Distillers (British Columbia, vodka and whiskey production);
Okanagan Spirits Craft Distillery (British Columbia, gin, whiskey, vodka production);
Prince Edward Distillery (Prince Edward Island, vodka);
Deep Cove Brewers and Distillers (British Columbia, vodka and gin production);
Still Waters Distillery (Ontario, whiskey and vodka);
Yukon Shine Distillery (Yukon, gin and vodka production);
Distillerie Fils du Roy (New Brunswick, gin production);2324
The last source of competition is from other imported brands, represented in the graph below. The largest
volume of vodka imports by dollar is from the US, which is the source of the most popular brands. French
vodka is second, responsible for 24.75% of imports, and is followed by imports from Sweden, 21.52%.
Based on this graph alone, it is evident that competition in the vodka market is intense.
23
24
https://www.lib.uwo.ca/news/business/2012/05/03/canadiancraftdistillers.html
http://www.whiskyportal.com/region.asp?RegionID=13&Region=Canada
FinlandLatvia
Other4.22% 3.99%
Partners
3.22%
Russian
Federati
on
6.24%
Netherl
ands
3.18%
USA
24.82%
Ireland
6.29%
USA
20.67
%
Poland
8.07%
Sweden
21.52%
Gin Import Volume, %
Whiskies Import Volume,
%
Vodka Import Volume, %
Japan
0.22%
Nether
lands
0.81%
Other
Partners
Other
Partners
0.17%
France
0.84%
United
Kingdom
72.34%
USA
0.93%
Spain
0.24%
United
Kingdom
97.01%
France
24.75%
Graph 8: Vodka, Whiskey and Gin Import Volumes, 2013.
Source: Based on UN Comtrade Data.
As for imported whiskey, 72.34% comes from the UK. Imports from the US place second, with a 20.67%
share. Taking into account that Canadian whiskey amounts to one-quarter of the distilled spirits market,
there is intense competition in this segment as well. The situation with gin is more complicated, as almost
100% of imports come from the UK. It could be extremely difficult for US gin to increase its 0.92% share.
For new entrants to the distilled spirits market, it is relatively easy to enter the market from a financial
standpoint, but competition with established major players could prove difficult.44 While there is little
regulation preventing creation of a new brand, distribution challenges and the small number of weak
players makes it difficult to compete with larger brands. With steady market growth and undifferentiated
products, new entrants to the market can easily create a business but may struggle to seriously compete
with large players for a significant market share.25
1.1.5 Market associations and guilds
For current research, several associations and guilds focused on distilled spirits and beer industries were
located, including Spirits Canada, Beer Canada, and the Brewers Association of Canada
Spirits Canada or Association of Canadian Distilleries is located in Ottawa.26 The group was formed in 1947
to provide an exchange of views and recommendations affecting the distilled spirits industry. The purpose
is to protect and advance interests of members and to promote well-being and economic health of the
Canadian distilling industry in Canada and globally.
Beer Canada is a voluntary trade association that advocates on behalf of its members, makers of Canada’s
most popular alcohol beverage – beer.27 The association works with members, governments,
stakeholders, and the public to improve the marketplace for beer. The organization prepares monthly and
annual reports on the Canadian beer industry.
25
The Spirit Industry in Canada. Retrieved from https://laurenarmstr.files.wordpress.com/2014/04/the-spiritindustry-final.pdf. Retrieved on 04.29.2015.
26
http://www.acd.ca/
27
Beer Canada. Retrieved from http://www.beercanada.com/about-us. Retrieved on 04.29.2015.
Brewers Association of Canada is a voluntary association of 22 brewers from coast to coast that represents
97% of beer brewed in Canada. The association was established in 194328 and primarily focuses on
providing networking opportunities to members and collecting information about events associated with
beer production and sales.
These organizations can potentially be useful for Alaska producers to identify potential business partners.
Another main point of contact for every US company that plans to export alcohol drinks to Canada are the
Alcoholic Beverage Control boards in each province.29 Canada’s 13 provinces and territories have a unique
liquor board or commission, all of which are committed to working together through the Canadian
Association of Liquor Jurisdictions (CALJ) on liquor-related issues of common interest.30
1.1.6 Local industry regulations
Information provided in this chapter is based on US Department of Treasury, Alcohol and Tobacco Tax and
Trade Bureau data. Nine major topics should be covered when talking about export and import regulations
in Canada for distilled spirits and other alcoholic beverages.
Labeling requirements.
Canadian packaging and labeling requirements for wine, beer, and distilled spirits are administered under
Canada’s "Food and Drugs Act and Regulations and the Consumer Packaging and Labelling Act and
Regulations."31 In addition to general requirements for most foods and beverages, there are regulations
for alcoholic drinks covering name and container rules. Quebec has additional labeling requirements,
mainly that information be listed in French, or in both French and English.
In either case, labels must include the following:






28
Common name of product (i.e. vodka, beer, whiskey, etc.; must be shown in type of at least 1.6
mm in height).
"Imported for" or "Imported by" followed by Canadian dealer’s name and address: as mentioned
above, it should be imported to Canada through liquor board or commission in the province where
the product will be sold/consumed.
Net quantity in metric units of volume (milliliters, liters), must be shown on the main label, clearly
and prominently displayed, easily legible and in distinct contrast to any other information on the
label.
Alcohol by volume declaration: Beverages containing 1.1% or more alcohol must declare the
amount of alcohol by volume, shown as "X % alcohol by volume" or "X % alc./vol."
Country of origin (e.g. Product of US)
Ingredients – this is required only for "unstandardized" alcoholic beverages, i.e. those beverages
for which there is no standard in Division 2 of the Canadian Food and Drugs Regulations. Division 2
Brewers Association of Canada. Retrieved from http://www.brewerydb.com/guild/U5SjmY. Retrieved on
04.29.2015.
29
Alcohol and Tobacco Tax and Trade Bureau. Retrieved from http://www.ttb.gov/wine/state-ABC.shtml#Canada.
30
Canadian Association of Liquor Jurisdictions. Retrieved from http://www.calj.org/. Retrieved on 04.29.2015.
31
http://www.hc-sc.gc.ca/fn-an/legislation/acts-lois/act-loi_reg-eng.php,
http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/01248.html

includes ethyl alcohol and alcohol with flavoring, as well as grain, malt and molasses spirits.32
Examples of "unstandardized" alcoholic beverages include products such as sake, cocktails
(manhattans, martinis), etc.
Durable life date (if shelf life is 90 days or less.)33
There are special voluntary labeling requirements for genetically-modified products.34
Standards for container sizes.
There is a standardized container size for wine but not for beer, vodka, or whiskey.35
Required documents.
The following is a typical list of documents that may need to be presented for the imported product to be
released from customs.36 The exporter should take into account that this list is only for informational
purposes. It is always better to contact the export and import broker to confirm requirements.
1. Two copies of the cargo control document, which may be obtained from the carrier or freight forwarder;
2. Two copies of an invoice which helps support the value of the goods and includes the following:





Information regarding the importer and exporter.
A description and value of the goods.
The country of origin and the destination of the goods.
The currency of settlement.
A Canada Customs’ invoice or a commercial invoice containing all the required
information is necessary for goods with a value of $1600 or greater. An additional copy
of the invoice is required in cases where the importer or broker intends to transmit the
final accounting data through Customs Automated Data Exchange (CADEX).
3. Two copies of a completed B3 form. A third copy is required if the shipment is valued over $1,600 US
dollars;
4. Permits, certificates, licenses, or other documents that are required by the Canada Customs and
Revenue Agency;
Taxis and tariffs.
Based on the customs tariff, T2015, the United States is subject to one of the most-favored nation tariffs,
Mexico-US Tariff and US Tariff. MFN Tariff is applied to a country with the most-favored nation status and
access to the lowest possible tariff for products imported to Canada, US Tariff and Mexico-US Tariff as
32
http://laws-lois.justice.gc.ca/eng/regulations/C.R.C.,_c._870/page-55.html#h-52
http://www.ttb.gov/itd/canada.shtml
34
http://www.inspection.gc.ca/food/labelling/food-labelling-for-industry/method-of-productionclaims/eng/1389379565794/1389380926083?chap=3
35
http://www.inspection.gc.ca/food/labelling/food-labelling-forindustry/alcohol/eng/1392909001375/1392909133296?chap=4
36
http://www.ttb.gov/itd/canada.shtml
33
part of the North American Free Trade Agreement.37 The agreement created duty-free access for most
beverage alcohol products imported to Canada from the US.
Besides customs duty, the Canadian government levies the following taxes on alcoholic beverage
products:



Excise Tax: levied on all alcohol beverage products.
GST: Goods and Services Tax levied at 5% of retail price at the federal level.
Provincial Sales Tax, collected on behalf of the provinces.
The federal excise tax on alcohol, however, is imposed on all products regardless of origin. As of April 15,
2008, the excise tax is CAD $0.3122/liter for beer, and CAD $11.69/liter of pure alcohol (for spirits.)38
The Goods and Services Tax applies to alcohol imported into Canada. In addition to the rate stated above,
provinces have their own sales tax, and rates can vary from province to province. Please see the table
below for Provincial Sales Tax (PST), GST, and Harmonized Sales Tax (HST).39
Province
Tax type (GST,
PST, HST)
GST
GST+PST
GST+PST
HST
HST
Province Rate
Canada Rate
Total
Alberta
0%
5%
5%
British Columbia
7%
5%
12%
Manitoba
8%
5%
13%
New-Brunswick
8%
5%
13%
Newfoundland
8%
5%
13%
and Labrador
Northwest
GST
0%
5%
5%
Territories
Nova Scotia
HST
10%
5%
15%
Nunavut
GST
0%
5%
5%
Ontario
HST
9%
5%
14%
Prince Edward
HST
9%
5%
14%
Island
Quebec
GST+QST
9.975%
5%
14.975%
Saskatchewan
GST+PST
5%
5%
10%
Yukon
GST
0%
5%
5%
The North America Free Trade Agreement (NAFTA) created duty free access for most beverage alcohol
products imported into Canada from the US. Therefore, customs duty does not apply. The federal excise
tax on alcohol, however, is imposed on all products regardless of origin
1.1.7 Recommendation on ways to advertise Alaska distilled spirits
Based on research and information presented in the previous chapters, these are some of the
recommendations on how to introduce Alaska beer and distilled spirits to Canadian markets:
37
http://www.cbsa-asfc.gc.ca/publications/dm-md/d11/d11-4-19-eng.html
http://laws-lois.justice.gc.ca/eng/acts/E-14.1/page-101.html#h-70
39
http://www.calculconversion.com/sales-tax-calculator-hst-gst.html
38











Choose a target province in Canada. Based on the research in this document Quebec could be a
good start for beer exports, as the province is the most into beer among all regions. The Quebec
liquor board, Societe Des Alcools Du Quebec, Montreal, is one of the leaders in beer import in
Canada. British Columbia is more into spirits than any other province. The Liquor Distribution
Branch of BC in Vancouver is a leading vodka importer.
Large markets like Quebec and British Columbia are also good because of the availability of welldeveloped infrastructure. Distilled spirits and beer are heavy products to deliver, and this expense
will be a main factor in determining a product’s price, so it would be useful to target large markets
where economy of scale can be reached through large deliveries and sales.
It is necessary to contact the provincial liquor board for instructions and a list of agents and
distributors, which makes the process easier. Once you have a contract with a local agent,
required to operate legally, the agent is dealing with the liquor board directly to follow the
importation processes and to promote products. An agent can represent only one product or
product line.
As wine is the primary competitor for beer, it may be useful to strategically compete against the
product. This could be achieved by offering a broader selection of choices for consumers so they
could experiment with different tastes. Sweeter flavors may also help attract female consumers.
According to a survey conveyed by the Wine Market Council, consumers value beer that pairs well
with food. From this standpoint it may be helpful to find local products and craft a beer with that
in mind specifically.
Canadian consumers prefer high-quality brands to traditional light beers. As such, the novelty of
Alaska brands may allow beer from the state to compete with local Canadian brands. A focus on
high-quality raw materials – pure glacier water, for example – could also help.
Men age 19 to 30 are the main consumers of beer in Canada (19.9%), followed by men age 31 to
50 (15.6%), and then men age from 51 to 70 (14.3%.) Appealing to the lifestyle of professionals
who have attained career success or are at the beginning of a career but have high expectations
and good opportunities may be one tricks to develop a customer base.
Whiskey is a generational drink in Canada and is the most popular distilled spirit. American
whiskey and vodka are popular in Canada, and flavored types of vodka are gaining popularity.
Accordingly, Alaska flavored vodka could be a good option for the local market.
Alaska distilled spirits will likely be perceived as a novelty in Canadian markets, and it may be
useful to focus on millennials as the generation most likely to try something new and experiment
with different tastes and drinks.
For distilled spirits it would be preferable to focus on vodka or whiskey, but not gin (please see
industry statistics in chapter 1.1.4.)
Alaska breweries and distilleries can advertise online as a way of connecting with consumers,
millennials in particular, as they spend a lot of time online for work, news, and to interact with
friends. This could be a good starting point for promotional efforts, targeting a specific age group
and residents of a chosen province.
Promotion of the product through websites of provincial liquor boards could be effective as well,
as it is the first place distributors and agents look. The Liquor Control Board of Ontario utilizes a
website, which not only shows products they sell, but also has advertising for new products,
promotions, and discounts. They also have a magazine called Food & Drink which advertise new
products.
1.2 Republic of Korea
Based on local regulations, only licensed companies are allowed to import alcoholic beverages. The most
up-to-date list of licensed importers is available upon request from the US Embassy in Seoul. Following a
request by UACED, the list was provided May 5, 2015 (please see Appendix 1.) At that time 118 importers
of distilled spirits and 31 importers of beer were licensed, but based on information provided by the
embassy, only around 50 maintained an active business. However, Korean importers are generally actively
looking for opportunities to bring a new product to market and to build business partnerships with foreign
suppliers. Therefore, once contacted directly they would provide in-depth market descriptions and
support to a foreign supplier. But it is better to contact the importer directly without using a middle man,
even if it is a government agency, as there is a very high chance the importer will not communicate with
a third-party due to lack of trust.
Importers are allowed to sell to wholesalers and retailers directly, but they are also required to have
official permits to trade alcoholic beverages. Importers can sell to such retailers as liquor stores, large
supermarkets, liquor retailers, chain stores, restaurants, cafes, bars, and hotels. However, importers rely
heavily on wholesalers when distributing to smaller retailers or regional markets (please see the
distribution chain graph below.)40
In addition, liquor retailers are not allowed to buy alcoholic beverages from off-trade liquor retailers. Offtrade accounted for 51% of beer distributed in 2011 in terms of volume, although it should be pointed out
that off-trade consumption has shown higher growth than on-trade in recent years.41 On-trade, or onpremise, refers to sales made in pubs, clubs, restaurants, and other retailers selling alcohol for
consumption within the venue. Off-trade or off-premise refers to businesses selling alcohol for
consumption elsewhere.42 The former was showing slower growth, mostly because of the economic
situation in Korea, and reduction in corporate spending on entertainment and business dinners.
40
Beer Import to the Republic of Korea. Retrieved from
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Beer_Seoul%20ATO_Korea%20-%20Republic%20of_2-72013.pdf. Retrieved on 05.06.2015.
41
Ibid.
42
The Affordability of Alcoholic Beverages in European Union. Retrieved from
http://ec.europa.eu/health/archive/ph_determinants/life_style/alcohol/documents/alcohol_rand_en.pdf.
Graph 9: Distribution Channels.
Source: Based on “Beer Import to the Republic of Korea” Report.
Among all retail channels, hypermarkets are the most popular for buying alcoholic beverages, primarily
because of lower per unit prices. This channel holds 38.6% of sales. Convenience stores are, however,
increasing in popularity as an easily-accessible source to purchase impulse alcoholic products.43 According
to Euromonitor, alcoholic beverage sales through hypermarkets will continue to grow (please see below
the structure of the off trade sales.)
Off-Trade Sales of Alcoholic Beverages by
Distribution Format in 2011
Supermarkets
14.90%
Food/drink/tobacco
specialists
2.10%
Small Grocery Retailers:
Independent small
grocers
28.80%
Small Grocery
Retailers:
Forecourt retailers
0.10%
Hypermarkets
38.60%
Small Grocery
Retailers:
Convenience
Stores
15.50%
Graph 10: Off-Trade Sales of Alcoholic Beverages by Distribution Format, 2011.
Source: Based on “Consumer Trends: Wine, Beer and Spirits in South Korea,” prepared by Agriculture and Ari-Food
Canada.
43
Consumer Trends: Wine, Beer and Spirits in South Korea. Retrieved from http://www.agr.gc.ca/eng/industrymarkets-and-trade/statistics-and-market-information/by-region/asia-pacific/consumer-trends-wine-beer-andspirits-in-south-korea/?id=1410083148704. Retrieved on 05.07.2015.
Rather than contacting Korean importers remotely, sometimes it could be a good idea to meet in-person,
as it is culturally more appropriate for business partnerships to stem from personal contacts and
relationships. One way to meet importers in-person is to join trade delegations to Korea organized by
various organizations promoting American exports, such as State Regional Trade Groups, State
Departments of Agriculture, and USDA Cooperators like the US Dairy Export Council.
Another option would be visiting specialized international exhibitions and trade fairs. One of the industry’s
most popular fairs in Korea is the Seoul International Wine and Spirits Expo (SIWSE), which is the only
exhibition in Korea dedicated specifically to wines and spirits. The fair attracts around 30,000 visitors per
year and gives participants unique networking opportunities, as it attracts a number of potential
importers or distributors.44 The fair is hosted by the Korea Wines and Spirits Association, which has leading
importers as members and is run by Korea International Exhibition Co. Ltd.45
The Seoul Food and Hotels fair is another option, visited by almost 41,000 people in 2013. The fair is held
20 minutes from the heart of Seoul in suburban Goyang and attracts professionals from all over the
world.46 The alcoholic beverages industry is among those represented at the exhibition, which allows US
exporters to meet potential distributors, retailers, and industry buyers from catering and hospitality
businesses.47
1.2.2 Beer Market Trends
According to a report prepared by the USDA Foreign Agriculture Service, Korea is a leading market for
alcoholic beverages. Drinking is appropriate in business and social settings. In terms of volume, Korean
adults on average consumed 86 bottles of beer (43 liters per capita) in 2011. Consumption per capita in
the US was around 76.7 liters the same year. However, beer remains one of the most consumed alcoholic
drinks in Korea.
Value of Consumption*
Source: Based on USDA Foreign Agriculture Service Report on Beer Market in South Korea.
* KRW were converted to UDS based on 07.22.2015 currency exchange rate 1 KRW=0.000864 USD.
Health concerns among the general public, particularly women, for alcoholic beverages generate strong
demand for products with less alcohol. That trend could be beneficial for beer producers.
44
http://siwse.com/
Seoul
International
Wine
and
Spirits
Expo.
Retrieved
from
http://www.winebusiness.com/industryevents/?go=eventDetails&event_id=10957. Retrieved on 05.06.2015.
46
Seoul Food and Spirits. Retrieved from http://www.seoulfoodnhotel.co.kr/2009_IFIES_allworld/index.asp.
47
Seoul Food and Hotel 2015. Retrieved from http://www.seoulfoodnhotel.co.kr/2009_IFIES_allworld/index.asp.
45
Beer imports to Korea in 2012 equaled $73.6 million, 0.6% of the world’s total beer import. Despite a
challenging economic environment, Korea’s beer imports have continued solid growth in recent years
primarily because of increased consumer demand for higher-quality products and increasingly diversified
tastes. The value of imports went up in 2013 to $89.7 million, with an increased share in world imports of
0.83%. 7.5% of beer imports to Korea come from the US: American whiskey and wine accounted for 21%
of alcohol supplied to the country. Beer and soju (come mostly from local processors and together
accounted for 74% of the total alcoholic beverages supplied.48
Premium alcoholic beverages are becoming more popular in Korea. The recent signing of free trade
agreements with the United States (March 2012) and the European Union (July 2011) eliminated or
reduced tariff duties and helped boost wine and whiskey sales.49 The cuts were beneficial for Korean
customers, allowing price reductions for imported alcohol drinks of almost 10%. Reduction of import
tariffs on American beer under Korea-United States Free Trade Agreement (KORUS FTA, implemented in
March 2012) should generate new opportunities for American products as well.50
Other
20.32%
Japan
31.16%
USA
7.53%
Ireland
8.06%
Netherlands
12.63%
China
8.20%
Germany
12.10%
Graph 11: Beer Import to South Korea, 2013.
Full realization of the impact of tariff reductions is typically at least a five-year process, and the US
presently holds sixth place in import volume to Korea. Japan has been the main beer importer for several
years, responsible for 31.16% of imports in 2013. It is followed by Netherlands (12.63%), Germany
(12.10%), China (8.20%) and Ireland (8.06%).
48
Beer. Retrieved from http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Beer_Seoul%20ATO_Korea%20%20Republic%20of_2-7-2013.pdf. Retrieved on 05.07.2015.
49
50
However, major competitors have outgrown the United States in recent years in large part by offering
more diversified products. From 2008 to 2012, Japan and the Netherland’s beer exports to Korea grew
546% and 62% in value respectively, while United States exports declined 8%.51
2010.5
$8,000,000
2011
2011.5
2012
2012.5
2013
2013.5
12.00%
$7,000,000
10.00%
$6,000,000
8.00%
$5,000,000
$4,000,000
6.00%
$3,000,000
4.00%
$2,000,000
2.00%
$1,000,000
$0
0.00%
2011
2012
2013
Import of beer from the US, $
Share of the US Import, %
Graph 12: Beer Import from the US, 2011-2013.
Source: Based on UN Comtrade Data.
Nevertheless, from 2011 to 2013, absolute dollar amount of beer imports from the US increased 20.63%,
with the US share of imports decreasing from 9.58% in 2011 to 7.53% in 2013 (please see graph above.)
Market Competition
The Korean beer market is a duopoly dominated by the historically leading local brewers: Oriental Brewery
Company, Ltd., and Hite-Jinro Co., which together hold nearly the entire market, with around 1.8 billion
liters of beer locally-brewed in 2011. The market power of these two companies increased due to
regulations in the brewing industry which existed before 2011. Based on the regulation all brewers were
obligated to have enough capacity to brew well over 1 million liters at a time. Smaller producers were
allowed to sell beer only on their own premises beginning from 2002, and as a result many micro-brewery
pubs have been established in metropolitan markets. After 2011 anyone with the capacity to produce
120,000 liters could apply for a wholesale license.52
Oriental Brewery was acquired by Interbrew (now Anheuser-Busch InBev) in 1998 and was again sold to
an international investment fund in 2009. As a result the company now brews and bottles Budweiser and
Hoegaarden beer in Korea for local distribution in partnership with Anheuser-Busch InBev. In addition, it
imports products under the AB InBev portfolio into Korea, including Bud Ice, Beck’s, Stella Artois, Leffe
and Löwenbräu.53 On the other hand, Hite beer is locally-owned and is part of the largest alcoholic
beverage company in Korea, Hite-Jinro Co. The other popular brands are mainly produced by two
51
52
Fiery Food, Boring Beer. Retrieved from http://www.economist.com/news/business/21567120-dull-duopolycrushes-microbrewers-fiery-food-boring-beer. Retrieved on 07.05.2015.
53
companies: Cass, OB, Cafri (all from Oriental Brewery Company Ltd.) and Hite, Max, d, S, Stout (Hite-Jinro
Co.)
Among imported brands popular in Korea are Budweiser, Hoegaarden, Bud Ice, Beck’s, Stella Artois, Leffe
and Löwenbräu, Suntory, Kirin. According to The Economist, most beer brands in Korea cost approximately
the same 1,850 won ($1.70) per 330 ml can. Therefore, in order to be price competitive Alaska beer should
try to fit in this price category and try other marketing tools to promote products.
As for foreign competition, Japan has been the leading supplier of imported beer to Korea since 2010,
mainly by developing strategic partnerships with major Korean food and beverage companies. Current
partnerships include Hite-Kirin, Oriental Brewery-Suntory, and Mail Dairy-Sapporo. In 2013, Japan took
31.16% of all beer imports to Korea, followed by Netherlands (12.63%), Germany (12.10%), China (8.20%),
Ireland (8.06%), and US (7.86%.)
Consumption habits
The legal drinking age in Korea is 19, and there were an estimated 19.7 million males in the population
and 20.05 million females in 2012 based on the OECD StatExtracts Database.54 There was 2.85%
population growth for people 19 or older compared to 2011.
12,575,116
11,617,050
Over 40
35-39
1,958,174
2,048,758
30-34
1,951,410
2,052,179
25-29
1,663,674
1,810,080
20-24
1,567,566
1,777,680
19 years old
331,868
375,070
Female
Male
Graph 13: Population by Age Group and Gender, 2012.
Source: Based on OECD StatExtracts Database.
According to a study conducted by The Australasian Professional Society on Alcohol and other Drugs
published in December 2011, the average number of drinks consumed per occasion, whether business or
social, by Koreans was 5.96 for women and 8.58 for men. Cocktails and low-alcohol content drinks are
popular with young adult consumers aged 20 to 34, especially women. Young adult consumers composed
54
OECD StatExtracts. Retrieved from https://stats.oecd.org. Retrieved on 05.05.2015.
29% of the population in 2012. In addition, marketers suggest the popularity of dark beer and stout is
going to increase in the next five years.55
According to a Euromonitor report, it is expected that young adults will continue to represent one of the
largest consumer groups in Korea. Therefore, it is expected that the preference for cocktails and lowalcohol beverages will continue. Experiments with taste and innovative approaches to spirits and beer
production is greatly appreciated by this consumer group.
While drinking is on the decline among the elderly population for health concerns, the market continues
to gain a sizable number of new consumers from young and female populations.56 Among the older
generation, the husband usually earns a salary while the wife stays home. But the latter is usually
entrusted to make purchasing decisions, so US beer producers may wish to take into consideration these
family roles when marketing to Korean consumers.57
1.2.3 Distilled Spirits Market Trends
Marketers point out that Korea is a highly polarized market for distilled spirits. Consumption is heavily
skewed to low-price products led by soju, Korea vodka, as well as to premium products led by Scotch
whiskey.
Soju is the most popular Korean alcoholic beverage, especially among businessmen, and is one of the main
drivers of spirit sales in the country.58 Similar to vodka, Soju is made from grain or sweet potatoes, has
alcoholic content of 15.5%, and is popular in a variety of flavors available at the local market. The alcohol
content of Soju has declined in response to consumer demand. Soju is the cheapest hard liquor sold in
markets (retailing less than $1 per typical 330ml bottle) and processors switch among different sources
for the base liquor for a lower cost. As a result, Korean soju processors import a significant volume of highalcohol spirits each year.59
Whiskey was the best-selling distilled spirit in 2012 based on “Euromonitor International,” with total sales
volume equal to 4,075 million liters, valued at $196 million. This category is projected to decline by 2016,
but whiskey will remain the largest group in the market (please see the table below.) White spirits rank
as the second largest group, with a sales volume equal to 376.4 million liters in 2012 and the dollar value
of sales equal to $12.2 million. This category is projected to grow 35% by 2016.
55
Consumer trends: Wine, Beer and Spirits in South Korea. Retrieved from http://www.agr.gc.ca/eng/industrymarkets-and-trade/statistics-and-market-information/by-region/asia-pacific/consumer-trends-wine-beer-andspirits-in-south-korea/?id=1410083148704. Retrieved on 05.07.2015.
56
Beer, Republic of Korea. Retrieved from
57
Doing Business in South Korea. Retrieved from
http://www.export.gov/southkorea/doingbusinessinskorea/index.asp. Retrieved on 05.05.2015.
58
Consumer Trends: Wine, Beer ad Spirits in South Korea. Retrieved from http://www.agr.gc.ca/eng/industrymarkets-and-trade/statistics-and-market-information/by-region/asia-pacific/consumer-trends-wine-beer-andspirits-in-south-korea/?id=1410083148704. Retrieved on 05.07.2015.
59
Distilled Spirits. Republic of Korea. Retrieved from
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Distilled%20Spirits_Seoul%20ATO_Korea%20%20Republic%20of_1-2-2013.pdf. Retrieved on 08.05.2015.
Distilled Spirits Market Sales (historic and forecast), million liters
Source: Euromonitor International, 2012
Despite a challenging economic environment, Korea maintained relatively stable imports of distilled spirits
in recent years largely due to strong demand for soju, which is blended in part from imported high alcohol
spirits.60 Korea relies heavily on imports for premium distilled spirits, which can be divided into two main
categories: products with alcohol strength of 80% or higher (HS2207.10: high alcohol ingredient spirits),
and products of alcohol strength less than 80% (HS2208: consumer oriented spirits.)61
In 2012, Korea ranked the tenth importing market of whiskey by value, taking 1.79% of global imported
whiskey. A year later, the country ranked twelfth with 1.73% of world imports. The Scotch Whiskey
Association, a trade association for the industry in the United Kingdom (UK), signed a Free Trade
Agreement in 2011 with Korea that eliminated Korea's 20% import tariff on spirits. 62 In spite of this
change, the share of UK whiskey imports was decreasing from 2011-2013, from 97.06% to 96.35%. The
absolute dollar amount of imports from the UK was decreasing as well.
The situation with imports from the US is slightly different. Based on 2013 data, the US is the second
largest supplier of whiskey to Korea after the United Kingdom. The recent signing of the US-Korea Free
Trade Agreement (implemented in March 2012) eliminated all tariffs on American whiskey imports to
Korea.63 Stable supply of imported whiskey leads to a decrease in local production of this distilled spirit.
Based on 2011 data, imported whiskey accounted for 91% of total supply.
60
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Distilled%20Spirits_Seoul%20ATO_Korea%20%20Republic%20of_1-2-2013.pdf
61
Ibid.
62
http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/by-region/asiapacific/consumer-trends-wine-beer-and-spirits-in-south-korea/?id=1410083148704
63
http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/by-region/asiapacific/consumer-trends-wine-beer-and-spirits-in-south-korea/?id=1410083148704
$5,700,000
3.50%
$5,650,000
3.00%
$5,600,000
2.50%
$5,550,000
$5,500,000
2.00%
$5,450,000
1.50%
$5,400,000
1.00%
$5,350,000
0.50%
$5,300,000
$5,250,000
0.00%
2011
2012
Import of whisky from the US, $
2013
Graph 14: Whiskey Import from the US, 2011-2013.
Looking at vodka import trends, there was a significant increase in the absolute dollar amount imported
after 2012: from $80,909 in 2011 to $570,380 in 2013. The share increased from 1.92% to 6.11%.
$600,000
7.00%
$500,000
6.00%
5.00%
$400,000
4.00%
$300,000
3.00%
$200,000
2.00%
$100,000
1.00%
$0
0.00%
2011
2012
Import of vodka from the US, $
2013
Graph 15: Vodka Import from the US, 2011-2013.
The situation with gin is not as good as with vodka and whiskey. In spite of the fact that the absolute dollar
amount of the import was increasing on average by 20% annually, the share of US exports to Korea
compared to overall imports was decreasing: 5.29% in 2011 to 4.43% in 2013. Imports from the UK
increased during the same time period.
Gin Import from the US, 2011-2013
$90,000
5.40%
$80,000
5.20%
$70,000
5.00%
$60,000
$50,000
4.80%
$40,000
4.60%
$30,000
4.40%
$20,000
4.20%
$10,000
$0
4.00%
2011
2012
Import of gin from the US, $
2013
Graph 16: Gin Import from the US, 2011-2013.
The free trade agreement led to an increased US share of total Korean imports, from 2.47% in 2011 to
3.04% in 2013. The absolute dollar amount increased from $5,693,860 in 2011 to $6,286,679 in 2013,
taking into account gin, vodka, and whiskey.
Consumption Habits
Korean consumers typically prefer soju and Scotch whiskey, with soju being one of the most popular local
drinks and whiskey among the most popular imported premium-quality drinks. In terms of volume, each
Korean adult consumed on average 81 bottles of soju (330 ml bottle), and 10 bottles of whiskey (1 liter
bottle) in 2011. Beer and soju together, mostly from local processors, accounted for 74% of the total
alcoholic beverages supplied in terms of value. The same year imported products, mainly whiskey and
wine, accounted for 21% of the products supplied.64
However, according to a report prepared by USDA Foreign Agricultural Service, distilled spirits are
expected to diversify into a wider range of products in the coming years, providing American suppliers
with new opportunities.
When looking at other distilled spirits such as brandy and Cognac, sales have been steadily declining as
spirits fall out of favor with consumers, with one exception: super-premium brandy products, such as
Cognac XO, will continue to be popular with middle-aged Korean consumers.65
Market Competition: Distilled spirits.
There are two main sources of competition: local producers of distilled spirits, and competition from
imports. Korea is one of the leading markets for distilled spirits. In 2013, total imports of the main distilled
64
Ibid.
65
spirits – vodka, whiskey and gin – was more than $196M, with imports from the US equal to $7.6M.
Looking at each product separately, the US was the fourth-largest importer of vodka to Korea (with 6.11%
share of total), second-largest importer of whiskey (3.04% of total) and second-largest importer of gin
(4.43% of total). The United Kingdom is the United States’ main competitor in whiskey and gin sales, and
at the same time Sweden was the primary source of vodka provided to Korea in 2013, responsible for
almost 63% of imports and followed by France (9.58%) and United Kingdom (6.13%).
Finland
Italy
1.93%
Other
5.72%
Poland
1.48% USA
6.11%
Russia
4.36%
United
Kingdom
6.13%
France
9.58%
Sweden
62.91%
Whiskey Import Volume,
%
Other Partners
Canada
0.12%
0.09%
USA
3.04%
Japan
0.10%
China
0.30%
Sweden
0.94%
France
1.21%
United
Kingdom
96.35%
Other
USA
4.43%
Philippines
1.34%
Spain
1.85%
United
Kingdom
87.13%
Graph 17: Vodka, Whiskey and Gin Import Share, 2013.
A 20% import tariff on American bourbon whiskey was eliminated under KORUS FTA in March 2012. This
duty reduction and diversifying tastes of Korean consumers were among the factors that led to an increase
in imports of distilled spirits from the US, from $5.8M to $7.6M, or 32.45%, and it also increased the share
of the US in total imports of vodka, whiskey, and gin.
Imports of other consumer-oriented distilled spirits such as vodka and liqueurs are likely to grow
continuously in the coming years as Korean drinkers seek to experience more diverse products and
tastes.66 According to USDA Foreign Agricultural Services report, young Korean consumers who have been
exposed to wider international cultures through foreign education and travel have different tastes from
older generations, and they are ready to experiment with drinks.
Among local producers, there are several leaders holding most of the market:






66
Jinro Co Ltd. – 47.7% of the market in 2011.
Lotte Liquor BG Co. Ltd. – 16.7% of the market in 2011.
Muhak Co. Ltd. – 9.2% of the market in 2011.
Kumbokju Co. Ltd. – 8.1% of the market in 2011.
Bohae Brewery Co. Ltd. – 6.5% of the market in 2011.
Daesun Distilling Co. Ltd. – 5.0% of the market in 2011.67
67
Jinro Co. Ltd. Is a leading local producer of soju, holding 47.7% of the distilled spirits market. The company
also produces whiskey and wine. Jinro soju is known by the brand name Chamisul. Jintro’s brand Chamisul
Fresh accounted for 20.2% of distilled spirit sales in 2011, Chamjinisulro – 26.8% of the market.
Lotte Liquor BG Co. Ltd. specializes in production of various beverages including soju, rice wine, fruit wine,
liquor, wine, and medicinal liquor. Choumchorum is the main brand produced by this company, and it
accounts for 16.1% of the distilled spirits market.
Muhak Co., Ltd. manufactures, exports, and sells liquor in Korea and holds 9.2% of the market. It
manufactures and sells rice and fruit wines, diluted distilled liquors, distilled water, and other beverages.68
Kumbokju Co. Ltd is one of the main exporters and manufacturers handling mainly Korean distilled liquors
since establishment in 1957. This company produces Charm Soju, which accounted for 8.1% of the market
in 2011.
Bohae Brewery Co. Ltd. was founded in 1950 and produces and sells liquor products in Korea and
internationally. One of the most popular brands produced by this company is Maechuisoon, which
accounts for 0.2% of the distilled spirits market.
Daesun Distilling Co. Ltd. was founded in 1930 and now produces products with asparagine for use in
alcoholic beverage products. It held 5% of the distilled spirits market in 2011.
There are several professional associations in Korea. Academies, Internet-based communities, periodic
journals, and nonprofit organizations are actively engaging with general consumers, and exert significant
influence on consumption trends.69
Korea Wine & Spirits Importers Association (KWSIA) is an organization that hosts the Seoul International
Wine and Spirits Expo (SWSExpo) – the only exhibition in Korea dedicated to wines and spirits. SWSExpo
automatically brings international exporters face-to-face with qualified importers and buyers in a single
venue. KWSIA members transact 90% of the wines and spirits imported into Korea.70
Korea Alcohol & Liquor Industry Association (KALIA) was formed in 1980 in order to represent
manufacturers from the alcoholic beverages industry, promote healthy drinking culture, and to support
international cooperation. The organization provides technical support to newly-organized and mature
liquor production companies, helps with policy and regulatory understanding, and promotes cooperation
between producers, government and other stakeholders.71
The Whiskey Society of Korea does not have much information in English, and the website is in a process
of construction as the society is still relatively young, but for US whiskey exporters it may be useful to get
68
Muhac Co. Ltd. Retrieved from
http://www.bloomberg.com/research/stocks/snapshot/snapshot.asp?ticker=033920:KS. Retrieved on 05.08.2015.
69
Distilled Spirits, South Korea. Retrieved from
70
Wine international. Retrieved from http://www.wineinternationalltd.com/newsletter1/. Retrieved on
05.08.2015.
71
KALIA. Retrieved from http://www.kalia.or.kr/introduction/k_biz.html. Retrieved on 05.08.2015.
in contact with this organization, as it may be a good source of information about possible local
partnerships, market trends and certified importers.72
Required Documents
Main documents required for import procedures include:







Invoice
Bill of Lading, or Airway Bill
Packing List
Certificate of Origin Statement (needed to qualify for preferential tariff rates)
List with names of all ingredients, including percentage of major ingredients
Processing Method
Certificate of Production Date73
Import procedures
This chapter is based on information provided on the US International Affairs Division website and should
be verified with Korean importers by Alaska businesses when getting in contact directly. As previously
mentioned, Korean importers usually deal with foreign suppliers without any third-party. Importers must
obtain an import certificate prior to importation of alcoholic beverages by following these steps:74
1. The importer should file an “Entry for Foods” form with the head of the Regional Food and Drug
Administration (this may be done no less than 5 days prior to the arrival of shipment) along with
required documents listed above.
2. There are a variety of different inspections that may be conducted by the KFDA (Korean Food and
Drug Administration) – these include a document inspection, visual inspection, laboratory
inspection, incubation test, and a random inspection. The laboratory inspection includes sampling
of the product and a chemical inspection in KFDA’s laboratories. It could be a good idea for the
importer to go through the “good importer practice” or register as a good importer to ensure that
safety guarantee outcomes are achieved. By designating importers as a "good importer" and
entrusting them with the first line of responsibility for the safety of food imports,75 it will allow
the importer to be exempt from random sampling inspections in future.
3. First-time importers of alcoholic beverages (i.e. the product has not been imported into Korea
before) must submit two sample bottles of each product to the KFDA inspection office, which will
complete a chemical safety inspection. Once this process is complete, the product may enter the
country with only a visual inspection or inspection of pertinent documents. However, products
contained in subsequent shipments must be identical to the original samples submitted in their
label, product name, alcohol percentage, ingredients, and net volume. Random chemical
inspections may also apply, although if the importer is registered as a “good importer,” the
company is exempt from random inspections.
72
The Whisky Society of Korea. Retrieved from http://www.whiskysociety.or.kr/. Retrieved on 05.05.2015.
http://www.ttb.gov/itd/korea.shtml
74
Korea. Retrieved from http://www.ttb.gov/itd/korea.shtml. Retrieved on 05.11.2015.
73
4. KFDA also inspects the product with regard to a “Conformity Assessment” process which
evaluates the compliance of the imported product with the Korean Food Code, Food Additive
Code, and Korean labeling regulations (set out in the Korean “Labeling Guide.”)
5. If the product complies with the above process, the importer is issued an import certificate, which
may be used to clear future shipments of the inspected product. If the product does not comply,
the importer will be notified and may choose to destroy the product or return it to the country of
origin. In some cases, such as labeling violations, the importer may be able to reapply for
inspection once the violations have been corrected.
6. Effective March 15, 2012, a Certificate of Origin Statement is needed to claim preferential duties
for imported products of US origin. Per the Korea-US FTA, to qualify for reduced preferential
duties, a certificate of origin statement must be presented to Korean Customs Service.
The Korean Customs Service uses an electronically-based import clearance system, which allows the
importer to complete declarations electronically as soon as five days prior to the arrival of a shipment by
carrier or one day prior to a shipment arriving by air (this process is referred to as a “prior-entry import
declaration.”)76 The importer should file import declaration in the customs office located in the region
where the shipment will arrive; the declaration form should include documents mentioned in
the Required Documents section. Once the shipment has arrived, it should be stored at a bonded storage
location while customs verifies the importer has completed all certifications, until customs finally accepts
the declaration if all requirements have been met. Then the importer is granted a certificate proving the
declaration has been accepted.77 Any applicable customs duties should be paid at this time along with
taxes or other tariffs (please see Taxes and Tariffs section of the current document.) The shipment may
then be released from a bonded storage location and enter free circulation, but both the importer and
exporter should keep in mind that all imported alcoholic beverages are subject to random inspections by
the Korea Food and Drug Administration (KFDA) once they have entered Korean Customs, unless the
importer is already registered as a “good importer.”
Food Inspection
According to Food Import and Export Statistics, Korea's dependence on imported food is 65% of total
calories consumed; more than 80% of processed food ingredients are imported.78 As it is expected that
the import of food and beverages is going to be constantly increasing, Korea Food and Drug Administration
(KFDA) tries to ensure safety of imported products. Imported food inspection is performed by the Regional
Food and Drug Administration (Seoul, Incheon, Busan, Daegu, Daejeon, Kwangju), which tests to
determine if products fit relevant criteria and standards for raw materials and food additives, food
labelling standards, and requirements for hazardous substances such as pesticides, veterinary drugs, and
so on. Based on data provided on the Korea Food and Safety Bureau website, from 2007 to 2011 between
0.34% and 0.54% of imported food and beverage inspections rejected the import of specific applications.
In 2011, 13,212 cases out of 312,724 were rejected.79
76
South Korea. Retrieved from http://www.ttb.gov/itd/korea.shtml. Retrieved on 05.11.2015.
Ibid.
78
Imported Food Safety. Retrieved from
79
Ibid.
77
The following chapter is based on information provided by USDA Foreign Agricultural Service in “Beer”
and “Distilled Spirits” import reports, so there may be direct quotes from the reports.
The first commercial shipment of a new-to-market product is required to go through a detailed inspection,
which under Korean law should take no longer than 10 business days, but in practice it may take longer.
For a detailed inspection, importers are required to submit one sample bottle of each product to the
inspection authority along with detailed product information such as major ingredient list and processing
flow chart.80 Once detailed inspection on the first shipment confirms no potential health concerns,
subsequent shipments of the same product will be subject to visual (checking the document) inspections,
which usually take no longer than three working days provided that the product in the subsequent
shipment is identical to the product in the first shipment with respect to label, product name, ingredients,
and net volume.81
1.2.6 Export/import tariffs and Pricing
In spite of the fact that Korea and the US on March 15, 2012 signed a Free Trade Agreement, beer and
distilled spirits are still subject to a conventional tariff. These tariffs are scheduled to reduce yearly and
phase out completely, with the beer tariff ending in 2018, and tariffs on distilled spirits in 2016.82
According to KORUS FTA, the US-Korea Free Trade Agreement, the following tariffs and taxes should be
applied in 2013:83
Source: Based on Data at US Commercial Services, FTA Tariff Tool Home.
In addition to tariffs, liquor tax, education tax and value added tax are applied to imported beer and
distilled spirits.
The following example illustrates the effects of import tariff and local taxes on a bottle of $10 (CIF import
value) American bourbon whiskey (0% tariff), imported into Korea:
80
Beer, republic of Korea. Retrieved from
81
Distilled Spirits, Republic of Korea. Retrieved from
82
83
KORUS FTA. Retrieved from http://www.atoseoul.com/fta/fta_page2_final.asp. Retrieved on 05.04.2015.
A.
B.
C.
D.
E.
F.
G.
H.
CIF Invoice Value - $10.00.
Import Tariff – A x 0% = $0.00.
Liquor Tax – (A+B) x 72% = $7.20.
Education Tax – C x 30% = $2.16.
Subtotal - (A+B+C+D) = $19.36.
Value Added Tax – E x 10% - $1.94.
Handling fees for customs clearance – A x 8% = $0.80.
Total cost of bourbon whiskey upon customs clearance – (E + F + G) = $22.1 per bottle.84
In addition to the actual price of the product at customs clearance, US exporters should take into account
possible mark-ups at different levels of the retail and wholesale trade:

Importer mark-up (the profit made by a seller, i.e. selling price minus the cost for a product):


o Importer selling to large-scale retail store: Mark-up 15-40%
o Importer selling to wholesaler: Mark-up 15-20%
o Importer selling to luxury hotel: Mark up 40-50%
Wholesaler selling price to liquor store: Mark up 15-30%
Retailer mark-ups:
o Hypermarket stores’ mark-up: 20-30%;
o Liquor stores’ mark-up: 30-40%;
o Luxury hotels’ mark-up: 50-200%.85
1.2.7 Packaging and labeling rules
Package and label design is very important in Korea, and suppliers should consider developing a new
design that can attract Korean consumers while taking into account addition of the Korean language
onto the label.86 Liquor labeling is administered by Korea Tax Administration and must include:










84
Product name;
Country of origin;
Product type (e.g. whiskies, vodka, beer, gin);
The name, address and phone number of the importer;
Importer’s business license number;
Date of bottling;
Alcohol percentage and product volume;
Tolerance of +/- 0.5% with regards to accuracy of alcohol content;
Location where product may be exchanged or returned in the instance of a defective product;
Instructions for storage, if applicable;
Distilled Spirits, Republic of Korea. Retrieved from
85
86
Republic of Korea Exporter Guide. Retrieved from
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_Seoul%20ATO_Korea%20%20Republic%20of_12-16-2014.pdf. Retrieved on 05.11.2015.




Mode of distribution, must specify one of the three: "Discount store sale only," "Restaurant sale
only," or "Sale for home use only" (taxes on beverages vary depending on the mode of
distribution); 87
Beer should have information about shelf life or best before date, while other alcoholic
beverages are excluded from this requirement;88
All whiskey is mandated to have a Radio Frequency Identification (RFID) tag since October 1,
2012, which are provided by National Tax Office authorized vendors. It should be loaded with
detailed product information and attached to the bottle by the importer before being
distributed so distributors and consumers are able to scan the RFID tag and verify authenticity;89
The use of a photo or a picture of fruit or ingredients on the product label for products that contain
only synthetic flavors is prohibited, effective April 30, 2010.90
Soju, beer, whiskey, and brandy should state “for home use” or “for large-size stores” on the label.
These liquors must also carry a statement on the main label or supplementary label that reads: “Not
allowed to be sold in restaurants and bars” (please see the table below.)
Source: USDA Foreign Agriculture Service Report “Republic of Korea Food and Agricultural Import Regulations and
Standards”
1.2.8 Recommendation on ways to market Alaska distilled spirits
Based on research and information presented in previous chapters, these are some recommendations for
how to introduce Alaska beer and distilled spirits to Korea:
1. It is necessary to find a local importer licensed to purchase products from foreign suppliers, and
contact the company directly without using any middleman (even if it is just a translator.) It is
recommended to set a personal contact before getting started with business issues. Personal
partnerships are highly valued in Korea, and one way to meet importers in-person is to join trade
delegations to Korea organized by various organizations promoting American exports or to visit
specialized international exhibitions and trade fairs (please look for examples in chapter 1.2.1.
and 1.2.4.) Visiting Korea a couple of times or inviting a potential importer to visit production
facilities in Alaska could be effective methods of building a sense of trust as well. It will help to
warm up the business relationship and can potentially lead to a better contract since Koreans
value personal involvement and almost familial relations with a business partner.
87
Beverage Alcohol Labeling Requirements by Country. Retrieved from
http://www.icap.org/Table/AlcoholBeverageLabeling, Retrieved on 05.11.2015.
88
Republic of Korea Food and Agricultural Import Regulations and Standards. Retrieved from
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Food%20and%20Agricultural%20Import%20Regulations
%20and%20Standards%20-%20Narrative_Seoul_Korea%20-%20Republic%20of_12-31-2014.pdf. Retrieved on
05.11.2015.
89
Distilled Spirits. Retrieved from
90
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Food%20and%20Agricultural%20Import%20Regulations
%20and%20Standards%20-%20Narrative_Seoul_Korea%20-%20Republic%20of_12-31-2014.pdf
2. Taking into account a FTA signed by the US and Korea in 2012, it is a good time for Alaska alcoholic
beverages to enter Korean market. As UN Comtrade data shows, the share of US products in
imports to the country varies from 3 to 8% depending on the beverage. Among all products,
whiskey and vodka showed upwards trend with an increase in share in Korea imports. This trend
identify growing interest to the US products and may be utilized by Alaska distilleries as a good
starting point.
3. Taking into account popularity of Soju, Alaska distilleries can try to diversify the vodka market,
offering different flavors and lower alcohol content. The latter is important for Koreans,
considering the tendency to lean towards healthier drinks and tradition to drink in average 5-8
drinks per occasion.
4. Another way to capitalize on Soju popularity is to build partnerships with local Soju producers,
who purchase foreign high-alcohol content beverages to blend it to Soju drink with different
flavors. In this case it is important to offer high-quality product at the least possible price as Soju
itself is considered relatively inexpensive drink. It gives the US producers additional target market.
5. Another trend that is beneficial for both Alaska distilleries and breweries is that more and more
consumers prefer cocktails in exchange of pure drinks. Adding to this young professionals, ready
to experiment with tastes and a variety of flavors, it may be useful to offer cocktails with beer and
Alaska distilled spirits, positioning it as a new taste for Korean market and getting attention of
consumers, interested in experimenting with drinks.
6. As consumers demand premium quality product, it may be useful to highlight in marketing
campaigns that Alaska products are made from high-quality raw-materials like glacier water and
organic barley, wheat, and wild berries picked in Alaska.
7. Beer is relatively inexpensive product in Korea, therefore Alaska breweries should pay close
attention to being price competitive (please see for details chapter “Market competition.”)
8. One way to penetrate the Korean market is involvement in local industry associations by
purchasing a membership. US governmental agencies located in Korea (e.g. US Commercial
Service) are usually good resources for identifying customs clearance issues and local industry
regulations.
9. The target market depends on the type of alcohol subject to export. Even if Korean vodka, soju,
is one of the most popular distilled spirits in the local market, whiskey is one of the most popular
foreign spirits, with US whiskey being widely sold and advertised. Gin is usually used in cocktails
and together with whiskey is growing in popularity among the female population. Whiskey though
is mostly preferred by males under 34 years old and is perceived as an elite alcoholic drink.
American beer is popular in Korea and is one of the most imported alcohol beverages.
10. As for advertising, it is notable that many Koreans, especially millennials, are actively engaging in
online social media like Facebook and Twitter, various Internet communities, and interacting with
friends on blogs. These online marketing tools could be good for promotion of Alaska-based
alcoholic beverages.
1.3 Germany
Although the United States does not have a free trade agreement with Germany or the European Union,
negotiations of the Transatlantic Trade and Investment Partnership (T-TIP) with the EU are in place. The
objective of the cooperative agreement is to help shape high-standard, broad-based regional pacts, and
to unlock opportunities for American businesses through increased access to European markets.91
Few German retailers import products directly from other countries. Most food retailers purchase from
central buyers or distributors specialized in imports. Wholesalers typically specialize in product groups or
imports from a specific country. These specialized importers have in-depth knowledge of importing
requirements, such as the necessary product certificates, labeling and packaging requirements, and may
take care of shipping, customs clearance, warehousing, and distribution of products within the country.92
There is no license needed for production, wholesale, or retail sales of alcoholic beverages. It is possible
to work through a distributor of alcoholic beverages in Germany or any other country within the European
Union, but in this case the US supplier should be aware that food imports from other countries within the
European Union fall under the "free movement of goods" principle, which means products imported by
other EU-countries may be brought into Germany even if they violate German food laws. If this is the case,
importers must obtain a permit from the Federal Office for Consumer Protection and Food Safety (BVL)
to sell the product in Germany.93 The US Commercial Service in Germany recommends US exporters find
a local representative to effectively place and promote their products.94
German food and beverage retail chains are consolidated in most cases but remain relatively diversified
in comparison with many other European countries. Overall, the top five German retailers (Edeka, Rewe
Group, Schwarz Group, Aldi Group, and Metro Group) have a market share of 73% of the entire German
retail market.95 According to the Germany Market Overview report, Edeka, Rewe Group, and Schwarz
Group, operate chains in more than one type of distribution channel, including supermarkets and
discounters, which are the most popular in Germany. In 2013, the market share of discounters was around
41%, hypermarkets and large-scale superstores (≥2,500 sqm) around 28% of the market, and conventional
supermarkets (1,000-2,499 sqm) have a market share of 16%.96
1.3.2 Distilled spirits market trends.
Based on a USDA report, Germany is a net importer of all major categories of food and beverage products
as the food market is heavily dependent on imports to meet customer demands. Last year Germany
imported $59.6 billion of consumer-oriented agricultural products including alcoholic beverages such as
distilled spirits. By value, about one-fourth came from the Netherlands, 11% from Italy, and 9% from
France. After Switzerland and Turkey, the US is the third-largest non-EU supplier of consumer-oriented
91
Transatlantic Trade and Investment Partnership. Retrieved from https://ustr.gov/ttip. Retrieved on 05.13.2015.
Germany Exporter Guide 2014. Retrieved from
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_Berlin_Germany_12-15-2014.pdf.
93
94
Ibid.
95
Market Overview. Retrieved from
http://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Industry-overviews/industryoverview-food-beverage-industry-en.pdf. Retrieved on 05.17.2015.
96
92
agricultural products.97 The German retail food market is attractive for US exporters because of its
saturation, strong competition, and low prices.
Germany’s food and beverage industry generated a production value of EUR 175.2 billion ($192.4 billion
based on currency exchange rate as on 07.24.2015) in 2013 and is the fourth-largest industry sector in
Germany. This sector’s growth was around 4% in 2013 compared to the year prior. The industry is
composed mainly of small to medium-sized companies with a total of 6,000 operators employing more
than 560,000 people.98
Industry analysts show positive market trends with growing demand for convenience, health, and
wellness food products. The domestic food and beverage sector has benefited from the strong German
economy (GDP growth rate in 2014 was 1.5%) and low unemployment rate (4.9% in February 2015.)
Germany is Europe’s leading alcoholic beverages market: around 16% of alcoholic beverages consumed
in Europe are sold in Germany.99 Almost half of the market share is taken by beer and flavored alcoholic
beverages followed by spirits with 29% and wines with 23%.
It is worth noting that whiskey in 2013 was around 75% of total distilled spirits imported to Germany.
There was 15% growth in imports of this product in 2013 compared with the previous year. Whiskey
imports are followed by vodka in dollar amount of sales, taking around 20% of distilled spirits imports in
2013, equal to more than $133 M. Gin is one of the smallest groups of imports among all distilled spirits.
In 2013, around 4.8% of total distilled spirits imported was gin.
$600,000,000
80.00%
70.00%
$500,000,000
60.00%
$400,000,000
50.00%
$300,000,000
40.00%
30.00%
$200,000,000
20.00%
$100,000,000
10.00%
$0
0.00%
Vodka
2012 Dollar Amount
Whisky
2013 Dollar Amount
Gin
2013 Share in World Import, %
Graph 18: Distilled Spirits Import in Germany, 2012-2013.
97
98
Industry Overview. Retrieved from
99
Ibid.
Import trends reveal that the total dollar amount of imported distilled spirits increased from 2011-2013,
with a constantly decreasing share of US products from 21.6% to 20.7% over that time frame. Meantime,
the dollar amount increased from $134M to $156M, 16.5% growth over the three-year period.
$160,000,000
21.80%
$155,000,000
21.60%
$150,000,000
21.40%
$145,000,000
21.20%
$140,000,000
21.00%
$135,000,000
20.80%
$130,000,000
20.60%
$125,000,000
20.40%
$120,000,000
20.20%
2011
2012
Import of distilled spirits from the US, $
2013
Graph 19: Distilled Spirits Import from the US, 2011-2013.
One of the biggest reasons behind the decrease in US share of total imports was a drop in the share of
whiskey imports from 29% in 2011 to 27% in 2013. However, the dollar amount of whiskey imports
increased by 16%, equal to the growth of total distilled spirits import. During the same period, the UK
share increased from 63% to 67%, motivated by increasing popularity of UK whiskey in Germany.
$160,000,000
30.00%
$155,000,000
29.50%
$150,000,000
29.00%
$145,000,000
28.50%
$140,000,000
28.00%
$135,000,000
27.50%
$130,000,000
27.00%
$125,000,000
26.50%
$120,000,000
26.00%
2011
Import of whisky from the US, $
2012
2013
Graph 20: Whiskey Import from the US, 2011-2013.
Vodka Imports from the US increased from $1.1M in 2011 to $1.4M in 2013, a 0.94% share of the total
distilled spirits import. For this group of spirits, both dollar amount and share of the import were
increasing over a three-year period.
$1,600,000
0.95%
$1,400,000
0.90%
$1,200,000
$1,000,000
0.85%
$800,000
0.80%
$600,000
$400,000
0.75%
$200,000
$0
0.70%
2011
2012
Import of vodka from the US, $
2013
Graph 21: Vodka Import from the US, 2011-2013.
Gin is the smallest group of distilled spirits imported to Germany and had the share increase from 0.05%
to 0.35% from 2011 to 2013 with the dollar amount of imports equal to $126,500 in 2013. This category
is growing fast but remains the smallest category of distilled spirits imported from the US. The US is the
11th largest import partner for gin, behind the UK, Netherlands, Spain, Sweden, and other countries.
$140,000
0.40%
$120,000
0.35%
0.30%
$100,000
0.25%
$80,000
0.20%
$60,000
0.15%
$40,000
0.10%
$20,000
0.05%
$0
0.00%
2011
Import of gin from the US, $
2012
2013
Graph 22: Gin Import from the US, 2011-2013.
Consumption Habits
The drinking age in Germany is 18. In recent years marketers observed increasing demand for wellness,
convenience food, and organic products in Germany and the European Union overall that represents a
large potential for US companies active in these markets. An aging population is building demand for
health and wellness as well as functional food products to prevent or overcome conditions including
diabetes, high blood pressure, and cholesterol. This is one reason German consumers are willing to pay
more for “sustainable,” “locally-sourced,” “free range,” “natural,” “organic,” “fair trade” and “carbon
neutral” products.100 With more than $8.3 billion in 2013 sales, Germany is a frontrunner in production
and consumption of organic food products, and the largest market in Europe followed by France ($4.4
billion) and the UK ($2.2 billion). 101 Per capita sales of organic products in Germany was equal to $93.7 in
2013, more than twice the EU average of $44.7.
This trend led to an increase in the number of organic food shops. Around 2,400 shops operate in Germany
selling solely organic-produced products. The introduction of the EU-wide organic food logo further eased
the import and distribution of organic foods in Germany and other EU member states.102 Companies new
to the market can benefit from this trend and offer products unique to the market.
In 2013, German households spent 11.2 billion Euro on alcoholic beverages, with wine and sparkling wine
together accounting for 39% of expenditures, followed by beer at 28%, then spirits with 25%.103 Distilled
spirits per capita consumption was between 23.8 and 25.1 liters, compared with beer per capita
consumption which is steadily decreasing and now equals 106 liters. At the beginning of the 21st century
per capita consumption of beer, distilled spirits, and wine in Germany decreased in comparison with the
20th century (see the graph below.)
The fastest-growing categories among alcoholic beverages include beer, mixed drinks, fruit brandies, and
alcohol-free beers, although changes in consumer preferences have also led to higher consumption of
organic wines, beers, and spirits.104 The alcoholic beverages segment grew 2.8% from 2010-2013 in
Germany according to the Market Overview report.
100
101
http://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Industry-overviews/industryoverview-food-beverage-industry-en.pdf. Retrieved on 05.17.2015. (Euros are converted to USD based on currency
exchange rate as on 07.22.2015. 1 Euro = 1.0906 USD)
102
Ibid.
103
Overview of German Wine Sector. Retrieved from
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Overview%20on%20the%20German%20Wine%20Sector
_Berlin_Germany_2-11-2015.pdf. Retrieved on 05.13.2015.
104
10
9
8.66
8
6.9
7
6
5
4
2.82
3
3.35
3.05
2.35
2
1
0
Beer
Distilled Spirits
1985
Wine
2003
Graph 23: Alcohol Consumption, liters per capita per year.
Source: The affordability of Alcoholic Beverages in European Union.
Another trend across the EU is toward more off-trade alcohol consumption in comparison with on-trade
consumption. Although there is little research examining this particular question, it is possible that one of
the main reasons for the increase in off-trade alcohol consumption is the lower price of alcohol in offtrade retailing.105
Competition
Beverage manufacturing in Germany is highly differentiated with intense competition, although a number
of major international players are present. The alcoholic drinks market is diversified, with the top three
companies generating one-third of total sales, which makes the German alcoholic beverage market an
attractive option for foreign exporters, specifically in niche and value-added product segments.106
As previously mentioned, Germany is a net importer of alcoholic beverages, and therefore the main
competition comes from the foreign markets and vendors ready to export products to the European Union
in general, and Germany in particular.
Sweden is the main exporter of vodka to Germany, responsible for almost 20% of the import market. The
United Kingdom (16.77%) is second, followed by France (15.80%) and Russia (16.82%), although with the
latest sanctions there may be a decrease in Russia vodka imports. With proper marketing and export
policies, US products could win a substantial market share. Based on the Comtrade database, the US had
only 0.94% of import sales to Germany in 2013. Recent data suggests vodka imports from the US to
Germany in the last three years increased almost 30%.
105
Ibid.
106
Ukraine
2.31%
Denmark
5.32%
Finland
5.63%
USA
0.94%
Poland
4.92%
Other
3.40%
United
Kingdom
16.77%
Netherlands
1.62%
Russia
16.82%
Whiskey Import Volume,
Other Partners
Canada
% Netherl
0.90%
ands
0.21%
Ireland
3.57%
USA
France
15.80% 27.40%
Italy
6.61%
0.52%
France
1.50%
USA
0.35%
Ireland
2.59%
Netherlands
5.81%
United
Kingdom
67.40%
Sweden
19.85%
Other
1.05%
Sweden
0.53%
Spain
0.83%
United
Kingdom
87.34%
Graph 24: Vodka, Whiskey and Gin Import Shares, 2013.
The situation with whiskey is different as the US holds around 27% of imports, behind only the UK (67.40%
of the import.) Together sales of distilled spirits from these two countries count around 94% of the total,
although the US share was decreasing with increased market share going to the UK. As for gin, the UK
remains an absolute leader in imports to Germany over the last several years, holding more than 87% of
imports in 2013. The US has only 0.35% of the import, but it has been increasing recently.
Overall the import of distilled spirits from the US has increased almost 16.5% in the last three years, which
is partially a result of promotion of US spirits by the Distilled Spirits Council of the US in cooperation with
the USDA. Together they conducted promotional campaigns in 15 markets since 2005, including:
Germany, China, Russia, Brazil, India, Hong Kong, Korea, Thailand, Vietnam, Singapore, Chile, Bulgaria,
Romania, Czech Republic, and Austria.107
There is little information about internal competition among distilleries in Germany, but the main
distilleries competing in the market were able to be identified: Schlitzer Destillerie, Blackwood, Blaue
Maus, Bayerwald-Bärwurzerei Spezialitäten-Brennerei Gerhard Liebl, Hammerschmiede, Höhler, Black
Forest – ROTHAUS, Rabel Berghof, A.Racke & Co. GmbH and others.108
1.3.3 Market trade shows and fairs.
Another successful way of finding the right distribution for products of US food and beverage companies
is to participate in trade fairs in Germany. Trade shows like ANUGA, Green Week, and the BioFach show
have an exceptional reputation among industry experts worldwide; participating in these events facilitates
direct contact with German food brokers, importers, and wholesalers.109
107
108
http://www.discus.org/assets/1/7/Distilled_Spirits_Industry_Briefing_Feb_4_2014.pdf
Germany Distilleries. Retrieved from
http://www.whiskyportal.com/region.asp?RegionID=27&Region=Germany. Retrieved on 05.18.2015.
109
Germany Exporter Guide. Retrieved from
The drinks section of the ANUGA food fair in Germany in 2013 gathered 460 exhibitors from 62 countries,
as well as about 74,000 visitors from the retail and out-of-home market, 73% of which are decision
makers.110 In 2015, the trade show is planned for October in Cologne, Germany.
International Green Week is another food exhibition taking place in Germany every year and attracting
exhibitors from all over the world. It was established in 1926 and in 2015 was held for the 80th time. The
IGW is a one-of-a-kind international exhibition for the food, agricultural and horticultural industries, and
at the same time functions as the point of origin for the Global Forum for Food and Agriculture (GFFA)
with more than 70 departmental ministers.111 This year more than 1,700 products were registered for the
exhibition, with around 159 beer brands to be represented and 185 other alcohol beverages. Just one US
company is registered in the “Alcoholic Beverages” section.
BIOFACH is scheduled to take place for the 27th year in a row in 2016. The event began with 197 exhibitors
in the Ludwigshafen Stadthalle in 1990, when 2,500 visitors attended the "1st European Trade Fair for
Organic Food and Natural Products." The exhibition was organized in Nuremberg for the first time in 1999
and brought together as many as 1,276 exhibitors and more than 21,000 visitors. 112 vodkas, whiskies,
and gins will be exhibited at the upcoming fair. Around 36 participants represent beer sectors, and around
82 participants have registered to represent the “Other Alcohol Drinks” sector.
Germany, as a European Union member, in most cases follows EU distilled spirits import regulations with
a couple additional factors. This chapter will provide an overview of regulations, but it is noticeable that
once goods cross the EU frontier and pass through customs clearance, they have a right to be traded in
EU territory. It is the distributor’s right to sell within any EU country, and there is no license needed for
production, wholesale, or retail sales of alcoholic beverages.
Required Documents for import purposes.
The following is a list of the documents required and/or recommended when importing alcoholic
beverages into Germany and other EU member states:







110
Commercial invoice;
Customs value declaration;
Freight insurance;
Freight documents;
Customs Import Declaration (SAD form – a common import declaration form for all EU Member
States; must be drawn up in one of the official languages of the EU);
Packing list;
Certificate of origin;
Anuga Drinks. Retrieved from http://www.anuga.com/anuga/the-fair/anuga-trade-shows/anugadrinks/index.php/. Retrieved on 05.13.2015.
111
International Green Week. Retrieved from http://www.gruenewoche.de/en/AboutIGWBerlin/. Retrieved on
05.13.2015.
112
BIOFACH. Retrieved from
https://www.biofach.de/en/ausstellerprodukte/?focus=edb3searchnew&edb3text=&edb3textold=&focus2=&focu
s3=&x=0&y=0&edb3category=Beer%2C+Other+alcoholic+drinks&edb3hall=&edb3fair=0&edb3plz=&edb3country=
0. Retrieved on 05.13.2015.

Goods insurance certificate.113
All documents should be properly filled in or prepared and should reflect the actual quantity and quality
of goods being imported to the EU in general and Germany in particular.
Import Procedures
The description of import procedures is based primarily on information from the US Commercial Services
and International Affairs Division of the Alcohol and Tobacco Tax and Trade Bureau. An import declaration
is required for goods from third countries, such as the US. When goods are imported into Germany, the
importer or authorized agent must declare all items to customs using SAD.114 SAD covers the placement
of any goods under customs procedures and is aimed at ensuring openness in national administrative
requirements; the program also attempts to rationalize and reduce administrative documentation and to
reduce the amount of requested information by standardizing data.115 The declaration may be submitted
to the Federal Customs Administration, in-person or electronically.
Goods are released from customs for "free circulation" once pertinent documents have been filed and
payment of tariff duties has been completed. After paying the value added tax (VAT) and any other
applicable excise duty, goods are released for consumption and ready to be marketed.116
1.3.5 Export/import tariffs and regulations
When exporting to Germany, US suppliers should take into account payment of import tariffs, as well as
value added taxes once goods are released from the customs, and excise taxes.
Tariffs
According to the Taxation and Customs Union Database (TARIC), vodka, gin and whiskey imported from
the US are subject to 0% import duty.117
Value Added Tax (VAT)
Value Added Tax (VAT or Umsatzsteuer in Germany) is an indirect tax on goods and services borne by the
end consumer and applied to the value added at each stage of the supply chain. The German VAT rate is
currently 19%, with 25 Euro minimum amount paid.118
113
International Affairs Division. Germany. Retrieved from http://www.ttb.gov/itd/germany.shtml. Retrieved on
05.15.2015.
114
International Affairs Division. Germany. Retrieved from http://www.ttb.gov/itd/germany.shtml#TARIFFS.
115
The Single Administrative Document (SAD). Retrieved from
http://ec.europa.eu/taxation_customs/customs/procedural_aspects/general/sad/index_en.htm. Retrieved on
05.15.2015.
116
International Affairs Division. Germany. Retrieved from http://www.ttb.gov/itd/germany.shtml#TARIFFS.
117
Tarrifs. Retrieved from
http://ec.europa.eu/taxation_customs/dds2/taric/taric_consultation.jsp?Lang=en&redirectionDate=20100802.
118
http://ec.europa.eu/health/archive/ph_determinants/life_style/alcohol/documents/alcohol_rand_en.pdf
Excise Tax
The minimum excise duty on ethyl alcohol in EU is 550 EUR or 1000 EUR per hectoliter of pure alcohol
(Article 20 of Directive 92/83EEC.) Germany’s rate is 1303 EUR per hectoliter of pure alcohol, the reduced
rate is 730 EUR per hectoliter. The rate by EU law may not be more than 50 below the standard national
rate.119
There are no specific regulations concerning price levels for distilled spirit products within the European
Union, but there are regulations in a small number of European countries that act as ‘proxies’ for
minimum-price regulations. For example, in Germany the “apple Juice law” states that in on-premise
trade, at least one alcohol-free beverage must be cheaper than the cheapest alcoholic beverage.120
Companies importing to Germany should be aware that product packaging is very important to German
consumers since they are highly environmentally conscious. Distilled spirits manufacturers and their
partners in Germany must make sure packaging materials for food products comply with EU and German
domestic regulations. German packaging laws require manufacturers to take care of recycling or disposal
of any packaging material they sell.121
All beverages which contain 1.2% alcohol or greater by volume must be labeled, according to food labeling
provisions which went into effect in 1984. Germany in general has the same packaging regulations as the
European Union, and therefore the label must include:



119
Name under which the product is sold: no trademark or brand name may substitute for the
generic name, but may be used in addition;
Net quantity of pre-packaged beverage in metric units (e.g., liter, centiliter, milliliter);
Indication of the acquired alcoholic strength: the labeling of beverages containing more than 1.2%
by volume of alcohol must indicate the actual alcoholic strength by volume, i.e. showing the word
"alcohol" or the abbreviation "alc." followed by the symbol "% vol";
Excise Duties in Germany. Retrieved from http://www.cfe-eutax.org/taxation/excise-duties/germany. Retrieved
on 05.15.2015. and
http://ec.europa.eu/taxation_customs/resources/documents/taxation/excise_duties/alcoholic_beverages/rates/e
xcise_duties-part_i_alcohol_en.pdf
120
The Affordability of Alcoholic Beverages in European Union. Retrieved from
http://ec.europa.eu/health/archive/ph_determinants/life_style/alcohol/documents/alcohol_rand_en.pdf.
121
Germany Exporter Guide. Retrieved from
Retrieven on 05.13.2015.







Date of minimum durability: this must consist of day, month, and year—in that order—and be
preceded by the words "best before," "best before end," or "use by" for highly perishable goods;
Any special conditions for keeping or use;
Name or business name and address of the manufacturer, packager, or importer established in
the EU;
Place of origin;
Instructions of use, where appropriate;
Lot marking on pre-packaged beverages, with the marking preceded by the letter "L";
According to the Commission Directive 87/250/EEC on the indication of alcoholic strength by
volume, the tolerances allowed in respect of the indication of the alcoholic strength by volume
are:
o 0.5% vol. for beers having an alcoholic strength not exceeding 5.5% vol. and beverages
classified under subheading 22.07 B II of the Common Customs Tariff and made from
grapes;
o 1% vol. for beers having an alcoholic strength exceeding 5.5% vol. and beverages classified
under subheading 22.07 B I of the Common Customs Tariff and made from grapes; ciders,
berries, fruit wines, and the like; beverages based on fermented honey;
o 1.5% vol. for beverages containing macerated fruit or parts of plants;
o 0.3% vol. for other beverages.122
According to internal regulations in Germany there are no labeling requirements specific to distilled
spirits -- only for wine – so importers should follow common rules EU rules.
1.3.7 Recommendation on ways to market Alaska distilled spirits
Based on research and information presented in the previous chapters, these are some recommendations
for how to introduce Alaska beer and distilled spirits to Germany:
1. In order to start working in the German market it may be useful to first visit a couple local trade
shows or fairs to build connections with potential distributors. Besides fairs held in Germany,
about 40 US organizations operate USDA-funded marketing programs there, with Alaska Seafood
Marketing Institute being one of the participants. Other participants include the California Wine
Institute, Almond Board of California, Cranberry Marketing Association, American Soybean
Association, California Walnut Commission, and US Meat Export Federation. Being part of the
marketing program at one of the mentioned organizations will give Alaska distilleries a good
chance to establish products and brands in the German market.
2. The distilled spirits market in Germany is unique and differs greatly from Canada and Korea. A
specialty of the market is the aging population and the related focus on healthy living. Organic
and natural food products are highly valued in Germany, which can be beneficial for Alaska
distilled spirits made from glacial water.
3. Since off-trade is getting more popular than purchasing alcohol in bars and restaurants, it may be
useful to start sales programs through a local distributor with a focus on retail stores. It is
important to be competitive on price, as this is a main driver of purchasing decisions for German
consumers.
122
http://www.icap.org/Table/AlcoholBeverageLabeling
4. The German alcoholic beverages market is heavily dependent on imported products, especially in
the case of distilled spirits, which gives US vendors a chance to strengthen positions in the market.
US whiskey plays an important role in Germany’s beverage market, but vodka and gin positions
are not that strong, taking less than 1% of the market based on 2013 data. With this being said it
may be good to start exporting whiskey first.
5. With vodka exports to Germany, Alaska distilleries should consider the recent trend of purchasing
fruit-flavored distilled drinks; Alaska berry-flavored vodka could be a good fit in the market.
6. In distilled spirit imports, the UK is an absolute leader for selling products to Germany. So in the
marketing campaign the US should put themselves up against the UK products. It may be useful
to capitalize on Alaska distilled spirits benefits. This is a widely-used advertising technique and
may help switch some customers to Alaska brands or at least to try something new.
7. Almost half the market share of alcohol beverages in Germany is taken by beer and flavored
alcoholic beverages. Alaska distilleries can capitalize on this trend and try to market spirits with
different flavors firsthand.
8. One recommendation for Alaska distilleries is to consider getting the newly-introduced “EU
Organic Food” logo to make the product easier to get attention from German consumers. In
recent years marketers observed increasing demand for organic products in Germany and the
European Union overall, which represents a large potential for US companies active in these
markets. It may also help Alaska products to fit into the price range for distilled spirits in Germany
as consumers are willing to pay more for “sustainable,” “natural,” and “organic” products.
1.4 China
Even though China does not have a free trade agreement with the US, there is zero import tariff for maltbased beer, which creates an opportunity for US manufacturers to sell products without tariffs influencing
the price.123 Alaska exports of merchandise in 2014 totaled $5.2 billion with China being the largest
market, accounting for $1.5 billion in sales. This amounts to 28.4% of the state’s merchandise exports.124
Distribution channels in China are divided into off-trade and on-trade (please see the picture below.) Ontrade sales include sales through full-service restaurants, fast food restaurants, street stalls and kiosks,
cafes and bars, and home delivery or take-away. This segment equals $51.6 billion in sales in 2009, around
49% of beer sales in China.125
Off-trade sales occur through supermarkets, hypermarkets, small grocery retailers, convenience stores,
independent small grocers, and food, drink, and tobacco specialists. This segment accounted for $53.4
billion in 2009, with 50.8% of beer sold through off-trade that year.126 Among all off-trade channels, small
grocery stores are the leading sellers, which is due mainly to their convenient location near residential
123
Free Trade Agreements. Retrieved from http://trade.gov/fta/. Retrieved on 05.21.2015.
Alaska: Expanding Exports and Supporting Jobs through Trade Agreements. Retrieved from
http://www.trade.gov/mas/ian/build/groups/public/@tg_ian/documents/webcontent/tg_ian_005315.pdf.
125
Consumer Trends: Wine, Beer and Spirits in China. Retrieved from http://www.gov.mb.ca/agriculture/marketprices-and-statistics/trade-statistics/pubs/china_alcohol_en.pdf. Retrieved on 05.19.2015.
126
124
neighborhoods. However, supermarket sales are increasing as they become more popular and as car
ownership increases, thereby making supermarkets more accessible.127
On-trade
Off-trade
• full-service resturants;
• fast food stores;
• street stalls/kiosks;
• cafes/bars;
• 100% home delivery
or take away.
• supermarkets;
• hypermarkets;
• small grocery retailers;
• convenience stores;
• independent small
grocers;
• food/drink/tobacco
specialists.
Graph 25: On-trade and Off-trade Distribution Channels.
Source: Consumer Trends: Wine, Beer and Spirits in China.
While off-trade sales dominate the market, on-trade sales are increasing as socializing in restaurants,
pubs, and bars grows in popularity.128
Online sales of beer is among the modern distribution channels in China. Direct Internet marketing has
become more popular in China, with a growth rate in 2014 more than 12%, reaching nearly $450 billion
that year, according to the National Bureau of Statistics. The Internet provides an avenue for educating
consumers interested in high-end products, a wide array of choices, and who shop out of convenience.
Taobao.com offers around 1,160 varieties of beer and is a good example of this trend.129
Working through specialized distributors can be challenging for US exporters as companies typically do
not focus on marketing a specific brand but instead emphasize selling all products available in a way that
would maximize profits. Another challenge is selling to rural remote regions, where transportation costs
are high and delivery takes 5-6 days. Quick delivery is critical for beer due to its relatively short shelf-life.
On the other hand it may be possible to concentrate on selling to large markets in China’s eastern, central,
and northeast regions. In these saturated markets, companies compete to serve urban consumers
through well-established sales channels including supermarkets, restaurants, and clubs.130
127
128
Ibid.
129
Ibid.
130
China’s Beer Industry: Breaking the Growth Bottleneck. Retrieved from
http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-China-Beer-Industry.pdf. Retrieved on
05.20.2015.
1.4.2 Market trends: Beer
General Market Trends
As previously mentioned, beer sales are not spread throughout the country in equal proportions: eastern,
central, and northeastern regions account for the majority of Chinese beer sales. In 2013, Greater Beijing
accounted for 23% of total beer sales, followed by Central Provinces (18%) and Northeast China (14%).
Northwest
China
8%
Southwest
China
12%
Greater
Beijing
23%
Greater
Shanghai
12%
Greater
Guangdong
13%
Central
Provinces
18%
Northeast
China
14%
Graph 26: Share in Total Beer Sales Volume, 2013.
Source: Based on “Focus: China’s Beer Market”. Retrieved from http://www.just-drinks.com/analysis/focus-chinasbeer-market_id109412.aspx. Retrieved on 05.19.2015.
China is the largest beer market in the world, consuming 450 million hectoliters per year, approximately
25% of global beer consumption. 131 China is double the size of the second-largest market, the US, yet it
accounts for an estimated 3% of global beer profit. Despite being a leader in beer consumption, China’s
per capita annual consumption is 32 liters in 2012 (see picture below.) Over the last nine years (20042012) per capita beer consumption in China increased 44.8%, and there is expected growth to 50 liters
annually by 2020.132 Czech Republic, the leader in per capita beer consumption, accounts for 148.6 liters
during the same year. US per capita consumption is 77.1 liters per year. Within the Asia-Pacific region,
China accounts for 70% of beer volume consumed and 18% of earnings before interest and taxes.133
131
Focus: China’s Beer Market. Retrieved from http://www.just-drinks.com/analysis/focus-chinas-beermarket_id109412.aspx. Retrieved on 05.21.2015.
132
Ibid.
133
Ibid.
40
36.6
35
30
28.92
29
2007
2008
30.2
32
31.5
25.86
25
22.1
22.85
2004
2005
20
15
10
5
0
2006
2009
2010
2011
2012
Graph 27: Per Capita Beer Consumption, liters.
Source: Access Asia, Kirin Institute of Food and Lifestyle Report Vol. 22 (2008 Beer Consumption in Major
Countries), Accenture analysis, China Economic Information Network.
Domestic beers continue to dominate Chinese markets. Beer is the largest and most successful sector
within alcoholic beverages. Two of the most popular local brands are Snow Beer and Tsingtao, accounting
for more than 15 billion liters sold in 2013. Inexpensive lagers account for 89% of sales, with domestic
standard lager achieving the most significant growth. 134
When marketing craft beer in China, specialists recommend focusing on premium product consumers and
investing in educating customers to create awareness of the variety of craft beer culture.135
In 2014, China beer imports accounted for approximately 3.73% of world beer imports, reaching almost
$407 million. This figure has grown by an astounding 349% over the past four years, and the global market
share increased from 0.8% in 2011 to 3.73% in 2014, according to United Nations Comtrade data. A
primary driver for this boom was economic growth in China. Per capita GDP grew by 53.6% from 2010 to
2013, reaching $6,807.4 per year.136 By comparison, per capita GDP growth in the US was around 9.6%,
although it was up to $53,042 in 2013.
134
135
https://far.rabobank.com/en/sectors/beverages/the-china-beer-market.html
136
GDP Per Capita. World Bank. Retrieved from http://data.worldbank.org/indicator/NY.GDP.PCAP.CD. Retrieved
on 05.21.2015.
$450,000,000
4.00%
$400,000,000
3.50%
$350,000,000
3.00%
$300,000,000
2.50%
$250,000,000
2.00%
$200,000,000
1.50%
$150,000,000
$100,000,000
1.00%
$50,000,000
0.50%
$0
0.00%
2011
2012
China Beer Import, $
2013
2014
Share in World Import, %
Graph 28: China Beer Import, 2011-2014.
Looking at beer imports from the US, there has been an increase over the last four years, from $3.7 million
in 2011 to $9.9 million in 2014. At the same time, the share of US imports decreased from 4.13% in 2011
to 2.45% in 2014. The projection is based on UN Comtrade data and may lack some numbers for 2014.
However, it appears there was a slight decrease after 2013 when the US share was 3.81%. With overall
import growth it can be assumed the US has strong competitors in the world beer market.
$12,000,000
4.50%
4.00%
$10,000,000
3.50%
$8,000,000
3.00%
2.50%
$6,000,000
2.00%
$4,000,000
1.50%
1.00%
$2,000,000
0.50%
$0
0.00%
2011
2012
China Beer Import from the US, $
2013
2014
Share in World Import, %
Graph 29: Beer Import from the US, 2011-2014.
Source: UN Comtrade Database
Based on information provided in the article “Worldwide Beer Production and Consumption,” China is
facing a beer consumption deficit of about 1%, which means more is consumed in the country than is
produced within its borders.
Consumption Habits
Although there is no official minimum drinking age in China, Chinese families have a conservative attitude
towards alcohol consumption. Alcohol is not typically served to anyone under 18. Based on “IMI
Consumer Behaviors and Lifestyles Yearbook 2002-2003” the primary consumption group includes people
aged 25 to 44, with the heaviest beer drinkers aged 35 to 44. This age group falls within the largest
population group in China based on 2013 data and accounts for approximately 47% of the total population
(please see Graph below.)
Health and wellness is becoming increasingly important to Chinese consumers, which is part of the reason
for increased consumption of grape wine and low-alcohol beer. Manufacturers have been launching new
health-focused products including Gold Jiu and Han Fang Nuan Pi. 137 With the increase in income and
economic growth in China, there was higher demand for premium and better-tasting products. As a result,
standard lager brands are becoming more popular and economy brands less so, especially in urban areas.
138
Graph 30: China Population Trends.
Source: Retrieved from http://www.worldometers.info/world-population/china-population/ and
http://www.geohive.com/earth/population_age_2.aspx.
China has a large, fast-growing population (please see the graph above) with consumer preferences that
vary regionally. It is difficult to pinpoint specific tastes to specific regions, although the majority prefer
lighter tasting beers like Carlsberg Chill and Tsingtao Huadong. Each region has a different culture and
varying social levels, and as a result, significant difference in the preference of beer. The working class has
always enjoyed drinking cheaper light-tasting beer while white collar urban citizens prefer imported or
high-end beer as a status symbol.139 Drinkers from Fujian and Guangdong provinces on the country’s
southeast coast prefer expensive foreign brands, while those from inland areas such as Shandong, Beijing
137
138
Ibid.
139
China’s Beer Market. Retrieved from http://www.thinkchina.com.au/thinkblog/chinese-beer-market/.
and areas farther north prefer local beer like Tsingtao, Yanjing, and Harbin, which dominate the local
market in those areas.140
Young consumers, particularly middle-class men who are well-educated, lead growth in the beer market,
but the number of female drinkers is also increasing dramatically.141 In China, women are increasingly
important to the beer market as more women are increasing their discretional income (through greater
employment opportunity) to spend at consumer markets.142 Breweries in China as well as importers are
targeting younger consumers, mainly millennials, which make up one-third of the country’s population.
This target market favors flavored alcoholic beverages, ciders, and imported premium brands.143
IMI reports in the survey “Consumer Behaviors and Lifestyles Yearbook 2002-2003” about situations in
which consumers from different areas in China would drink beer (please see the table below.) In most
cases Chinese residents expressed an interest in drinking beer while dining (the share of answers vary
from 32.5% to 67.5%) or at a banquet (the share of answers vary from 43.4% to 59.9%.) Consumers in
Guangzhou are more willing to drink beer at a bar (15.7%), while Shanghai leads in drinking while dining
(67.5%.) The “at banquet” group (in Guangzhou and Chengdu) is a leading segment, which is supported
by the fact that it is socially acceptable to drink during social and business occasions. Beijing and Shanghai
are absolute leaders in “at dining category” with “at banquet” being the second largest group.
Another survey conducted by the same organization focused on identifying what drives consumers in
different locations to purchase beer. The results indicated that 100% of consumers ranked pleasant taste
as the number one criterion; except in Shanghai, peers in the other six metropolitan markets ranked
reasonable price and famous brand as the number two and three criteria respectively.144
Competition
The top five players in the local beer market are Tsingtao Brewery, China Resources Breweries, Yanjing
Beer, Anheuser-Busch InBev, and Carlsberg. The top four companies together accounted for about 60%
140
141
142
Consumer Behaviors in China Beer Market. Retrieved from
https://www.nlb.gov.sg/Portals/0/Docs/Research/IndustryDigest.pdf. Retrieved on 05.19.2015.
143
https://far.rabobank.com/en/sectors/beverages/the-china-beer-market.html
144
Consumer Behaviors in China Beer Market. Retrieved from
https://www.nlb.gov.sg/Portals/0/Docs/Research/IndustryDigest.pdf. Retrieved on 05.19.2015.
of the nation’s beer sales and increased their market share by 2% in the past five years (Please see the
picture below.)
Biggest Beer Brands in China, 2013
Billion
Liters
Laosh
an
Harbin
Yanjin
g
Tsingt
ao
Snow
Beer
Biggest Breweries in China, 2013
Billion
Liters
Carlbe
rg
1.5
Beijing
Yanjin
g
2.8
Anheu
serBush…
3.8
Tsingt
ao
Brew…
5.2
10.3
China
Resou
ces
2.3
5.6
6.2
8.6
12.1
Graph 31: Brands and Breweries in China, 2013
Source: Based on “The Most Popular Beer Brand in China”. Retrieved from http://firstwefeast.com/drink/themost-popular-beer-in-the-world-is-chinese/. Retrieved on 05.20.2015.

China Resources is owned primarily by SABMiller, which holds 49% of the company shares. CR
Snow has increased its market share from 5% in 2000 to about 20% today.145 This was caused
primarily by the fact that the company added numerous breweries in the past year, including one
in Guizhou, two in Liaoning, one in Jiangsu, one in Shanghai, one in Anhui, and two in Henan. 146
 Tsingtao – 20% of the company is owned by Asahi. Tsingtao is the second-largest brewery in China
and accounts for about 30% of China's profit pool because of its higher price. 147
 Anheuser-Busch InBev is a multinational beverage and brewing company headquartered in
Belgium. The company recently built a new brewery in Sichuan and is expanding in the northeast
and Fujian. 148
 Beijing Yanjing is a state-owned brewing company.
 Carlsberg is mainly focused on the western part of China through direct subsidies and minority
partnerships with local companies. 149
Another key competitor in the local market is Heineken, which has interests managed by the Hong Kong
office of its Asia-Pacific Breweries department. The company has breweries in Hainan and Guangzhou.
Anheuser-Busch InBev, China Resources, Heineken, and Carlsberg occupy 46% of the market. 150
145
Focus: China’s Beer Market. Retrieved from http://www.just-drinks.com/analysis/focus-chinas-beermarket_id109412.aspx. Retrieved on 05.18.2015.
146
Ibid.
147
Ibid.
148
Ibid.
149
Ibid.
150
China Beer Industry 2013 Market Size, Share, Growth, Trends and Forecast. Retrieved from
https://www.linkedin.com/pulse/20140805114629-137774108-china-beer-industry-2013-market-size-sharegrowth-trends-and-forecast. Retrieved on 05.18.2015.
One recent trend in brewing is mergers and acquisitions, which allows local companies to consolidate and
take a larger share of the market, and foreign companies to have easier access to the market. For example,
Anheuser-Busch InBev wholly owns China’s Harbin Brewery. SABMiller, which is a multinational brewing
and beverage company headquartered in England, holds a 49% stake in China Resources Snow Breweries.
Carlsberg, a Danish brewing company, acquired a 29.71% stake in China’s Chongqing Brewery.151 These
acquisitions make the industry more concentrated and allow foreign players to attempt to brew locally.
The five most popular beer brands in China account for 23.6 billion liters of brewed beer in 2013 (please
see the graph above):





Snow Beer (10.3 billion liters produced in 2013) is the most popular beer in China, made by China
Resources Snow Breweries Ltd. CR Snow is the largest brewing company in China. Its other brands
include Blue Sword, Green Leaves, Huadan, Huadan Yate, Largo, Löwen, New Three Star,
Shengquan, Shenyang, Singo, Sip, Tianjin, Yatai, Yingshi and Zero Clock.152
Tsingtao (5.2 billion liters produced in 2013) has a pleasant aroma and well-balanced taste, and
it is the second largest beer brand globally and China’s most widely exported beer. Each and every
bottle is brewed using the exact same ingredients and is only ever brewed at the famous Tsingtao
brewery.153
Yanjing (3.8 billion liters produced in 2013) brewed with spring water for a crisp, refreshing taste
brewed at the Beijing Yanjing Brewery. 154
Harbin (2.8 billion liters produced in 2013) made by Belgium’s Anheuser-Busch InBev, the largest
brewing company in the world.
Laoshan (1.5 billion liters produced in 2013) an amber-colored, pilsner-style beer delivering a
crisp, slightly malty flavor and a sweet taste.155
Competition is growing from imported brands, which usually differ from Chinese brands even on a
production level. The article “China’s Beer Market” suggests that Chinese beers are often made from rice,
sorghum, and sometimes rye, in addition to barley, bitter melon as a bittering agent rather than hops. As
a result, local brands usually have a light taste and may even be used to prevent dehydration. Foreign
brands use only water, malted barley, and hops as a bittering agent in production, which makes a bitter
taste compared to Chinese competitors. Without educating local buyers about foreign beer tastes and
without a proper marketing campaign, bitter beer can be perceived negatively.
Imported beer usually has a higher alcohol content and stronger taste than local beers while also being
30-50% more expensive than local beers, recent research from Tsinghua University Press suggests.156
151
China Beer Industry 2013 Market Size, Share, Growth, Trends and Forecast. Retrieved from
https://www.linkedin.com/pulse/20140805114629-137774108-china-beer-industry-2013-market-size-sharegrowth-trends-and-forecast. Retrieved on 05.18.2015.
152
Five Biggest Beer Brands in China by Volume. Retrieved from http://ceoworld.biz/2014/07/28/5-biggest-beerbrands-china-volume. Retrieved on 05.19.2015.
153
Ibid.
154
Ibid.
155
Ibid.
156
France
3.77%
Other
19.13%
US
3.55%
Mexico
4.10%
Republic of
Korea
Belgium
6.78%
Germany
54.90%
Netherland
s
4.41%
Graph 32: Beer Import Volume by Country, 2013.
The graph above shows the share of different countries in terms of total imports to China. Germany is an
absolute leader, holding 54.9% of beer imports in 2013. The US is fifth based on the dollar value of
imported beers, behind Belgium (6.78%), Mexico (4.10%), and France (3.77%.)
Joining beer associations in China is a good way to build relationships with local beer makers, and to find
potential distributors and importers. We located several local beer associations:
China Craft Brewers Association is a coalition of brewers founded in 2012 by brewers Leon Mickelson,
Michael Jordan, Dane VandenBerg, and Carl Setzer . The organization aims to teach drinkers, brewers, and
distributors the proper techniques and best practices for creating, packaging, shipping, and appreciating
good beer.157
Chinese Brewers Association is the Chinese office of the American Brewers Association, which launched
in Shanghai. The organization’s export manager targeted the Chinese market for promotional activities
since 2006 and maintains a presence annually to support growth.158 The organization participated in the
Shanghai International Beer Festival in 2012, 2013, and 2014 as part of its export development program.159
For Alaska companies exploring export channels to China, this could be a good starting point.
Aside from joining brewers associations, visiting industry fairs, exhibitions and trade shows could be
useful. “China’s Food and Drink Expo” is the China’s largest show of its type and is held in Chengdu every
157
China Craft Brewers Association. Retrieved from http://chinacraftbrewersassociation.com/. Retrieved on
05.20.2015.
158
The American Brewers Association. Retrieved from
https://www.brewersassociation.org/attachments/0001/4321/BA_Interview-Hops.pdf. Retrieved on 05.21.2015.
159
Shanghai International Beer Festival. Retrieved from http://www.brewersassociation.org/. Retrieved on
05.21.2015.
March. Beer manufacturers are widely-represented. Many visitors are importers or distributors seeking
newly-introduced beer brands.160
Another good example is the Shanghai International Beer Festival, which attracted more than 30,000
visitors in 2014. It serves as a platform to connect brewers and customers and for manufacturers to
promote brands and to present novelties into the market.161
The description of the import process summarized in this chapter is based primarily on information from
the “British Craft Brewers Export Report” and the US Alcohol and Tobacco Tax and Trade Bureau
International Affairs Division report. These resources should be consulted further to ensure the
information reflected in this report remains current.
Required Documents
The following documents are required in order to conduct a customs clearance of import beer:








Commercial invoice;
Customs Value Declaration;
Freight Insurance/documents;
Packing List;
Insurance Certificate;
Certificate of Origin (specifically for malt beverages);
Certificate of Health/Sanitation (specifically for malt beverages);
Certificate of Authenticity/Free Sale (specifically for malt beverages);
The Certificate of Health and Sanitation, Certificate of Origin, and a Certificate of Authenticity and Free
Sale must be signed, stamped, and dated by a competent authority from the product's country of origin.
That means the US Alcohol and Tobacco Tax and Trade Bureau International Affairs Division must approve
documents. The agency issues certifications for China, though Certificates of Origin may be signed by any
government entity that can verify the origin of the product, such as a state Commerce Department. The
supplier and producer may not approve documents themselves.162
Import Process
When importing beer into China, eight steps must be followed: 163

160
Registration of the Exporter with the Certification and Accreditation Administration of the
People’s Republic of China (CNCA): From October, 1, 2012, food and beverage exporters to China
US Craft Beer Has a Great Potential in China Market. Retrieved from
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/US%20Craft%20Beer%20Has%20a%20Great%20Potenti
al%20in%20the%20China%20Market%20_Guangzhou_China%20-%20Peoples%20Republic%20of_2-5-2015.pdf.
161
Shanghai International Beer Festival. Retrieved from
http://www.bevexmarketing.com/beerfest/about_en.html. Retrieved on 05.21.2015.
162
International Affairs Division: People’s Republic of China. Retrieved from
http://www.ttb.gov/itd/china.shtml#DOCUMENTS. Retrieved on 05.22.2015.
163
British Craft Brewers: Export Project Report. Retrieved from http://www.clementsmarketing.com/wpcontent/uploads/2013/10/inet_project_submitted_report.pdf. Retrieved on 05.21.2015.




are required to register through the General Administration of Quality Supervision, Inspection and
Quarantine (AQSIQ), which can be done directly by a manufacturer or importer. Both options can
be accessed through http://ire.eciq.cn. The exporter will also need to apply for registration with
the Certification and Accreditation Administration of the People’s Republic of China; 164
Recording of labels with the local Entry-Exit Inspection and Quarantine Bureau. The following
procedures and documents are required when recording a label: complete application from the
local Entry-Exit Inspection and Quarantine Bureau, copy of the exporters UK Business License with
signature or stamp, Chinese label (which is examined in more detail in section 3.5 Beer Labeling
Regulations), English label sample together with a Chinese translated version, certificate of origin,
beer production technology process with signature or stamp, production license, beer quality
inspection reports (given by AQSIQ after inspecting sample beers); 165
Receipts examination before beer arrival at port of entry. Original documents must be signed,
stamped and couriered to China to arrive one week before the expected shipment. One should
also note that if the package is made from wood it must be marked with International Plant
Protection Convention (‘IPPC’) as China is a signatory of this international agreement; 166
Filing Customs declaration. When the beer arrives at the port of entry the following documents
are required: container loading list, import invoice, import contract, port clearance, payment
voucher, bill of lading, delivery order, export license; 167
Examination of product and its release. The tax payment receipts are required for this procedure;
168



Customs clearance. The appointed consignee should sign for the beer; 169
Legal Commodity Inspection. When the consignment arrives at the port of entry, a Customs
Information Paper (CIP) declaration together with customs declaration need to be produced with
the following documents: import invoice, country of the origin certificate, sanitary certificate, bill
of lading, container loading list, import contract, label recording form, original and translated
label, and a copy of any distributor’s Business License, commodity inspection certificate for
export, English label sample together with Chinese translated version, beer production
technology process with signature or stamp;170
Expense settlements for the importation process.
For all procedures mentioned above – with the exception of registering with the Certification and
Accreditation Administration of the People’s Republic of China – the official importer or professional
customs brokerage company may deal with all procedures. In addition, various US agencies in China
provide information on import procedures and regulations. Examples include Agricultural Trade Office in
Shanghai, US Agricultural Trade Office in Shanghai, and Embassy of the People's Republic of China.
164
International Affairs Division: People’s Republic of China. Retrieved from
http://www.ttb.gov/itd/china.shtml#DOCUMENTS. Retrieved on 05.22.2015.
165
British Craft Brewers: Export Project Report. Retrieved from http://www.clementsmarketing.com/wpcontent/uploads/2013/10/inet_project_submitted_report.pdf. Retrieved on 05.21.2015.
166
Ibid.
167
Ibid.
168
Ibid.
169
Ibid.
170
Ibid.
1.4.5 Export/import tariffs and regulations
Beer has the unified commodity code 2203.0000.00, which is relevant for all import procedures. Zero beer
import tariff is added in China for beer imported from the US.171
A value added tax of 17% is imposed, and the products are also subject to a consumption tax: 172


RMB250/ton or $42 per ton, if price (after VAT paid) is more than $370 per ton.
RMB220/ton or $37 per ton, if price (after VAT paid) is less than $370 per ton.
One ton is equal to 998 liters. Both imported and local beer are subject to a consumption tax.173
Based on information provided in a USDA Foreign Agriculture Services report, US craft beer’s unit price
(CIF) in China is around is $2.4 per liter. Belgian and French beers have similar unit prices of $2 and $2.3
per liter respectively, and in 2014 their exports to China are estimated to reach $29 million and $23
million. 174 Taking into account that French and Belgian imported beer has a larger share of the market
than US beer, there is an incentive for US exporters to push down prices to the level of competitors.
According to the “General Standard of Labeling of Food and General Standard of Labeling of Pre-packaging
Alcoholic Beverages in China” the following information should be placed on a label:








171
Name of product;
Alcoholic strength at 20°C: the percentage of pure alcohol in total volume or mass (this should be
expressed as alcoholic strength in %);
Original extract content or ingredients list (sweeteners, preservatives and added color – legal in
the case of fortified wine only – must be declared), exempt for products made of one ingredient;
Net volume (ml): This should be marked as ‘net content xxx Ml (ml)’ for bottle sizes under a liter,
or ‘net content x Liters (l)’ for bottle sizes over a liter. For packages up to (and including 200ml)
the minimum print height is 3mm. From 200ml up to and including 1 liter, the minimum print
height is 4mm. For packages greater than 1 liter the minimum print height is 6mm;
Production date (yy/mm/dd): The date of bottling is required;
Producer/Distributor/Importer (Name and address): The name and address of the Chinese agent,
importer, or distributor must be shown. The name and address of the producer is not mandatory,
and if included does not need to be translated;
Labeling of date and storage instructions: date labeling must include date of packaging as well as
durability information;
Recommended content information: lot number, drinking methods, and type of product (e.g.,
dry/sweet, sugar content, flavoring, for flavored spirits);
China Tariff Schedule. Retrieved from http://www.chinafta.govt.nz/1-The-agreement/2-Text-of-theagreement/0-downloads/China-Tariff-Schedule.pdf. Retrieved on 05.20.2015.
172
Ibid.
173
Ibid.
174
US Craft Beer Has a Great Potential in China Market. Retrieved from
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/US%20Craft%20Beer%20Has%20a%20Great%20Potenti
al%20in%20the%20China%20Market%20_Guangzhou_China%20-%20Peoples%20Republic%20of_2-5-2015.pdf.




Country of origin: a country of origin statement is mandatory, and importers will usually request
a Certificate of Origin to confirm this claim;
Sugar content (g/L);
Mandatory Warning Statements: the following warning and others must be on the bottle in
Chinese: "Excessive drinking is harmful to health" or "Pregnant women and children shall not
drink." For beer in glass bottles also add "Do not hit; it might cause explosion of the bottle";175176
Nutrition and energy labeling is voluntary and needs to meet general food/nutrition labeling
standards.177
Glass bottles are cheaper than cans in China due to reduced packaging costs. However, canned brands are
increasing in popularity due to their shatterproof appeal and status amongst younger, fashion-conscious
consumers.178
1.4.7 Recommendations on ways to market Alaska distilled spirits
Based on research and information presented in previous chapters, these are some recommendations on
how to introduce Alaska beer to China alcohol beverages market:
1. Based on information provided in previous chapters, building relationships with local producers
in China is the recommended starting point for breaking into the Chinese market. Networking
with potential importers and distributors is also another sound strategy. A good approach is by
taking part in industry-specific trade shows, fairs, and exhibitions in China. Direct investment to
local beer manufacturers is another option which is widely used by international beer-making
companies with a presence in China.
2. When marketing craft beer in China, specialists recommend focusing campaigns on premium
product consumers, including business people or even young professionals, especially those who
went abroad for education, as they may already be familiar with US beer or at least will be more
open for experiments. This group is usually ready to pay more for a high-quality product.
3. Taking into account No. 2, it may be possible to concentrate on selling to large markets in China’s
eastern, central, and northeast regions, where companies compete to serve urban consumers
through well-established sales channels including supermarkets, restaurants, and clubs.
4. Online sales of beer is getting more popular in China and can be completed at minimum expense
for breweries. The Internet provides variety for educated consumers interested in high-end
products, an array of choices, and to shop out of convenience. This can be accompanied by
utilizing social media sites to describe offerings and to explain how to pair beers with food.
5. As in Korea and Germany, health and wellness is becoming increasingly important to Chinese
consumer, which is part of the reason for increased consumption of grape wine and low-alcohol
beer, which generates demand for premium and well-tasting products. Alaska breweries together
with other products may offer low-alcohol beer and possibly beer with different flavor or ciders
175
China - Labeling Prepackaged Alcoholic Beverages. Retrieved from
http://www.fas.usda.gov/gainfiles/200501/146118532.doc. Retrieved on 05.10.2015.
176
People’s Republic of China. Retrieved from http://www.ttb.gov/itd/china.shtml. Retrieved on 05.21.2015.
177
General Administration of Quality Supervision, Inspection and Quarantine. Retrieved from
http://english.aqsiq.gov.cn. Retrieved on 05.10.2015
178
6.
7.
8.
9.
(wild berries, fruits etc.) It may be especially useful taking into account that women are getting
more into beer and already take a strong role in family decision-making.
When choosing which region in China to conduct business, the exporter should take into account
that rural and urban areas have different preferences. In addition, the market is among the most
diversified in the world, and it is recommended to pick one area to begin, learn its traditions and
culture, and tailor marketing campaigns to local characteristics. It would also be relatively easier
to start distribution in first-tier cities like Guangzhou, Shenzhen, Shanghai, and Beijing. The article
“China’s Beer Market” states several reasons for this approach, including the fact that consumers
in these regions are more willing to experiment with taste and to try imported beer.
The beer industry in China has experienced rapid growth for several years, but now growth is
slowing. In order to “break the growth bottleneck,” experts suggest manufacturers focus on highend products in China’s urban markets and low-cost, high-quality products in rural areas.
The heaviest beer drinkers in China aged 35 to 44 years old. This age group in large cities is usually
characterized as working class people who already graduated and decided a career path. This
group of consumers usually knows what they need from life and lean toward traditional beer
brands. Targeting this group may be difficult, but one technique is to pair Alaska beer with Alaska
seafood. Alaska seafood is already well-known in China, which may translate well for beer.
Partnering with Alaska Seafood Marketing Institute may prove helpful in this effort.
In China there are two main categories of drinking: “at dining” and “at banquet,” and therefore
for Alaska breweries it may be useful to focus marketing campaigns on households and families
as well as business people and political circles who spend a lot on banquets.
Methodology of Choosing the Countries
Selection of countries included in the current report was based on methodology developed by the UA
Center for Economic Development. The methodology focuses on assigning a weighted average score for
each potential export country. The reasoning is based on the idea that all countries can be ranked on
specific parameters important for successful international cooperation and foreign trade.
The following parameters are used to assign ratings:
1. Share of imports to a specific country in the world import of the product. This parameter is based
on import volume of the chosen product;
2. Growth of import;
3. Share of export to a specific country out of total export of the product from the US. This parameter
is based on export volume of the chosen product from the US to countries identified in parameter
1;
4. Export growth;
5. Rank of the country in trade volume with Alaska;
6. Share of the US in import to a specific country of the chosen product (identification of main trade
partners);
7. Existence of a free trade agreement (FTA) between the country and the US.
In the description of methodology, vodka is used as example, but the same process is applied to all the
products. As a first step, countries importing the most vodka were identified, and then parameter three
is focused on the main countries among the largest importers of US vodka. Each mentioned parameter
was assigned a weight based on relative importance to Alaska export opportunities. For example, how
well a particular country ranks in trade with Alaska is likely more important than measuring the recent
growth in overall US exports for a specific product, therefore, each criterion is assigned its own weight
based on its relative importance. The weighting formula can be seen below:
In order to gather data for each chosen parameter, a number of sources were used throughout the study,
including: United Nations Commodity Trade Statistics Database,179 US Census Bureau Foreign Trade
Data,180 and Office of the United States Trade Representative information on FTAs.181
Parameters 1 and 2.
The first parameter is based on import volume for a chosen product and was used to identify the initial
list of countries for vodka, whiskey, gin, and beer trade. Countries with the highest dollar amount of
imports were chosen. After this initial list was identified, UACED calculated the share of import to every
country from the world import of every specific product, as well as the import’s growth rate.
Countries were given one point for the share higher than the average share of all countries on a list. One
more point was given to countries with a higher-than-average growth rate.
The results are presented in the table below. Only one product (Vodka) is shown below, for illustrative
purposes. Full results can be found in Appendix 4.
179
United Nations Commodity Trade Statistics Database. Retrieved from
http://comtrade.un.org/db/mr/rfCommoditiesList.aspx?px=HS&cc=220860. Retrieved on 04.30.2015.
180
US Census Bureau Foreign Trade. Retrieved from http://www.census.gov/foreigntrade/statistics/state/data/ak.html. Retrieved on 04.30.2015.
181
Office of the United States Trade Representative. Retrieved from https://ustr.gov/trade-agreements/free-tradeagreements. Retrieved on 04.30.2015.
Parameter 3 and 4.
Parameter three shows the dollar value of US exports to each country identified in parameter one. As this
list was generated, countries not initially identified in parameter one were included when it was found
that the US had a high volume of exports to that particular country. This way, all major potential export
markets for Alaskan distilleries were included in the UACED’s analysis. After this list of countries was
identified, UACED calculated the share of exports to every country from the US of every specific product,
as well as the export’s growth rate.
Countries were given one point for having a share higher than the average share of all countries in the
list. One more point was given to countries with a growth rate higher than the average growth rate.
(The table below represents the results for vodka only, all the rest products rank can be found in Appendix
4.)
Parameter 5: Rank of export from Alaska
One point was given to every country with a rank equal to or higher than five. The result for all the
countries, taking part in ranking for vodka, whiskey, gin and beer, is represented in the table below.
Parameter 6: Share of the US in product import to specific country.
This parameter basically shows whether or not the US is one of the key trade partners for such products
as vodka, whiskies, gin and beer. The top six countries with a highest share were granted a point, the
result for whiskey is represented in the table below (the result for all the rest products can be found in
Appendix 4.)
Parameter 7: Free Trade Agreement
The country was given a point if there is a FTA between the country and the US, the result for all the
countries taking part in raking is in the table below as well.
After multiplying points for each parameter on the parameter weight and summing all parameters, UACED
identified final points for each country in the list for every specific product
Countries with the highest points were chosen as Alaska trade partners: for distilled spirits, Canada,
Republic of Korea, and Germany were chosen, and for beer, Canada, Republic of Korea and China.
Appendix 1: Licensed Importers of Beer in South Korea (requested on
May 5th, 2015).
COMPANY
CONTACT
TITLE
PHONE
E-MAIL
4UKorea
Jin Seon Yoo
President
82-2-323-0348
[email protected]
BK Co., Ltd.
Mi Na KANG
Manager
82-2-529-6525
[email protected]
Kannabiz Club Korea
Saeuhn Oh
Vice President
82-2-511-8411
[email protected]
Chet International
Chungbu Hannam
Chain Co., Ltd.
Craftworks Brewing
Company
Do Hyun KIM
Bon Joon
HWANG
Manager
82-31-757-1886
[email protected]
President
82-43-212-9181
[email protected]
Andrew KONG
Sales Manager
82-70-8955-2337
[email protected]
Daekyung Ham co., Ltd.
Dongwha Liquor Co.,
Ltd.
Global Craft Korea Co.,
Ltd.
Woo Sung JUNG
82-31-762-6628
[email protected]
82-31-239-4992
[email protected]
Eunjueng Sohn
Manager
Deputy General
Manager
Representative
Director
82-2-2190-3712
[email protected]
Hite Brewery Co., Ltd.
Young Tae BYUN
Manager
[email protected]
I&J Partners Co., Ltd.
Seong PARK
Manager
82-2-520-3047
82-2-3788-0153/
0159
iBEER Ltd.
Into Franchise Systems
Inc.
Joon Hwan JOO
Manager
82-70-8958-7376
[email protected]
In Sung BAEK
Seung Yeon
CHOI
General Manager
82-2-487-0581
[email protected]
President
82-31-726-2472
[email protected]
Hyung Gon KIM
General Manager
82-2-2109-9250
[email protected]
Koweon Liquors Co.,Ltd
Weon Woo KO
82-2-2249-2301
[email protected]
KS Wine
Jay Kim
CEO
Marketing
Manager
82-31-752-2579
[email protected]
M's Beverage Co, Ltd
SAB Miller Brand Korea
Co.,Ltd
Eun Ji LEE
Staff
82-2-2127-9860
[email protected]
Jeung Wuk KIM
Team Leader
82-2-3019-6000
[email protected]
Sanmi Co., Ltd
Schmuker Korea Co.,
Ltd
Segye Juryu Sangsa Co.,
Ltd.
Ho Young BAEK
President
82-2-553-6861
[email protected]
Young Hoon KIM
President
82-31-793-6947
[email protected]
Tae Yong YEO
Chairman
[email protected]
Seung-Ji Co., Ltd.
James KYUN
82-53-783-6333
82 (0)32 663
4997
Shin Han F & B Co., Ltd
Ho Cheol JEONG
Choong Goo
JEONG
President
82-2-706-1541
[email protected]
Team Leader
82-2-727-1971
[email protected]
June Oh KIM
Business Manager
82-70-7601-4178
[email protected]
KB Korea Inc
Keumyang
International
Shinsegae L&B Co., Ltd.
SK happiness
Foundation
Nam Joong KIM
[email protected]
[email protected]
Sunil Trading
Corporation
Seung Sun PARK
President
82-2-757-7831
[email protected]
Vin de Vin Co., Ltd.
Seok Ho LEE
Director
82-31-974-1960
[email protected]
Vintage Korea Co., Ltd.
Myung Jin PARK
President
82-2-574-1999
[email protected]
Indulge Co., Ltd.
James Pollina
CEO
82-2-512-5270
[email protected]
USCRAFT International
John Lee
CEO
82-2-867-8452
[email protected]
Appendix 2: Licensed Distilled Spirits Importers in South Korea
(requested on May 5th, 2015).
COMPANY
Allied Young Fortune
Brands Co., Ltd.
CONTACT
TITLE
Eun Jin CHOI
Brand
Manager
Andina Wine Co., Ltd.
ATL Korea (All That
Liquor)
A-young Liquor Trading
Co., Ltd.
Sung Soo KIM
President
Hee Jin SEO
President
Jong Ik WOO
President
B&B Wine Co., Ltd.
Kyung Koo BAE
President
BK Co., Ltd.
Mi Na KANG
Kwang Taek
BYUN
Manager
Bonito Korea Co., Ltd.
Brown-Forman Korea
Ltd.
Moo Il CHO
Manager
Yong Shik KIM
President
Buck Kyeong Trading
Jum Doo NAH
President
Cave-De-Vin Co., Ltd.
President
Cep D'or Liquor
An Keun YOO
Chang Bun
AHN
Chet International
Do Hyun KIM
Manager
Chun Par
Chungdam Distribution
Co., Ltd.
Hong Sung KIM
President
Heung In KIM
President
Daejung Co., Ltd.
Manager
Daekyung Ham Co., Ltd.
Cheol Soo KIM
Woo Sung
JEONG
Daeyoo Import Inc.
Ki Jung LA
Daeyoo Wines Co., Ltd.
Ju Lee KIM
Team Leader
Brand
Manager
Dana Cellars Co., Ltd.
Diageo Korea Co., Ltd.
Ick Soon SHON
Jung Hoon
SHON
Dongwha Liquor Co.,
Ltd.
Nam Joong
KIM
BNC Wine Co., Ltd.
President
CEO
Manager
CEO
Manager
Deputy
General
Manager
PHONE
82-2-21750015
82-2-7194255
82-70-89871683
82-2-26312304
82-2-5487634
82-2-5296525
82-2-8303323
82-31-2810461 (101)
82-2-5187700
82-2-4754128
82-2-7863136
82-2-5523131
82-31-7571886
82-31-2939527
82-2-5676885
82-2-8678001
82-31-7626628
82-2-21750015
82-2-5989870
82-2-4054300
E-MAIL
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
82-31-2394992
[email protected]
E & J Gallo Korea
Hyun Jun CHO
Edrington Korea
Joo Ho KIM
Woo Hyun
PARK
Asia Pacific
Regional
Manager
Managing
Director
General
Manager
Min LEE
Wine Manager
Enoteca Korea
Fine Liquor Korea Co.,
Ltd.
Jin Seob KIM
Young Hwa
CHOI
CEO
Gim Po Rice Wine
President
Gold Dragon
Yi Jun KWON
Hee Hyoung
SO
Golden Blue
Kwan Tae KIM
Grandvin Korea
Handeulwine Import
Co., Ltd.
Kwan Gyu HAN
Yang Myeong
LEE
CEO
Handok Wine Co., Ltd.
Hak Gyun KIM
Supporter
Hanjin Co., Ltd.
Eun Kyu PARK
Staff
Hant Co., Ltd.
Ho Seok KIM
President
Hanwol
Cheol O JEON
Director
Hermes Logix
Jong Ha KANG
Myung Ha
(David) YOON
Hyun Chul
SONG
Young Tae
BYUN
Seong (Sean)
PARK
Won Seok
(Jason) CHUN
Jong Myoung
KIM
Director
Wang Lim LEE
President
Joong Hee LEE
President
General
Manager
Eland Retail Co., Ltd.
Eland Retail Ltd. / Wine
Castle Ltd.
HighRich Corporation
HighRich Corporation
Hite Brewery Co., Ltd.
I & J Partners Co., Ltd.
Iaan Marketing Co.
iBEER Ltd.
Ilkwang FNS Co., Ltd.
Independent Liquor
Korea (KGB)
Into Franchise Systems
Inc.
In Sung BAEK
President
President
Brand
Manager
President
CEO
Manager
Manager
Senior
Manager
Assistant
Manager
Director
82-2-22928094
82-2-21404600
82-2-5095368
82-2-5095370
82-2-34421150
82-2-4493151
82-31-9890104
82-63-2470111
82-2-34889931
82-2-5698700
82-52-2699175
82-2-5516874
82-2-7285744
82-2-34776697
82-31-4623440
82-31-3204900
82-2-5614581
82-2-5614581
82-2-5203047
82-2-37880159
82-31-80152142
82-70-36677877
82-2-4136081
82-2-5813400
82-2-4870581
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Jacqueline International
KAJA WINE & SPIRIT Co.,
Ltd.
KB Korea Inc
Keumyang International
Kil Jin International Inc.
Korea Alcohol Industrial
Co., Ltd.
Korea Wine Mart Co.,
Ltd.
Koweon Liquors Co.,
Ltd.
Kuk Dong Wine Co., Ltd.
Kwang Myung Liquor
Co., Ltd.
Kwangwon Trading
Les Vins De Maeil
Liquor & Joy Co., Ltd
Liquorvalley Co.,Ltd.
Lotte Chilsung Beverage
Co., Ltd.
Lotte Liquor BG
Luvin Corea Co., Ltd.
Macrocom Co., Ltd.
Malgeun Naeil
MEG International
Kyoung Lim
HAN
Moon Hee
MIN
Seung Yeon
CHOI
Hyung Gon
KIM
Woo Hyung
CHOI
President
Marketing
Manager
President
General
Manager
Manager
Jin Gook KIM
Manager
Il Seok YONG
President
Weon Woo KO
Young Hwan
CHO
CEO
General
Manager
Chun Il LEE
President
Hyun Il KIM
Ji Chan (James)
YOO
Director
Soo Jin CHO
Hee Young
JEON
Young Song
HAN
Seong Ju
JEONG
Seung Ki LEE
Jae Woong
JUN
Joong Hyeop
PARK
President
Import
Manager
Assistant
Manager
Deputy
General
Manager
General
Manager
President
General
Manager
Director
Marketing
Manager
Moutai Korea Co., Ltd
So Ra SEO
Seong Kwan
CHO
Do Kyoung
KIM
M's Beverage Co, Ltd.
Eun Ji LEE
Staff
Muhak Co., Ltd.
Yeon Jin AHN
Staff
Mo A Alcoholic Bank
President
President
82-31-4684249
82-2-4062220
82-31-7262472
82-2-21099250
82-2-8052013
82-2-34404271
82-2-34746240
82-2-22492301
82-2-4164391
82-2-5142003
82-2-8026400
82-2-34976800
82-2-34637931
82-31-9795757~8
82-2-34591472
82-2-64247350
82-2-8246606
82-2-63008181
82-55-2640997
82-31-8171629
82-2-5372291~2
82-16882663
82-2-21279860
82-70-75762247
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Kyung Woon
YOON
President
Nara Cellar Co., Ltd.
Seok Il LEE
Jeong Hee
(Jenny) PARK
President
General
Manager
Naru Global Co., Ltd.
Sang Bong LEE
CEO
New York New York
Jung Sik PARK
Byeong Suk
YANG
Director
Hyuck KIM
Bong Hyun
YOO
Director
Sun Ae KWON
Jeung Wuk
KIM
Jeong Soo
PARK
Manager
Moon Jae JO
Ho Young
BAEK
Young Hoon
KIM
Jeong Han
(Ernie) CHIN
CEO
Tae Yong YEO
Chairman
General
Manager
Mundovino
N.T.C. (National Trading
Company)
NIHON SHU KOREA
Podo Plaza
Podonamu Co., Ltd.
R. P. Corp.
SAB Miller Brand Korea
Co., Ltd.
Samjin Core
Samkoo Wine
Corporation
Sanmi Co., Ltd.
Schmuker Korea Co.,
Ltd.
SE&L Co., Ltd.
Segye Juryu Sangsa Co.,
Ltd.
Sharp Trading Inc.
Shin Han F & B Co., Ltd
Phil Soo CHO
Ho Cheol
JEONG
Shindong Wine Co., Ltd.
Jong Hoon LEE
Shine Trade Korea Co.
Gi Hwan LEE
Choong Goo
JEONG
Soo
Hwan(Joshua)
KIM
Soon CHoong
KIM
Seung Sun
PARK
Shinsegae L&B Co., Ltd.
SPC Co., Ltd.
Sunbo Liquor Trading
Co., Ltd.
Sunil Trading
Corporation
President
Manager
Team Leader
President
President
President
Managing
Director
President
President
Planning
General
Manager
Team Leader
General
Manager
President
President
82-2-4074642
82-2-7061616
82-2-4054300
82-2-20577826
82-53-7653766
82-2-5453251
82-2-69127504
82-2-3534578
82-2-5508649
82-2-30196000
82-2-5211400
82-2-7050129
82-2-5536861
82-31-7936947
82-2-5143102
82-53-7836333
82-2-34464160
82-2-7061541
82-2-7944531
82-31-2234448
82-2-7271971
82-2-22765680
82-2-22339610
82-2-7577831
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]/
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Sureung Corp.
Yil Han (Albert)
LEE
Taesan Liquor
International Co., Ltd.
Soon Hae CHOI
CEO
Deputy
General
Manager
Tamburlaine
Dae Seong LEE
Team Leader
The Odd Wine
Geun Tae KIM
CEO
The Wine Co., Ltd.
Soon Pil KANG
President
Vin de Vin Co., Ltd.
Seok Ho LEE
Director
Vinideus Korea
Jae CHON
Eun Myung
HONG
CEO
Joo Young KIM
Myung Jin
PARK
Director
Director
Wine for U
Woo Sung HAN
Hyun Chang
SHIN
Chang Kwon
KIM
Wine Tree Co., Ltd.
Ki Ok YOO
President
Wine2U Korea
In Quen LEE
President
Winekit Korea
Jae Min JEONG
Winenara Co., Ltd.
World Juice Inc.
Jin Ho SON
Han Seok
(Harold) LEE
CEO
Chief
Professeur
World Wine
Worldzone
International Co., Ltd.
Ki Won KIM
Deok Kyoung
LEE
CEO
Yeonil
Yun Jung CHOI
President
Youngnam Co., Ltd.
Sung Geun KIM
Jeong Hoon
SEO
President
Vino Vino Co.
Vinokims & Co.
Vintage Korea Co., Ltd.
Vitis Co., Ltd.
Wagner Korea, Inc.
Zennihon Juryu Co., Ltd.
CEO
President
President
President
Director
President
President
82-2-7775589
82-31-7220167
82-70-86835234
82-2-7529111
82-2-5779822
82-31-9741960
82-2-22530035
82-2-4792341
82-2-5113280
82-2-5741999
82-2-7524105
82-32-5836626
82-2-5455816
82-2-3534578
82-31-7057169
82-41-3379584
82-2-5490140
82-31-7773466
82-51-5328181
82-2-5741631
82-2-32107710
82-2-3857225
82-31-5563207
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Appendix 3: Official Beer Importers in China.182
Company Name
Shanghai Ted Foodstuffs
Development Ltd
Pinlive (Shanghai) Foods Co
Ltd
Shanghai Foodstuffs IMP &
EXP. CORP
Bright View Trading Ltd
Chengdu High-tech
Comprehensive Bonded
Zone Coimp Imported Food
Company
Chengdu Dezun
Handelsgesellchaft Ltd
Chengdu Hengchang Wine
Industry Co Ltd
182
Brands or Products for
Import
Beer from Germany and
Netherlands (Netherlands
Heileke and German
Caesar)
Valentins Weiss beer,
Apostelbrau and
Königsbacher
Poultry, wine, olive oil
and beer from America,
Brazil, Japan, England and
Korea
Distribution of
international level brands
to the top grade wine
shops, supermarkets and
hotels
Beer brands:
Benediktiner, WGR Pils,
Thüringer and Eichbaum
Primarily German beer
and French wine
German beer
Hoegarrden, Brauerel
Simon, and also some
brands from America,
Brazil and Czech
Company Website
http://www.eurocity.com.cn/
http://www.pinlive.com/
http://www.shfiec.com/news_detail.asp?articleid=2
http://brightviewsh.cn/
http://www.coimp.cn/
http://cdwittinger.net/
http://www.028yjh.com/
British Craft Brewers Export Project Report. Retrieved from based on http://www.clementsmarketing.com/wpcontent/uploads/2013/10/inet_project_submitted_report.pdf. Retrieved on 05.21.2015.
Appendix 4: Parameters Examples.
Parameter 1 and 2: Beer.
Parameter 1 and 2: Whiskey.
Parameter 1 and 2: Gin.
Parameter 3 and 4: Beer.
Parameter 3 and 4: Whiskey.
Parameter 3 and 4: Gin.
Parameter 6: Vodka.
Parameter 6: Beer.
Parameter 6: Gin.

Study on Alaska Distilleries and Breweries Products Export

Transcription

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