Export opportunities for Alaska Distilleries and Breweries

Export opportunities for Alaska Distilleries and Breweries

Study of Foreign Market Opportunities

University of Alaska Center for Economic Development

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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%20Sector%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 http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Overview%20of%20the%20Wine%20and%20Spirits%20Sector%20in%20Canada%20_Ottawa_Canada_8-26-2013.pdf. Retrieved on 04.10.2015.

http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Overview%20of%20the%20Wine%20and%20Spirits%20Sector%20in%20Canada%20_Ottawa_Canada_8-26-2013.pdf




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.

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

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 placed orders for the supplier

Liquor board takes care of customs clearance;

the product is placed at board warehouse

• 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 7 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.

https://www.ic.gc.ca/app/scr/sbms/sbb/cis/revenues.html?code=44531&lang=eng#rdp4

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% five-

year 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 newly-

launched 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 9 www.ibisworld.ca/gosample.aspx?cid=124&rtid=101 10 Ibid. 11 www.ibisworld.ca/gosample.aspx?cid=124&rtid=101

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%.

Man aged 19 to 30 years old19.90%

Men aged 31 to 50 years old15.60%

Men aged 51 to 70 years old14.30%

Women aged 19 to 30 years old

12.10%


10.40%


10.10%

Men aged 71 years old or older

9.70%

Women aged 71 years old or older

7.90%

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.

0%

5%

10%

15%

20%

25%

30%

35%

40%

Share of the Population vs. Share in Beer Sales by Province

Share in Total Beer Sales 2013, % Share of Population, %

http://www.ibisworld.ca/gosample.aspx?cid=124&rtid=101

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.

2,6818

262

83,613

264 449

122,496

9,460 2,194

40,477

174

43,438

5,336

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Canadian products, liters Import products, liters

http://www.ibisworld.ca/gosample.aspx?cid=124&rtid=101

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, small-

scale 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 http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Overview%20of%20the%20Wine%20and%20Spirits%20Sector%20in%20Canada%20_Ottawa_Canada_8-26-2013.pdf

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.

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

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

$160,000,000

$180,000,000

$200,000,000

Vodka Whisky Gin

2012 Dollar Amount 2013 Dollar Amount 2013 Share in World Import, %

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Share in Total Spirits Sales, % Share of Population, %

http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=1830006&paSer=&pattern=&stByVal=1&p1=1&p2=31&tabMode=dataTable&csid=

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.

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%2017%20Jun-Jul%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

1,006 2532,266 466

11,286

30,753

2,860 2,17710,928

12,171

106 123 80

10,00020,00030,00040,00050,00060,00070,00080,00090,000

100,000

Import vs. Locally Produced Spirits, 2013

Canadian products, liters Import products, liters

http://www.drinkstrade.com.au/ContentFiles/Documents/Drinks%20Trade/Public/Library/reports/spirits/Issue%2017%20Jun-Jul%2010%20Getting%20into%20the%20spirit%20In%20Focus%20Whisky%20and%20Bourbon%20reports.pdf



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 competitively-

priced 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-spirit-industry-final.pdf. Retrieved on 04.29.2015. 19 http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/by-product-sector/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-spirit-industry-final.pdf. Retrieved on 04.29.2015.

https://laurenarmstr.files.wordpress.com/2014/04/the-spirit-industry-final.pdf




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 https://www.lib.uwo.ca/news/business/2012/05/03/canadiancraftdistillers.html 24 http://www.whiskyportal.com/region.asp?RegionID=13&Region=Canada

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-spirit-industry-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.

USA24.82%

France24.75%

Sweden21.52%

Poland8.07%

Russian Federati

on6.24%

Other Partners

3.22%

Finland4.22%

Latvia3.99%

Netherlands

3.18%

Vodka Import Volume, %

United Kingdom72.34%

USA20.67

%

Ireland6.29%

Japan0.22%

Other Partners

Whiskies Import Volume, %


USA0.93%

France0.84%

Netherlands0.81%

Spain0.24%

Other Partners

0.17%

Gin Import Volume, %



http://www.beercanada.com/about-us

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:

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

28 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. Retrieved on 04.29.2015. 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

http://laws-lois.justice.gc.ca/eng/regulations/C.R.C.,_c._870/page-55.html#h-52

http://www.brewerydb.com/guild/U5SjmY

http://www.ttb.gov/wine/state-ABC.shtml#Canada

http://www.calj.org/

http://www.hc-sc.gc.ca/fn-an/legislation/acts-lois/act-loi_reg-eng.php

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 33 http://www.ttb.gov/itd/canada.shtml 34 http://www.inspection.gc.ca/food/labelling/food-labelling-for-industry/method-of-production-claims/eng/1389379565794/1389380926083?chap=3 35 http://www.inspection.gc.ca/food/labelling/food-labelling-for-industry/alcohol/eng/1392909001375/1392909133296?chap=4 36 http://www.ttb.gov/itd/canada.shtml

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)

Province Rate Canada Rate Total

Alberta GST 0% 5% 5%

British Columbia GST+PST 7% 5% 12%

Manitoba GST+PST 8% 5% 13%

New-Brunswick HST 8% 5% 13%

Newfoundland and Labrador

HST 8% 5% 13%

Northwest Territories

GST 0% 5% 5%

Nova Scotia HST 10% 5% 15%

Nunavut GST 0% 5% 5%

Ontario HST 9% 5% 14%

Prince Edward Island

HST 9% 5% 14%

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 38 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

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 well-

developed 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

1.2.1 Distribution channels 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. Off-

trade 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 on-

premise, 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_2-7-2013.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. Retrieved on 05.15.2015.

http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Beer_Seoul%20ATO_Korea%20-%20Republic%20of_2-7-2013.pdf


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.)

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/industry-markets-and-trade/statistics-and-market-information/by-region/asia-pacific/consumer-trends-wine-beer-and-spirits-in-south-korea/?id=1410083148704. Retrieved on 05.07.2015.

Food/drink/tobacco specialists

2.10%

Hypermarkets38.60%

Small Grocery Retailers:

Convenience Stores15.50%

Small Grocery Retailers:

Forecourt retailers 0.10%

Small Grocery Retailers: Independent small

grocers28.80%

Supermarkets14.90%

Off-Trade Sales of Alcoholic Beverages by Distribution Format in 2011

http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/by-region/asia-pacific/consumer-trends-wine-beer-and-spirits-in-south-korea/?id=1410083148704



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/ 45 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. Retrieved on 05.04.2015. 47 Seoul Food and Hotel 2015. Retrieved from http://www.seoulfoodnhotel.co.kr/2009_IFIES_allworld/index.asp. Retrieved on 05.06.2015.

http://www.winebusiness.com/industryevents/?go=eventDetails&event_id=10957

http://www.seoulfoodnhotel.co.kr/2009_IFIES_allworld/index.asp

http://www.seoulfoodnhotel.co.kr/2009_IFIES_allworld/index.asp

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

Graph 11: Beer Import to South Korea, 2013. Source: Based on UN Comtrade Database.

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 Consumer Trends: Wine, Beer and Spirits in South Korea. Retrieved from http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/by-region/asia-pacific/consumer-trends-wine-beer-and-spirits-in-south-korea/?id=1410083148704. Retrieved on 05.07.2015. 50 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.

Japan31.16%

Netherlands12.63%

Germany12.10%

China8.20%

Ireland8.06%

USA7.53%

Other20.32%








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

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 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. 52 Fiery Food, Boring Beer. Retrieved from http://www.economist.com/news/business/21567120-dull-duopoly-crushes-microbrewers-fiery-food-boring-beer. Retrieved on 07.05.2015. 53 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.

2010.5 2011 2011.5 2012 2012.5 2013 2013.5

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

2011 2012 2013

Import of beer from the US, $ Share of the US Import, %



http://www.economist.com/news/business/21567120-dull-duopoly-crushes-microbrewers-fiery-food-boring-beer

http://www.economist.com/news/business/21567120-dull-duopoly-crushes-microbrewers-fiery-food-boring-beer



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.

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.

375,070

1,777,680

1,810,080

2,052,179

2,048,758

11,617,050

331,868

1,567,566

1,663,674

1,951,410

1,958,174

12,575,116

19 years old

20-24

25-29

30-34

35-39

Over 40

Female Male

https://stats.oecd.org/

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 low-

alcohol 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 high-

alcohol 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/industry-markets-and-trade/statistics-and-market-information/by-region/asia-pacific/consumer-trends-wine-beer-and-spirits-in-south-korea/?id=1410083148704. Retrieved on 05.07.2015. 56 Beer, Republic of Korea. Retrieved from http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Beer_Seoul%20ATO_Korea%20-%20Republic%20of_2-7-2013.pdf. Retrieved on 07.05.2015. 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/industry-markets-and-trade/statistics-and-market-information/by-region/asia-pacific/consumer-trends-wine-beer-and-spirits-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.






http://www.export.gov/southkorea/doingbusinessinskorea/index.asp




http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Distilled%20Spirits_Seoul%20ATO_Korea%20-%20Republic%20of_1-2-2013.pdf


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/asia-pacific/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/asia-pacific/consumer-trends-wine-beer-and-spirits-in-south-korea/?id=1410083148704

Graph 14: Whiskey Import from the US, 2011-2013. Source: Based on UN Comtrade Database.

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%.

Graph 15: Vodka Import from the US, 2011-2013. Source: Based on UN Comtrade Database.

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.

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

$5,250,000

$5,300,000

$5,350,000

$5,400,000

$5,450,000

$5,500,000

$5,550,000

$5,600,000

$5,650,000

$5,700,000

2011 2012 2013

Import of whisky from the US, $ Share of the US Import, %

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

2011 2012 2013

Import of vodka from the US, $ Share of the US Import, %

Graph 16: Gin Import from the US, 2011-2013.

Source: Based on UN Comtrade Database.

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 Consumer Trends: Wine, Beer and Spirits in South Korea. Retrieved from http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/by-region/asia-pacific/consumer-trends-wine-beer-and-spirits-in-south-korea/?id=1410083148704. Retrieved on 07.05.2015.

4.00%

4.20%

4.40%

4.60%

4.80%

5.00%

5.20%

5.40%

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

2011 2012 2013

Gin Import from the US, 2011-2013

Import of gin from the US, $ Share of the US Import, %




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%).

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:

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

66 http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Distilled%20Spirits_Seoul%20ATO_Korea%20-%20Republic%20of_1-2-2013.pdf 67 http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Distilled%20Spirits_Seoul%20ATO_Korea%20-%20Republic%20of_1-2-2013.pdf

USA6.11%

France9.58%

Sweden62.91%

United Kingdom

6.13%

Russia4.36%

Italy1.93%

Finland Poland1.48%Other

5.72%



USA3.04%

China0.30%

Canada0.12%

Japan0.10%

Other Partners0.09%

Whiskey Import Volume, %


USA4.43%

France1.21%

Sweden0.94%

Spain1.85%

Philippines1.34%

Other


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.

1.2.4 Market associations and guilds

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 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. 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.

http://www.bloomberg.com/research/stocks/snapshot/snapshot.asp?ticker=033920:KS



http://www.wineinternationalltd.com/newsletter1/

http://www.kalia.or.kr/introduction/k_biz.html

in contact with this organization, as it may be a good source of information about possible local

partnerships, market trends and certified importers.72

1.2.5 Local industry regulations

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. 73 http://www.ttb.gov/itd/korea.shtml 74 Korea. Retrieved from http://www.ttb.gov/itd/korea.shtml. Retrieved on 05.11.2015.

http://www.whiskysociety.or.kr/

http://www.ttb.gov/itd/korea.shtml

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. 77 Ibid. 78 Imported Food Safety. Retrieved from http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Beer_Seoul%20ATO_Korea%20-%20Republic%20of_2-7-2013.pdf. Retrieved on 05.11.2015. 79 Ibid.




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 http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Beer_Seoul%20ATO_Korea%20-%20Republic%20of_2-7-2013.pdf. Retrieved on 05.11.2015. 81 Distilled Spirits, Republic of Korea. Retrieved from http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Beer_Seoul%20ATO_Korea%20-%20Republic%20of_2-7-2013.pdf. Retrieved on 07.22.2015. 82 Korea. Retrieved from http://www.ttb.gov/itd/korea.shtml. Retrieved on 05.1.2015. 83 KORUS FTA. Retrieved from http://www.atoseoul.com/fta/fta_page2_final.asp. Retrieved on 05.04.2015.






http://www.atoseoul.com/fta/fta_page2_final.asp

A. CIF Invoice Value - $10.00.

B. Import Tariff – A x 0% = $0.00.

C. Liquor Tax – (A+B) x 72% = $7.20.

D. Education Tax – C x 30% = $2.16.

E. Subtotal - (A+B+C+D) = $19.36.

F. Value Added Tax – E x 10% - $1.94.

G. Handling fees for customs clearance – A x 8% = $0.80.

H. 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:

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;

84 Distilled Spirits, Republic of Korea. Retrieved from http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Beer_Seoul%20ATO_Korea%20-%20Republic%20of_2-7-2013.pdf. Retrieved on 07.22.2015. 85 Korea. Retrieved from http://www.ttb.gov/itd/korea.shtml. Retrieved on 05.1.2015. 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.




http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_Seoul%20ATO_Korea%20-%20Republic%20of_12-16-2014.pdf

http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_Seoul%20ATO_Korea%20-%20Republic%20of_12-16-2014.pdf

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 http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Distilled%20Spirits_Seoul%20ATO_Korea%20-%20Republic%20of_1-2-2013.pdf. Retrieved on 05.11.2015. 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

http://www.icap.org/Table/AlcoholBeverageLabeling

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

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

1.3.1 Distribution channels 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. 92 Germany Exporter Guide 2014. Retrieved from http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_Berlin_Germany_12-15-2014.pdf. Retrieved on 05.13.2015. 93 Germany Exporter Guide 2014. Retrieved from http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_Berlin_Germany_12-15-2014.pdf. Retrieved on 05.13.2015. 94 Ibid. 95 Market Overview. Retrieved from http://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Industry-overviews/industry-overview-food-beverage-industry-en.pdf. Retrieved on 05.17.2015. 96 Market Overview. Retrieved from http://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Industry-overviews/industry-overview-food-beverage-industry-en.pdf. Retrieved on 05.17.2015.

https://ustr.gov/ttip

http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_Berlin_Germany_12-15-2014.pdf


http://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Industry-overviews/industry-overview-food-beverage-industry-en.pdf




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.

Graph 18: Distilled Spirits Import in Germany, 2012-2013.


97 98 Industry Overview. Retrieved from http://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Industry-overviews/industry-overview-food-beverage-industry-en.pdf. Retrieved on 05.17.2015. 99 Ibid.

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

Vodka Whisky Gin

2012 Dollar Amount 2013 Dollar Amount 2013 Share in World Import, %



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.

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.

Graph 20: Whiskey Import from the US, 2011-2013.


20.20%

20.40%

20.60%

20.80%

21.00%

21.20%

21.40%

21.60%

21.80%

$120,000,000

$125,000,000

$130,000,000

$135,000,000

$140,000,000

$145,000,000

$150,000,000

$155,000,000

$160,000,000

2011 2012 2013

Import of distilled spirits from the US, $ Share of the US Import, %

26.00%

26.50%

27.00%

27.50%

28.00%

28.50%

29.00%

29.50%

30.00%

$120,000,000

$125,000,000

$130,000,000

$135,000,000

$140,000,000

$145,000,000

$150,000,000

$155,000,000

$160,000,000

2011 2012 2013

Import of whisky from the US, $ Share of the US Import, %

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.

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.

Graph 22: Gin Import from the US, 2011-2013.


0.70%

0.75%

0.80%

0.85%

0.90%

0.95%

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

2011 2012 2013

Import of vodka from the US, $ Share of the US Import, %

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

0.30%

0.35%

0.40%

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

2011 2012 2013

Import of gin from the US, $ Share of the US Import, %

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 Germany Exporter Guide 2014. Retrieved from http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_Berlin_Germany_12-15-2014.pdf. Retrieved on 05.13.2015. 101 Market Overview. Retrieved from http://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Industry-overviews/industry-overview-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 Market Overview. Retrieved from http://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Industry-overviews/industry-overview-food-beverage-industry-en.pdf. Retrieved on 05.17.2015.




http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Overview%20on%20the%20German%20Wine%20Sector_Berlin_Germany_2-11-2015.pdf

http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Overview%20on%20the%20German%20Wine%20Sector_Berlin_Germany_2-11-2015.pdf



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 off-

trade 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 Market Overview. Retrieved from http://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Industry-overviews/industry-overview-food-beverage-industry-en.pdf. Retrieved on 05.17.2015.

8.66

2.823.35

6.9

2.353.05

0

1

2

3

4

5

6

7

8

9

10

Beer Distilled Spirits Wine

1985 2003



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 http://www.discus.org/assets/1/7/Distilled_Spirits_Industry_Briefing_Feb_4_2014.pdf

108 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 http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_Berlin_Germany_12-15-2014.pdf. Retrieved on 05.13.2015.


France15.80%

Sweden19.85%

Italy6.61%

Russia16.82%

Netherlands1.62%

Finland5.63%

Denmark5.32%

Poland4.92%

Ukraine2.31%

USA0.94%

Other3.40%



USA27.40%

Ireland3.57%

Canada0.90%

Netherlands

0.21%

Other Partners0.52%

Whiskey Import Volume, %


Netherlands5.81%

Ireland2.59%

France1.50%

Spain0.83%

Sweden0.53%

USA0.35%

Other1.05%


http://www.discus.org/assets/1/7/Distilled_Spirits_Industry_Briefing_Feb_4_2014.pdf

http://www.whiskyportal.com/region.asp?RegionID=27&Region=Germany


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.

1.3.4 Local industry regulations 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:

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;

110 Anuga Drinks. Retrieved from http://www.anuga.com/anuga/the-fair/anuga-trade-shows/anuga-drinks/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=&focus3=&x=0&y=0&edb3category=Beer%2C+Other+alcoholic+drinks&edb3hall=&edb3fair=0&edb3plz=&edb3country=0. Retrieved on 05.13.2015.

http://www.anuga.com/anuga/the-fair/anuga-trade-shows/anuga-drinks/index.php/

http://www.anuga.com/anuga/the-fair/anuga-trade-shows/anuga-drinks/index.php/

http://www.gruenewoche.de/en/AboutIGWBerlin/

https://www.biofach.de/en/ausstellerprodukte/?focus=edb3searchnew&edb3text=&edb3textold=&focus2=&focus3=&x=0&y=0&edb3category=Beer%2C+Other+alcoholic+drinks&edb3hall=&edb3fair=0&edb3plz=&edb3country=0



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. Retrieved on 05.15.2015. 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. Retrieved on 05.15.2015. 117 Tarrifs. Retrieved from http://ec.europa.eu/taxation_customs/dds2/taric/taric_consultation.jsp?Lang=en&redirectionDate=20100802. Retrieved on 05.15.2015. 118 http://ec.europa.eu/health/archive/ph_determinants/life_style/alcohol/documents/alcohol_rand_en.pdf

http://www.ttb.gov/itd/germany.shtml

http://www.ttb.gov/itd/germany.shtml#TARIFFS

http://ec.europa.eu/taxation_customs/customs/procedural_aspects/general/sad/index_en.htm

http://www.ttb.gov/itd/germany.shtml#TARIFFS

http://ec.europa.eu/taxation_customs/dds2/taric/taric_consultation.jsp?Lang=en&redirectionDate=20100802

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

1.3.6 Packaging and labeling rules 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:

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";

119 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/excise_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. Retrieved on 05.16.2015. 121 Germany Exporter Guide. Retrieved from http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_Berlin_Germany_12-15-2014.pdf. Retrieven on 05.13.2015.

http://www.cfe-eutax.org/taxation/excise-duties/germany

http://ec.europa.eu/health/archive/ph_determinants/life_style/alcohol/documents/alcohol_rand_en.pdf


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 malt-

based 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

1.4.1 Distribution channels Distribution channels in China are divided into off-trade and on-trade (please see the picture below.) On-

trade 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. 124 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. Retrieved on 05.21.2015. 125 Consumer Trends: Wine, Beer and Spirits in China. Retrieved from http://www.gov.mb.ca/agriculture/market-prices-and-statistics/trade-statistics/pubs/china_alcohol_en.pdf. Retrieved on 05.19.2015. 126 Consumer Trends: Wine, Beer and Spirits in China. Retrieved from http://www.gov.mb.ca/agriculture/market-prices-and-statistics/trade-statistics/pubs/china_alcohol_en.pdf. Retrieved on 05.19.2015.

http://trade.gov/fta/

http://www.trade.gov/mas/ian/build/groups/public/@tg_ian/documents/webcontent/tg_ian_005315.pdf

http://www.gov.mb.ca/agriculture/market-prices-and-statistics/trade-statistics/pubs/china_alcohol_en.pdf




neighborhoods. However, supermarket sales are increasing as they become more popular and as car

ownership increases, thereby making supermarkets more accessible.127

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 Consumer Trends: Wine, Beer and Spirits in China. Retrieved from http://www.gov.mb.ca/agriculture/market-prices-and-statistics/trade-statistics/pubs/china_alcohol_en.pdf. Retrieved on 05.19.2015. 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.

On-trade

• full-service resturants;

• fast food stores;

• street stalls/kiosks;

• cafes/bars;

• 100% home delivery or take away.

Off-trade

• supermarkets;

• hypermarkets;

• small grocery retailers;

• convenience stores;

• independent small grocers;

• food/drink/tobacco specialists.



http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-China-Beer-Industry.pdf

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%).

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-chinas-

beer-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 (2004-

2012) 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-beer-market_id109412.aspx. Retrieved on 05.21.2015. 132 Ibid. 133 Ibid.

Greater Beijing

23%

Central Provinces

18%

Northeast China14%

Greater Guangdong

13%

Greater Shanghai

12%

Southwest China12%

Northwest China

8%

http://www.just-drinks.com/analysis/focus-chinas-beer-market_id109412.aspx




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 Consumer Trends: Wine, Beer and Spirits in China. Retrieved from http://www.gov.mb.ca/agriculture/market-prices-and-statistics/trade-statistics/pubs/china_alcohol_en.pdf. Retrieved on 05.19.2015. 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.

22.1 22.85

25.86

28.92 2930.2

31.5

36.6

32

0

5

10

15

20

25

30

35

40

2004 2005 2006 2007 2008 2009 2010 2011 2012



http://data.worldbank.org/indicator/NY.GDP.PCAP.CD

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.

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.

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

$450,000,000

2011 2012 2013 2014

China Beer Import, $ Share in World Import, %

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

2011 2012 2013 2014

China Beer Import from the US, $ Share in World Import, %

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 Consumer Trends: Wine, Beer and Spirits in China. Retrieved from http://www.gov.mb.ca/agriculture/market-prices-and-statistics/trade-statistics/pubs/china_alcohol_en.pdf. Retrieved on 05.19.2015. 138 Ibid. 139 China’s Beer Market. Retrieved from http://www.thinkchina.com.au/thinkblog/chinese-beer-market/. Retrieved on 05.19.2015.

http://www.worldometers.info/world-population/china-population/

http://www.geohive.com/earth/population_age_2.aspx



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 China’s Beer Market. Retrieved from http://www.thinkchina.com.au/thinkblog/chinese-beer-market/. Retrieved on 05.19.2015. 141 Consumer Trends: Wine, Beer and Spirits in China. Retrieved from http://www.gov.mb.ca/agriculture/market-prices-and-statistics/trade-statistics/pubs/china_alcohol_en.pdf. Retrieved on 05.19.2015. 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.




https://www.nlb.gov.sg/Portals/0/Docs/Research/IndustryDigest.pdf

https://www.nlb.gov.sg/Portals/0/Docs/Research/IndustryDigest.pdf

of the nation’s beer sales and increased their market share by 2% in the past five years (Please see the

picture below.)

Graph 31: Brands and Breweries in China, 2013 Source: Based on “The Most Popular Beer Brand in China”. Retrieved from http://firstwefeast.com/drink/the-

most-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-beer-market_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-share-growth-trends-and-forecast. Retrieved on 05.18.2015.

10.3

5.2

3.8

2.8

1.5

SnowBeer

Tsingtao

Yanjing

Harbin

Laoshan

Billion Liters

Biggest Beer Brands in China, 2013

12.1

8.6

6.2

5.6

2.3

ChinaResou

ces

Tsingtao

Brew…

Anheuser-Bush…

BeijingYanjin

g

Carlberg

Billion Liters

Biggest Breweries in China, 2013

http://firstwefeast.com/drink/the-most-popular-beer-in-the-world-is-chinese/

http://firstwefeast.com/drink/the-most-popular-beer-in-the-world-is-chinese/



https://www.linkedin.com/pulse/20140805114629-137774108-china-beer-industry-2013-market-size-share-growth-trends-and-forecast


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-share-growth-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-beer-brands-china-volume. Retrieved on 05.19.2015. 153 Ibid. 154 Ibid. 155 Ibid. 156 China’s Beer Market. Retrieved from http://www.thinkchina.com.au/thinkblog/chinese-beer-market/. Retrieved on 05.19.2015.



http://ceoworld.biz/2014/07/28/5-biggest-beer-brands-china-volume

http://ceoworld.biz/2014/07/28/5-biggest-beer-brands-china-volume


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%.)

1.4.3 Market associations and guilds 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.

Germany54.90%

Netherlands

4.41%

Belgium6.78%

Republic of Korea

Mexico4.10%

US3.55%

France3.77%

Other19.13%

http://chinacraftbrewersassociation.com/

https://www.brewersassociation.org/attachments/0001/4321/BA_Interview-Hops.pdf

http://www.brewersassociation.org/

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

1.4.4 Local industry regulations 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

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

160 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%20Potential%20in%20the%20China%20Market%20_Guangzhou_China%20-%20Peoples%20Republic%20of_2-5-2015.pdf. Retrieved on 05.19.2015. 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/wp-content/uploads/2013/10/inet_project_submitted_report.pdf. Retrieved on 05.21.2015.

http://gain.fas.usda.gov/Recent%20GAIN%20Publications/US%20Craft%20Beer%20Has%20a%20Great%20Potential%20in%20the%20China%20Market%20_Guangzhou_China%20-%20Peoples%20Republic%20of_2-5-2015.pdf


http://www.bevexmarketing.com/beerfest/about_en.html

http://www.ttb.gov/itd/china.shtml#DOCUMENTS

http://www.clementsmarketing.com/wp-content/uploads/2013/10/inet_project_submitted_report.pdf


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/wp-content/uploads/2013/10/inet_project_submitted_report.pdf. Retrieved on 05.21.2015. 166 Ibid. 167 Ibid. 168 Ibid. 169 Ibid. 170 Ibid.

http://ire.eciq.cn/

http://www.ttb.gov/itd/china.shtml#DOCUMENTS



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.

1.4.6 Packaging and labeling rules 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:

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);

171 China Tariff Schedule. Retrieved from http://www.chinafta.govt.nz/1-The-agreement/2-Text-of-the-agreement/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%20Potential%20in%20the%20China%20Market%20_Guangzhou_China%20-%20Peoples%20Republic%20of_2-5-2015.pdf. Retrieved on 05.19.2015.

http://www.chinafta.govt.nz/1-The-agreement/2-Text-of-the-agreement/0-downloads/China-Tariff-Schedule.pdf

http://www.chinafta.govt.nz/1-The-agreement/2-Text-of-the-agreement/0-downloads/China-Tariff-Schedule.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 Consumer Trends: Wine, Beer and Spirits in China. Retrieved from http://www.gov.mb.ca/agriculture/market-

prices-and-statistics/trade-statistics/pubs/china_alcohol_en.pdf. Retrieved on 05.19.2015.

http://www.fas.usda.gov/gainfiles/200501/146118532.doc

http://www.ttb.gov/itd/china.shtml

http://english.aqsiq.gov.cn/



(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.

6. 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.

7. 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 high-

end products in China’s urban markets and low-cost, high-quality products in rural areas.

8. 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.

9. 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/foreign-trade/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-trade-agreements. Retrieved on 04.30.2015.

http://comtrade.un.org/db/mr/rfCommoditiesList.aspx?px=HS&cc=220860

http://www.census.gov/foreign-trade/statistics/state/data/ak.html

http://www.census.gov/foreign-trade/statistics/state/data/ak.html

https://ustr.gov/trade-agreements/free-trade-agreements

https://ustr.gov/trade-agreements/free-trade-agreements

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 Do Hyun KIM Manager 82-31-757-1886 [email protected]

Chungbu Hannam Chain Co., Ltd.

Bon Joon HWANG President 82-43-212-9181 [email protected]

Craftworks Brewing Company Andrew KONG Sales Manager 82-70-8955-2337 [email protected]

Daekyung Ham co., Ltd. Woo Sung JUNG Manager 82-31-762-6628 [email protected]

Dongwha Liquor Co., Ltd. Nam Joong KIM

Deputy General Manager 82-31-239-4992 [email protected]

Global Craft Korea Co., Ltd. Eunjueng Sohn

Representative Director 82-2-2190-3712 [email protected]

Hite Brewery Co., Ltd. Young Tae BYUN Manager 82-2-520-3047 [email protected]

I&J Partners Co., Ltd. Seong PARK Manager 82-2-3788-0153/ 0159 [email protected]

iBEER Ltd. Joon Hwan JOO Manager 82-70-8958-7376 [email protected]

Into Franchise Systems Inc. In Sung BAEK General Manager 82-2-487-0581 [email protected]

KB Korea Inc Seung Yeon CHOI President 82-31-726-2472 [email protected]

Keumyang International Hyung Gon KIM General Manager 82-2-2109-9250 [email protected]

Koweon Liquors Co.,Ltd Weon Woo KO CEO 82-2-2249-2301 [email protected]

KS Wine Jay Kim Marketing Manager 82-31-752-2579 [email protected]

M's Beverage Co, Ltd Eun Ji LEE Staff 82-2-2127-9860 [email protected]

SAB Miller Brand Korea Co.,Ltd Jeung Wuk KIM Team Leader 82-2-3019-6000 [email protected]

Sanmi Co., Ltd Ho Young BAEK President 82-2-553-6861 [email protected]

Schmuker Korea Co., Ltd Young Hoon KIM President 82-31-793-6947 [email protected]

Segye Juryu Sangsa Co., Ltd. Tae Yong YEO Chairman 82-53-783-6333 [email protected]

Seung-Ji Co., Ltd. James KYUN 82 (0)32 663 4997 [email protected]

Shin Han F & B Co., Ltd Ho Cheol JEONG President 82-2-706-1541 [email protected]

Shinsegae L&B Co., Ltd. Choong Goo JEONG Team Leader 82-2-727-1971 [email protected]

SK happiness Foundation June Oh KIM Business Manager 82-70-7601-4178 [email protected]

mailto:[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 CONTACT TITLE PHONE E-MAIL

Allied Young Fortune Brands Co., Ltd. Eun Jin CHOI

Brand Manager

82-2-2175-0015 [email protected]

Andina Wine Co., Ltd. Sung Soo KIM President 82-2-719-4255 [email protected]

ATL Korea (All That Liquor) Hee Jin SEO President


A-young Liquor Trading Co., Ltd. Jong Ik WOO President


B&B Wine Co., Ltd. Kyung Koo BAE President 82-2-548-7634 [email protected]

BK Co., Ltd. Mi Na KANG Manager 82-2-529-6525 [email protected]

BNC Wine Co., Ltd. Kwang Taek BYUN President


Bonito Korea Co., Ltd. Moo Il CHO Manager 82-31-281-0461 (101) [email protected]

Brown-Forman Korea Ltd. Yong Shik KIM President


Buck Kyeong Trading Jum Doo NAH President 82-2-475-4128 [email protected]

Cave-De-Vin Co., Ltd. An Keun YOO President 82-2-786-3136 [email protected]

Cep D'or Liquor Chang Bun AHN CEO


Chet International Do Hyun KIM Manager 82-31-757-1886 [email protected]

Chun Par Hong Sung KIM President 82-31-293-9527 [email protected]

Chungdam Distribution Co., Ltd. Heung In KIM President


Daejung Co., Ltd. Cheol Soo KIM Manager 82-2-867-8001 [email protected]

Daekyung Ham Co., Ltd. Woo Sung JEONG Manager


Daeyoo Import Inc. Ki Jung LA Team Leader 82-2-2175-0015 [email protected]

Daeyoo Wines Co., Ltd. Ju Lee KIM Brand Manager


Dana Cellars Co., Ltd. Ick Soon SHON CEO 82-2-405-4300 [email protected]

Diageo Korea Co., Ltd. Jung Hoon SHON Manager [email protected]

Dongwha Liquor Co., Ltd.

Nam Joong KIM

Deputy General Manager







E & J Gallo Korea Hyun Jun CHO

Asia Pacific Regional Manager


Edrington Korea Joo Ho KIM Managing Director


Eland Retail Co., Ltd. Woo Hyun PARK

General Manager


Eland Retail Ltd. / Wine Castle Ltd. Min LEE Wine Manager


Enoteca Korea Jin Seob KIM CEO 82-2-3442-1150 [email protected]

Fine Liquor Korea Co., Ltd.

Young Hwa CHOI President


Gim Po Rice Wine Yi Jun KWON President 82-31-989-0104 [email protected]

Gold Dragon Hee Hyoung SO President


Golden Blue Kwan Tae KIM Brand Manager


Grandvin Korea Kwan Gyu HAN CEO 82-2-569-8700 [email protected]

Handeulwine Import Co., Ltd.

Yang Myeong LEE President


Handok Wine Co., Ltd. Hak Gyun KIM Supporter 82-2-551-6874 [email protected]

Hanjin Co., Ltd. Eun Kyu PARK Staff 82-2-728-5744 [email protected]

Hant Co., Ltd. Ho Seok KIM President 82-2-3477-6697 [email protected]

Hanwol Cheol O JEON Director 82-31-462-3440 [email protected]

Hermes Logix Jong Ha KANG Director 82-31-320-4900 [email protected]

HighRich Corporation Myung Ha (David) YOON CEO


HighRich Corporation Hyun Chul SONG Manager


Hite Brewery Co., Ltd. Young Tae BYUN Manager


I & J Partners Co., Ltd. Seong (Sean) PARK

Senior Manager


Iaan Marketing Co. Won Seok (Jason) CHUN

Assistant Manager


iBEER Ltd. Jong Myoung KIM Director


Ilkwang FNS Co., Ltd. Wang Lim LEE President 82-2-413-6081 [email protected]

Independent Liquor Korea (KGB) Joong Hee LEE President


Into Franchise Systems Inc. In Sung BAEK

General Manager




















Jacqueline International Kyoung Lim HAN President


KAJA WINE & SPIRIT Co., Ltd.

Moon Hee MIN

Marketing Manager


KB Korea Inc Seung Yeon CHOI President


Keumyang International Hyung Gon KIM

General Manager


Kil Jin International Inc. Woo Hyung CHOI Manager


Korea Alcohol Industrial Co., Ltd. Jin Gook KIM Manager


Korea Wine Mart Co., Ltd. Il Seok YONG President


Koweon Liquors Co., Ltd. Weon Woo KO CEO


Kuk Dong Wine Co., Ltd. Young Hwan CHO

General Manager


Kwang Myung Liquor Co., Ltd. Chun Il LEE President


Kwangwon Trading Hyun Il KIM Director 82-2-802-6400 [email protected]

Les Vins De Maeil Ji Chan (James) YOO President


Liquor & Joy Co., Ltd Soo Jin CHO Import Manager


Liquorvalley Co.,Ltd. Hee Young JEON

Assistant Manager

82-31-979-5757~8 [email protected]

Lotte Chilsung Beverage Co., Ltd.

Young Song HAN



Lotte Liquor BG Seong Ju JEONG

General Manager


Luvin Corea Co., Ltd. Seung Ki LEE President 82-2-824-6606 [email protected]

Macrocom Co., Ltd. Jae Woong JUN

General Manager


Malgeun Naeil Joong Hyeop PARK Director


MEG International So Ra SEO Marketing Manager


Mo A Alcoholic Bank Seong Kwan CHO President

82-2-537-2291~2 [email protected]

Moutai Korea Co., Ltd Do Kyoung KIM President

82-1688-2663 [email protected]

M's Beverage Co, Ltd. Eun Ji LEE Staff 82-2-2127-9860 [email protected]

Muhak Co., Ltd. Yeon Jin AHN Staff 82-70-7576-2247 [email protected]










Mundovino Kyung Woon YOON President


N.T.C. (National Trading Company) Seok Il LEE President


Nara Cellar Co., Ltd. Jeong Hee (Jenny) PARK

General Manager


Naru Global Co., Ltd. Sang Bong LEE CEO 82-2-2057-7826 [email protected]

New York New York Jung Sik PARK Director 82-53-765-3766 [email protected]

NIHON SHU KOREA Byeong Suk YANG President


Podo Plaza Hyuck KIM Director 82-2-6912-7504 [email protected]

Podonamu Co., Ltd. Bong Hyun YOO Manager


R. P. Corp. Sun Ae KWON Manager 82-2-550-8649 [email protected]

SAB Miller Brand Korea Co., Ltd.

Jeung Wuk KIM Team Leader


Samjin Core Jeong Soo PARK President


Samkoo Wine Corporation Moon Jae JO CEO


Sanmi Co., Ltd. Ho Young BAEK President


Schmuker Korea Co., Ltd.

Young Hoon KIM President


SE&L Co., Ltd. Jeong Han (Ernie) CHIN

Managing Director

82-2-514-3102

[email protected]/ [email protected]

Segye Juryu Sangsa Co., Ltd. Tae Yong YEO Chairman


Sharp Trading Inc. Phil Soo CHO General Manager


Shin Han F & B Co., Ltd Ho Cheol JEONG President


Shindong Wine Co., Ltd. Jong Hoon LEE President 82-2-794-4531 [email protected]

Shine Trade Korea Co. Gi Hwan LEE

Planning General Manager


Shinsegae L&B Co., Ltd. Choong Goo JEONG Team Leader


SPC Co., Ltd.

Soo Hwan(Joshua) KIM

General Manager


Sunbo Liquor Trading Co., Ltd.

Soon CHoong KIM President


Sunil Trading Corporation

Seung Sun PARK President



























Sureung Corp. Yil Han (Albert) LEE CEO


Taesan Liquor International Co., Ltd. Soon Hae CHOI



Tamburlaine Dae Seong LEE Team Leader 82-70-8683-5234 [email protected]

The Odd Wine Geun Tae KIM CEO 82-2-752-9111 [email protected]

The Wine Co., Ltd. Soon Pil KANG President 82-2-577-9822 [email protected]

Vin de Vin Co., Ltd. Seok Ho LEE Director 82-31-974-1960 [email protected]

Vinideus Korea Jae CHON CEO 82-2-2253-0035 [email protected]

Vino Vino Co. Eun Myung HONG CEO


Vinokims & Co. Joo Young KIM Director 82-2-511-3280 [email protected]

Vintage Korea Co., Ltd. Myung Jin PARK President


Vitis Co., Ltd. Woo Sung HAN Director 82-2-752-4105 [email protected]

Wagner Korea, Inc. Hyun Chang SHIN President


Wine for U Chang Kwon KIM President


Wine Tree Co., Ltd. Ki Ok YOO President 82-2-353-4578 [email protected]

Wine2U Korea In Quen LEE President 82-31-705-7169 [email protected]

Winekit Korea Jae Min JEONG CEO 82-41-337-9584 [email protected]

Winenara Co., Ltd. Jin Ho SON Chief Professeur


World Juice Inc. Han Seok (Harold) LEE Director


World Wine Ki Won KIM CEO 82-51-532-8181 [email protected]

Worldzone International Co., Ltd.

Deok Kyoung LEE President


Yeonil Yun Jung CHOI President 82-2-3210-7710 [email protected]

Youngnam Co., Ltd. Sung Geun KIM President 82-2-385-7225 [email protected]

Zennihon Juryu Co., Ltd. Jeong Hoon SEO President

























Appendix 3: Official Beer Importers in China.182

Company Name Brands or Products for Import

Company Website

Shanghai Ted Foodstuffs Development Ltd

Beer from Germany and Netherlands (Netherlands Heileke and German Caesar)

http://www.eurocity.com.cn/

Pinlive (Shanghai) Foods Co Ltd

Valentins Weiss beer, Apostelbrau and Königsbacher

http://www.pinlive.com/

Shanghai Foodstuffs IMP & EXP. CORP

Poultry, wine, olive oil and beer from America, Brazil, Japan, England and Korea

http://www.shfiec.com/news_detail.asp?articleid=2

Bright View Trading Ltd Distribution of international level brands to the top grade wine shops, supermarkets and hotels

http://brightviewsh.cn/

Chengdu High-tech Comprehensive Bonded Zone Coimp Imported Food Company

Beer brands: Benediktiner, WGR Pils, Thüringer and Eichbaum

http://www.coimp.cn/

Chengdu Dezun Handelsgesellchaft Ltd

Primarily German beer and French wine

http://cdwittinger.net/

Chengdu Hengchang Wine Industry Co Ltd

German beer Hoegarrden, Brauerel Simon, and also some brands from America, Brazil and Czech

http://www.028yjh.com/

182 British Craft Brewers Export Project Report. Retrieved from based on http://www.clementsmarketing.com/wp-

content/uploads/2013/10/inet_project_submitted_report.pdf. Retrieved on 05.21.2015.

http://www.shfiec.com/news_detail.asp?articleid=2



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.

Export opportunities for Alaska Distilleries and Breweries

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