Exporting Beverages to Asia
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EXPORTING BEVERAGES TO ASIA A REGULATORY GUIDE TO JAPAN, SOUTH KOREA AND SINGAPORE OCTOBER 2018 Growing the success of Irish food & horticulture EXPORTING BEVERAGES TO ASIA TABLE OF CONTENTS Introduction 4 Useful Contacts 66 How to Use This Guide 5 1. Government and Regulatory Bodies 66 Key Considerations and Tips 6 2. Local Irish Contacts 68 3. Industry and Stakeholder Bodies 69 Japan Market 12 4. Trade Promotion Boards 69 Glossary of Terms - Japan chapter 13 5. Local Spirits and Alcohol Associations 69 Market Overview 14 6. List of Exhibitions and Trade Fairs for Alcohol 1. Alcohol Consumption 16 Beverages 70 2. Alcohol Policy 17 References and Useful Information Sources 72 3. Doing Business in Japan – Important to Know 18 4. Options for Irish Exporters to Japan 19 Singapore Market 74 Regulatory Environment 21 Glossary of Terms - Singapore chapter 76 1. Import Procedures 22 Market Overview 77 2. Alcohol Taxes 23 1. Alcohol Consumption 79 3. Sales and Marketing 24 2. Alcohol Policy 80 4. Product Regulation and Standards 26 3. Trade Overview 81 5. Packaging Rules 30 4. Doing Business in Singapore – Important to Know 82 Useful Contacts 32 5. Options for Irish Exporters to Singapore 83 1. Government and Regulatory Bodies (SUBJECT Regulatory Environment 85 TO CHANGE) 32 1. Import Procedures 83 2. Local Irish Contacts 34 2. Distribution, Sales and Marketing 88 3. Industry and Stakeholder Bodies 34 3. Product Regulation and Standards 90 4. Trade Promotion Boards 35 4. Packaging Rules 93 5. Local Spirits and Alcohol Associations 35 Useful Contacts 94 6. List of Exhibitions and Trade Fairs for Alcohol 1. Government and Regulatory Bodies 94 Beverages 36 2. Local Irish Contacts 95 References and Useful Information Sources 40 3. Industry and Stakeholder Bodies 95 4. Trade Promotion Boards 96 South Korea Market 42 5. Local Spirits and Alcohol Associations 96 Glossary of Terms - South Korea chapter 44 6. List of Exhibitions and Trade Fairs for Alcohol Market Overview 45 Beverages 96 1. Alcohol Consumption 47 References and Useful Information Sources 98 2. Alcohol Policy 48 3. Trade Overview 49 Glossary of Terms - Master 100 4. Doing Business in South Korea – Important Acknowledgements and Disclaimer 102 to Know 49 5. Options for Irish Exporters to South Korea 50 Regulatory Environment 54 1. Import Procedures 54 2. Alcohol Tax 57 3. Distribution, Sales and Marketing 58 4. Product Regulation and Standards 59 5. Packaging Rules 64 EXPORTING BEVERAGES TO ASIA INTRODUCTION This Guide has been produced by Bord Bia (Irish Food Bord Bia’s Asia Regional Office is based in Singapore. Board) to help Irish manufacturers of whiskey, white spirits The opening in 2016 of this office represents an important and craft beers gain increased awareness, insight and strengthening of Ireland’s presence in Asia, in recognition understanding of the respective regulatory environments of the growing demand and opportunities for Irish food to facilitate the importation, distribution and selling of their and drinks exports in the region and, in particular, the products in Japan, South Korea and Singapore. industry’s ambition for South East Asia. Bord Bia is the Irish government agency whose mission is to drive, through market insight and in partnership with industry, the commercial success of a world class Irish food, drink and horticulture industry. 4 EXPORTING BEVERAGES TO ASIA HOW TO USE THIS GUIDE This Guide provides an overview of the regulatory and For each of the three markets covered, the key laws and market-entry environment in Japan, South Korea and regulations are identified, and references are provided to Singapore for Irish manufacturers of alcohol beverages enable detailed follow-up by individual companies and (whiskey, white spirits and craft beer) who are considering their advisers on their specific legal and administrative exporting to these markets. requirements, as appropriate. Through this Guide, users will have a greater awareness Where these are available, hyperlinks to relevant and understanding of: government websites, legislation and guidance documents have been included in the text as an additional – the overall regulatory and policy environment for tool for users of this Guide. However, please note alcohol beverages in these three markets; that while these links were active at the time of writing – the key relevant local regulations and procedures (October 2018), such links and the material to which they that impact the importation, distribution and sale of link may be updated from time to time or even deleted by whiskey, white spirits and craft beers; and the body concerned. – major potential regulatory, procedural and cultural As with all laws and legislation, the requirements and barriers and constraints. regulations covered in this Guide are liable to regular change and updating, sometimes with limited or no prior It is necessarily broad in scope and presents the warning or grace period. Therefore, all those wishing to overarching regulatory requirements and import export to these markets should ensure that they check for procedures that apply to the alcohol beverages categories updates regularly, verify import requirements and obtain concerned, recommendations for meeting these relevant up-to-date advice from their trusted advisers and requirements and general advice for those considering local in-market business partners before commencing exporting to these markets. Individual company exports. circumstances and export ambitions will vary and by its very nature, this Guide cannot and does not seek to This Guide includes a list of useful contacts, including address individual circumstances or company-specific government regulatory agencies, Irish Embassy, trade issues. promotion and industry bodies in the three markets. 5 EXPORTING BEVERAGES TO ASIA KEY CONSIDERATIONS AND TIPS Irish exports in the beverage category overall increased by This opportunity will be further enhanced following 7% in 2017 to EUR1.5 billion. There was growth in export the signing of the European Union’s new Free Trade values to all three of the priority Asian markets identified Agreements (FTAs) with Singapore and most recently by Bord Bia, largely driven by the demand for Irish beer Japan. These agreements, once entered into force, will and whiskey. The export values of Irish beverages to the eliminate existing import tariffs on alcohol beverages three priority markets in Asia continued growing at 10% (notably, beer imported into Singapore). Further regulatory equating to absolute values of EUR24 million in 2016 to cooperation between the EU and its partners will also EUR27 million in 2017. likely reduce the emergence of non-tariff barriers to trade. Moreover, Irish Geographical Indications (GIs) such as With an expanding economy and a steadily-increasing ‘Irish whiskey’ and ‘Irish cream’, will be protected from population (that stands at over 650 million in South East imitations in these markets. For comparison, it is worth Asia alone, with a further 126 million and 50 million in highlighting that following the entry into force of the EU’s Japan and South Korea respectively), Asia offers huge FTA with South Korea, trade between the two surged, growth potential at a time when Ireland’s food and drink particularly because of the reduction of trade barriers and industry drives forward to realise its ambition of increasing tariffs as well as the protection of GIs. As a result from a exports by 85%. substantial trade deficit with South Korea in 2010, the EU was running a surplus of EUR3.1 billion by 20161. Innovation and emerging global trends are delivering new opportunities in the alcohol beverage category overall. Some of main options available for Irish alcohol beverage The rapidly expanding and innovative markets in Asia producers who do decide they want to export and in particular present an excellent opportunity for Irish sell their products into Asian markets are provided drinks manufacturers to replicate their success elsewhere below. However, whichever of the options is eventually with growing demand for craft beers and gin, as well chosen it is essential that, before a decision is taken as whiskey. Asian consumers are also discerning with to go ahead and a contract signed, adequate time is a strong interest in the quality and heritage of products, invested in understanding the market, the consumer, the particularly of foreign brands. opportunities for alcohol beverages, your brands, and the specific product(s) in particular, as well ensuring that you are aware of the potential challenges and pitfalls ASIA OFFERS HUGE GROWTH POTENTIAL AT A TIME WHEN IRELAND’S FOOD AND DRINK INDUSTRY DRIVES FORWARD TO REALISE ITS AMBITION OF INCREASING EXPORTS BY 85%. 1 European Commission (https://ec.europa.eu/agriculture/sites/agriculture/files/trade- analysis/statistics/outside-eu/countries/agrifood-south-korea_en.pdf) 6 EXPORTING BEVERAGES TO ASIA Before taking any major business decisions to start exporting to a new market, exporters should always; Engage with Bord Bia’s Plan to Grow Tap into Your (and others’) Networks service Spend time meeting and talking to others who have first- Plan to Grow is a new service from Bord Bia focused on hand experience of doing what you plan to do. As well as Commercial Marketing Strategy development, planning helping you to avoid the potential pitfalls it will enable you and implementation. Plan to Grow will enable and to decide if importing into the market you have identified support companies on their route to market journeys really is the right decision for your company at this point and will include online, workshop and bespoke strategic in time, and the potential negative and positive impacts it marketing assistance. The steps outlined below are could have on your core business. addressed within Plan to Grow and manufacturers are Understand the challenges and barriers to entry they encouraged to contact their Sector Managers to avail of faced and if, and how, they managed (or mitigated) them; this end to end service.