Markets for Tropical Fruit Wine Products

RIRDC Publication No. 09/033

RIRDC

Innovation for rural Australia

Markets for Tropical

Fruit Wine Products

By Judy Noller and Brian Wilson

November 2009

RIRDC Publication No 09/033

RIRDC Project No. PRJ-000608 (DAQ-331A)

 2009 Rural Industries Research and Development Corporation

All rights reserved.
ISBN 1 74151 837 7
ISSN 1440-6845
Markets for Tropical Fruit Wine Products
Publication No.09/033
Project No. PRJ-000608 (DAQ-331A)
The information contained in this publication is intended for general use to assist public knowledge and discussion
and to help improve the development of sustainable regions. You must not rely on any information contained in
this publication without taking specialist advice relevant to your particular circumstances.
While reasonable care has been taken in preparing this publication to ensure that information is true and correct,
the Commonwealth of Australia gives no assurance as to the accuracy of any information in this publication.
The Commonwealth of Australia, the Rural Industries Research and Development Corporation (RIRDC), the
authors or contributors expressly disclaim, to the maximum extent permitted by law, all responsibility and liability
to any person, arising directly or indirectly from any act or omission, or for any consequences of any such act or
omission, made in reliance on the contents of this publication, whether or not caused by any negligence on the
part of the Commonwealth of Australia, RIRDC, the authors or contributors.
The Commonwealth of Australia does not necessarily endorse the views in this publication.
This publication is copyright. Apart from any use as permitted under the Copyright Act 1968, all other rights are
reserved. However, wide dissemination is encouraged. Requests and inquiries concerning reproduction and rights
should be addressed to the RIRDC Publications Manager on phone 02 6271 4165.
Researcher Contact Details
Ms Judy Noller
Trade and Business Officer
Department of Primary Industries and Fisheries
21 Redden Street
PORTSMITH QLD 4870

Mr Brian Wilson
Wine Solutions Consultancy Pty Ltd
60 Greenvale Drive
GISBORNE VIC 3437

Phone:
03 5428 8808
Phone:
07 4044 1617
Fax: 03 5428 8426
Fax: 07 4035 5474
Email: brian@winesolutions.com.au
Email: judy.noller@dpi.qld.gov.au
In submitting this report, the researchers have agreed to RIRDC publishing this material in its edited form.
RIRDC Contact Details
Rural Industries Research and Development Corporation
Level 2, 15 National Circuit
BARTON ACT 2600
PO Box 4776
KINGSTON ACT 2604
Phone:
Fax:
Email:
Web:

02 6271 4100
02 6271 4199
rirdc@rirdc.gov.au.
http://www.rirdc.gov.au

Electronically published by RIRDC in November 2009

Print-on-demand by Union Offset Printing, Canberra at www.rirdc.gov.au
or phone 1300 634 313

ii

Foreword
A small fruit wine industry is emerging in major tropical fruit-growing regions of northern Australia,
using a wide range of tropical, exotic and Australian native fruits. The industry has potential to
emulate Australias very large and successful grape wine industry in tropical regions. This report seeks
to identify and describe potential markets and marketing strategies to guide producers on market
development.
As fruit wine is consumed widely in many countries, popular with international visitors to Australia,
and readily exportable, the research has focussed on both domestic and international markets.
This report finds that that there are small, under-developed Australian markets of domestic and
international tourists visiting tropical fruit wine-producing regions and people buying from local
wineries, favourable demand trends and identifiable potential segments in the Australian mass market,
potential segments in the Japanese market, and minor opportunities in a number of other countries.
These markets are highly competitive and increasingly quality and price-conscious, so the tropical
fruit wine industry will need strategies to develop and maintain quality standards and to position its
products as quality and value for money.
RIRDC urges anyone looking to make use of the information within this report to encourage a
responsible approach to the marketing and consumption of alcohol.
This project was funded from RIRDC Core Funds which are provided by the Australian Government
through the New Plant Products R&D Program, and by the Queensland Government and members of
the Association of Tropical North Queensland Wineries.
This report, an addition to RIRDCs diverse range of over 1900 research publications, forms part of
our New Plant Products R&D program, which aims to facilitate the development of new industries
based on plants or plant products that have commercial potential for Australia.
Most of RIRDCs publications are available for viewing, free downloading or purchasing online at
www.rirdc.gov.au. Purchases can also be made by phoning 1300 634 313.

Peter OBrien
Managing Director
Rural Industries Research and Development Corporation

iii

Acknowledgments
Ms Yumi Ozaki, Queensland Government Trade and Investment Office, Japan.
Ms Alexandra Rochetau-Hasan, Queensland Government Trade and Investment Office, United
Kingdom.

Abbreviations
FOB:

Free on board the value of the wine when it placed on the international carrier at the port of
departure. It includes production and other costs, but not insurance or freight

CIF:

Cost, insurance and freight

VAT:

Valued added tax on the value contributed at each stage of the production of a product.

EU:

European Union

WTO:

World Trade Organisation an agreement where countries seek to trade with each other on a
most-favoured nation basis

Measurements and terms commonly used for wine (these are not necessarily used in this report, but
often used in tariff databases and elsewhere)
Centilitre 100th of a litre, or 10ml

Cl:

Hectolitre 100 litres

Hl:
v

Percentage alcohol by volume, also expressed as per cent vol

Alc % /w:

Percentage alcohol by weight

Vpl:

Value per litre

LPA:

Litre of pure alcohol

Case:

Nine litres of wine, equating to a carton of one dozen 750 ml bottles of wine, weight
approximately 15 kg

Alc % /v:

1 tonne of packaged wine: 66.6 cases or 600 litres.

Bottle size:

Assume to be 750 ml unless otherwise states

Assumptions
It was not possible to measure the size of most national fruit wine markets due to the lack of specific
and consistent statistics for fruit wine. To enable comparison, the country profiles provide a rough
estimate of market size, assuming up to 10 million litres a year for a small market, 10 to 50 million
litres for a medium market and 50 million litres and over for a large market.
International research relies on international harmonised tariff codes to identify imports and exports
(see Appendix D for list). Unfortunately, the relevant Harmonised System (HS) Code HS 2206, groups
fruit wine with all other fermented drinks other than wine from grapes only. Some countries have their
own domestic code extension for major drinks categories, such as cider, perry, mead and sake but
rarely for fruit wine or wine from specific fruits. However, these extended codes vary between
countries, and between imports and exports. Therefore, HS 2206 data is likely to include substantial
quantities of products other than fruit wine, such as rice wine and flavoured grape wine and, at best,
provides an indication of the whole category of fermented drinks from bases other than grapes.

iv

A few media and industry reports provide estimates of fruit wine consumption and/or production but
statistical databases combine fruit wine and drinks such as grape wine, sake or flavoured spirits.

Currency conversion
The exchange rates for Japanese wine prices obtained during the market visit to Japan in July 2007
were converted at the average daily rate for the week of the visit (A$0.00953 to 1). Elsewhere prices
have been converted to Australian dollars at the average exchange rate for the relevant year.

Guide to references
Most references are compiled at the end of the country profile, but references that are common to a
number of countries are provided in the general References section at the end of the report.

Contents
Foreword ............................................................................................................................................... iii
Acknowledgments................................................................................................................................. iv
Abbreviations ..................................................................................................................................... iv
Assumptions ....................................................................................................................................... iv
Currency conversion............................................................................................................................ v
Guide to references.............................................................................................................................. v
Contents................................................................................................................................................. vi
Tables................................................................................................................................................... viii
Figures ................................................................................................................................................... ix
Executive summary ............................................................................................................................... x
1.

Introduction .................................................................................................................................. 1
1.1

2.

Description of fruit wine........................................................................................................ 1

Evaluation of the Australian domestic market .......................................................................... 2

2.1

Methodology .......................................................................................................................... 2

2.2.

Key findings........................................................................................................................... 3

3. Profiles of overseas fruit wine markets and selection of an overseas market for further
research ................................................................................................................................................ 28

4.

3.1

Methods ............................................................................................................................... 28

3.2

Country profile summaries Asia ....................................................................................... 28

3.3

Country profile summaries North America ...................................................................... 33

3.4

Country profile summaries Europe ................................................................................... 34

3.5

Regional profile summary - Pacific region .......................................................................... 42

3.5

Regional profile summary Central and South America .................................................... 42

3.6

Regional profile summary Africa ..................................................................................... 42

3.7

Regional profile summaries Middle East.......................................................................... 43

Selection of international market for detailed research.......................................................... 44

4.1

Method of selection.............................................................................................................. 44

4.2

Assessment factors for market attractiveness and competitive strength .............................. 44

5.

Market profile Japan............................................................................................................... 47

6.

Strengths, weaknesses, opportunities and threats analysis (SWOT) ..................................... 65

7.

Discussion of Results .................................................................................................................. 67

7.1

Australian market................................................................................................................. 67

7.2

International markets ........................................................................................................... 68

References ............................................................................................................................................ 70

vi

Appendices ........................................................................................................................................... 87
Appendix A: Global trends in wine and related drinks ..................................................................... 87
Appendix B: Wine quality................................................................................................................. 91
Appendix C: Case studies.................................................................................................................. 92
Appendix D: Harmonised system (HS) codes for wine .................................................................... 98
Appendix E:

Country profiles ................................................................................................... 100

E.1

Country profiles Asia ...................................................................................................... 100

E.2

Country profiles North America ..................................................................................... 133

E.3

Country profiles Europe.................................................................................................. 143

E.4.

Pacific region ..................................................................................................................... 184

E.5

Regional profile Central and South America .................................................................. 188

E.6

Regional profiles Africa.................................................................................................. 193

E.7

Regional profile Middle East .......................................................................................... 195

Appendix F: Questionnaire for distributor survey........................................................................... 197

Appendix G: Questionnaire for consumer survey ........................................................................... 199
Glossary........................................................................................................................................... 201

vii

Tables
Table 2.2.1:
Table 2.2.2:
Table 2.2.3:
Table 2.2.4:
Table 2.2.5:
Table 2.2.6:
Table 2.2.7:
Table 2.2.8:
Table 2.2.9:
Table 2.2.10:
Table 2.2.11:
Table 2.2.12:
Table 2.2.13:
Table 2.2.14:
Table 2.2.15:
Table 4.1:
Table 4.2:
Table 5.1:
Table 5.2:
Table 5.3:
Table 5.4:
Table 5.5:
Table 5.6:
Table 6.1:
Table D.1:
Table E.1:
Table E.2:
Table E.3:
Table E.4:
Table E.5:
Table E.6:
Table E.7:
Table E.8:
Table E.9:
Table E.10:
Table E.11:
Table E.12:
Table E.13:
Table E.14:
Table E.15:
Table E.16:
Table E.17:
Table E.18:
Table E.19:
Table E.20:
Table E.21:
Table E.22:
Table E.23:
Table E.24:
Table E.25:
Table E.26:
Table E.27:
Table E.28:
Table E.29:
Table E.30:

Australian producer and trade interviews....................................................................................... 2

Consumer survey age, gender and place of residence of respondents......................................... 3
Consumer survey likelihood of future purchase of fruit wines ................................................... 6
Consumer survey - usual drink by occasion................................................................................... 6
Australias exports of fruit wine products, by leading markets, 200206...................................... 8
Examples of Australian fruit wine producers and their products, 2007 ......................................... 9
Australias imports of fruit wine drinks by leading countries of supply, 200206 ...................... 10
Australian retail audit examples of fruit wines and flavoured wines ........................................ 12
Consumer survey unprompted selection of wines for tasting.................................................... 13
Consumer survey - importance of the type of fruit used .............................................................. 13
Consumer survey preferred degree of sweetness in alcoholic drinks........................................ 14
Consumer survey information needs regarding tropical fruit wines ......................................... 14
Distributor survey quality rating for alcoholic fruit drinks ....................................................... 14
Consumer survey price expectation for tropical fruit wine products ........................................ 18
Consumer survey experience of tropical fruit wines................................................................. 22
Market attractiveness and competitive strength factors ............................................................... 44
Weighted scores by country ......................................................................................................... 45
Interviews with Japanese distributors, 2007 ................................................................................ 47
Japan: fruit wine supply August 2007, and annualised (000 litres) ......................................... 50
Japan: imports of fruit wine products from selected countries, 200206..................................... 50
Japan - product audit for domestic fruit wines ............................................................................. 51
Japan - product audit for imported fruit wines ............................................................................. 52
Japan - import duties and taxes for wine...................................................................................... 63
Strengths, weaknesses, opportunities and threats for the tropical fruit wine industry.................. 65
Harmonised system codes for fruit wine products, grape wine and related products .................. 98
China: trade in fermented drinks HS2206, # 20026................................................................. 102
China - import regulations and requirements ............................................................................. 109
Hong Kong: trade in fermented drinks HS2206#, 200206....................................................... 110
India: trade in fermented drinks HS2206#, 200206 ................................................................. 113
India: examples of fruit wines.................................................................................................... 113
Indonesia: trade in fermented drinks HS2206, # 200206......................................................... 115
Republic of Korea: trade in fermented drinks HS2206, # 200206 ........................................... 117
Republic of Korea: import duties and taxes on fruit wine products........................................... 119
Malaysia: trade in fermented drinks HS2206, # 200206.......................................................... 120
Malaysia: import tariffs and taxes on fruit and grape wine........................................................ 122
Singapore: trade in fermented drinks HS2206, # 200206 ........................................................ 123
Singapore: wine taxes ................................................................................................................ 125
Taiwan: trade in fermented drinks HS2206, # 200206 ............................................................ 126
Taiwan: import taxes and tariffs on wine................................................................................... 128
Thailand: trade in fermented drinks HS2206, # 200206 .......................................................... 129
Vietnam: trade in fermented drinks HS2206, # 200206........................................................... 132
Canada: trade in fermented drinks HS2206, # 200206............................................................. 134
Canada: product audit for fruit wines......................................................................................... 135
Canada: import taxes and tariffs on wine................................................................................... 136
Mexico: trade in fermented drinks HS2206, # 2002-6............................................................. 137
United States: trade in fermented drinks HS2206, # 200206 ................................................... 139
United States: examples of fruit wines....................................................................................... 140
United States: import duties and taxes on wine ......................................................................... 142
Import tariffs on bottled wine European Union ...................................................................... 145
European Union: Excise and VAT on imported fruit and grape wine, 2007 ............................. 145
Belgium - trade in fermented drinks, 200206 .......................................................................... 148
Denmark - trade in fermented drinks HS2206, # 200206 ........................................................ 150
Estonia - trade in fermented drinks HS2206, # 200205 ........................................................... 152
Finland - trade in fermented drinks, 200206............................................................................ 153
France - trade in fermented drinks HS2206, # 200206 ............................................................ 155

viii

Table E.31:
Table E.32:
Table E.33:
Table E.34:
Table E.35:
Table E.36:
Table E.37:
Table E.38:
Table E.39:
Table E.40:
Table E.41:
Table E.42:
Table E.43:
Table E.44:
Table E.45:
Table E.46:
Table E.47:
Table E.48:
Table E.49:
Table E.50:
Table E.51:
Table E.52:

Germany - trade in fermented drinks HS2206, # 200206 ........................................................ 158

Ireland trade in fermented drinks HS2206, # 200206 ........................................................... 161
Italy - trade in fermented drinks HS2206, # 200206................................................................ 162
Netherlands - trade in fermented drinks HS2206, # 200206.................................................... 165
Norway - trade in fermented drinks HS2206, # 200205 .......................................................... 167
Poland - trade in fermented drinks HS2206, # 200206 ............................................................ 169
Russia - trade in fermented drinks HS2206, # 200206 ............................................................ 171
Spain - trade in fermented drinks HS2206, # 2002-6............................................................... 173
Sweden - trade in fermented drinks HS2206, # 200206 .......................................................... 174
Switzerland - trade in fermented drinks HS2206, # 200205 .................................................... 176
United Kingdom - production, imports and exports of fruit wines, cider, mead, fortified
wines, vermouth and herbal grape wine *.................................................................................. 180
United Kingdom - trade in fermented drinks HS2206, # 2001-05 ............................................. 180
United Kingdom - examples of fruit wine producers and products ........................................... 181
United Kingdom - duties and taxes on fruit wine products........................................................ 183
New Zealand - production of non-grape wine, 200206 ........................................................... 184
New Zealand - trade in fermented drinks HS2206, # 200206................................................. 185
New Zealand - examples of fruit wine producers and products ................................................. 185
Pacific countries - leading imports of fermented drinks HS2206, # 200206 ........................... 187
South America - leading imports of fermented drinks HS2206, # 200206 .............................. 189
Central America - leading imports of fermented drinks HS2206, # 200206............................ 192
Africa - leading imports of fermented drinks HS2206, # 200206............................................ 194
Middle East - leading imports of fermented drinks HS2206, # 200206................................... 196

Figures
Fig. 2.2.1:
Fig. 2.2.2:
Fig. 2.2.3:
Fig. 2.2.4:
Fig. 2.2.5:
Fig. 2.2.6:
Fig. 2.2.7:
Fig. 4.1:
Fig. 5.1:
Fig. 5.2:
Fig. 5.3:
Fig. 5.4:
Fig. 5.5:
Fig. 5.6:
Fig. 5.7:
Fig. 5.8:
Fig. 5.9.

Australias exports of fruit wine products and annual average price per litre, 200206................ 8
Australian distribution channels for wine .................................................................................... 19
Australian tropical fruit wines...................................................................................................... 27
Fresita fruit flavoured wine and Dr Demuth strawberry wine...................................................... 27
Grape wine labels......................................................................................................................... 27
Sparkling fruit flavoured grape wines.......................................................................................... 27
Promotion of grape wine.............................................................................................................. 27
Market attractiveness: competitive strength grid ......................................................................... 46
Japan: total wine consumption and expenditure, 19942003....................................................... 48
Japan: typical distribution channels for fruit and grape wine....................................................... 58
Japanese fruit wines ..................................................................................................................... 64
Display of Japanese fruit wine ..................................................................................................... 64
Dr Demuth sparkling fruit wines.................................................................................................. 64
Chu-hi canned cocktails ............................................................................................................ 64
Japanese health fruit wines........................................................................................................... 64
Fruit wine tasting, Fujikyu Highland Tourism centre and Theme park ....................................... 64
Restaurant wine-tasting................................................................................................................ 64

ix

Executive summary
What the report is about
This report describes the current and potential markets for fruit wines in Australia and Japan, and
provides information on fruit wine markets in 37 other countries and several regions. It discusses the
competitive situation for Australian wines produced from tropical, exotic and Australian native fruits
and the strategies needed to develop existing and new markets.

Who the report is targeted at

The report is primarily for Australian tropical fruit wine producers seeking to expand their existing
markets and develop new markets. It is also for distributors, retailers and food service operators
seeking to handle tropical fruit wine. It will be useful for potential new producers of tropical fruit
wine, other Australian fruit wine producers, and government and other agencies that assist producers
with market development.

Background
A small emerging industry exists in northern Australia producing wine from various fruits. This
industry seeks to expand sales as production volumes increase and more producers enter the industry.
The Australian fruit wine market has remained small and under-developed compared with the grape
wine market. In contrast, many overseas countries have large fruit wine markets and strong traditions
of wines produced from fruit other than grapes.

Aims and objectives

The principal aim of this report is to assist producers of tropical fruit wines to develop their businesses
through identifying those markets with strongest demand and prospects for growth on which to
concentrate their marketing resources, potential distribution channels and trading partners.
Additionally, the report identifies opportunities for alliances with the wine industry and other
organisations to aid industry development.
The report will support the introduction of these wines to retail outlets, restaurants and other relevant
enterprises.

Methods used
The domestic market evaluation was informed by: producer interviews; a literature review; distributor
and consumer surveys; and interviews with retailers, restaurants, clubs, and tourist agencies. The
international evaluation was based on: a literature review, to identify and profile significant fruit wine
markets from around the world; the development of selection criteria to choose the most attractive
market where Australian tropical fruit wines could compete; selection of the overseas market with
most potential, Japan; and a market visit to Japan to interview potential distributors.

Results/Key findings

Residents of the tropical fruit wine producing regions and visitors to these regions from
elsewhere in Australia and Japan, North America, the United Kingdom and Germany are major
domestic markets and offer the best prospects for further development in the short to medium
term.

Development of the national market should begin with niches of sweet wine and cocktail
drinkers who prefer fruitier drinks and seek variety. Significant impediments to market
development will be: a negative market image of fruit wines as being of low quality and overly
sweet; and lack of an appropriate retail category. 1

Japan has small growing markets of novice wine drinkers and health conscious people buying
tropical and other fruit wines. These markets offer a strong potential for Australian tropical fruit
wines, promoted as premium fruit wines through specialist distributors. Marketing strategies
should be developed to suit the Japanese culture and marketplace.

There are potential markets in several other countries, such as the United States, Canada and
Singapore, warranting in-market research in these countries.

Fruit wine is popular worldwide, with some very large markets, particularly in Europe.

Emerging tropical fruit wine industries in many tropical countries, usually developing
economies, indicate a growing category for wines from tropical, exotic and indigenous fruits of
variable quality.

Implications for relevant stakeholders

The findings of this report have implications for industry members, communities, policy makers
and other interested individuals and agencies.

As there are no large producers, development of the domestic market will have to gradually
expand from regional niches.

Market development should focus on local residents and visitors to the wine-producing regions
in the short term as a platform for expansion into the national market.

Communities can support their local fruit wine industries by developing interest in the various
wines, trying them, and promoting them to visitors.

Development of the international visitor market should focus on visitors from countries that
offer potential export markets, with both Australian and the visitors markets developed
together. This should begin with the Japanese market.

Development of the Australian wine market will require high and consistent product quality to
compete with alternative drinks. The confidence of distributors and consumers needs to be
fostered.

Research and development facilities and wine-making education will be needed to support new
product development and product quality.

As other countries develop tropical fruit wine industries, markets and retail categories,
opportunities will be created for Australian produced products. At the same time competition
will develop in overseas and domestic markets.

Recommendations
In terms of the Australian market, the following recommendations are promoted for producers:

Develop key market segments through promotion of product quality and value for money
including promotion of individual and regional brands.

The authors advocate that for all sectors of the community it is expected that, when drinking alcohol,
consumers are of an appropriate (legal) age and they drink responsibly and in moderation.

xi

Develop pro-active supply chains to appropriate sales outlets, with pricing strategies to expand
usage beyond special occasions and gifts.

Promote tropical fruit wines in key markets as products with high and consistent quality,
supported by industry-wide quality standards.

Develop an appropriate retail category in collaboration with retailers and possibly temperate
fruit wine producers.

Stage development of the national market, focusing initially on the most promising market
segments starting locally and expanding region by region and niche by niche.

Build awareness and interest for tropical fruit wine in new markets through generic industry
activities, including food and wine events with tastings, wine trails, wine maps and brochures,
and media publicity, as well as individual winery promotions.

Position the wines through usage occasions to introduce them to new markets while avoiding
competing directly with major grape wine brands.

Jointly promote the category of tropical fruit wine in new markets to build demand through
activities such as tastings, wine education and media publicity.

Establish an industry-wide financial base for activities of mutual benefit, such as joint
marketing and product research and development.

In international markets, producers are advised to:

Develop identified niches in the Japanese market in the short to medium term through specialist
distributors to key fruit wine markets, using marketing strategies focused on the specific
requirements of the market.

Further investigate other promising markets, starting with the United States, Canada and
Singapore, for potential niche segments to develop.

Recommendations for government are to:

Assist the industry, through tourism development organisations and agencies, to develop
regional branding in order to raise awareness in domestic and international visitors to wine
producing regions.

Assist the industry to develop a wider Australian market through activities such as wine maps
and trails, industry brochures and food and wine events.

Assist producers to develop export markets by identifying, qualifying and developing market
opportunities and including the industry in government-assisted wine promotions in these
markets.

Assist the industry to develop common product standards that comply with Australian food and
wine standards and develop a process to regulate these standards.

Support the provision of education and training in fruit wine making.

Assist producers to access product research and development facilities and services to maximise
product quality and innovation.

xii

1. Introduction
There is an emerging tropical fruit wine industry in northern Queensland, the Northern Territory and
Western Australia, consisting of small wineries using locally grown tropical, exotic and Australian
native fruits. As production grows, producers are seeking new markets to develop. Strategies are also
required to expand existing markets.

1.1

Description of fruit wine

Around the world the making of country wine from fruit, flowers and sometimes vegetables in the
home is a popular hobby with a long tradition.
Some cooler climate countries have large commercial fruit wine industries using mainly apples, pears,
stone fruit and berries and applying similar fermentation techniques to grape wine production.
Tropical fruit wines are now being produced in tropical regions globally, and also by some temperate
climate manufacturers, using a wide range of tropical fruits and the same wine-making processes.
Despite the similarity to grape wine production, most tropical fruits have a more intense flavour, lower
sugar content and usually more pulp than grapes. Sugar and water are added to obtain similar alcohol
content and drinking quality to grape wine.
Fruit wines are produced as single fruit wines and blends with up to 12 per cent alcohol; and distilled
spirit is added to produce fortified wines with 15-20 per cent alcohol. Some fruit wines are distilled
into spirits such as fruit brandy. Cider and perry are fermented from apples and pears respectively, but
less sugar is added so that final alcohol content is only around five to seven per cent. (Cider and perry
are also brewed using similar processes to beer).
Wine is also fermented from sources such as sugarcane, various tree saps such as sugar palm and
coconut, cacti, ginger, honey (mead) and milk (see Appendix A; The Gale Groupe 2003).
Problems with fruit wine quality are usually due to inadequate hygiene and clarification (FAO
Corporate Document Repository 2007).

2. Evaluation of the Australian domestic

market
2.1

Methodology

The domestic market research began with a literature search including, predominantly, producer
websites and articles about fruit wine producers. No reports were identified describing the market
situation for fruit wine.
Producers of tropical and other fruit wines from around Australia were interviewed by telephone and
face-to-face. Information was provided about current markets, market development activities and
problems experienced.
A questionnaire was mailed to Australian wine wholesalers and distributors listed in the Australian
and New Zealand Wine Directory. Wholesalers and distributors were also telephoned to increase the
response rate from this sector. Fifteen responses were received. These distributors predominantly
handle grape wines; one distributes fruit wine, four distribute cider, and two distribute fruit liqueurs
and some ready to drink beverages (RTDs), beer and spirits.
Personal interviews were carried out with representatives of liquor retail chains, hotels, resorts,
restaurants, clubs and nightclubs, including a sommelier, a cocktail consultant, and representatives of
the Queensland Department of Tourism, Fair Trading and Wine Industry Development and Tourism
Tropical North Queensland (Table 2.2.1).
Table 2.2.1: Australian producer and trade interviews
Company
Producers
Bob Hardy, Thornlea Wines and Liqueurs, Sorell, Tasmania, and President, Fruit Winemakers (Tas.) Inc.
Cheryl Parry, Parwill Swill, Bendigo, Victoria
Joanne Petrillo, Sunny Ridge Winery, Mornington Peninsula, Victoria
Kakadu Winery, Kakadu, Northern Territory
Lorraine Hunter and Fred Swainston, Giverny Kiwi Fruit Winery, Yarra Valley, Victoria
Michael Skivinis, The Berry Farm, Margaret River, Western Australia
Geoff Weguelin, Kanagae Estate, Broome, Western Australia
Retailers
Ben Preston, Fine Wines Manager, Dan Murphy, Queen Vic Building, Melbourne
Chris Brittain, Proprietor, Crown Hotel and Shields Street Cellars, Cairns
Jeremy Stockman, Senior Business Manager, Fine Wines & Imports, Coles, Melbourne
Nick Kinsman, Manager, 1st Choice, Toowong, Brisbane
Rick Lovett, Business Manager, and Michael Bynan, Assistant Business Manager, Supermarket Liquor,
Woolworths, Sydney
Hotels, restaurants, bars and clubs
Brett Daniells, Manager, Cairns Cruising Yacht Squadron, Cairns
Chris Crawford, Wine Manager and Sommelier, Prince of Wales and Stoke Group, St Kilda, Melbourne
Damian Lyth, Food and Beverage Manager, Cairns Colonial Club, Cairns
Daniel Zeuelden, Manager, Zenith Caf Bar, St Kilda, Melbourne
Duty Manager, Onyx Restaurant, Milton, Brisbane
Ingram Yung, Cocktail Consultant, Cairns
Jarred Roberts, Store Manager, Gilligans Backpackers, Hotel & Resort, Cairns
Renee Reddrop, Food and Beverage Manager, Salsa Bar and Grill, Port Douglas
Shaun Turnbull, Proprietor, Mad Cow Nightclub, Cairns
Stewart Kentish, General Manager, Silky Oaks Resort
Tina Wort, Director, Dundees Restaurant, Cairns
Wendy Baker, Gaming Administrator, Cazalys Social Club, Cairns
Ross Bearkley, Principal Business Development Officer Tourism and Wine Industry, Queensland Department of
Tourism, Fair Trading and Wine Industry Development, Brisbane
Rob Giason, Chief Executive Officer, Tourism Tropical North Queensland, Cairns

A consumer survey was conducted at a large Cairns shopping centre frequented by local people and
tourists. The survey was undertaken on consecutive Thursday, Friday and Saturday afternoons (these
being the most popular shopping days). A range of eighteen wines and fortified wines as well as two
liqueurs from mainstream and exotic tropical fruits and Australian native fruits were offered for
sampling. This was followed by a face-to-face questionnaire.
While effort was made to include all adult age groups as part of the sample, all young shoppers
approached to participate declined to do so. For this reason the survey was extended to a Cairns
workplace with a large number of young employees. This improved the proportion of participants
aged 35 year and under in the sample. The combined sample totalled 51.
Some respondents did not answer all questions. Of the respondents, 73 per cent classified themselves
as the main wine buyer for their household, 17 per cent usually bought wine with a partner, 68 per cent
usually decided individually which wine to buy while 12 per cent deciding with a partner. One quarter
of respondents visiting northern Queensland. The age group, gender and place of residence are shown
in Table 2.2.2.
Table 2.2.2: Consumer survey age, gender and place of residence of respondents
Number of
Percentage
Characteristic
respondents
of total
Sex
Female
34
68%
Male
17
32%
Age
Under 25
2
4%
2535
5
10%
3555
32
63%
55+
12
24%
Source: Consumer survey 51 respondents

Characteristic
Place of residence
Australian
British
European
New Zealand
American

Place of
residence

Percentage
of total

40
4
4
2
1

78%
8%
8%
4%
2%

2.2. Key findings

Market profile
Australias first popular wine was a strong pear cider. Grape wine did not develop at this time due to
problems establishing grape production in the early colony (Walsh 1979).
Fruit wine produced in the home continues to be somewhat popular. However, growth in consumption
of commercial fruit wine has failed to match that of grape wine. There are no production statistics for
production of fruit wine and, in the absence of these statistics, it is assumed to be less than two million
litres are produced in Australia a year.
Market segments
Interviews with producers identified these key market segments for tropical fruit wines:
People living near wineries - These people usually buy fruit wine when bringing visitors to the
wineries and typically drink it with meals and when socialising.
International visitors - These are mostly Japanese, German, British, American and Canadian tourists
who buy from wineries and their associated Internet and mail order services; airport, duty free and
tourist stores; and local liquor stores in the wine-producing regions. They buy the wines as souvenirs
and gifts and sometimes to drink with meals. Those who visit wineries are usually independent
travellers seeking local activities and are attracted by winery signage. Some have consumed fruit
wines previously, but rarely from tropical fruit. A Cairns independent liquor store located near several
restaurants reports that local mango wine is sold only to international and domestic tourists wanting
local wine as a souvenir, rather than to drink with dinner.
Domestic tourists - From across Australia, these tourists are either travelling independently, usually as
couples. They are buying from wineries and occasionally regional liquor stores for gifts, souvenirs and
3

to drink while travelling, often with meals. They seek local experiences, drink grape wine, are often
inexperienced in wine-tasting, and some have consumed fruit wine previously.
The markets are similar for temperate fruit wines around Australia.
Demand for tropical fruit is growing steadily, and Victorian wineries have noticed more visitors
seeking out fruit wines after experiencing it in northern Queensland. However, distributors have not
observed demand trends favouring fruit wine.
Barriers to demand for fruit wine
The fruit wine market is under-developed with low consumer and trade awareness and experience of
fruit wine products, lack of demand from consumers to retailers, restaurants and bars, and resistance
from grape wine devotees to non-grape wines.
Barriers to market development will be:

A market perception of sweet, poor quality wines

Strong potential competition from low-priced flavoured grape wines and other drinks

Resistance from grape wine producers afraid of losing market share.

Niche market segments

Trade interview respondents identified the following niche segments of the Australian market as
having strongest potential for development 2:
Young people - Trade interview respondents identified young people, mostly women aged 1826 years
of age, but also inclusive of men 1820 years, often with middle incomes, and often living outside
large cities. They currently drink: cask wine and sweet wine, usually by the glass; ready to drink
flavoured spirits (RTDs); premixes; various spirits; non-boutique cider; and premium and standard
beer. According to trade interview responses, young women in particular buy Sauvignon Blanc and
house wines, partly to avoid appearing lacking in wine knowledge to their peers. However, a
Melbourne bay side caf with a significant clientele of young women has had some requests for fruit
wines, such as sparkling wine with peach, and its manager would consider adding fruit wines to its
wine menu in response to these requests. Retailers regard fruit wines as a potential entry level to
grape wine for this market. However, as more quality tropical fruit wines enter the market, consumers
might move up to premium quality fruit wines rather than migrate to grape wines as their palates
mature.
While the under 25 years of age group is the most adventurous, this market sector is viewed as having
numerous alternative options, such as RTDs. They are also viewed as highly price sensitive. As
women are believed to be most likely to prefer sweeter drinks, manufacturers have been focussing on
young women and positioning RTDs as an introductory, easy to drink alcoholic beverage. The alcohol
content is similar to that of beer. Young women, according to trade responses, usually prefer light
fruity styles while young men drink more dark RTDs such as cokeflavoured rum.
Grape wine drinkers in Queensland - This growing market prefers white wines, mainly Sauvignon
Blanc, and is more likely to accept fruit wines than drinkers of other wines. It includes mainly women
and novice drinkers buying a growing range of domestic and imported fruit-flavoured wines in retail
chain bottle shops. Demand is influenced by Queenslands range of climates that suits a variety of
drinks. Coles are gradually introducing imported sparkling fruit wine to its 1st Choice outlets in
Queensland for this market.

Note that these findings are drawn from interview responses. The authors advocate that for all sectors of the
community it is expected that, when drinking alcohol, consumers are of an appropriate age and they drink
responsibly and in moderation.

Older people who have tried a lot of wines - Trade responses indicate that these people are often
viewed as open to new experiences.
Tourists -This sector is viewed by those in the wine trade as having potential for development within
the following contexts:

Grape wine drinkers, mainly from Australia and New Zealand, drinking boutique and standard
beer, upmarket spirits, liqueurs, and RTDs, in resort bars, duty free outlets and restaurants

Tourists buying Australian produce from airport shops as a regional or Australian souvenir

An emerging market of people who holiday at smaller coastal towns, seeking organic and
natural products. This sector perceives these wines as healthy and more natural than grape
wines

People on long trips, typically retired and aged 50 years of age and over, who have time to
relax, drink wine, develop an awareness of a regions wines by visiting wineries. These people
will promote wines through word of mouth to fellow grey nomads

Australia has a large wine tourism market of domestic and international visitors to wineries. In 2002,
around 126 000 domestic travellers visited a winery at least once during a trip. In 1999 about 425 000
international visitors, or 11 per cent, visited a winery at least once. Typical wine tourists are older
couples, often retired, tertiary educated, higher and income earners. They are concerned with quality,
they are knowledgeable about wine, and are seeking new experiences. These people drive themselves,
often stay in bed and breakfasts, seek information, and are heavy users of newspapers, magazines and
the Internet.
A survey found these travellers visit a winery mainly to experience the regions character, food,
lifestyle and cultural attractions; to visit friends and relatives; to unwind, relax, have fun, and build
relationships; and for a change of scene. They seek to learn about the wine, the winery and the region,
to taste and perhaps buy the wine, and to be entertained. However, hoteliers observed that visitors do
not expect to find wineries in northern Queensland, which is associated with tropical, sunshine and
seafood, not wine.
Cocktail drinkers - This growing market includes mixologists: those who drink and mix cocktails for
cocktail bars, competitions and for their own consumption. These people like to experiment; want to
utilise all flavour options; and will use Australian ingredients.
Within this sector, there is also demonstrated demand for tropical fruit liqueurs including mango and
lychee, and cream cocktails such as Baileys.
Other potential cocktail drinkers, according to trade respondents, are blue collar drinkers and
experimental drinkers who buy grape wine from independent bottle shops and restaurants.
For an emerging category such as these wines, retailers recommend producers start by developing one
potential market in their region and doing it well before marketing state-wide and expanding further
once that is achieved. This is viewed as an appropriate approach because there is an entry and exit cost
to market development. As market development for wine requires a large budget, retailers recommend
that producers market together.
Survey respondents also indicate that wholesalers, retail chain buyers and restaurant operators have
little, if any, awareness or experience of the northern Queensland fruit wine industry.
The consumer survey asked if respondents had bought, tried or even seen specific sample wines
previously. In response, 19 of the 41 local people stated that they had bought or tried local fruit wines,
seven had seen but not tasted them, eight had not seen any local products, and four had tasted local
fruit liqueurs but not fruit wines. Six people had bought or tried fruit wine in southern states or
overseas.
Survey respondents were then invited to select and taste three wines and asked to provide comment on
the taste. Two-thirds rated their samples as good to excellent overall. This suggests that grape wine
drinkers are likely to like tropical fruit wines if they experience them.

When subsequently asked if they would buy such wines, 80 per cent stated that they definitely or
probably would, including all but one male (Table 2.2.3). This and the previous response support the
trade view that tastings of these wines are likely to lead to sales.
Table 2.2.3: Consumer survey likelihood of future purchase of fruit wines
Characteristic Definitely Probably
Age
Under 25
2535
1
3555
8
6
55 plus
5
Sex
Female
9
3
Male
5
3
Where from
Local
12
5
Non-local
2
1
Total
respondents
14
6
Consumer survey (42 respondents)

Maybe

Undecided

1
8
4

Maybe
not

Definitely
not

Total
respondents

4
1

2
2
27
11

9
4

5
1

29
13

9
4

5
1

34
8

13

42

When asked to name their usual alcoholic drink, 75 per cent of these consumers said wine, 32 per cent
said beer, 24 per cent said spirits and 14 per cent said liqueurs. Few drank RTDs or cocktails regularly.
A few did not drink wine because they disliked it, found it too acidic or anticipated an allergic
reaction.
These respondents were further asked what they mostly drank at parties, restaurants and at home.
Wine was the preferred drink for each occasion, with beer and spirits also widely consumed at parties.
Beer, spirits and liqueurs were consumed at home. Respondents aged under 35 consumed mainly wine
and beer, and most spirit drinkers were aged over 35 years. Women mainly preferred wine at
restaurants, while most men preferred beer. This indicates that younger people are drinking lower
alcohol drinks, and wine is used as a versatile drink for all occasions (Table 2.2.4).
Table 2.2.4: Consumer survey - usual drink by occasion
Occasion

Main
Age
Sex
Total
drink
Under 25
25-35
35-55
55 plus
Female
Male
Responses
28
At restaurants
Wine
1
2
15
10
21
7
17
Beer
1
0
12
4
6
11
2
Spirits
0
0
1
1
2
0
1
Liqueurs
0
0
1
0
0
0
29
At home
Wine
1
2
18
8
21
8
15
Beer
1
1
12
1
7
8
11
Spirits
0
0
0
5
8
3
15
Liqueurs
0
0
3
5
11
4
28
At parties
Wine
1
2
15
10
21
7
17
Beer
1
0
12
4
11
6
12
Spirits
0
0
9
3
9
3
1
RTDs
0
0
1
0
1
0
1
Liqueurs
0
0
1
0
1
0
1
Cocktails
1
0
0
0
1
0
Total respondents
2
2
31
12
34
17
51
Source: Consumer survey 51 respondents. Notes: These respondents participated in the tasting survey
because they were already interested in wine. Restaurant and party drink choices would be influenced by drinkdriving laws.

The literature search and trade interviews indicate these demand trends for similar drinks:
Grape wine - Australians consumed 449 million litres of grape wine in 2006/07, and an average of
22.5 litres per person in 2005 (Winefacts 2007). The grape wine market is maturing, with numerous
domestic and international products and brands and strong price competition. There is slow growth in
consumption largely due to older consumers reducing their wine intake when reaching about the age

of 64 years. This is combined with poor uptake by young consumers who are faced with a wide choice
of drinks such as fruit-flavoured RTDs. This sector appears to not move to wine as a preferred alcohol
beverage (Levine 2004). To renew market growth, wine retailers are offering fruity wine-style drinks
to introduce younger people to grape wine (as indicated in responses from trade interviews).
Fruit-infused grape wines - Large retailers sell a growing range of sweeter and mostly sparkling grape
wines. These are flavoured with pineapple, mango, passionfruit, strawberry juice and pulp, and citrus
juice, sourced from Australia or overseas. These have been developed in response to consumer and
retailer demand. Retailers have had mixed success with these drinks. Sparkling drinks such as Fraise,
Omni citrus, and Soul flavoured wines from Chile have sold well. These are more likely to provide a
closer bridge to grape wine than carbonated RTDs, with new products, such as Killawarra Dusk,
which styles its advertisements for the appeal of young women (see Killawarra website). This
indicates potential demand for tropical fruit wines for the same uses.
This category has advanced from the low quality, low priced wine coolers and blends such as Golden
Gates Passion Pop and peach flavoured wine, which were at their most popular in the 1980s. Wine
coolers are perceived as a low quality, watered-down and sweetened version of grape wine.
Cider - This market is currently very small as most consumers have switched to sweet premixed fruitflavoured and other drinks. Organic and sparkling ciders (mthode champenoise) have sold well. Cider
drinkers are a minor potential market for tropical fruit wines, particularly sparkling.
Japanese plum wine or umeshu - This imported Japanese liqueur with about 15 per cent alcohol
content is made from a traditional Asian stone fruit. It retails at $15.0025.00 a bottle in some bottle
shops near Japanese and Chinese restaurant precincts. It is also sold in Japanese restaurants throughout
Australia. Manufacturer promotions and tastings in southern states have had ready acceptance. This
has been predominantly from Australians in general and Chinese women more specifically. It is often
consumed with Japanese meals in restaurants, with some sales through retail chains to consumers and
Japanese bars. A Melbourne city retailer sells umeshu to Chinese people seeking plum wine. This
indicates a potential demand from Japanese and Chinese people for fruit based wine-style drinks, such
as tropical fruit wines.
Fruit liqueurs - Some metropolitan liquor stores display a large range of brands and products with
flavours such as banana, mango, melon and strawberry, mainly for bars offering cocktails with fresh
fruit and fruit liqueurs, such as daiquiris. Tropical fruit wines are seen as versatile and potential
substitutes in cocktails and mocktails. There is also potential demand for cream wine liqueurs,
although these would need to be marketed as liqueurs rather than wine.
Fruit-flavoured spirits - A wide range of sweeter RTDs are made from spirits, mainly vodka,
flavoured with tropical fruits such as passionfruit, pineapple and lime, and numerous temperate fruits.
These have an alcohol content of about five per cent. It is retailed in small bottles or cans of
150250 mls with colourful and fluoro labels, often in party packs, for about $2.503.50 a bottle. The
primary market is young, drinking-age women. This market has significant potential for fruit wine. 3
Sangria - This traditional Spanish punch-style drink is mainly purchased by Europeans and others
wanting an easy to drink summer beverage. A Melbourne store sells a fruit wine-style sangria base for
punch, to which customers add their own ingredients. The store provides recipes on request. This
market may potentially be a tropical fruit wine market.
Australia has developed some overseas markets for fermented drinks other than wine and beer,
although exports of HS 220600 appear to have been mostly fruit wine, fruit flavoured wine and
coolers in 2006. Total volumes fell continuously from 9.6 to 0.63 million litres from 200206 as
annual average prices rose from $2.50 to $4.90 a litre (Fig. 2.2.1), reflecting declining demand in key
markets, the strengthening Australian market, and possibly growing competition.

The authors urge industry participants to carefully consider marketing strategies and to encourage a
responsible approach to consumption of alcohol

10,000,000

5.00

8,000,000

4.00

6,000,000

3.00

4,000,000

2.00

2,000,000

1.00

Avg price per litre

6.00

Litres

12,000,000

Exports
$/litre

0.00
2002

2003

2004

2005

2006

Fig. 2.2.1: Australias exports of fruit wine products and annual average price per litre, 200206
Note: HS 220600: fermented beverages not specified elsewhere such as cider and mead. Source: Australian
Bureau of Statistics

From 200206 Australian fruit wine products were exported to 26 countries. The largest 2006 markets
were Singapore, New Zealand, Japan, Hong Kong and Vietnam (Table 2.2.5).
Table 2.2.5: Australias exports of fruit wine products, by leading markets, 200206
Country
Japan

2002
2003
2004
2005
2006
Litres
7 930 221
5 937 316
3 644 518
5 957
278 836
$ per litre
2.42
2.54
2.63
14.28
2.11
Singapore
Litres
248 930
253 550
155 432
182 508
184 935
$ per litre
3.24
2.80
2.65
2.66
2.69
New Zealand
Litres
10 190
188 841
184 068
239 246
86 476
$ per litre
8.22
3.15
2.92
2.99
8.59
Hong Kong
Litres
156 964
91 595
50 123
48 527
43 613
$ per litre
2.09
2.37
2.20
2.01
1.94
Vietnam
Litres
0
0
0
2
18 903
$ per litre

144.00
53.44
India
Litres
0
0
0
293
8550
$ per litre

40.06
4.44
China
Litres
2 705
0
0
2 435
5400
$ per litre
2.18

14.65
10.25
Taiwan
Litres
27 085
110 030
77 508
1 640
2646
$ per litre
2.65
2.48
2.12

2.33
South Korea
Litres
199 450
161 903
8 316
0
162
$ per litre
1.87
1.83
2.12

15.00
Malaysia
Litres
42 283
13 001
14 654
298
161
$ per litre
2.41
3.91
2.79
5.53
5.02
Canada
Litres
18 729
55 821
17 136
9 036
0
$ per litre
3.79
4.02
3.57
3.73

Finland
Litres
60 566
0
43 686
64 909
0
$ per litre
2.15

1.75
1.81

Note: Harmonised Code HS 2206.00 (fermented beverages not specified elsewhere such as cider and mead).
Prices FOB. Source: ABS

In addition, very small quantities (in descending order by volume) also went to Christmas Island,
Antarctica, Romania, East Timor, Vanuatu, Norfolk Island and the Solomon Islands in 2006.
Meanwhile, Australias grape wine industry is increasingly focussed on developing existing and new
export markets. In 2006 it supplied 761 million litres of wine valued at $2760 million to 162 countries,
led by the United Kingdom, United States, Canada, New Zealand, the Netherlands and Germany, with
growing exports to most countries (ABS).

Exports are expected to grow as awareness of Australian wine is raised in overseas markets through
generic promotions by the Australian Wine Export Council (AWEC) and other agencies. These
growing markets indicate strong demand for Australian branded wine and potential distribution
channels for Australian fruit wine.

Supply
As fruit wine and grape wine production statistics are intermingled, tropical fruit wine production has
been conservatively estimated at 300 000 litres a year for this report.
Australia has approximately 40 commercial fruit wineries using mostly local fruits tropical, exotic
and native Australian fruits in northern Queensland; mainly mango in the Northern Territory and
northern Western Australia; and stone fruit, berries and apples in southern states (Table 2.2.6).
Table 2.2.6: Examples of Australian fruit wine producers and their products, 2007
Winery and brand
Tropical fruit wines
De Brueys Boutique Wines,
Mareeba, Queensland
Murdering Point Winery,
Silkwood, Queensland
Pacific Blue Winery, Ingham,
Queensland
Paradise Estate Wines, Mission
Beach, Queensland
Shannonvale Winery,
Mossman, Queensland
Wild Mountain Spirit,
Yungaburra, Queensland
Cairns Tropical Wines, Cairns,
Queensland
Golden Pride Winery, Mareeba,
Queensland
Hirsh Wines, Endeavour Valley
Winery, Cooktown, Queensland
Kakadu Mango Winery, Kakadu,
Northern Territory
Kanagae Estate, Broome,
Kimberley, Western Australia
Temperate fruit wines
Ashbolts Farm, Tasmania
Birdwood Park Fruit Winery,
Balingup, Western Australia
Bloobs Winery, Shepparton,
Victoria
Bramble Patch, Stanthorpe,
Queensland
Giverny Estate, Toolangi,
Victoria Toolgangi Gold brand
Hartzview Winery, Gardners
Bay, Tasmania
Hillwood Strawberry Farm,
Hillwood, South Australia
Kates Berry Farm, Tasmania
Parwill Swill, Heathcote, Victoria
Petcheys Bay Vineyard,
Petcheys Bay, Tasmania

Products

Price (wines
only)*

Jaboticaba, lychee, mango, passionfruit and Bush cherry

wines, ports and cream liqueurs
Black sapote, Davidson plum, Lemon aspen, lychee,
mango, passionfruit and pineapple wines, mulberry and
Black sapote port
Jaboticaba, Davidson plum, Black sapote, lychee, lime,
lime and chilli, citrus, mango, passionfruit
Banana, Davidson plum, dragonfruit, lime, lychee,
mangosteen and passionfruit wines and blends, ports
Jaboticaba, mulberry, Purple star apple, Water cherry,
Black sapote, mulberry, lychee, lime, mango, passionfruit,
grapefruit, orange and ginger wines, liqueurs
Acai, Black sapote, dragonfruit, pineapple, Bush Honey,
persimmon and lychee wines, liqueurs and ports
Red bush fruits, Davidson plum, mango, lychee,
passionfruit, pineapple, banana, plum and coconut wine,
ports
Golden Drop mango wine still, sparkling and fortified;
fruit liqueurs
Mango and passionfruit wines

$20.00

Mango wine, mango wine with juice

$13.6016.50

Mango wine, dessert wine and port

$20.00

Elderflower and elderberry wine

Apricot, peach, plum, pear and strawberry wines;
strawberry, apple plum and orange ports
Blueberry, apple, pear, cherry, plum, blended fruit ports
Fortified blackberry, strawberry and boysenberry wines
and strawberry honey mead
Sparkling, still dry and sweet kiwi fruit wine, kiwi fruit
liqueur and schnapps
Blackcurrant, blackberry, blueberry and cherry fortified
wines
Strawberry, raspberry, blackcurrant, apple
Strawberry wine, strawberry-grape wine blend
Feijoa, prickly pear fruit, plum, apricot, nectarine and
cherry wine
Organic blueberry and blackcurrant wine

$20.00

$15.0020.00
$22.0028.00
$20.00

$20.00
$25.00

$22.0024.00

Wines $15.00
$15.0025.00
$15.0033.00
(375 mls)
$15.0025.00

$16.00

Winery and brand

Products

Price (wines
only)*
$19.50 for 375 mls

Sorell Fruit Farm, Sorell,

Strawberry, raspberry, tayberry, loganberry, silvanberry,
Tasmania, Thornlea brand
blackberry, blackcurrant, jostaberry and cherry liqueurs
Sunny Ridge, Mornington
Strawberry wines and ports
Peninsula, Victoria
Tathra Winery, Nanup, Western
Plum wine and port
$18.20
Australia
The Berry Farm, Margaret
Berry, kiwifruit, mango, nashi, pear and plum wines,
$16.0022.00
River, Western Australia
sparkling and fortified wines
Wilmot Wines Vineyard, Wilmot, Blackcurrant, raspberry and elderberry wines, apple cider
Tasmania
and grape wine
Note: Prices of 750 ml bottles of wine, unless otherwise specified, mostly obtained from winery websites.
Sources: Cairns Wine Show Awards, winery websites, retail audit, Fruit wine adds a Gourmet Touch 2004

Northern producers have ample supply of a variety of mainstream, exotic and native fruits; capacity to
expand production using existing facilities through year-round production; and flexibility to adjust
their product ranges with variable harvests, crop losses and demand variation for the fresh fruit.
Australian fruit wine producers are represented by two regional associations: the Association of
Tropical North Queensland Wineries for commercial producers; and the Fruit Winemakers (Tas.) Inc.
for professional and amateur winemakers. The Queensland Wine Industry Association is open to
manufacturers of wine other than from grapes and promotes northern Queensland as a wine-producing
region but is predominantly grape wine oriented. The fruit wine industry is not eligible for direct
support from the Australian grape wine industry for activities such as product development, quality
monitoring and market development. This is understandable as the grape industry is largely self
funded. However, Queensland producers have the benefit of a Queensland Government Ministry for
Wine Industry Development, which has accepted the tropical fruit wines as equal members with the
Queensland grape wine industry. While acceptance at the political level does not translate to cooperation with the grape industry on the ground, it advances co-operation between the two industries.
A growing market for fruit wine-style drinks is indicated by the doubling of imports of non-grape
fermented drinks from 200206 to 541 000 litres with a market value of $2.03 million in 2006
(Table 2.2.7). Stable average import prices of around $3.50 a litre indicate these are mostly low-priced
drinks such as coolers from Europe and the United States and rice wines from Asian countries.
Table 2.2.7: Australias imports of fruit wine drinks by leading countries of supply, 200206
Description
2002
2003
2004
2005
2006
Japan litres
92 201
89 969
119 591
148 874
138 422
$ per litre
5.87
6.58
5.24
4.41
5.86
Ireland litres
0
0
72 100
50 636
126 048
$ per litre

3.30
3.20
3.48
Germany litres
96 753
122 945
118 839
137 627
116 523
$ per litre
2.43
2.57
2.37
2.27
2.43
China litres
41 692
33 177
53 601
42 566
65 205
$ per litre
2.57
2.15
2.57
1.91
2.32
United Kingdom litres
8 945
10 377
20 724
41 117
42 415
$ per litre
2.76
3.50
2.61
1.75
1.98
Korea litres
8 882
8 550
8 517
3 600
32 518
$ per litre
4.63
6.16
5.42
7.64
6.28
United States litres
1 269
1 362
1 023
2 648
8 163
$ per litre
5.98
4.74
4.19
3.06
3.47
France litres
1 989
4 058
6 846
3 438
3 004
$ per litre
2.76
4.22
4.39
3.61
3.97
Total volumes
272 616
300 013
414 014
460 087
541 229
Total value
1 009 474
1 156 847
1 462 410
1 405 427
2 033 154
Average $ per litre
3.70
3.86
3.53
3.05
3.76
Notes: HS2206003020: grape wine (blends), cider, perry, mead, sake, fruit and vegetable wine. Prices CIF.
Source: ABS

Australias large grape wine industry produced 1400 million litres of wine in 2007, supplying the large
domestic market and exporting 785 million litres, more than half of its production. The industry is

10

continuously improving its exports and competitiveness through better quality, price, consistency and
reliability. This is reflected in its 2007 exports, where export value grew by six per cent, ahead of
volume growth of three per cent (AWBC Wine Export Approval Report 2007). See Appendix C for a
case study on the grape wine industry.

Product profile
The tropical fruit wine industry produces still and sparkling wines, fortified wines and wine-based
liqueurs from exotic tropical and subtropical fruits including lychee, dragon fruit, mangosteen, black
sapote, jaboticaba, jackfruit and kaffir lime; the Australian native fruits Davidson plum, lemon aspen
and bush cherry; and major tropical and subtropical fruits such as mango, passionfruit, banana,
pineapple, persimmon, orange, lime and grapefruit. In cooler southern regions fruit wines are
produced mainly from stonefruit, berries, apples and pears (Table 2.2.6).
Fruit wine production and imports are required to comply with Food Standard 2.7.3: Fruit wine and
vegetable wine of the Food Standards Code administered by Food Standards Australia New Zealand
(FSANZ), which provides these definitions for fruit wine products:

Fruit wine and/or vegetable wine - the product prepared from the complete or partial
fermentation of fruit, vegetable, grains and/or cereals or preparations of those foods, other than
that produced solely from grapes.

Fruit wine and/or vegetable wine product - A food containing no less than 700 ml per litre of
fruit wine and/or vegetable wine, which has been formulated, processed, modified or mixed
with other foods such that it is not a fruit wine and/or vegetable wine.

Wine product - fruits other than grapes added to a minimum of 70 per cent grape wine.

Cider - the fruit wine prepared from the juice or must of apples and no more than 25 per cent of
the juice or must of pears.

Perry - the fruit wine prepared from the juice or must of pears and no more than 25 per cent of
the juice or must of apples.

Mead - The product prepared from the complete or partial fermentation of honey.

The Standard also permits fruit wine and vegetable wines to contain fruit juice and fruit juice products,
vegetable juice and vegetable juice products, sugars, honey, spices, alcohol and water.
Any combination of grape wine with other fruit wine, juice or flavours must be named sufficient to
indicate the true nature of the food, such as Peach Flavoured Chardonnay.
In contrast, FSANZ Standard 2.7.4 for Wine and Wine Product limits wine to grape wine only:

Wine - the product of the complete or partial fermentation of fresh grapes, or a mixture of that
product and products derived solely from grapes.

Wine product - a food containing no less than 700 mls per litre of wine as defined in this
standard, which has been formulated, processed, modified or mixed with other foods such that it
is not wine. The only foods that may be added during production are grape juice, grape juice
products, sugars, brandy or other spirit, and water where needed to incorporate any permitted
food additive or processing aid.

Grape wine production and marketing are also regulated by the Australian Wine and Brandy
Corporation Act 1980 and Regulations. The Act and Regulations provide blending rules and
compositional and other requirements for wines imported from countries with which Australia has a
formal wine trading agreement (see definition of The Mutual Acceptance Agreement on Oenological
Practices). Australian wine exports are categorised as still (red and white), sparkling, fortified,
carbonated, sherry and other (Winefacts 2007).
Despite the wide range of fruit wines available, Australian liquor retailers do not offer a fruit wine
category and major retailers are unsure of where to position fruit wines. Visits to several liquor stores
11

found only one fruit wine, an imported sparkling strawberry wine, displayed with a growing
assortment of fruit-flavoured sparkling wines (Table 2.2.8).
Table 2.2.8: Australian retail audit examples of fruit wines and flavoured wines
Brand
Domestic
Omni Citrus

Killawarra Dusk
Golden Gate Passion Pop
and Crack Peach
Berri peach passion wine
Beerworld coolers
Imported
Katlenburger sparkling fruit
wine, Germany
Lindauer Fraise, New Zealand
Raspberry sparkletini, Peach
sparkletini, Italy
Fresita with strawberry from
VCG S.A., Santiago, Chile

Product (750 mls unless otherwise stated)

Pricing

Grape wine flavoured with lemon, lime and

orange, 9% alcohol in single 750ml and 200ml
bottles and three-packs of 200 mls
Sparkling strawberry-flavoured grape wine
Flavoured grape wine, 9.4% alcohol

$8.00 for 750 mls; $3.95 for

200 mls
$7.2012.00 for 750 mls
$5.00

xx
xx

$5.79 for 750 mls

$4.00

Sparkling strawberry and peach wines, 8.3%

alcohol (Fig. 2.2.4)
Strawberry flavoured grape wine (Fig. 2.2.6)
Flavoured grape wine, natural flavours,
Italian spumante by Verdi, 4.8% alcohol
Sparkling wine 97% with strawberry pulp 3%,
with natural strawberries, 8% alcohol (Fig.
2.2.4)

$17.00
$11.0013.90
$8.00
$14.00 for 750 mls
4 pack x 175 ml @ $14.00,
single $4.00.

Distributors expect fruit wines to appeal to consumers due to their exotic flavours, flavour profiles,
tropical aspect and the wide range of fruits used. Suggestions for differentiating the wines at the point
of sale were by the specific fruit used; a list of the fruits; description of a more definite flavour than
grape wines; or a new universal logo such as 100 per cent single fruit, 50 per cent grape and 50 per
cent fruit and under 10 per cent fruit.
When asked what effect fruit type might have on quality image, distributors suggested apple, pear,
mango, plum, lychee and raspberry wines would give a higher quality image, and apple, cherries,
guava, mango, oranges, mandarin, pineapple, watermelons and tropical would convey a lower
quality image. One distributor suggested that using cheaper fruits could undermine positioning of the
category. They suggested full flavoured fruit wines from fruits such as mangosteen and mango in a
range of dry to sweet; dry lychee, mango and lime wines; strawberry; sparkling apple wine and pear
dessert wines bottled like the pear in the bottle brandy in France, and a medium-sweet grape wine
blend in a standard wine bottle. One recommended being guided by customer demand.
A large retailer saw mango wine as having a tropical image, lychee as a fruit people love or hate,
jaboticaba wine with potential as a differentiated product with a story, and wines from Australian
native fruits likely to appeal if customers were sufficiently informed. A small Cairns retailer expects
that as Europeans drink plum wine they would accept Davidson plum wine.
When respondents to the consumer survey were asked to choose three wines to try, they usually
started with a mainstream tropical fruit wine but quickly moved to lesser known fruits. While the most
popular wines were lychee and mango, there was strong interest in exotic and Australian native fruit
wines, fortified wines from exotic fruits, and liqueurs (Table 2.2.9).
The specific fruit had at least some importance to three-quarters of respondents, and some respondents
commented that they would probably only try fruits they knew and liked (Table 2.2.10). This suggests
fruit type should be indicated on the label, at least in the description.
Some grape wine labels have recently included fruit images. For example, Jacobs Creeks Three
Vines labels feature images of the grape variety used (Fig 2.2.7); while Coles home brand Vino
Gusto labels depict the fruits that the flavour of the wines emulate (Fig 2.2.5).

12

Table 2.2.9: Consumer survey unprompted selection of wines for tasting

Wine 1 and number of
responses
Mango wine
8
Lychee
7
Lime
5
Black sapote port
3
Passionfruit
3
Dragonfruit port
3
Bush cherry
2
Coffee liqueur
2
Cream liqueur
2
Tropical fruit blend
2
Jaboticaba
1
Lime & chilli
1
Pineapple
1

Wine 2 and number of

Wine 3 and number
Most popular choices
responses
of responses
Lychee wine
5
Lychee wine
5 Lychee
17
Davidson plum
5
Cream liqueur
4 Mango
13
Mango
4
Coffee liqueur
4 Cream liqueur
9
Cream liqueur
3
Bush cherry
3 Black sapote port 9
Jaboticaba
3
Passionfruit
3 Passionfruit
8
Lime
3
Jaboticaba
3 Lime
8
Dragonfruit port
2
Davidson plum
1 Dragonfruit port
8
Passionfruit
2
Dragonfruit port
2 Jaboticaba
7
Mango port
2
Pineapple
3 Coffee liqueur
7
Decadence
2
Black sapote port
1 Davidson plum
6
Black sapote port
2
Feijoa
1 Bush cherry
6
Bush cherry
1
Lime & chilli
1 Pineapple
5
Coffee liqueur
1
Mango
1
Feijoa
1
Lime and chilli
1
Pineapple
1
Note: shading indicates around 50 per cent of responses. Source: Consumer survey (51 respondents)

Table 2.2.10: Consumer survey - importance of the type of fruit used

Characteristic

Important

Somewhat
important

Neither important
nor unimportant

Unimportant

Total
respondents

Age
Under 25

25-35
35-55
55 plus

1
14
6

2
4
1

0
2
0

1
6
3

4
26
10

Female

18

30

Male

12

Local

17

10

35

Non-local

Total respondents
23
7
Source: Consumer survey (42 responses)

10

42

Sex

From where

Trade interview responses identified strong demand for sweet fruity drinks, as demonstrated by the
success of Two Dogs alcoholic lemonade and RTDs, and the preference of younger wine drinkers,
particularly young women, for sweeter fruitier styles such as Sauvignon Blanc, Crouchen Riesling,
Traminer Riesling and Muscato. Sauvignon Blanc sells particularly well because it has a dry style that
suggests ripe fruit, pungent aromatics and lack of complexity, and because it can be consumed without
food due to its low acidity compared with wines such as Riesling. As the palate matures, drier and
more bitter drinks are requested. Fruit wines will need to respond to this if wishing to make inroads
into this market by reduce their sweetness if they are to appeal to consumers and overcome the
prevailing misconception that fruit wines are always sweet.
It was also revealed by trade interviewees that restaurants require lighter, drier wines that will not
overpower the food. However, wines with some sweetness were expected to appeal to the key
potential market of novice drinkers more than very dry fruit wines.
In the consumer survey, 43 per cent of respondents preferred very or somewhat fruity wine, mostly
women (70 per cent) and locals (83 per cent), but less so the 2535 year old age group (20 per cent).
Respondents often tried to choose wines that met their preferred level of sweetness. When asked to
indicate the degree of sweetness they preferred in wines on a scale from sweet to dry, a quarter chose

13

sweet, and a third somewhat sweet. This applied more so in men and the 3555 age group (Table
2.2.11).
Table 2.2.11: Consumer survey preferred degree of sweetness in alcoholic drinks
Characteristic

Sweetness

Neither

Very

Sweet

Somewhat

0
1
7
2

0
0
1
0

0
0
5
0

6
4

0
1

Dryness
Somewhat

Dry

Very

Total

0
0
5
1

2
1
6
4

0
1
6
0

0
1
1
2

2
4
31
9

3
2

5
1

9
4

6
1

4
0

33
13

Total
10
1
5
Source: Consumer survey (46 responses)

13

46

Age
Under 25
25-35
35-55
55 plus
Sex
Female
Male

Respondents commented that: the wines are good, once you get over the stigma of too sweet,
although I know the wines are not sweet, and many fruits are sweet, which suggests sweet wine.
When asked what information they would need if buying the sample wines, most respondents
specified taste, fruit type, and sweetness (Table 2.2.12).
Table 2.2.12: Consumer survey information needs regarding tropical fruit wines
Age
Information
Under 25
25-35
A tasting
0
1
Sweetness
0
0
Fruit base
2
0
Taste description
1
0
Place of origin
1
1
Price
0
0
Alcohol
0
1
Preservatives
0
0
Source: Consumer survey (40 respondents)

35-55
13
5
3
3
2
3
2
1

55 plus
3
2
0
0
0
0
0
0

Sex
Female
10
5
1
2
1
2
0
1

Male
2
0
1
0
0
0
1
0

Responses
17
7
5
4
4
3
3
1

Distributors were asked to rate key fruit wine products on perceived quality from 1 to 7. The number
of responses was multiplied by those ratings in order to rank the products. This indicated that they
viewed tropical and other fruit wines as medium quality compared with other drinks (Table 2.2.13).
Table 2.2.13: Distributor survey quality rating for alcoholic fruit drinks
Drink category
Ciders
Fruit wine liqueurs
Tropical fruit wines
Fruit wines
Fruit flavoured wines
Fruit ports
Coolers
Fruit flavoured RTDs
Total
Source: Distributor survey

Rating
Low
1
0
1
1
2
3
2
1
4
14

2
0
1
1
1
1
1
1
0
6

Medium
3
4
2
0
0
2
2
3
1
2
2
1
1
0
1
1
1
0
10
9

5
3
1
1
2
1
1
0
0
9

High
6
2
0
0
0
0
0
1
0
3

7
0
2
0
0
0
1
0
1
4

Total score
(score X rating)
33
30
26
25
20
19
16
14
Av 22.88

Distributors suggested using gold medals to promote fruit wines positive attributes. In the consumer
survey a third of respondents, mostly men aged 3555 years, saw medals as an important guide when
buying wine, and a fifth as extremely important. Men also commented that: I would consider the
wines if buying a premium product for gift, medals provide the only orientation for a new wine type

14

like this, medals can give false importance; and medals are no use unless one understands the
(judging) system. Two women said they do not look for or at medals. Another consumer survey found
that 42 per cent of respondents were more likely to choose a medal-winning grape wine (Levine
2004).
Northern Queensland hotel and restaurant operators interviewed had little if any experience of fruit
wines, but declined to taste samples offered at meetings, doubting that the wines would appeal to their
clientele. Some said they evaluated all grape wine samples at staff tastings, often as a training session,
and it was suggested that producers have their salesperson give a presentation to the decision-maker
such as the food and beverage manager, then leave the wines for a staff tasting. A large hotel receives
up to 30 samples a week from sales representatives. Decision-makers have extensive experience in
grape wines and producers will need to develop a favourable image of fruit wines in this sector
through tastings and education to overcome existing biases and negative experiences before these
buyers will consider these wines for their customers, and to provide samples and training for service
staff.
Trade interview responses identified strong consumer demand for healthier drinks, with low alcohol,
low kilojoules, a source of nutrition, and claims of health benefits. Fruit wines could be differentiated
at the point of sale by describing them as pure or natural (but not mentioning juice), as organic
if from organic fruit, and on ingredients such as herbs, but need to be distinguished from non-alcoholic
health drinks. In the consumer survey the 56 per cent of respondents who considered healthy
ingredients in wine to be important were mostly women aged 3555 years.
A retailer and a sommelier have observed some demand in organic, biodynamic and preservative-free
wines (which have a short shelf life) from consumers who have had physical reactions to chemicals in
wine. It was suggested that such reactions are more likely where large corporate producers use excess
sulphur dioxide, particularly at the lower quality end, to protect grapes being transported long
distances from vineyard to winery, compared with producers of premium wines who hand-pick and
immediately process the grapes. Distributors also foresaw potential for organic fruit wines and fruit
wines without added sugar or preservatives, provided they were distributed beyond organic stores. In
the consumer survey eight people aged 35 years and over expressed concern about additives and
preservatives, and two would prefer organic wine. These findings indicate the promotion of production
processes that minimise the use of preservatives.
Most tropical fruit wine is still, with some sparkling mango wine. All imported fruit wines and most
fruit-flavoured bottled products observed were sparkling. Sparkling wines have held a nine per cent
market share of the Australian grape wine market since the mid1990s.
Tropical fruit wines range widely in colour, depending on the fruit used and distributors expected good
colour to appeal to consumers. Red wine outsold white wine in Australia in the ten years to 200506,
although health claims for the polyphenol in red wine may have contributed to this growth.
Kosher wine has limited markets with demand only at times such as before Jewish Passover (trade
interviews).
Trade interview responses predicted a major barrier for fruit wines to be that potential consumers and
distributors will not take them seriously due to a prevailing image of low quality and flavour from
current and past poor quality fruit wines, and may price them lower than for grape wines. Distributors
commented on low quality wine at $15.00$30.00 a bottle, which wine drinkers are not really
interested in; country craft, sweet, daggy, for tourists and a gimmick. One retailer observed that
selling fruit wines in local markets gave them an image of kitsch and touristy. Some distributors and
a sommelier commented that fruit wines are misunderstood and that quality is often very good. It was
recommended that this perception could be overcome by focussing on a specific market, developing
and designing suitable products for it, winning medals at shows, and providing consumer education,
especially tastings.
Wineries succeed through their local communities supporting and promoting local products, which
requires local people to have faith and pride in the product as a reflection of their community, so
quality must be maintained.
15

There are no industry quality standards for tropical or other fruit wines, and Australias food and wine
standards include fruit wine with all flavoured grape wines. Developing trade and consumer
confidence will require a combined industry effort to establish and maintain quality standards across
the tropical fruit wine category, and ideally for all fruit wines. This could start with devising a quality
certificate for any wine that is free of the basic faults that would make it undrinkable, which could be
modified as the industry develops, in accordance with the quality levels outlined in Appendix B. Wine
competitions will raise the quality benchmark by establishing quality parameters, rewarding quality
focussed producers, and providing trophies and medals as a guide to quality for early purchasers. The
fruit wine industry should also continue to draw on the grape wine industrys extensive body of
technical knowledge and keep up with the latest technology through wine-making courses and quality
winemaker consultants. Using an established fruit winemaker to teach others can lead to stagnation;
producers will need to continue to advance to compete in the ever-evolving drinks industry.
Trade interviews emphasised that good packaging and labelling will be essential for the wines, and
labelling will need to communicate that it is fruit wine. Use of traditional wine bottles and labelling
signifies that tropical fruit wines are quality table wines, so the wines will need to attract interest from
people who are already knowledgeable about and interested in wine, such as chardonnay-drinkers.
Most tropical fruit wineries offer gift boxes or bags. Retailers expected gift boxes to appeal mainly to
the tourist market. Respondents to the consumer survey saw tropical fruit wines as a suitable gift for
birthdays, special occasions and visitors, indicating wider potential for gift-packaging.
One retailer commented on the need for table wine drinkers to want the wines, maybe for an occasion
such as a party, indicating the use of dramatically different packaging to differentiate fruit wines at the
point of sale. Packaging can be used to attract specific sectors. For example, RTD drinkers drink from
bottles rather than glasses, including in hotels and nightclubs, so to consider fruit wines they would
need a more appealing pack size than a 750 ml bottle. A further example is that of Yellowglen, which
has positioned its sparkling strawberry flavoured Dusk wine both as a wine in 750 ml bottles and as an
RTD in 250 ml bottles, sold in the RTD section of liquor stores. People aged under 40 years are most
influenced by packaging and labelling (Levine 2004). Large wine manufacturers are focussing on
young drinkers with bright packaging, messages about having fun, and product names to position wine
in young lifestyles such as Simeon McGuigan's Crocodile Rock (Canaider 2004).
The consumer survey showed that most people liked the traditional wine bottles, just like normal
wine bottles. However, one respondent said these bottles did not indicate fruit wine, one called them
boring, and a third suggested that they would not attract tourists. Opinions on the fortified wine bottles
(traditional squat shapes for ports and tall and narrow for liqueurs) were more divided but generally
favoured a classic, straight liqueur bottle. Almost all were satisfied with the 750 ml size for wine.
While clear bottles would show the wine colour, their use is contra, indicated by the industry
experience that darker bottles such as antique green convey a higher quality image, while wines in
clear bottles have traditionally had a low priced image.
Most grape wine sales are of one or two bottles at a time, except where stores promote discounts for a
dozen bottles. Older, retired people often buy cask wine. Large retailers prefer six bottle cartons rather
than 12, to meet workplace, health and safety requirements.
A retail audit observed a growing range of containers for wine, with novel bottle shapes, cans, metal
bottles, small softpacks, and pouches in various sizes.
Most tropical fruit wineries use screw-caps, which wine-drinkers have widely accepted, and have
proven to create fewer problems than corks. It was suggested that novel closures would attract
attention and differentiate the wines.
A Cairns liquor retailer recommends that labels clearly indicate what the fruit is, ideally as a symbol
rather than the fruit itself. Tourist customers rarely read labels, and Japanese customers, the main
buyers of fruit wine, need to be able to understand what the wine is from the label. Labels should also
promote the positive attributes of the fruit wines.

16

Retailers and distributors advised that labels should be classy and exude quality, and look like wine
labels rather than rural country craft, particularly for the key potential market of young women of
eligible drinking age. Examples of quality labels include a South Australian fruit wine that conveys a
premium image at $14.00$45.00 a bottle, and some New Zealand fruit wines. Tourist oriented labels
appeal to Japanese tourists but are unlikely to attract Australians. Critter labels (with animal images)
do well overseas but not with domestic customers. Modern labels on tropical fruit wines do not
suggest traditional wines but their positioning is uncertain.
There is a risk that consumers will not recognise products with traditional labels as fruit wines, so
labels will need to inform customers that the product sitting on a wine shelf is fruit wine.
There are no leading brands in fruit wine in Australia or elsewhere, and trade and consumer interviews
in northern Queensland found almost no recall of brands, even when the person interviewed had
visited the winery or seen its recent television advertising. Young, appropriately aged, novice drinkers
are highly influenced by brands as a guide to quality (ABC News Online 2001).
On the potential for a regional brand, distributors and large retailers observed that northern
Queenslands fruit wine industry has little if any profile outside the region. Regionality gives heritage
to wines over $10.00 to give customers a reason to pay more; otherwise the wines will compete
directly with imported wines and other drinks. Also, a regional brand would provide a common
identity and representation for all fruit wine producers, which would enable a more comprehensive
market focus. A regional brand is very important for grape wines as it indicates quality of fruit source
and so reflects certain qualities common to all wines from that area. For example, Marlborough is
synonymous with Sauvignon Blanc, and Coonawarra with fine reds. Fruit wines should reflect the
quality of the best fruit-growing regions, and be made from the best fruit suited to that region such as
mangoes from Australias Top End. However, one distributor saw geographical indicators as
confusing consumers, and only of concern to serious drinkers.
In the consumer survey only a third of respondents saw place of origin as important for these products,
mainly men aged 35 years and over. Additional comments were: prefer local wines, prefer
Australian and New Zealand wines, would buy Australian if the price is the same, place of origin is
important if for a gift; visitors like to try the local products and industries, and origin is not
important yet as the products are unique, but will be later on.
The Australian grape wine industry has developed and maintained strong brands recognised by
consumers in domestic and export markets largely by establishing quality standards, geographical
indicators, product ranges, distinctive labels, promotion of brands and product attributes through point
of sale material, advertising, wine media and sommeliers.

Pricing
Australian tropical and other fruit wines generally retail at $18.0025.00 a bottle, while an imported
strawberry wine retails at around $17.00. Domestic and imported flavoured grape wines from large
manufacturers with economies of scale range in price from approximately $5.0014.00. Fortified
domestic tropical fruit wines are typically $25.0035.00. A retailer observed that current fruit wine
prices indicate a focus on tourists rather than regular drinkers.
One large retailer predicts sales will stay small at $20.00 a bottle, regardless of high quality, due to
strong competition from flavoured wines at around $10.00. Another doubted its stores could sell any
fruit wine at $20.00, as its customers are unlikely to try a wine priced at $16.00 or over. The retailer
advised that 92 per cent of its wine sales are under $16.00 (average dollar sales across the category),
much of which is $21.0022.00 wines on special. Its best-selling fruit-flavoured wine is Fresita
Sparkling, which retails at $8.00.
Distributors suggested recommended retail prices of $10.0015.00 for wine, $10.0020.00 for
fortified wines and $15.0020.00 for liqueurs. However, they felt the market would decide the
optimum price, which can be tested through consumer research, and advised that strategic pricing will
be needed to achieve sales.

17

When the consumer survey asked respondents what they usually pay for a bottle of wine, most said at
least $15.00, and more than half pay $20.00 and higher. Most expected to pay the same or more for
fruit wines, with willingness to pay more than $15.00 (Table 2.2.14).
Table 2.2.14: Consumer survey price expectation for tropical fruit wine products
Age group
Under 25
25-35
35-55
55 plus

$10 &
under
1
0
3
1

$10$15
0
0
5
1

Total
5
6
Source: Consumer survey

$15$20
0
0
1
0

$1525
1
0
2
3

$20
0
1
3
2

$20$25
0
0
0
0

$20$30
0
0
4
0

Cant say/
don't know
0
0
3
2

Total

$15
1
0
2
0
3

36

3
1
23
9

Sample prices for a glass of wine in Cairns are $5.00 in a nightclub (against $6.00 for basic spirits and
$7.009.00 for RTDs) and leisure clubs, and $6.00 and higher in restaurants. These wines are only
expected to sell by the glass.
Cairns restaurant mark-ups vary, with examples being between 200 and 400 per cent (at 400 per cent
an $8.00 bottle would sell for $32.00). A Cairns nightclub expects a gross profit of 75 per cent on
drinks, and more on RTDs. A retail store puts a ten per cent mark-up on wines in promotions and up to
35 per cent for premium wines.
Several distributors used discounting when introducing new products and this strategy was suggested
for fruit wines to penetrate existing markets and gain market share. Various studies show that pricing,
such as discounts and specials, is particularly influential when targeting the under 40 years of age
purchaser (Levine 2004).
Pricing incentives such as buy five get six are effective for motivating and increasing sales.
To position tropical fruit wines in a similar retail price bracket to premium grape wines will require
demonstrating higher value, such as highly regarded fruits, the quantity of real fruit in a wine (such as
the number of mangoes), to compare with low priced flavoured wines, trophies, medals, consistent
quality, a regional brand linked to quality fruit production, and a new standard for fruit wine with
parameters that ensure quality. Increased production and sales will enable more efficient production
and freight systems to reduce costs and improve price-competitiveness.
Most consumers are only familiar with the mainstream fruits used, which are in much greater supply
than exotic and native fruits. This indicates an opportunity to anchor a product range with high volume
products from mainstream fruits at lower prices. This is to encourage everyday, moderate drinking and
a premium for low volume exotic and native fruit wines for variety, novelty and special occasions.

18

Distribution
The main distribution channels for wine in Australia are summarised in Fig 2.2.2.
Vineyard

Fruit farm

Grape winery

Fruit winery

Distributor
Manufacturers
agent, auction
house, commission
agent, broker

Airlines,
cruises

Wholesale
r

Retail chains,
duty free
stores, airport
stores

Restaurants,
clubs,
winebars

Hotels,
pubs, clubs,
resorts

Mail
order,
website

Satellite
stores

Winery
cellar
door

Party
plan

Consumer

Fig. 2.2.2: Australian distribution channels for wine

Sources: Distributor survey, trade interviews, producer interviews

Most tropical fruit wine is sold by the wineries and through their Internet and mail order services and
outside retail outlets, with some sales in a few tourist and airport shops, restaurants (usually mango
wine), bars, festivals, and farmers markets. Temperate fruit wines are mostly sold through similar
outlets, the more sophisticated farmers markets, local liquor stores, and convenience stores where
state laws permit. Woolworths sell a local mango wine in selected Northern Territory stores. Direct
sales are more profitable for smaller wineries that are exempt from the wine equalisation tax. These
smaller wineries can sell most products through their own outlets but expanding outside local markets
require distributors.
The 15 respondents to the distributor survey were involved in a number of distribution channels. All
supplied restaurants and wine bars; most supplied state and regional retail chains and independent
stores; hotels, clubs and conferences; and half handled national chains liquor barns and department
stores.
One was a manufacturers sales branch, one was involved in a hotel, another in a liquor store, five
supplied other wholesalers and distributors, and one supplied retail buying groups, while two exported.
Eight belonged to a marketing group or co-operative, such as IBA-Bottlemart and Liquormart; and one
had shared a customer service account centre with other distributors. Some had temperature controlled
warehouses; some had transport vehicles ranging from prime movers with trailers and trucks to airconditioned vans and purpose built vehicles. Others contracted out warehousing, transport and
delivery to freight companies. Their percentage margins ranged from 1035 per cent; with the
majority being 30 per cent.
Most were prepared to handle volumes of less than a pallet. One commented the consignment would
need to be presold; another that this suits slow-moving expensive products such as premium, rare or
museum fortified Tokay or Muscat. One handled a minimum of a pallet due to freight charges.

19

The distributors were only aware of fruit wines in their local region (northern Queensland, Northern
Territory and Tasmania), with most not knowing of any fruit wines. They were divided on whether
they would handle fruit wines in the future. Seven of the 15 were interested in receiving more
information on fruit wines.
On reviewing a list of possible outlets for tropical fruit wines, they recommended (in descending order
by number of recommendations) 1. Retail sector: national retail chains, specialist liquor stores, small bottle shops, liquor barns, duty
free outlets with strong tourist sales, airports, niche international hotels and tourist areas.
2. Food service sector: restaurants, cafes, hotels, wine bars and cocktail bars.
3. Entertainment sector: sports venues, sporting clubs, leisure clubs and RSL clubs.
4. Tourism sector: harbour cruises (including Sydney Harbour), guest houses, bed and breakfasts,
backpacker hostels, resort hotels, tourist hotel restaurants, tourist bars and ocean liners.
They suggested using: liquor distribution channels; alternative niche-focussed boutique wholesalers
serving a more adventurous market and client base; specialised agent; and using specified alternative
hotels, health conscious cafes, organic shops and the Internet to reach young drinkers aged 1825 and
blue collar workers. One warned of resistance from wary retailers.
Coles and Woolworths sell an increasing number of domestic and imported fruit flavoured wines in
order to offer a wide range. Coles sells imported fruit wine from Germany, with potential to introduce
tropical fruit wines gradually, starting in northern Queensland and Brisbane, and moving from the
tourist market to Australian consumers. They have three national retail divisions for alcohol
beverages:

1st Choice: These large format stores focus on all demographics with best quality drinks. Stores
are mostly in Queensland, and increasing through the conversion of former Liquor Barns. If a
new product sells well in a 1st Choice store, it is extended to other stores. An example is a
German fruit wine now sold in Queensland.

Vintage Cellars: Stores cater to a very specialist metropolitan market with edgy, different and
differentiated high quality products that offer value for money. The division continues to
introduce numerous new products to the Australian market, but not mainstream products from
major brands.

Liquorland: These stores stock a limited range of popular brands and extensions of known
products. Fruit wines would only suit Liquorland if store-specific. Stores require volume
turnover so new products need to succeed quickly.

Woolworths operates several Dan Murphys and BWS outlets in Queensland; Dan Murphys, Federal
Hotels and Woolworths outlets in other states; and some independent stores. Their outlets are
primarily convenience stores. Stores carry major grape wine brands; regional brands, such as Western
Australian wines sold in that state; and some stores carry local wines which would not sell outside that
area, such as mango wine in the Northern Territory. Customers generally select quickly, wine being a
low involvement purchase, so the challenges for fruit wine producers will be to communicate that
these are new products to the customer and to provide tasting in a self-selection environment. A large
retailer observed that the Queensland wine industry is in its infancy compared with other states and
that the chains have made wines affordable and provide displays.
One large retailer noted that with the constraints of a bottle shop a supplier needs to know when to
enter a new product which must perform for 12 months to justify the space. The question is when will
be the right time for these wines?
An independent liquor store in Cairns specialises in wines outside the main lines stocked by retail
chains, including trophy winners, recommended wines, and wines sought by regular customers.
Products need to sell well to be retained. This store stocks local mango wine and fortified wine, which
sell well to tourists but not to serious wine drinkers. They have tried to sell other local fruit wines. It
has discontinued tastings for fruit wines due to mixed reactions from shoppers. The store also has
20

good sales of mango liqueurs such as Mango Ricco and imported lychee liqueurs. The owner expects
passionfruit wine to appeal to overseas tourists given that the very popular Sauvignon Blanc has
passionfruit characteristics.
The consumer survey found almost all male respondents and two-thirds of the female respondents
purchased wine from bottle shops, some women also used liquor barns, only three used mail order or
wine clubs. None bought via the Internet. A few occasionally purchased wine at markets and wineries.
Most expected to find tropical fruit wines at bottle shops, markets, or wineries. Only five respondents,
of various ages, suggested selling through a website. One respondent suggested selling through airport
shops and another respondent suggested wine magazines.
Restaurants are major outlets for wine, introducing customers to new wines, and promoting wines
through introductory tastings, wine lists, specials boards, display material and staff recommendations.
However, a distributor warned that restaurant buyers attitudes may be too established in favour of
grape wines to consider fruit wines.
Interviews with Cairns hotel and restaurant wine buyers found little interest in, or prospects for,
tropical fruit wine. Most were only vaguely aware of local fruit wines, and had not tasted them
although some had tasted fruit wines elsewhere. A few tourist hotels and restaurants stock local mango
and passionfruit wine, but rarely have it on the wine list. One restaurant was interested in trialling fruit
wines for its tourist and local customers and one was seeking a distinctively labelled local wine for its
large Japanese clientele, but most saw no potential as their customers were not asking for fruit wine or
local wine, did not expect to find local wine in northern Queensland, and were unlikely to risk buying
a wine that might not suit their meals, even by the glass. A resort food and beverage manager doubted
its mostly international clientele would buy these wines for quaffing, or buy them from a wine list, so
staff would need to push the wines, which would probably require offering them sales incentives.
However, he saw potential as aperitifs and in dishes such as desserts, particularly as the hotels
executive chef prefers local ingredients. One Cairns leisure club doubted fruit wine would appeal to its
regular clientele of beer drinkers or its function market which usually orders sparkling wine, while
another sells tropical fruit wine in its bottle shop but has experienced little demand for bar sales.
The manager and sommelier for a group of restaurants, cafes and retail outlets in inner Melbourne has
a favourable perception of fruit wines, having judged very good quality Victorian wines at wine
shows. He has not sold fruit wine but sees potential for fruit wines such as lychee in the groups Thai
restaurant. The business buys Australian and imported wines through distributors, imports directly
from Europe, buys directly from small businesses such as boutique and new wineries, and has its own
centralised warehouse. The sommelier assesses new products for these start-up producers, seeing 100
wine samples a week. The group usually buys wine by the pallet, but will handle small quantities of
wines that are difficult to obtain.
The manager of a small Melbourne beachside restaurant and bar saw potential for fruit wines for its
local and visiting international customers, who do occasionally ask for fruit wines. The manager of a
trendy Brisbane restaurant in an inner suburb dining precinct saw no potential for fruit wines,
believing its customers seek a safe predictable European-style dining experience with comfort food,
mostly Italian and modern Australian, and would not experiment with new drinks such as these.
To access the restaurant sector, tropical fruit wine producers will need to demystify the wines to
restaurant managers and staff so that they in turn will be confident to demystify them to the consumer.
Producers can provide food matching advice on labels and through staff training, wine samples to test
on staff and consumers, promotional material to attract attention, and products from well known fruits.
As awareness and demand grows for fruit wines, restaurants and bars are likely to introduce them,
starting with wines from well-known fruits, staff training, tasting samples and strong sales support.
There is more potential initially to introduce wines through chefs, who seek opportunities to offer
dishes with a point of difference.
While trade interviews suggested focussing on young people through entertainment venues, Cairns
nightclub operators have experienced little demand for fruit wine but strong competition for RTDs, so
accessing these venues would require strong and ongoing promotion, tastings, and price incentives.

21

Distributors recommended using Internet mail order retailing, particularly to reach 1825 year olds,
and one uses direct marketing for new product introductions.

Promotion
Tropical fruit wines are mainly promoted through tastings at the wineries and their external retail
outlets, local consumer shows and events, winery brochures, winery websites and word of mouth.
Fruit wines sold well to departing Japanese tourists at a large Cairns duty free store, provided tastings
were given. Winery visitors had often enjoyed fruit wine tastings elsewhere.
Awareness of northern Queensland tropical fruit wines is very low across the national marketplace.
Distributors observed that fruit wine was not represented or visible in their region, and a national retail
buyer had only become aware of tropical fruit wines when holidaying in northern Queensland. Hotel,
restaurant and nightclub representatives interviewed in the Cairns region were aware of local fruit
wines, and some had noticed television advertisements for the wines, but few had tasted local wines or
knew any brands. However, three quarters of consumer survey respondents were aware of local fruit
wines, 40 per cent had tasted them, and some had purchased wine (Table 2.2.15).
Table 2.2.15: Consumer survey experience of tropical fruit wines
Experience
Have bought
Have bought or tried at a winery
Have bought for gifts
Have tried
Have seen, e.g. local markets and shops
Have seen advertising and signage
Have only heard of them
Occasionally over the years, such as Bundaberg fruit wines
Often, in Tasmania, but have not heard of wine in northern Queensland,
despite frequent visits
Have tried local fruit local liqueurs
No experience
Responses
Source: Consumer survey

Local
3
4
2
11
9
1
1
1

Non-local
4

1
4
6
42

2
7

Total
3
8
2
11
9
1
1
1
1
4
8
49

Low awareness outside northern Queensland indicates a need to promote the area as a wine producing
region. Most major wine producing regions have built regional brands for food and wine, usually
based on geographical indicators, such as Margaret River, the Yarra Valley and, recently, the Strange
Bird trail in the Stanthorpe region, which local and state tourist organisations promote to attract coach
tour and self-drive visitors. The peak tourism organisation in northern Queensland promotes its
members and members of smaller regional associations under its umbrella. There is potential to
include regional food and wine tourism, centred on the Atherton Tablelands as a food-producing hub,
in its program of media, chef and other promotions.
Key activities can include food and wine experiences, packaged as coach tours, and regional wine
trails on maps promoted at the wineries, in visitor centres, on tourism organisation websites and
through vehicle hire and coach tour companies. Group displays and industry posters with generic
storylines about the local industry and essential information such as opening times could be posted at
visitor centres. Group tastings at public locations would build an image of the industry and enable trial
of the wines, potentially broadening the market (Giason pers. comm. 2007).
Trade interviews identified low consumer awareness and unknown quality, indicating a need for
education on shelf life, styles available, alcohol content and food matching. It was recommended that
tastings are essential initially to get these products into customers minds, such as through sales
promotions.
Large retailers observed that introducing these wines to new markets would require advertising, media
and tastings, handselling, and recommendation by informed and trained staff to entice customers to
switch to fruit wines when they came to the store to buy grape wine.

22

Distributors recommended promotions need to involve all levels of the distribution channel, including
producers, the industry association, distributors, wine wholesalers and a retail chain. They could be
funded and managed by producers as a collective; individual producers; a combined representative
group such as an industry association; producers together with a distributor; or producers with
government contributions. Wineries seeking to expand will need significant commitment to marketing.
According to a large retailer, a tasting across four stores will typically sell 2436 bottles. Tastings
should be held mid-week for people seeking wines to drink at home; Fridays when they buy for parties
and events, and Saturdays for wines for parties. These tastings would ideally offer mainstream wines
such as mango, lychee or passionfruit, with an exotic fruit wine such as jaboticaba or black sapote, as
consumers are likely to move from traditional to more obscure drinks. Fruit wines could also be
promoted effectively through party plans, which are used for some grape wine promotions.
Hotels and restaurants have tastings as an essential part of business. One Cairns restaurant uses
customer tastings and feedback to introduce new wines, and expects this would lead to sales for fruit
wines. A Victorian producer commented that tastings are needed to convince consumers to buy
because of the variable quality of fruit wines, and that attempts to develop local markets, including
through liquor stores, have had little success because of lack of opportunity to provide tastings. A food
and beverage manager advised that it is critical that tastings present the wines in the best possible state
and context. For example, wines being promoted as an aperitif would need to be served cool and
ideally displayed attractively with appropriate foods such as smoked salmon. Producers could increase
the impact with giveaways such as a free tour of the winery. It was suggested that producers, ideally as
an association, offer group tastings to mass audiences at large local shopping centres, high-traffic
tourist areas, and large liquor barns during the peak buying time of 12.004.00 pm on Saturdays.
Restaurants mainly promote wines on their winelist, with blackboards and table cards for special
promotions such as wine of the month. Tropical fruit wine producers have had little success in
accessing winelists as large grape wine manufacturers and distributors often design and produce them
for hotels and other restaurants, to favour their products. However, larger businesses such as hotels
design their own wine lists to offer a wide choice. Tropical fruit wines could be promoted through
information such as table cards until sufficiently established to be on the menu. Wine of the month
promotions are widely used to introduce new wines and develop demand, and the manufacturer price
incentives either passed on to the customer through discounting or retained to maximise profit. A
Cairns leisure club uses these promotions to trial and select new wines. A Cairns tourist restaurant saw
potential for fruit wines as wine of the month if producers supply high quality point of sale material
such as table cards, staff briefings and wine for tastings. If the wines sold slowly initially, some
restaurants have equipment to re-gas wine bottles to prevent oxidisation. A large tourist hotel supports
wine of the month promotions with tastings and staff sales incentives, and suppliers usually provide a
discount of around 15 per cent on pouring wines, but not for wines on the wine list. However, most
businesses will only run these promotions for grape wines with strong sales prospects.
When asked what information they would need to buy these wines, respondents to the consumer
survey mostly wanted to know what taste and sweetness to expect, and occasionally fruit type, place of
origin and alcohol content. They suggested providing tastings, or at least a description of taste, food
suggestions, advertising, other media promotion, and informed sales staff. Only a quarter said they
would or might consider buying a fruit wine without knowing the taste, while 14 per cent were
undecided. Knowing the taste would lower the purchase risk, particularly if expensive or for gifts.
Most distributors used trade shows and consumer wine shows to introduce new wines and
recommended trade shows for fruit wines. Not all shows permit selling.
Distributors recommend wine competitions with tastings to create awareness and interest in new
consumers. Wine show awards are particularly influential for the under 40s age group (Levine 2004).
Australias fruit wine industry runs two wine shows most years. The Cairns Fruit Wine Competition,
currently in development, uses a panel of professional wine judges and attracts entries from
commercial fruit wines across Australia. A Victorian producer commented on the valuable feedback of
this commercial focus to commercial producers. Hobarts longer established Australian Fruit Wine

23

Show organised by Fruit Winemakers (Tasmania) Inc. is open to commercial and amateur fruit wines,
with a competition followed by a well-advertised wine tasting attracting approximately 3500 people.
The distributors surveyed were usually small businesses with up to 13 staff, mainly in sales. Retail
chains also have fine wine managers and staff trained in selling fine wines.
A hotel food and beverage manager observed that women often ask advice from their partner or bar
staff on what to drink, unlike men. Most respondents to the consumer survey had low confidence in
their knowledge about wine, regardless of sex or age. Two thirds sought information from others when
buying wine, mainly from sales staff, family, friends, or colleagues, and three took note of media
publicity and advertising. Various studies show that wine buyers aged under 40 years, are most
influenced by recommendations from retail staff, wine waiters and friends and family (Levine 2004).
This indicates a need to educate sales and serving staff when introducing wines.
Trade interviews recommended promoting and emphasising the positive attributes of the wines
through point of sale material attractive to young, appropriately aged people. This includes brochures
attached to the product in bright colours linked to the wine product concept and tropical origins.
Information should be focussed, story-driven and quality-oriented, with images and background on the
fruits used and their provenance and quality, details of any organic production, and a story to attract
people who drink and mix cocktails. A health-oriented display could suit fruit wines. Retail store
displays often feature introductory wine displays with signs and other point of sale promotion (Fig.
2.2.7 demonstrates an integrated store promotion in Brisbane).
The wines could also be promoted in master cooking classes for use in cooking.
Media publicity of fruit wines has been sporadic, mostly local newspaper articles on winery and
product launches and tourism awards, with some profiling in Liquor Trade magazine. Most
distributors recommended advertising and publicity campaigns to support the introduction of fruit
wines to new markets. A national retail buyers experience is that publicity for new products through
media such as magazines and newspaper lifestyle sections leads immediately to consumer enquiries,
and a Cairns liquor store has had enquiries for fruit from local shoppers following media articles.
Activities could include media tastings and endorsement by experts in relevant fields such as health
write-ups by credible media to reach aimed mainly at young men and women aged 1825 years,
through magazines such as Cleo, Gourmet Wine and Wine Business Magazine.
An advertising campaign can be used for the under 40s age group and for experimental consumers
buying regular grape wines in independent bottle shops and some restaurants.
Distributors suggested developing a champion for the fruit wine industry, maybe from the media,
such as a popular food critic who is impressed with the whole category; a well-known wine writer or
media-savvy chef; fruit winemakers. The champion could effectively translate the products virtues
and put a face to the industry.
Wine reviews are influential across all markets (Levine 2004). The distributors surveyed read and look
out for new products mainly in a wide range of trade magazines, led by Wine Business Magazine and
Winestate, with some readership of Divine, Gourmet Traveller, Gourmet Wine, Daily Wine News,
Hospitality, Liquor Guide, Liquor Watch, James Halliday and Jeremy Oliver annuals, Thompsons
Wine Industry Directory, Winestate, Australian & New Zealand Wine Industry Journal and Australias
Wine Business Magazine, and some refer to daily newspapers and newspaper lifestyle sections.
However, a large retailer observed that trade readership of liquor trade magazines is low.
Public education about the wines point of difference was suggested to create customer demand. The
Australian wine industry has successfully used education to develop initial demand in new markets
through classes, wine clubs and media articles.
Northern Queenslanders awareness of their local fruit wines is growing through winery visits and
word of mouth. Around a third of respondents to the consumer survey visit wineries at least once a
year. A Western Australia company has successfully developed dedicated winery tours aimed at the
generation X consumers aged 2746 (Martin 2005). Tourism enables producers to promote the
attributes of their products and raise awareness and interest in fruit wines through winery tours,

24

signage, and promotion of the region and its wine, food and other attractions. Northern Queensland is
featured as a wine producing region on the Tourism Fair Trading and Wine Industry Development
wine map for Queensland and on the Queensland Wine Industry Association website.
The Queensland Wine Industry Development Strategy acknowledges the potential for the States
combined wine industry to build the industry and regional brand for Queensland wine so as to support
the development of wine tourism. This will require collaboration between producers, producer
associations and regional tourism organisations as well as with government agencies (Hynes 2007).
Asked about potential model industries that have successfully introduced similar products, distributors
and retailers suggested: 2 Dogs Sparkling lemonade; boutique beers; RTDs in a can; the grape wine
industry; family wine companies such as Brown Brothers, de Bortoli and Taylors, which are growing
faster than large corporate producers; and high quality Australian produce (see Appendix C).

Product positioning
Trade interviews and the consumer survey indicate a number of positioning options for tropical fruit
wines, on likely use by consumers and a suitable retail category. The following summarises responses.
By final usage by the consumer
As matched with appropriate foods: This was strongly recommended in trade interviews, particularly
for 1825 year olds who are learning about wine, and considered useful by respondents to the
consumer survey. It was suggested tourist restaurants could use wines from quality fruits used by chefs
to pair with dishes from those fruits; and that restaurants could serve a 75 ml glass of fruit wine with
fruit or with a cheese plate as vintage cheeses are complemented by fortified wines, full-bodied reds,
and botrytis wines. Max Allen, wine writer for the Weekend Australian, recommends apple cider with
full-flavoured foods such as strong cheeses and roast pork (Allen 2008).
As an aperitif: Fruit-based aperitifs are particularly popular with 3040 year olds, mainly women, who
choose drinks such as fruit cups, fruit cocktails, vodka and orange or gin, to avoid becoming bloated
before their meal (men usually choose beer). Wines such as passionfruit may be suitable, maybe with
ice, but consumers are likely to think of better known drinks when ordering.
In restaurant meals: Wines from quality fruits used by chefs, such as Australian native fruits, could be
paired with appropriate dishes in tourist oriented restaurants. Liqueurs such as Mango Rico are already
used this way. The wines are likely to suit desserts, sauces, salad dressings and poaching. A chef could
pair the fruit on a pavlova with the same fruits in the fruit wine, or use an exotic fruit wine as the base
for a sauce in a signature dish.
As a drink at nightclubs and hotels: Trade interviews suggested this to reach those aged under 25, such
as a hotel drink or as a fun female low calorie Friday night drink instead of cheap bubbles. However,
Cairns nightclub operators have had very little demand for wine or response to wine promotions from
this market, and fruit wine would compete with spirits, beer and RTDs, which manufacturers promote
heavily. One large nightclub restricts its range to a few strong selling lines of wines, premium beers,
RTDs, cocktails and basic spirits. To introduce a new product, owners expect an exclusive contract,
distributor price rebates, a large promotional budget, point of sale material, and extra discounted stock
for a month of tastings to build word of mouth. Owners of a city pub with a trendy bar sell fruit wine
in the bottle shop but doubt they would sell from the bar.
As a dessert wine or after dinner drink
In fruit cocktails: Tropical fruit wines could be used as ingredients in cocktails mixed with fruit and
juice, starting with popular wines with flavours that consumers know and like. Ingredients need to
blend well, and the wines would compete with low priced spirit bases. Usage would depend on the
concentration and flavour of individual wines and a subtle wine could be used in large amounts.
Cocktails usually contain 6070 mls of total alcohol volume of 3040 per cent, which wines cannot
provide. However, wine-based cocktails could be made with up to 60 mls of wine (two standard
25

drinks). Mocktails (non-alcoholic cocktails) are very popular, so there is likely to be demand for lower
alcohol cocktails. Hotels, restaurants and bars could offer them to comply with Responsible Service of
Alcohol laws, and consumers could buy more cocktails while abiding drink driving limits.
Fruit wines can be promoted in recipes on point of sale material and websites, and as ingredients in
national cocktail competitions. If winners go on to compete internationally the fruit wine ingredients
would be promoted more widely. Cocktails are trend-driven, with current trends favouring classics
such as sours, and use of high-end liqueurs and culinary herbs such as mint and basil (Crawford per.
comm. 2007; Yung per. comm. 2007; Wright 2007; trade interviews).
Using fruit wines as a major cocktail ingredient would solve many inherent problems where
inexperienced cocktail-makers use too much base spirit, overwhelming the drink. Liqueurs used in
cocktails are essentially a mixture of alcohol, sugar, water and a simple strong flavour. Substituting
fruit wines for liqueurs can add complexity through attributes such as tannin, fruit acid, glycerol and
complex flavours. Using fruit wines will help balance many other ingredients in the final drink if the
cocktail-maker understands how to balance them. It can also be used to develop many new recipes.
Fruit wines could be customised to cocktail-making with characteristics such as higher flavour, single
fruits, more sweetness than current table wines, and higher glycerol production through yeast
selection. Also, as fruit wines do not attract liqueur tax, which is currently $57.00 per litre of alcohol,
lower cocktail prices can be used to appeal to new markets.
As a transition from RTDs to grape wines: Retailers are seeking such a product, hence the growing
stocks of sparkling flavoured fruit wines in liquor stores.
As a novelty: This was suggested by some distributors and two consumer survey respondents.
As a gift: Asked if the wines were suitable for gifts, distributors agreed provided quality was good.
84 per cent of consumer respondents also agreed, particularly the under 35 years of age group. Three
had already given them as gifts. Most saw the wines as gifts for special occasions, for friends and
relatives, for guests and dinner parties, for overseas visitors and when travelling overseas.
By store category
Retailers felt the wines would be lost amidst the traditional wines section so would need a separate
location. Distributors, retailers and consumers were uncertain of the appropriate category and store
location for these wines, making several suggestions:
As tropical fruit wines: One retail chain buyer saw tropical fruit wine as the ideal description, but
another felt it would confuse customers. A restaurant wine buyer disliked the term as it suggesting
mainstream tropical fruits, and sweetness. When asked if tropical fruit wine was the best description
for the sample wines, 70 per cent of consumer survey respondents agreed, 19 per cent disagreed and
11 per cent were undecided. Support was across all demographics, but strongest from 2535 year olds,
over 55s, women and non-locals. There were positive comments about the appeal of tropical fruit
countered by concerns that wine from tropical fruits implies alcoholic fruit juice rather than wine, or
implies sweetness. Tropical is a key point of difference for promotion (Giason pers. comm. 2007).
By the specific fruit: Large retailers suggested individual fruit categories, similar to grape wines which
are usually sold by grape variety to create and maintain consumer confidence and avoid confusion
with grape wines. One suggested separate sections similar to bins in a fruit shop.
As fruit wines and liqueurs: A third of the consumers suggested a specific fruit wine section. There is
no dedicated fruit wine category in retail stores.
With grape wine of similar style: Most of the consumers (all local) suggested displaying with similar
styles of grape wines, sweet fruit wines with dessert wines, such as sparkling wines together, and ports
with ports. This would raise awareness in shoppers buying for specific purposes.
With RTDs. The wines could be sold in small bottles as a substitute for RTDs, similar to some
sparkling wines. A large retailer strongly recommended this, believing the fruit wines will not sell on
their labels on a wine shelf. However, nightclub operators pointed out that there are hundreds of RTD

26

products which sell largely because of quality packaging, and that packaging as RTDs has not
succeeded for small bottles of champagnes, despite good promotion, or for Mudslides cream cocktails.
Demand is stronger for RTDs with higher alcohol content, such as seven per cent.
Other suggestions were: with cider or mead (distributor); on colour or price (retailers); as a gourmet
line; in a tropical drinks section, local drinks section, exotic wines section, with liqueurs, gifts and
novelties, or at the front of the store (consumers).
Taxes and import regulations and requirements
All fruit and grape wine sold in Australia is liable for Wine Equalisation Tax (WET) of 29 per cent.
Australian wineries pay this on domestic sales if their total annual sales exceed $1 million, but exports
are WET and GST exempt. WET is also payable on imported wine unless the wine is covered by an
exemption such as diplomatic, duty free allowance, or consular allowance.

Fig. 2.2.3: Australian tropical fruit wines

Fig. 2.2.4: Fresita fruit flavoured

wine and Dr Demuth strawberry
wine

Fig. 2.2.6: Sparkling fruit flavoured grape wines

Fig. 2.2.5: Grape

wine labels

Fig. 2.2.7: Promotion of

grape wine

27

3. Profiles of overseas fruit wine markets

and selection of an overseas market for
further research
3.1

Methods

An initial Internet and database search identified numerous countries where fruit wine markets were
indicated by fruit wine production and imports of fruit wine products. Country profiles were prepared
for countries with larger markets, and brief regional profiles for those regions where substantial trade
flows suggest fruit wine markets. This chapter presents brief summaries of the overseas fruit wine
market profiles. For detailed profiles see Appendix E.
To enable comparison of the markets and selection of the market with most potential for Australian
tropical fruit wines, these larger country markets were then rated on market attractiveness and the
likely competitive strength of Australian suppliers (Table 4.1). Market attractiveness was assessed on
market size; growth; demand and demand trends for fruit wines and similar drinks; the existence of
current and potential market segments reachable with distribution and promotion; consumer
purchasing capacity; intensity of competition from fruit wines and substitute drinks; access to
distribution channels with the infrastructure to maintain product quality; trade barriers; and the effect
of import tariffs and various taxes on final price. The likely competitive strength of Australian
suppliers was assessed on expected demand for their products and ability to supply, differentiate, meet
domestic quality standards and make profitable sales.
These market, competitive, financial, economic and technology scores were then weighted using a
scale developed by the researchers to prioritise factors considered critical to export success. Table 4.2
shows the total scores for market attractiveness and competitive strength for each of the larger country
markets. The scores of the 12 most promising countries on both aspects were plotted on a Market
Attractiveness: Competitive Strength grid to enable comparison, using circle size to indicate
estimated annual sales and market size (Fig. 4.1). This process indicates Japan as having the most
potential, due mainly to its consumption, production and imports of tropical and other fruit wines,
favourable demand trends, distribution channels for fruit wine, and attractive pricing.
A market visit to Japan in July 2007 used product demonstrations and interviews with a cross-section
of potential distributors and a store audit to assess the market potential of Australian tropical fruit
wines. A complete analysis of the Japanese market is located in Section 4.

3.2

Country profile summaries Asia

China
China has a very long tradition of fruit wines, and a growing market as domestic supply increases with
the development of large commercial factories. A wide range of fruit wines is made from temperate
and sub-tropical fruits, ranging from very low in quality and price to high quality higher priced wines.
In comparison grape wines were only introduced in the 1970s through a Chinese Government project
to shift consumers from grain based local spirits and imported brandy to lower alcohol drinks so as to
conserve grain for food. While consumption is growing, mainly by people with higher income and
education, many Chinese do not drink alcoholic beverages.
Retail prices for fruit wine range from below CNY15 (A$2.35) a bottle for low quality local product to
CNY3150 (A$4.907.90) for good quality wines, and more than CNY50 (A$7.90) for high quality
local and imported wines. Restaurants sell fruit wines at more than CNY50 ($7.85) a bottle. Import

28

tariffs, value added tax and consumption tax add from A$4.80 a bottle to an Australian wine with a
landed cost of A$10.00.
Large fruit wine manufacturers typically have distribution centres around China. Specialist import
companies handle most imported wine, on behalf of wine distributors, and most private importers and
distributors operate under a sub-license from the China National Cereals, Oils & Foodstuffs Import
and Export Corporation (CEROILS), the state monopoly wholesaler and distributor of alcoholic
beverages. Fruit wines are widely sold in supermarkets and restaurants, and in karaoke bars which are
widely used for business entertainment.
Most grape wine is sold through restaurants, hotels, bars and clubs, and the rest through a growing
supermarket sector, boutique stores, specialist wine stores, discount stores, and wine and cheese shops.
Fruit wines are mostly promoted on manufacturer and distributor websites and restaurant winelists,
and have access to a number of trade shows.
In conclusion, there is a very large fruit wine market with some potential for Australian tropical fruit
wines.

Hong Kong
A very small market for fruit wines is indicated by some imports of fruit wines. Grape wine
consumption is growing, mainly by expatriates, overseas visitors, Hong Kong citizens returning from
living overseas, and middle and Chinese with high incomes. Import tax, VAT and consumption tax
would add A$8.00 to a bottle of Australian fruit wine with a landed price of A$10.00. Fruit wines can
be exhibited at the annual HOFEX trade show, while grape wines are typically promoted through
retailer wine tastings and promotions, wine exhibitions, winemaker dinners, incentive programs and
direct marketing.
Hong Kong is an important market for Australian grape wine, and a major port for reshipment into
China, although trade is shifting to ports in mainland China. Australian grape wine has a sound
reputation for consistent quality and value for money. All wine is imported, mainly by import agents
who usually supply the retail and food service sectors.
In conclusion, Hong Kong has a very small fruit wine market that may offer minor opportunities for
Australian fruit wine.

India
India has small emerging domestic and export markets for fruit wines and large tropical fruit
industries. A small emerging industry produces fruit wines from tropical and temperate fruits, as well
as grape wines and blends with fruit wine and juice. Imports of grape wine from Australia have grown
in recent years.
India has a legal drinking age of 25 and a Constitution that prohibits intoxicating drinks so does not
have a tradition of alcoholic drinks. Grape wine consumption was only five million litres in 2005, but
expected to grow with favourable demand trends, the removal of import restrictions and the lowering
of import duties (formerly 265 per cent). However, state excises, restricted distribution and poor
domestic wine quality will constrain market growth.
Sample retail prices are around R150 (A$4.35) a bottle for domestic fruit wine and R799 (A$23.10)
for an Italian fruit wine, while grape wine is usually below R500 (A$14.50). Basic customs duty,
additional customs duties and VAT can add up to A$37.00 to the cost of a bottle of Australian fruit
wine with a landed cost of A$10.00, and State and Federal taxes can also apply.
Fruit wineries mostly sell directly or via their websites or mail order. Grape wine is usually distributed
by a dozen importers to restaurants and bars, and low priced wines are also sold through government
and independent retail stores. Complex regulations over distribution and sale are used to inhibit liquor
consumption and protect the domestic wine industry.

29

Fruit wine appears to be promoted mainly on winery websites. Advertising of wine is prohibited, so
grape wines are usually promoted through wine clubs, media articles, importer promotions, wine
dinners and wine shows.
In conclusion, there is a moderately attractive market with potential for Australian branded fruit wines
if import and distribution barriers are further reduced.

Indonesia
Indonesias fruit and herbal wine market of around nine million litres a year is located mainly in Bali.
A small local industry produces fruit and grape wines. Tourists and expatriates in Bali buy most grape
wine imported into Indonesia, and most Indonesians abstain from alcohol in accordance with the
Muslim religion, so wine consumption is unlikely to grow significantly.
Distribution of grape wine is restricted, with most sold through the food service and retail sectors,
while promotion is limited to non-public outlets such as duty free stores and restaurants. Imported
wines incur import tariffs, excise tax, sales tax, VAT, and regional government and labelling levies.
In conclusion, Indonesia has a small regional fruit wine market with minor potential for Australian
tropical fruit wines.

Japan
While it does not have a long tradition of fruit wines, Japan has a small emerging fruit wine market
which has stabilised after growing consumption in recent years.
Annual production of fruit and grape wine is estimated at 215 million litres of wine and 68 million
litres of fortified wine, although statistics are likely to include other fruity alcoholic drinks. Key
markets for fruit wine included young women and health conscious people. Domestic producers range
from small wineries to large breweries diversifying into wine, using temperate and tropical fruits.
Small quantities of tropical and temperate fruit wines are imported from a number of countries.
Grape wine consumption was 410 million litres in 2005, and has averaged around 3.2 litres per person
annually, while growth has been stabilising. Wine drinking has become increasingly popular, although
beer and sake remain the most popular alcoholic drinks.
Sample retail and internet prices range from A$8.3019.00 a bottle for fruit wines and A$4.6017.00
for fruit flavoured grape wines, the higher prices being for imported wines.
Fruit wine distribution includes wineries, internet sales, restaurants, bars, a wide range of retail outlets,
and catalogues. Wines are promoted via winery and store tastings and producer and distributor
websites.
Import tariffs, taxes and other fees would add A$2.18 to a bottle of Australian fruit wine with a landed
price of A$10.00.
In conclusion there is an attractive Japanese market with significant potential for Australian tropical
fruit wines.

Malaysia
Malaysia has a very small fruit wine market, largely mainly by a small industry producing wines from
mostly tropical fruits for domestic consumption and exports to countries such as Singapore and Japan.
While there is a small steadily growing grape wine market, most Malaysian people drink brandy,
whisky or beer or abstain in accordance with the Muslim religion. Australia is the leading supplier of
imported grape wines, in growing quantities.
No retail prices were identified for fruit wines. In 2004, 33 per cent of grape wine sales were under
RM30 (A$10.80) a bottle and 46 per cent at RM3050 (A$10.7028.00). Import tariffs and taxes
would add A$6.50 a bottle to an Australian fruit wine with a landed price of A$10.00.
30

Fruit wines are sold through wholesalers, retailers, winery and distributor websites, and entertainment
venues, and promoted mainly on manufacturer websites. Several major importers supply imported
grape wine to distributors to liquor stores, restaurants, hotels and entertainment venues, and to large
retailers, and trade mark-ups are substantial. Wine is increasingly retailed by mail order. Grape wines
are publicised through trade shows, print media and food and wine matching events.
In conclusion, there is a small moderately attractive fruit wine market with minor potential for
Australian tropical fruit wines.

Republic of Korea
A small fruit wine market appears to be growing, supplied mostly by a small expanding industry
producing temperate fruit wines. Grape wine consumption was only 16 million litres in 2004, but is
expected to continue growing. Wine is mostly drunk at home or in restaurants, or used for gifts.
Korean liquor consumption is amongst the world's highest, averaging 78.1 litres a person in 2005. A
local grape wine industry has been shrinking, largely because of strong competition from around
6000 imported wine brands. The most stable and profitable price segments are mid-priced wines in
liquor stores, supermarkets and discount stores.
Some fruit wine manufacturers retail and promote through their websites. A few licensed liquor
importers handle most grape wine imports, usually using their own warehousing and transport, but full
vertical integration is prohibited so distribution is generally regional and fragmented. Most grape wine
is sold through retail chains, speciality and convenience stores, restaurants, bars and the Internet, and
promoted through trade shows and other tasting events and organisations providing wine education.
Import tariffs, liquor tax and education tax add around A$7.70 to bottle of Australian fruit wine with a
landed cost of A$10.00. High distribution costs and mark-ups can cause the final price to double and
more in retail outlets and restaurants.
In conclusion, there is a very small fruit wine market with limited opportunities at best for Australian
tropical fruit wines.

Singapore
Singapore has a small fruit wine market, and no wine industry, so all wine is imported, including
tropical fruit wines from the Philippines, and temperate fruit wines from Canada.
A small maturing grape wine market of around 10 million litres a year is maturing and intensely
competitive, supplied mainly with red wine from France and Australia.
Tropical fruit wines from the Philippines have been retailing in Singapore at A$22.10 a bottle. In 2000
half of grape wine sales were over S$18.00 (A$18.50).
Imported grape wine is handled by specialist and general importers, merchants, trading companies,
and retailers, and usually sold through retail chains, grocery stores, specialist shops, restaurants, clubs;
airline caterers and ship chandlers servicing cruise liners. Promotion is mostly by trade events, tastings
and education events, media advertising and direct mail.
In conclusion, Singapore has a small moderately attractive market with some opportunities for
Australian tropical fruit wines.

Taiwan
Small fruit and grape wine markets have emerged following a Government-sponsored project to
develop wine production and wine tourism, and also partial deregulation of wine production. Small
quantities of fruit wines are imported, such as berry wine from Canada.

31

Wine is a popular gift, particularly for major events such as Chinese New Year. The grape wine
market has been shrinking as Taiwanese businesses relocate to China to reduce costs. Imports have
also been shifting from Old to New World suppliers, and increasingly Australia.
The wine market is price-sensitive, and competition between large retailers is bringing down prices.
Most Australian grape wine retails from A$12.0030.00 in supermarkets, department and convenience
stores, restaurants and nightclubs. Import duty and various taxes add from A$5.00 to a bottle of
Australian fruit wine with a landed price of A$10.00.
Most fruit wine is sold through producer and distributor websites. Imported grape wines are generally
distributed by import agents to large retail chains, restaurants, pubs, hotels, liquor stores, independent
food stores and duty free shops.
Fruit wines are mostly promoted to domestic tourists at the wineries. Grape wines are promoted
through tasting events and media publicity.
In conclusion, Taiwan has a small emerging market for fruit wines, with some potential for Australian
tropical fruit wines.

Thailand
Thailands developing fruit wine market consumed 1.4 million litres of mostly local fruit wine in
2007. An emerging fruit wine industry produces wines from tropical and subtropical fruits and herbs,
and has exported these and blends of fruit and grape wine to Japan, Norway, Sweden, Laos and
Myanmar, for outlets such as Thai restaurants.
A small grape wine market has stabilised at around eight million litres a year, constrained by low
consumer incomes and poor wine knowledge. Supply is from local wineries and declining imports,
usually from France and increasingly Australia.
An example of fruit wine pricing is 320 baht (A$11.90) a bottle advertised on the leading fruit wine
producers website. Grape wines retail from A$15.0030.00 a bottle for table wines, and from
A$50.00 for premium wines. Import tariffs, excise tax, municipal tax and VAT (reimbursed by the
importer) would add around A$9.15 to a bottle of Australian fruit wine with a landed price of
A$10.00. Import tariffs will be progressively reduced until 2015.
Fruit wine is usually retailed at the wineries or through their websites or mail order services; and by
local restaurants and shops. Most grape wine is sold in hypermarkets, international hotels, and higher
quality Thai hotels and restaurants.
Fruit wines are promoted by the wineries, a government website, and fruit wine competitions and
tasting events.
In conclusion, Thailands emerging and price-sensitive fruit wine market offers little opportunity for
Australian tropical fruit wines.

Vietnam
Fruit wines represent around three quarters of Vietnams wine market, although there is some shift to
grape wine and beer. An emerging wine industry, of small and commercial producers, uses fruits such
as lychee, citrus and apricot as well as grapes.
Grape wine consumption, mainly by expatriates and tourists, reached 22 million litres in 2005 and
continues to grow, although constrained by rising fuel costs, high import tariffs, the introduction of
value added tax, and competition from illicit low-priced spirits. Beer provided 97 per cent of liquor
sales by volume in 2005. Most wine is imported, mainly from France but increasingly from Australia
which supplied 537 000 litres in 2006.
Import tariffs, excise tax, VAT and Special Consumption Tax add around A$25.00 to a bottle of
Australian fruit wine with a landed price of A$10.00.

32

Producers sell most fruit wine at the winery or through their websites or mail order. Grape wine is
handled by import, trading and distribution companies and sold through large retail chains, small
shops, hotels and restaurants.
Promotion of domestic fruit wines includes producer and distributor websites and an international
wine competition. Fruit and grape wines are often promoted as having health benefits.
In conclusion Vietnam has a significant but price-sensitive and heavily protected fruit wine market
with little opportunity for Australian tropical fruit wines.

3.3

Country profile summaries North America

Canada
Canada has a moderately sized fruit wine market, mostly of tourists visiting wineries. A growing fruit
wine industry consists of both small wineries and large grape wine manufacturers diversifying into
new drinks. Most fruit wines are made from apples, berries, kiwifruit and stonefruit to national product
and quality standards.
Provincial liquor boards usually control wine distribution, pricing and production quotas. Where state
laws permit, many small producers sell through their wineries, websites and mail order services.
Sample retail prices range from A$11.0025.00 a bottle. Imported wines are subject to import tariffs,
excise tax, GST, levies and provincial taxes. Promotion is mainly through producers websites and
fruit wine competitions.
Grape wine consumption was 358 million litres in 2005, with low individual consumption. Most grape
wine is imported, including growing quantities from Australia.
In conclusion Canada has a moderately attractive fruit wine market with some potential for Australian
tropical fruit wines.

Mexico
Mexico has a price-sensitive market of undetermined size for domestic wines from fruit and other
plants such as cacti and palms. Imported fruit wines incur import tariffs, Special Products and Services
Tax, VAT and other taxes.
While grape wine consumption is growing, imports of Australian grape wine have been falling,
indicating strong competition.
In conclusion, Mexicos fruit wine market offers an uncertain opportunity for Australian tropical fruit
wines.

United States
The United States has a substantial market for fruit wines, as well as large markets for cider, perry,
and blends of fruit and grape wine, and growing demand for fruity alcoholic drinks. Around 200 small
producers and a few large manufacturers produce fruit wine, cider and fruit flavoured grape wines.
While most fruit wines are from berries and apples, wineries in Hawaii and Florida use similar tropical
fruits to the Australian industry.
There is also a large and growing grape wine market which reached 2660 million litres in 2005,
supplied by a domestic industry and imports, with strong demand for Australian wine, and the
Australian brand Yellow tail the market leader.
Most fruit wine is retailed directly at the wineries or through their websites and mail order, and some
is sold through liquor stores, restaurants and distributor websites. Grape wine is distributed by
wholesalers, wine brokers and distributor websites, and sold mainly by supermarkets, liquor stores,

33

bars and restaurants. Deregulation of wine distribution across state borders has improved market
access in recent years.
Fruit wine prices are typically from A$16.0025.00 on winery websites. Import tariffs and excise add
around $1.10 to a bottle of Australian fruit wine with a landed cost of A$10.00.
Fruit wines are promoted mainly through winery and other websites, retail store promotions and fruit
wine competitions.
In conclusion, the United States offers an attractive market with good potential for Australian tropical
fruit wines.

3.4

Country profile summaries Europe

European profile
Europe has a long tradition of fruit wines, cider and perry which, like grape wines, have been made in
the home for centuries, particularly in northern countries too cold for grape-growing. The Association
of the Cider and Fruit Wine Industry of the European Union (EU) in Brussels represents the fruit wine
industries and industry organisations of a number of European countries, and provides production
standards and technical support.
The largest markets for European and imported fruit wine, cider and perry are in Belgium, Denmark,
Finland, Germany, Ireland, the Netherlands, Russia, Sweden and the United Kingdom. Much of the
fruit wine is low priced low quality product from several countries in eastern Europe. Around one
million litres of fruit wine were exported from the EU in 2002. Within the EU fruit wines are usually
drunk in the home, while cider and perry are mostly sold through the food service and retail sectors.
Fruit wines attract similar import tariffs to grape wine, but excise and other taxes vary.

Austria
Austria has a market of undetermined size for local cider, perry, and wines from temperate fruits such
as apple, pear and berries.
The grape wine market is in decline as Austrians reduce their liquor consumption. Growing conditions
suit mainly white wine production so most red wine is imported from New World countries, led by
Australia.
Fruit wines are mostly sold by wineries and wine taverns. Grape wine is also sold in shops and
restaurants, and promoted through tasting events and word of mouth.
Import duty and VAT would add from $2.30 a bottle to an Australian fruit wine with a landed cost of
A$10.00, depending on alcohol content.
In conclusion, Austrias small moderately attractive fruit wine market may offer a minor opportunity
for Australian tropical fruit wines.

Belarus
Wines from berries and other temperate fruits are among the leading alcoholic drinks in Belarus,
particularly for people on lower incomes. A large fruit wine industry produced 18 million litres in
2005, and includes some large wine and spirit manufacturers of berry and grape wines, often fortified.
Consumption is expected to grow as the Belarus Government plans to increase the production and
imports of natural fruit and berry wine. From 200205 imports of fruit wine related products doubled
to 28 million litres.
While the government is trying to persuade consumers to switch from fortified fruit wines and vodka
to lower alcohol beer to counter high levels of alcoholism, consumption of local and imported grape
wine is growing. A domestic grape wine industry produces mostly special fruit wine made from dry
34

and fermented grape concentrate imported mainly from other eastern European countries due a lack of
local grapes. In 2006 imports of grape wine included 18 100 litres from Australia.
In 2007 retail price ranges ranged from BYR4000 8000 (A$2.244.48) a bottle for local berry and
fruit fortified wines and BYR11 00032 000 (A$6.1617.92) for imported grape wines. Restaurants
usually sell a few wines from BYR22 000111 000 (A$12.3262.15) a bottle.
Liquor distribution is confined to state-controlled kiosks, state food shops, and universal shops in
outlying villages, giving little access to illegal and counterfeit products, unlike in neighbouring Russia.
However, modern retailing is emerging.
In conclusion, Belarus has a substantial but price-sensitive fruit wine market offering limited
opportunities for Australian tropical fruit wines.

Belgium
Belgium has moderate sized fruit wine and cider markets consuming mostly local product. Combined
tariffs, excise and VAT would add from A$3.00 to a bottle of Australian fruit wine with a landed price
of A$10.00, depending on alcohol content.
A substantial and growing grape wine market consumes mainly imported wine including growing
quantities from Australia of mostly red and bulk wine. Most grape wine is sold by large retail chains.
Beer remains the most popular alcoholic drink, including fruit beers made from wheat, malt and fruits.
In conclusion, Belgium has a moderately attractive fruit wine market with uncertain potential for
Australian tropical fruit wines.

Bulgaria
Bulgaria has substantial markets for low-priced fruit and grape wine supplied by a domestic industry.
Product quality has been poor but is improving. Most people cannot afford to buy imported wines,
although demand is growing for quality wines following media and retail promotions and expanding
distribution, and imports in recent years have included small intermittent quantities of fruit wine
products from Australia. However, the leading alcoholic drinks remain beer and spirits.
In conclusion, Bulgaria has a price-sensitive fruit wine market offering little opportunity for Australian
tropical fruit wines.

Denmark
Denmark has one of Europes largest markets for fruit wine and cider and a domestic industry
producing mostly berry and cherry wines and cider.
Grape wine consumption was 180 million litres in 2004 and growing as consumers shift from beer. All
grape wine is imported, mainly from Europe but some from Australia.
An example of pricing is a cherry wine advertised on a distributors mail order website at US$12.99
(A$17.25) a bottle. Import tariffs, excise, VAT and bottle tax add from $4.40 to a bottle of Australian
fruit wine with a landed price of A$10.00, depending on alcohol content. Wholesaler and retailer
mark-up is around 20 per cent, but restaurant mark-ups can reach 300 per cent. The grape wine market
is very price sensitive.
Most importers handle Australian grape wine. Most wine is sold in retail chains and speciality stores,
and some in hotels, pubs and restaurants. Advertising and other promotion of liquor is restricted, and
wine trade shows are often used for promotion.
In conclusion, Denmark has a moderately attractive fruit wine market offering a minor opportunity for
Australian tropical fruit wines.

35

Estonia
Estonia has a long fruit wine tradition, a substantial fruit wine market and a growing cider market.
Large industries produce fruit wine and cider from temperate fruits such as berries, apples and pears.
Import tariffs, excise and VAT would add at least A$3.00 to a bottle of Australian fruit wine with a
landed price of A$10.00, depending on alcohol content.
Imports of grape wine have included growing quantities of Australian grape wine, with 168 000 litres
in 2006.
In conclusion, Estonia has a moderately attractive fruit wine market where further research may
identify opportunities for Australian tropical fruit wines.

Finland
Finland has one of Europes largest markets for fruit wine and cider, at around 10.4 million litres a
year, and significant export markets, including Japan. In the 1990s fruit wine and cider represented
half of all wine consumed. A small and declining fruit wine industry produces mostly berry wines,
often fortified.
There is also a large and growing grape wine market. All grape wine is imported, including growing
quantities of Australian grape wines which reached 3.6 million litres in 2006.
Leading retailer Alkos website lists fruit wines from 2.9613.86 (A$4.8422.67) a bottle. The wine
market is highly price-sensitive, with 85 per cent of table grape wines retailing at under 10.00
(A$16.30) in 2005. Taxes are prohibitively high to discourage drinking of alcohol, and import tariffs,
excise, VAT, alcohol beverage tax and a surcharge on retail containers that cannot be refilled or
recycled add from A$5.60 to a bottle of Australian fruit wine with a landed price of A$10.00,
depending on alcohol content.
Ten importers handle 90 per cent of all wine imports. Former State business Alko has a monopoly on
the retail of drinks with more than 4.7 per cent alcohol, although wine producers can sell wine below
13 per cent direct to the consumer. Distribution is through around 300 Alko stores and associated
outlets as well as grocery stores, restaurants and cafes.
Advertising of wine is restricted so promotion is mainly through media publicity, Alkos generic
promotional campaigns, product price lists, trade shows and tasting tours.
In conclusion, Finland has a moderately attractive fruit wine market with some potential for Australian
tropical fruit wines.

France
France has a small fruit wine market, and a stable cider and perry market which is the fourth largest in
Europe. Fruit wines are made from fruits such as berries and plum.
Grape wine consumption was 2730 million litres in 2004, and is declining despite wine-drinking being
a traditional part of French life. France is the worlds leading wine producer and has amongst the
largest exports, but is increasingly affected by overproduction amid growing global competition and
rising demand for imported wines. Imports of mainly bulk wine from Australia reached 8.8 million
litres in 2006.
Examples of pricing on distributor websites are sparkling fruit wines at 3.80 ($6.20) a bottle and fruit
flavoured grape wine at 15.00 (A$24.50), while mid-priced grape wines retail at around A$10.00.
Import tariffs, excise and VAT add from A$2.40 to a bottle of Australian fruit wine with a landed
price of A$10.00, depending on alcohol content.
About 25 importers handle Australian grape wine, mainly bulk wine for bottling in France for buyers
own brands sold in United Kingdom supermarkets. Distribution is increasingly dominated by large
retail chains, as well as specialist stores, bars, restaurants and cafes.

36

Television advertising of alcohol is banned and French law limits other media promotion and also
sponsorships, particularly to young audiences.
In conclusion, France has a small fruit wine market with no apparent opportunities for Australian
tropical fruit wines.

Germany
Germany has a long tradition of fruit wines, and one of Europes biggest fruit wine and cider markets.
A large fruit wine industry produces fruit wines, ciders, cocktails, mulled drinks and blended drinks
from temperate and tropical fruits for domestic consumption and export markets that include Australia
and Japan.
Germany is also a major producer and has the worlds leading import market for grape wine at around
1560 million litres a year. Large volumes of imported bulk wine have included growing quantities
from Australia. The market is mature with strong competition between numerous brands and
distributors, and price-sensitive consumers, and most grape wines retail at under A$10.00 a bottle.
Promotion is often through large food and wine trade shows.
Distribution of fruit wines includes sales through wineries and producers websites. Import tariffs,
excise and VAT would add from A$4.00 to a bottle of Australian fruit wine with a landed price of
A$10.00, depending on alcohol content.
In conclusion, Germany has an attractive market for fruit wines and related drinks, indicating some
opportunity for Australian tropical fruit wines.

Ireland
Ireland has one of Europes largest fruit wine markets, its leading cider market, a substantial perry
market, and a tradition of home-made fruit wines. Some very large cider and perry manufacturers are
based there.
Grape wine consumption was 31.5 million litres in 2000 and growing as consumers shift from beer
and spirits to grape wine. Almost all grape wine is imported other than made wine from imported
concentrate, and increasingly from Australia. Most grape wine is sold by large Irish retail chains, pubs,
hotels and restaurants.
Ireland is a price-sensitive market, with 76 per cent of retail sales of grape wine under 10 (A$16.70) a
bottle in 2006. Import tariffs, excise and VAT would add from A$6.35 to a bottle of Australian fruit
wine with a landed cost of A$10.00, depending on alcohol content.
In conclusion, Ireland has a moderately attractive market for fruit wines and related drinks that may
offer an opportunity for Australian tropical fruit wines.

Italy
Italy does not have significant fruit or cider markets, although imports of around 21 million litres a
year of fruit wine related products fermented drinks other than grape wine and beer indicate demand
for such drinks. A domestic industry produces and exports fruit wines and blends with grape wine,
including some based on tropical fruits.
Italy has one of the worlds largest grape wine markets, at 2.6 billion litres in 2005, with wine the
leading alcoholic drink and considered an important part of the daily diet, particularly with meals at
home. However, consumption is falling, and shifting to wines with higher quality and lower alcohol.
Italys large wine industry is also slowly shrinking, with growing imports of mostly bulk grape wine
(including from Australia), champagne, port and sherry.
Grape wine is mostly sold by retail chains, specialist shops and restaurants, or direct to the consumer.
This is a price sensitive market, with quality grape wine typically retailing at around A$6.55 a bottle.

37

Import duty, VAT and a strip stamp levy would add from A$2.80 to the cost of a bottle of Australian
fruit wine landed at A$10.00, depending on alcohol content.
Italy appears to have a small moderately attractive fruit wine market with uncertain opportunity for
Australian tropical fruit wines.

Lithuania
Lithuania has large fruit wine and cider markets, some large producers of fruit wines and fruit
flavoured grape wine, and imports of around 16 million litres a year of related drinks, almost all from
within the EU. Imports of Australian grape wine have been insignificant.
EU import tariffs, excise and VAT would add A$2.60 to a bottle of Australian fruit wine with a landed
price of A$10.00, depending on alcohol content.
In conclusion, Lithuania has a moderately attractive fruit wine market with uncertain potential for
Australian tropical fruit wines.

Luxembourg
Luxembourg does not have significant markets for fruit wine or cider, but has amongst the worlds
highest grape wine consumption averaging around 55 litres per person a year. Most grape wine is
imported, including a small quantity from Australia in 2002.
Import tariffs and VAT would add from A$2.00 to a bottle of Australian fruit wine with a landed price
of A$10.00, depending on alcohol content.
In conclusion this market appears offers opportunity for Australian tropical fruit wines.

Republic of Moldova
Moldova has a very large fruit wine market and one of the worlds largest fruit wine industries,
producing wine from berries and other temperate fruits. Large volumes of low-priced fruit wines are
exported to Russia each year, as well as grape wine to mostly eastern European countries. There have
been no imports of Australian grape wine in recent years.
In conclusion Moldova has a very large but price-sensitive market offering little opportunity for
Australian tropical fruit wines.

Netherlands
The Netherlands has a long tradition of fruit wines from temperate fruits such as berries, and one of
Europes largest markets for fruit wine and cider. Import tariffs, excise tax and VAT would add from
A$3.00 a bottle to an Australian fruit wine landed at A$10.00, depending on alcohol content.
A large and growing grape wine market consumed 325 million litres in 2004. All grape wine is
imported, with growing quantities from Australia reaching 25 million litres in 2006. Around 30 wine
importers distribute a wide range of Australian wine. Most wine is sold through large retail chains and
liquor stores, and intense competition has led to 99 per cent of wine retailing at under A$4.50 a bottle.
In conclusion, the Netherlands has a moderately attractive fruit wine market but with limited
opportunities for Australian tropical fruit wines.

Norway
Norway does not have a significant fruit wine market, but minor imports have included tropical fruit
wine from Thailand.

38

There is growing consumption of grape wine as consumers become more knowledgeable about wine,
and increasing demand for quality wine. Almost all grape wine is imported, including bulk wine for
bottling locally, and growing imports of Australian wine reached 3.9 million litres in 2006.
Wine is imported by numerous specialist importers and wholesalers, but Government policy to
moderate alcohol consumption restricts consumer sales to licensed restaurants and the 200 retail stores
of Vinmonopolet, which has long held a monopoly on liquor distribution. There are high levels of
illicit production and importing of grape wine.
The wine market is very price-sensitive. Australian grape wines retail mostly in the mid-price range of
NOK80130 (A$16.3326.55). While not an EU member, Norway applies EU wine legislation and
tariffs, and import tariffs, excise, VAT and recycling tax on containers adds from A$1.20 to a bottle of
Australian fruit wine with a landed price of A$10.00, depending on alcohol content.
Promotion is also heavily restricted, and usually through retail, hotel and restaurant tastings, trade
shows, media publicity and point of sale information.
In conclusion, Norways small fruit wine market offers little opportunity for Australian tropical fruit
wines.

Poland
Poland has a long fruit wine tradition, and a very large fruit wine market, mainly for low priced sweet
products, but with some shift to imported fruit wine and grape wine. In 2000 the wine industry
produced 300 million litres of fruit wine, mulled fruit wine, and blends with grape wine, mainly from
berries, stonefruit and apples. Fruit wine producers include not only wineries but businesses such as
large juice processors. Imports of fermented drinks in 2005 appear to have included fruit wines from
Australia and the United States.
Grape wine consumption is around 700 million litres a year and growing. Almost all wine is imported,
including bulk wine which is bottled locally. Growing imports of Australian grape wine reached
680 000 litres in 2006.
Retail prices for grape wine range from 8100 zlotys (A$3.46 $43.32) in supermarkets and 201200
zlotys (A$8.66520.00) in wine shops. Most sales are in the low price range, reflecting low consumer
incomes. Import tariffs, excise and VAT add from A$2.90 to a bottle of Australian fruit wine with a
landed price of A$10.00, depending on alcohol content.
Most wine is handled by large importers who supply independent wholesalers, retail chains, and
grocery and wine stores. Promotion is usually through wine store recommendations and tastings,
competitions, tasting events, television advertising and word of mouth.
In conclusion Poland has a very large and somewhat attractive fruit wine market with some potential
for Australian tropical fruit wines.

Russian Federation
Russia has a long-established fruit wine market and one of Europes largest cider markets. Fruit and
grape wine represented around seven per cent of Russian liquor consumption in 2003. There is a large
but shrinking fruit wine industry, using fruits such as stonefruit, berries and mango. Large quantities
of fruit wine are imported from Moldova and other neighbouring countries, and 160 million litres of
fruit wine related products were imported in 2005.
A very large and strongly growing grape wine market reached 316 million litres in 2004. Most wine is
made in Russia from imported ingredients, but demand is shifting to imported products with higher
quality, and from eastern European to New World suppliers. Imports of Australian grape wine reached
650 000 litres in 2006.

39

Retail prices were not identified for fruit wine. Grape wines retail at around A$5.30 a bottle. Import
tariffs, excise and VAT would add from A$6.30 to the cost of a bottle of Australian fruit wine landed
at A$10.00, depending on alcohol content.
Wine is imported by wine traders and sold through specialty stores, supermarkets, hotels and
restaurants. Much is promoted through tastings, trade shows such as the annual DRINKS St.
Petersburg trade show which has a fruit wine category, and media advertising.
In conclusion, Russia has a large and moderately attractive market with some potential for Australian
tropical fruit wines.

Spain
Spain has large domestic markets for cider and sangria, a traditional grape wine and fruit juice blend,
and large industries producing these drinks for domestic and export sales.
A large grape wine market is supplied by a domestic industry that produced 3300 million litres of
grape wine in the 200506 year, and growing imports. Imports of Australian wine reached
505 000 litres in 2006.
Most grape wine is supplied by specialist importers, wholesalers and distributors to retail chains,
specialist shops, department and convenience stores, and restaurants. Australian wine often enters
Spain via the United Kingdom as an English language point.
Import tariffs and VAT would add from A$1.80 a bottle to an Australian fruit wine with a landed cost
of A$10.00, depending on alcohol content.
In conclusion, further investigation may reveal a small market for fruit wine with minor potential for
Australian tropical fruit wines.

Sweden
Sweden has large fruit wine and cider markets which consumed a total of 60 million litres in 2003.
Fruit wine is the minor category, and includes domestic berry wines, some tropical fruit wines
imported from Thailand for Thai restaurants, and some imports from Australia of fruit wine related
products.
Grape wine consumption was around 161 million litres in 2003, and growing. Domestic grape wine is
usually produced from imported grape must, and demand is shifting to imported quality wines.
Imports of Australian wine, mostly bulk wine, reached 9.4 million litres in 2006.
Sample prices for domestic fruit wines are SEK 93 (A$16.45) for 750 mls for still wines and SEK 129
(A$22.80) for sparkling. Import tariffs, excise, VAT and glass bottle duty would add from A$4.30 to a
bottle of Australian fruit wine with a landed cost of A$10.00, depending on alcohol content.
Traditional Government controls on distribution and promotion have been relaxed somewhat with
Swedishs accession to the EU but while hundreds of licensed companies now import and wholesale
wine, retailing of all domestic and imported wine remains restricted to the Swedish Governments own
retail company, Nya Systembolaget. Wine is usually promoted through media articles, wine and food
shows and wine clubs.
In conclusion, there is a small moderately attractive fruit wine market with some potential for
Australian tropical fruit wines.

Switzerland
Switzerland has no significant fruit wine consumption, although growing imports of related drinks
(which are likely to include wine coolers) reached 4.8 million litres in 2005, including 21 600 litres
from Australia.

40

Switzerland has one of the worlds wealthiest and highest-consuming grape wine markets, with
consumption of 291.6 million litres representing an average of 40 litres per person in 2004. Imports of
Australian grape wine have declined in recent years.
A monopoly tax and VAT would add from A3.10 to a bottle of Australian fruit wine with a landed
cost of A$10.00, depending on alcohol content.
In conclusion, Switzerland appears to have a small fruit wine market with uncertain opportunities for
Australian tropical fruit wines.

Turkey
Turkey has a small market for local fruit wines, mainly from berries, apples and stone fruit. While
99.8 per cent of its population follow the Moslem religion, Turkey is not governed by Sharia law so
alcohol consumption is permitted, and there is a long tradition of fruit wine production and
consumption by non-Moslems.
A small but growing grape wine market, mainly of younger Turks and tourists, is supplied by a small
local industry and imports, which include occasional small quantities of Australian wine.
No prices were found for fruit wines. Medium quality grape wines retail from around A$9.30$13.30
a bottle, and better quality wines at around A$19.5022.40. Turkey is not an EU member, and its
import duty, VAT, special consumption tax and customs clearance fees would add A$11.28 to a bottle
of Australian fruit wine landed at A$10.00. Wines are also subject to high trade mark-ups and fees.
Wine is distributed mainly through importers, agents and distributors supplying retail chains, specialty
stores, restaurants and hotels. Promotion is mostly through tasting events, media articles and
distributor websites.
In conclusion, there is a small moderately attractive but heavily protected fruit wine market with little
opportunity for Australian tropical fruit wines.

United Kingdom
The United Kingdom has a long tradition of fruit and other non-grape wines, one of Europes largest
markets for fruit wine at around 4050 million litres a year, and annual cider and perry consumption
of more than 700 million litres. Consumption in all categories has grown in recent years due to the
expansion of commercial production, with numerous small wineries and some large drinks
manufacturers making a wide range of wines from stonefruit, berries, apples, pears and citrus, as well
as honey, ginger and herbs.
Grape wine consumption was 1259 million litres in 2004 and growing steadily, but the market may be
maturing. A small domestic industry produces wine from local grapes or imported grape concentrate.
However, most wine is imported, led by Australian wines, with 261 million litres of Australian wine in
2006 and six of the ten leading wine brands by value.
Sample prices for domestic fruit wines on producer and distributor websites range from 1.5010.00
(A$3.6023.90) a bottle. In comparison most grape wine retailed at below 5.00 (A$11.95) in 2005.
Import tariffs, excise and VAT add from A$5.80 to a bottle of Australian fruit wine with a landed
price of A$10.00, depending on alcohol content.
Fruit wines are mostly sold by producers through their wineries, websites and mail order services, and
some large national and regional retail chains, National Heritage Trust stores, gift catalogues and
farmers markets. Some producers supply bulk wine to other manufacturers for blending with grape
juice. Grape wine is mostly sold by major retail chains, as well as thousands of specialist liquor and
grocery stores, pubs, clubs, bars and licensed restaurants.
Fruit wines are usually promoted through producer and distributor websites, fruit wine competitions,
and major promotional campaigns by large fruit wine and cider manufacturers. Several very large
trade shows cater for grape wine.
41

In conclusion, the United Kingdom offers a moderately attractive market with some potential for
Australian tropical fruit wines.

3.5

Regional profile summary - Pacific region

New Zealand
New Zealand had a fruit wine market of 3.8 million litres in 2005, but consumption has been declining
along with domestic production. Export markets include Japan, the United States and Australia.
Growing consumption of grape wine reached 111 million litres in 2006, averaging 20.8 litres per
person. Production of grape wine and fruit flavoured wines has been growing and imports falling.
Australia wines lead grape wine imports, particularly in red wines.
Sample fruit wine prices from winery and distributor websites range from NZ $13.00 (A$11.40) to NZ
$32 (A$28.06) a bottle. Excise tax, an Alcohol Advisory Council levy and GST would add A$6.60 a
bottle to an Australian fruit wine with a landed price of A$10.00.
Key outlets for fruit wines are wineries and their Internet and mail order services, retail chains, and
flights to Japan. Most grape wine is sold through retail chains, specialist stores, online and direct mail
retailers, restaurants and hotels.
Fruit wines are promoted on company, distributor and retailer websites, an annual Fruit Wine and
Cider Competition, and the fruit wine industry association website. Grape wines are also promoted
through retail promotions, distributors, and media advertising and publicity.
In conclusion, New Zealand has a small but attractive fruit wine market with minor potential for
Australian tropical fruit wines.

Pacific (Oceania)
These countries have small populations and minor wine imports. However, growing tourism,
substantial expatriate communities, high consumer awareness of tropical fruits, and trade and cultural
links with Australia indicate minor potential markets for Australian tropical fruit wines.

3.5

Regional profile summary Central and South America

Trade statistics indicate that a number of countries have markets for imported fruit wine related
products, which are likely to include fruit wine and cider, led by Chile, Columbia, Paraguay, Peru,
Uruguay and Venezuela. These countries are familiar with most fruits used in Australian tropical fruit
wines, and have traditional colonial links with wine producing countries, a wine culture, and industries
producing grape wine, including fruit-flavoured wine, some of which is exported to Australia. Some
have imports of Australian grape wine.
Several countries have small markets for local produced tropical fruit wines, as well as tourist markets,
expatriates and immigrants from countries with a fruit wine tradition, and high awareness of tropical
and exotic fruits. Minor exports of fruit wine products indicate some domestic production. Bahamas,
Barbados, Bermuda, Cayman Islands, Costa Rica, Jamaica, Panama, Trinidad and Tobago (Port of
Spain) all have imports of fruit wine related products and some have tropical fruit wine industries.

3.6

Regional profile summary Africa

While most African countries are unlikely markets for Australian fruit wines, these countries are
mentioned because they have production of fruit wine and tropical fruit wine, or significant imports or
exports of fruit wine related products. Producers range from cottage production to tourist wineries,
with commercial trials and wine training programs indicating further growth, examples being:

42

Egypt, which has the largest market for cider and perry in the African and Middle East region, valued
at $13.9 million in 2004.
Malawi, where aid programs have introduced wine-making from tropical fruit.
Namibia and Nigeria, which have fruit wine development projects.
Kenya, Tanzania and Uganda, which have small emerging markets for local tropical fruit wines
South Africa, which has growing imports of fruit wine related drinks

3.7

Regional profile summaries Middle East

Liquor consumption is very low in Middle Eastern countries, where Sharia law prohibits consumption
by Moslem people and restricts distribution and retailing of alcoholic drinks to others, although most
permit expatriate residents to buy and consume alcohol drinks. However, Lebanon, Oman, Qatar and
the United Arab Emirates have minor imports of imported fruit wine related products, and some have
imports of Australian grape wine.
Israel has a small fruit wine market, supplied by a small emerging industry focussed on domestic and
export markets. Fruit wines are accepted as kosher by religious Jews, unlike grape wine where
production has to be supervised by a rabbi.

43

4. Selection of international market for

detailed research
4.1

Method of selection

This process involved scoring each country profile on factors that are considered to determine the
attractiveness of a market and the potential competitive position of that market. These scores were
weighted to emphasise more critical factors (Table 4.1).

4.2 Assessment factors for market attractiveness and competitive

strength
Table 4.1: Market attractiveness and competitive strength factors
Market attractiveness
Market
Size, growth, favourable demand
trends
Existence of reachable market
segments (promotion, distribution)
Culture lifestyle, westernisation, wine
usage and events, likelihood of repeat
sales
Market access, opportunities for
Australian product
Competition
Type, concentration, substitutes
Opportunity to differentiate, such as
quality and food safety
Attractive pricing
Buying power, vertical and horizontal
integration
Low loyalty to domestic brands
Domestic industry will not constrain
imports
Financial and economic
Discretionary buying capacity, ability to
purchase
Profitable margins
Experience
Economies of scale
Barriers to entry, e.g. laws, tariffs
Risk assessment
Technological
Maturity
Intellectual property

Total
Score = 1 to 5, 5 being highest

Score Weighting Competitive strength

1-5
37

Market
Demand for product category

Score Weighting
1-5
31

Willingness to meet cultural

requirements
Ability to supply

31

Competition
Ability to differentiate product
Competitive pricing

26

Bargaining power, vertical and

horizontal integration

Brand strength

23

Financial and economic

Profitable margins (production,
transport and marketing costs)

27

Experience
Economies of scale
Access to finance
9

Technological
Innovation
Flexibility
Intellectual property, exclusive
patents and processes
Expertise, manufacturing
capacity and capability
Total

100

This process produced the following weighted results (Table 4.2).

44

15

100

Table 4.2: Weighted scores by country

Factors
Market attractiveness
Market
Competition
Financial and economic
Technological
Total
Competitive strength
Market
Competition
Financial and economic
Technological
Total

Factors
Market attractiveness
Market
Competition
Financial and economic
Technological
Total
Competitive strength
Market
Competition
Financial and economic
Technological
Total

Country
AT
BE

BG

BY

CA

CH

CN

DE

DK

EE

ES

FI

FR

92
62
92
27
273

101
93
102
36
332

74
62
31
18
185

101
77
46
27
251

175
93
98
36
402

55
77
69
27
229

101
33
69
9
212

148
93
92
27
360

148
93
92
36
369

148
62
69
27
306

74
62
85
27
248

148
108
80
36
373

101
62
69
36
268

93
78
81
60
312

62
78
81
60
210

16
78
13
60
161

101
78
54
45
278

119
104
81
60
364

77
78
81
45
281

93
78
54
60
285

108
78
94
45
326

124
91
81
60
356

124
78
81
60
343

88
78
52
60
278

124
104
108
60
396

62
52
54
30
178

Country
GB HK

HU

ID

IE

IN

IT

JP

KR

LT

LU

MD

MX

124
104
115
45
388

64
124
92
36
316

74
91
69
18
252

74
93
69
27
263

74
62
69
27
232

101
124
46
9
280

62
62
92
36
252

180
155
115
40
490

64
62
92
27
245

111
62
46
27
246

77
55
92
27
251

148
62
46
27
283

101
62
46
28
237

93
69
81
60
313

76
65
67
60
268

62
78
81
60
281

93
52
81
60
286

62
52
81
60
255

124
104
81
60
369

62
78
81
60
281

155
104
135
60
454

62
52
81
60
255

124
52
54
60
290

31
52
81
45
209

93
52
40
45
230

93
26
40
60
219

PO

RU

SE

SG

TH

TR

TW

US

VN

148
84
69
27
328

148
93
69
18
328

74
93
92
27
286

148
124
92
36
400

111
62
46
27
246

55
93
69
22
239

91
62
92
27
277

185
108
103
36
433

107
62
46
27
252

93
78
67
60
298

108
78
81
60
327

62
78
71
60
271

124
104
108
60
396

93
39
26
40
198

62
65
67
60
254

62
52
108
60
282

155
117
135
60
467

93
39
40
60
232

Country
Factors
MY
NL NO
NZ
Market attractiveness
Market
111
111 74
74
Competition
124
62 62
124
Financial and economic
46
46 115 115
Technological
18
27 27
45
Total
299
246 278 358
Competitive strength
Market
91
93 62
108
Competition
52
78 52
104
Financial and economic
54
40 54
108
Technological
60
45 60
60
Total
257
236 228 380
Note: Scores rounded to nearest whole number

Country codes (World Intellectual Property Organisation two-letter codes)

AT Austria
CA = Canada
DK = Denmark
FR = France
ID = Indonesia
JP = Japan
MD = Moldova
NO = Norway
SE = Sweden
TW = Taiwan

BE = Belgium
CH = Switzerland
EE = Estonia
GB = Great Britain
IE = Ireland
KR = Republic of Korea
MX = Mexico
NZ = New Zealand
SG = Singapore
US = United States

BG = Bulgaria
CN = China
ES = Spain
HK = Hong Kong
IN = India
LT = Lithuania
MY = Malaysia
PL = Poland
TH = Thailand
VN = Vietnam

BY = Belarus
DE = Germany
FI = Finland
HU = Hungary
IT = Italy
LU = Luxembourg
NL = Netherlands
RU = Russian Federation
TR = Turkey

The highest scoring countries on both market attractiveness and competitive strength were plotted on
this Market attractiveness: competitive strength grid which is based on a strategic business planning
grid designed by General Electric (Kotler & Armstrong, 1996).

45

500

Japan
United
States
Canada

Singapore

United
Kingdom

Finland

Germany
Denmark

New
Zealand
300

Russia
Estonia
India

200

Market attractiveness

400

100

Competitive position
0

Fig. 4.1: Market attractiveness: competitive strength grid

Note: 500 = high, 0 = low. Circle size indicates market size by approximate value

The grid indicates that Japan is the market with the strongest prospects for Australian tropical fruit
wine. This is due to its existing markets for tropical and other fruit wines, both domestic and imported;
demand for high quality and safe food products; and attractive pricing.
The grid also suggests that the United States, Canada, Singapore, several northern European countries
and New Zealand are significant market prospects warranting further market research.

46

5. Market profile Japan

This profile was initially developed in the international literature review, and expanded by a market
visit to Japan in July 2007, when importers, wholesalers, retailers and restaurateurs in Tokyo and
Osaka were given tastings of wines and blends from mango, passionfruit, pineapple, lychee, Davidson
plum, Bush cherry, banana, dragonfruit, lime and persimmon, as well as fortified Black sapote, orange
and mulberry wines, and questioned about their potential in Japan (Table 5.1).
Table 5.1: Interviews with Japanese distributors, 2007
Business
Mr Y Yoneme, Mr K Fukuda, General Manager and Mr T
Yoneme, Executive Producer Corporate Development, Asahi
Brewery <http://www.asahibeer.co.jp>
Ms M Kondo, Executive Director, Kawachi Wine Co., Ltd, Osaka
<http://www.kawachi-wine.co.jp>
Mr H Ishida, President and Mr M. Hosomura, General Manager
Wine Business Department Farmstone Co., Ltd.
<http://www.farmstone.com/
Mr S Inohara, President and Ms K. Inohara, Executive, Niche
Trading
Mr Nakao, in charge of wine, Hanshin Department Store, Osaka

Mr Yakubo, in charge of wine and beverage, Marubeni Co. Ltd,

Tokyo
Mr Gouda, Shop Manager, St Cousairs Herbis Ent. Shop
<http://www.stcousair.co.jp>
Mr Masumoto, Mr K. Suzue, General Manager merchandising
department and Mr M. Numata, Manager Overseas Section,
Bond Co. Ltd. <http://www.bondco.co.jp>
Mr J Kinoshita, Managing Director, Old Vine Restaurant & Bar
<http://www.lvino.com>
Mr O Hayashi, Managing Director, Grande Sam Corporation

Products handled
A leading manufacturer of fruit wine, wine
and other alcoholic beverages
Manufacturer of Kawachi Wine, Osakas
leading brand, and importer of Australian
wines
Specialist Australian wine importer and
wholesaler for 18 Australian and other
wineries
Wine importer
Osakas leading department store in food
products, recently merged with Hankyu
Department Store
Large trading company and wine importer
Wine producer, importer and retailer with a
chain of retail stores and supermarkets for
wine and food
Inflight goods (mail order for Japanese
travellers)
Owner of three wine bars, totalling 500 seats
Importer and wholesaler

Market profile
While it does not have a long tradition of fruit wines, Japan has a small emerging fruit wine market
which has stabilised after growing consumption in recent years (distributor survey; Suntory 2001a;
Tejima, 2005).
Annual consumption statistics were not located for fruit wine. Statistics for liquor tax paid on wine
sales in August 2007 recorded 17.91 million litres of fruit wine and 5.66 million litres of fortified fruit
wine (fruit wine includes fruit wine, grape wine and fruit flavoured grape wine) for the month. These
statistics indicate a total annual fruit and grape wine market of around 215 million litres of wine from
all fruit and 68 million litres of fortified wines (see Appendix E).
There are some small markets for fruit wine. Large manufacturers have concentrated their marketing
on young women in their 20s and 30s, positioning fruit wine as easy to drink with low alcohol and
reasonably priced. A small stable market of health conscious people buys fruit wine in anticipation of
health benefits. People buy imported fruit wine through airline catalogues as a souvenir, both when
travelling and afterwards, but buy grape wine to drink themselves (JETRO 2001).There are no obvious
occasions where Japanese people would drink tropical fruit wines (trade interviews).
Distributors saw several potential markets for the sample wines:

Working and non-working women not used to drinks with alcohol content as high as 12 per cent

47

Drinkers of chu hi, a ready-to-drink carbonated flavoured spirit with around five per cent
alcohol

Men as a health product to improve their blood and body and provide vitamins

Non-professionals who drink wine but dislike traditional red grape wines as being too tannic,
chemically complex, and confusing. They would readily buy these wines so that they can drink
a red fruit wine and appear professional

People living in west coast cities, who drink sweeter wines than on the east coast

Traditional wine drinkers

Drinkers of fruit liqueurs.

Demand trends for similar drinks indicate further growth in fruit wine consumption:

Young people increasingly drinking sweet flavoured alcoholic drinks

More fruit flavoured shochu (a popular Japanese spirit) drunk by women and younger men

Growing consumption of grape wine, due to recent publicity

A small market for liqueurs, such as umeshu (Japanese plum wine liqueur), particularly
women and young men attracted by their sweet taste, relatively low alcohol and appealing
image (Aoki 2006).

However, the Japanese market is renowned for short product cycles as consumers move on to the next
fad.
Exports of fruit wine related products grew from 985 000 to 1 347 000 litres from 200205 (FAO
2007).
In 2005 grape wine consumption was 409.9 million litres, averaging around 3.2 litres per person. Beer
represented 70 per cent of total alcohol consumption, sake 15 per cent and wine two per cent in 2007.
Although the wine market is immature, demand has been stabilising in recent years, after strong
growth for several decades, as Fig. 5.1 demonstrates. This is due largely to publicity of the health
benefits of polyphenols in red wine, deregulation of liquor retailing, and growing interest in wine
education (AWBC Japan 2006; Japanese trade interviews).
500
450
400
350

Volume
(million litres)

300
250
200

Expenditure
(billion yen)

150
100
50
0
1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Fig. 5.1: Japan: total wine consumption and expenditure, 19942003

Source: Aoki 2006

However, grape wine consumption is forecast to reach 514 million litres by 2011, and to outperform
overall consumption of alcoholic beverages in the long term, due to:

Young people switching from other drinks to wine

Consumers experiencing wine when travelling overseas

48

Low priced high quality New World wines being positioned as everyday wines to lower and
middle-class Japanese

Consumer education through wine schools, articles, programs and books

An increasingly westernised lifestyle

Expanding retail distribution with the progressive deregulation of retail liquor licensing

The strengthening economy (Kizan Wine n.d.; JETRO n.d.; Aoki 2007; Ho 2006).

The leading grape wine market is 3039 year olds (30 per cent of the population) who drink wine in
and outside the home. A growing market of younger women aged in their late 20s and early 30s
increasingly perceives wine as a sophisticated drink with moderate alcohol (JETRO 2001; Aoki 2007).
Grape wine is becoming an everyday drink, due to lower priced domestic and imported wines, easier
to drink wines, greater appreciation of wine, assumed health benefits from wine, wider distribution
and choice, and more wine drunk at home. More people drink wine due to growth in casual winedrinking restaurants and western-style restaurants, and more restaurants offering wine by the glass.
Wine is sold widely, including in casual bars, trendy Japanese restaurants, and Chinese and other
restaurants. Restaurant diners usually eat quickly, but increasingly enjoy leisurely meals of food and
wine, although beer remains the preferred drink (JETRO 2001; Yanagawa 2005 pers. comm.).
Most Japanese are light drinkersaround 40 per cent drink wine only two to three times a month at
home and many drink little or no wineso heavier drinkers are likely to have similar consumption to
Australia, France and Italy, and to know about wine and choose on quality (Kizan Wine n.d.). Demand
for grape wine is seasonal, falling away sometimes dramatically after Valentines Day, and shifting to
beer in summer. Special presentation gift packs of prestige wines sell well at Ochugen (midsummer)
and Oseibo (end of year). Japanese consumers like seasonal food products, and seasonal wines such as
Beaujolais Nouveau which is released each November (JETRO 2001; Aoki 2007). Grape wine
consumption is heaviest in major urban areas. Premium wines are mostly bought by the more educated
drinker in large cities, with more than 60 per cent of sales in Tokyo, while rural people have
traditionally drunk low-priced domestic wine in large bottles. The prefectures (states) where winedrinking is highest are Yamanishi averaging 10.26 litres a year, Tokyo 7.78 litres, Miyagi 5.53 litres,
Hokkaido 4.3 litres, Nagano 3.7 litres and Osaka 3.5 litres (JETRO 2001; Aoki 2007).
Japanese people drink alcohol on some occasions which differ culturally from in Australia and can be
difficult to understand. For example, the businessman's overtime work drinking is a formal negotiation
technique, where business people take clients to a bar such as a karaoke bar and engage in social
drinking to build a good business relationship (Kizan Report n.d.). Drinks are usually beer for normal
business and social drinking and whisky and brandy at high class and hostess bars.

Supply
Production statistics do not distinguish between fruit and grape wine. The term fruit wine or kajitushu
is used for fermented wine, champagne and cider. Japans Liquor Tax law has a Liquors and Fruit
Wines category where fruit wine includes wine from grapes and other fruits, and sweetened fruit
wine if fortified. The category includes alcoholic drinks such as shochu (the leading Japanese white
spirit) mixed with fruit juice (Mainichi Daily News 2006; Aoki 2007).
Total production of fruit wine, grape wine and chu-hi fluctuated between 111 and 975 million litres a
year from 200205. Chu-hi is a carbonated fruit-flavoured ready-to-drink cocktail based on vodka or
schochu (Aoki 2007).
Domestic production of fruit wine, including grape wine was estimated at around 68.5 million litres of
wine and 6.6 million litres of fortified wine for 2007, by annualising available production data for the
month of August (Table 5.2).

49

Table 5.2: Japan: fruit wine supply August 2007, and annualised (000 litres)
August 2006
Annualised
Category
Domestic
Imported
Total supply Domestic
Imported
Total supply
Fruit wine
5 713
12 193
17 906
68 556
146 316
214 872
Sweet fruit wine
551
515
1 066
6 612
6 180
12 792
Total wine
6 264
12 708
18 972
75 168
152 496
227 664
Total all liquor
31 010
803 114
834 124
372 120
9 637 368
10 009 488
Note: Fruit wine includes grape wine. Source: Customs Statistics on Imported Wines and Spirits, 2004

Wine production (this is assumed to be fruit and grape wine) was 100.4 million litres in 2005, and
fluctuated between 86 and 125 million litres from 19992005 (Aoki 2007). Three large manufacturers
dominate Japans 230 licensed wine producers, with 75 per cent of total production, and major wine
and brewing companies such as Asahi, Mercian, Kikkoman, Sapporo and Suntory also lead the
production of fruit wine. Large manufacturers introduced a category of health-conscious fruit wine to
stimulate sales during the depressed economy and the boom in red wine as a health drink in the late
1990s. By diversifying into fruit wine they could differentiate their domestic product from imported
grape wine (JETRO 2001; JETRO n.d.; Kizan Report n.d.; Aoki 2007).
Geographically, Japan extends from the northern glacial zone nearly to the tropics, and its fruit wines
also range from temperate fruit wines in cooler northern regions to mango and pineapple wines in
Okinawa. Yamanashi Prefecture near Tokyo leads the production of fruit wine, grapes and grape wine,
and grape-growing and wine-making appear to have started there, probably because conditions do not
suit rice-growing (Kizan Report n.d.).
From 200205 imports of fruit wine products from several countries were led by China (assumed to be
mostly rice wine) with small quantities of tropical fruit wine from countries that include Thailand,
Germany and Malaysia (Table 5.3: Trade interviews).
Table 5.3: Japan: imports of fruit wine products from selected countries, 200206
Description
2002
2003
2004
2005
2006
HS 2206.00.229: fermented beverages including cider, perry and mead (excludes sake and coolers)
China litres
8 089 800
7 553 400
8 003 700
7 862 700
7 602 300
$ per litre
3.79
3.24
2.80
2.75
2.72
Republic of Korea litres
399 700
400 00
502 300
602 700
579 600
$ per litre
4.18
3.93
3.70
3.16
3.02
Taiwan litres
541 300
521 800
345 400
319 100
244 700
$ per litre
5.08
4.04
3.90
3.77
4.23
France litres
273 400
245 400
370 100
232 100
220 700
$ per litre
3.67
4.21
2.97
3.31
3.59
United Kingdom litres
212 000
118 600
59 600
77 700
87 700
$ per litre
1.97
1.81
3.14
3.04
3.30
United States litres
108 600
48 900
113 700
71 600
79 500
$ per litre
6.39
6.30
5.79
5.91
5.71
New Zealand litres
87 100
59 400
7 900
47 400
42 400
$ per litre
6.88
5.64
5.30
6.14
5.90
Thailand litres
9 900
0
14 400
10 900
13 500
$ per litre
2.83
1
3.68
3.39
2.52
Germany litres
3 200
36 400
9 000
50 000
13 300
$ per litre
.10
6.51
3.22
3.98
4.14
Australia litres
7 137 300
5 169 800
3 169 700
399 400
8 400
$ per litre
2.68
2.74
2.77
2.94
17.98
Canada litres
2 998
4 722
35 700
538 650
4 325
$ per litre
21.86
20.94
1.22
1.45
44.89
Malaysia litres
1 800
400
1 100
1 400
2 700
$ per litre
6.11
12.50
5.45
4.29
5.19
Note: * includes cider, perry, mead and mixtures of fermented beverages and mixtures of fermented beverages
and non-alcoholic beverages not elsewhere specified or included. Source: Trade Statistics, Japan Customs, 2007

Over the same period annual imports from Australia dropped from 7 137 000 litres to only 8400 litres.
An average import price of A$17.98 for 2006 indicates a shift from low value to higher value drinks,
which would include Australian sake.
50

Most grape growing regions are constrained by a monsoonal climate with high rainfall and humidity
during fruit development, and typhoons; unsuitable soils; limited land availability due to the
mountainous terrain; small vineyards; and aging producers. In response to declining sales of domestic
wines, and to defend their markets against imports, manufacturers produce not only fermented wines
but blends of domestic wine with imported bulk wine or wine from imported grape must, and some
invest in overseas wineries (Aoki 2007; Kizan report n.d.; JETRO 2004).
Imports of grape wines of 174 million litres in 2004 represented 72 per cent of supply, led by France
(39 per cent), Italy (17 per cent, United States (15 per cent), Chile (10 per cent) and Australia (4.9 per
cent) (AWBC Japan, 2004). From 200206 Australias exports of wine (mainly red) to Japan grew
from 6.4 to 10.4 million litres, averaging A$5.30 a litre FOB in 2006 (ABS).
Large quantities of flavoured grape wines are also imported. In 2006 these were led by France with
3.05 million litres), followed by the United States (1.05 million litres), Germany (422 000 litres),
Spain (357 000 litres, presumably sangria) and Belgium (36 800 litres), with none from Australia since
2003 (Japan trade statistics 2007; USDA trade statistics).

Product profile
Store visits and an Internet search identified domestic fruit wines from tropical, temperate and
Japanese indigenous fruits (Table 5.4).
Table 5.4: Japan - product audit for domestic fruit wines
Manufacturer and brand
Domestic fruit wines
Suntory Fruit Wine Selection
(Suntory 2003)

Pompa dor, Suntory

Okinawa Itoman Wine

Ste Neige, Asahi

Description

Retail price *

Blends of pineapple and lychee, grapefruit

and guava, raspberry and banana, peach
and mango, orange and passionfruit, from
fruit puree
Strawberry and grapefruit wine
Passionfruit wine

580 (A$9.30) for 500 mls

Ume wine from (Japanese apricot), a

traditional Japanese stonefruit

Choya
Ste Neige brand, Asahi

Ume wine
Yuzu wine from yuzu, a traditional Japanese
citrus
Kirin Caf de Paris Fruit Wine Sparkling lychee, grapefruit, pear, green
apple and peach flavoured wines, from
imported French sparkling wine
Kiuchi Brewing Company
Yuzu wine
Sapporo Beverage Co.,
Cranberry, chokeberry, raspberry and
Power Fruits Wine
blackberry blend
Soleo, United States
Raspberry wine
Takahata Winery Mo mo wine Mo Mo peach wine from Japanese peach
Sakuranbo cherry wine
Source: Retail audit; company websites; Wine 2000; Suntory 2003

1260 (A$12.00) for 750 mls

1575(A$16.60) for 720 mls
1155(A$12.15) for 500 mls
840(A$8.85) for 360 mls
996 (A$10.50) for 720 mls
272 (A$2.90) for 180 mls
1289 (A$13.60) for 1.8 L plastic
pack
736 (A$7.75) for 1 L plastic pack
A$7.00 for 360 mls
694 (A$7.30) for 500 mls
272 (A$2.90) for 180 mls
618(A$6.50) for 200 mls

US$14.99 for 500 mls

680 (A$6.50) for 750 mls

1278(A$13.50) for 720 mls
1383(A$14.55) for 720 mls

Fruit wines, including wines from tropical fruit, were also identified through store visits and on
distributor websites (Table 5.5).

51

Table 5.5: Japan - product audit for imported fruit wines

Imported wine
Dr Demuth, Germany
Kinoshita website

Orange, pineapple, apple, lemon,

passionfruit, banana, apricot, kiwifruit,
mango and guava wines
Mango sparkling wine
Visage sparkling blueberry wine
Blueberry fizz; Lemon fizz
Blends of pineapple, papaya and other
tropical fruit wine with white grape wine
Italian lemon and Blood orange wine

Osaka department
Store
Hawaiian fruit wines
(Netyokocho 2007)
Perl Wine, Italy (Mercian
2007)
Preston Wines, New Zealand Kiwifruit wine
Fort Wine, Canada
Blackberry, blackcurrant, blueberry and
raspberry wines
Blossom Winery, Canada
Blossom Blueberry and Raspberry wines
Boones, United States
Fresita, Chile

Green apple wine (flavoured grape wine)

Sparkling strawberry wine (strawberry
flavoured grape wine)
Source: Retail audit; company websites; International Trade Canada 2005

785 (A$8.30) for 750 mls

254 (A$2.70) for 750 mls
1600 (A$15.25) for 750 mls
1000 (A$9.50) for 750 mls
780 (A$7.40) for 750 mls
4935(A$52) for set of three 750 ml
bottles
580 (A$6.10) for 500 mls
A$19 for 750 mls
2520 (A$30) for 375 mls
743(A$7.80 bottles for 360 mls
3129 (A$16.50) for two 500 ml
bottles
480 (A$4.60) for 750 mls
1980 (A$18.90) for 750 mls

Domestic wine labels frequently promote light and sweet taste, such as Ste Neige Yuzu Wines
balanced light taste, light body type, relatively sweet. Sweetness is a critical attribute to wine buyers.
All the distributors preferred the dry wine samples over sweet. Comments were that the drier styles
were interesting; that the wines presented were not dry or sweet, but a good neutral; that a sample
passionfruit wine did not taste sweet despite considerable sugar content; and that the wines were drier
than German fruit wines. They recommended tropical fruit wines be dry to have any credibility (note:
buyers who taste grape wine often prefer dry wines); that wineries not dictate to consumers on sugar
levels but listen to what they want; and that the market for fruit wines wants to drink them with a
meal, so wines should be dry like Japanese plum wine. As catalogues provide no opportunity to let the
customer taste, sugar level in these wines is less critical and can vary from wines sold in department
stores. Fruit wines have an image of a dessert wine in Japan as past fruit wines have been sweeter than
the fruit, causing consumers to assume the flavour is unnatural and diminishing the perceived value.
Japanese people are conservative and it is very difficult to change their minds. First impression lasts a
very long time, so if the first fruit wine tasted is sweet, consumers will believe all fruit wines are
sweet. These tropical fruit wines will have an uphill battle as this negative consumer preconception of
fruit wines as sweet and low-priced is likely to be applied to them.
Japanese people prefer mild flavours in foods and drinks as their food styles are lighter than in most
Asian countries, so lower quality, low-priced sweeter lighter wines can be used to introduce new
Japanese consumers to fruit wine, as grape wine suppliers have been doing (Yanagawa 2005). For new
wine companies this is probably an easier route to market penetration as buyers of sweet wines are
usually less brand-loyal. Japanese consumers preferred sweet fruit white wines until the shift to red
wine in the 1990s, and demand is again growing for white and sweet wines, and special health wines
(JETRO 2001; Aoki 2007).
Distributors compared the drier fruit wine samples to Semillon and Chenin Blanc, a dry mango wine
to Chardonnay, and a Black sapote fortified wine to brown sugar shochu, a traditional spirit.
They suggested a champagne style would have more appeal than still fruit wines. Sparkling Merlot
and Shiraz are the best selling Australian wines for a catalogue retailer, and sparkling wine and
champagne sales are up, probably due to celebrations of improvement in the business economy.
A retailer suggested that wineries should limit their range to two tastes per variety, say sweet and dry,
across perhaps three varieties.
Distributors commented that colour is very important when selling wine, with grape wine sales around
70 per cent red, 25 per cent white, and 5 per cent ros. As ros has been difficult to sell, they
recommended darkening the colour, even if the natural fruit has a pinkish colour; but only using
52

natural colours. A consumer survey by manufacturer Mercian indicates demand in wine is shifting
from white to red, still to sparkling, and sweeter to drier (Kizan report n.d.).
Alcohol content is generally lower than Australian wine standards require, and some fruit wines
contain only five per cent alcohol according to their labels.
Domestic wine quality has improved in recent years due to larger manufacturers striving to improve
their product quality in defence against imported wine since grape wine consumption began to grow in
the 1980s, and due to recent legal changes allowing corporations to own agricultural enterprises,
which have enabled wineries to grow their own grapes and improve control over the whole wine
process (Wine in Japan 2007). Winemakers often add sugar to compensate for low sugar content in the
grapes at the optimum harvest time due to unfavourable climatic conditions (Kizan report n.d.).
Non-grape fruit wines are often positioned as healthy wines, with labels promoting health-conscious
fruit wines, healthy wines, for health for every day and for a happy body. Health wines tend to
be very light bodied, sweet and fragrant, and include wines from fruits such as plum and berry; grape
wines flavoured with fruits such as aloe, apple, blueberry, cranberry, orange and peach; and wines
with added polyphenol (JETRO 2001). Suntorys healthy wine product Saishokukenbi Fruitia White
wine contains added organic acid to aid digestion and promote physical healing (Suntory 2001b), and
Sapporos Power Fruits wine contains 120 mg polyphenol per 100 ml.
Liquor production, importation and distribution must comply with the various laws, regulations and
standards for alcohol and foods.
The Food Sanitation Law prohibits toxic or harmful substances, and requires importers and retailers to
ensure preservatives and colorants added to domestic and imported wines, whether for retail, samples
or gifts; comply with Food Sanitation Law standards; and provide an import notification and Japanese
Certificate of Analysis from an authorised laboratory. The Liquor Tax Law regulates the addition of
preservatives.
Packaging and labelling need to comply with standards under the Food Sanitation Law which requires
this mandatory information in Japanese language:

Product name Fruit wine or Sweet fruit wine

Content volume, in litres or millilitres

Alcohol content at 15C as a percentage of total volume rounded to the nearest percentage point
(for example 11 per cent, or over 13 per cent and less than 15 per cent)

A list of food additives used, including antioxidants and preservatives

Presence of carbon dioxide in sparkling wine, as Contains carbonation or Carbon dioxide gas
mixture

Country of origin, and any Geographic Indicators

Name and address of importer, and destination or address of distributor or rebottling plant after
removal from the bonded area, unless the same as the importer

A warning to minors worded as Consumption of alcohol by minors is prohibited or Alcohol

may only be consumed by those age 20 or over.

The Measurement Law requires labelling to indicate net content, while the Act against Unjustifiable
Premiums and Misleading Representation prohibits labelling that misleads the consumer regarding the
product and country of origin.
Two laws apply to packaging. The Law for Promotion of Effective Utilisation Resources requires
identifying marks on metal cans and labelling on paper and plastic containers to support recycling. The
Containers and Packaging Recycling Law requires recycling of all glass bottles, steel and aluminium
cans, PET (polyethylene terephthalate) bottles, other plastic and paper containers and all paper and
plastic packaging, and a recycling identification mark on steel and aluminium containers and PET
bottles. Manufacturers, distributors and retailers who use these materials are responsible for recycling
53

costs, and importers are responsible for the costs for imported wines. In 2007 recycling charges, paid
to the Japan Containers and Packaging Recycling Association, were 5200 (A$150.33) a metric tonne
for brown bottles, 5800 (A$167.68) for other colours, and 3800 (A$109.85) for colourless glass.
Demand is low for recycled green bottles so Japanese winemakers have switched to clear bottles to
reduce recycling costs, but foreign manufacturers have resisted this out of concern with protecting
wine quality (Aoki 2007; JETRO 2004; Promer Japan, 2003). More information on recycling laws is
available at the Associations website.
More information on production, packaging and labelling standards can be obtained from the Ministry
of Agriculture, Forestry and Fisheries of Japan and the Ministry of Health and Welfare.
Large grape wine manufacturers often use imported grape concentrate or blend domestic wine with
imported bulk wine, supported by a loophole in the labelling laws. Domestic wine is defined as wine
bottled in Japan, being kokunaisan wine made from only domestic materials; kokusan wine
fermented in Japan from imported materials; or yunyu imported wine bottled in Japan. If these two or
three entities are blended the exact proportions of each have to be shown on the label. Therefore
domestic grape wines fermented in Japan from grapes or imported grape must be made from more
than 50 per cent domestic grapes or a blend of domestic and imported wine. While these labelling laws
tend to confuse consumers, most are ignorant of the distinction. The industry has a voluntary code of
practice to use the description domestic wine only for wine from domestic materials with a
Certificate of Origin and to list blends of domestic and imported wine in order of quantity, for example
made from domestic and imported wine. However, this is mainly adhered to by smaller producers
(Kizan Report n.d.; US Foreign Agricultural Service 2006).
As falling retail prices for imported wines have led to wine-drinking shifting from special occasions to
everyday, consumers are becoming increasingly conscious of the relationship between price and
quality, more educated about wine, and more conscious of medals and awards (Austrade Japan 2007).
Wine show medals are extremely effective in developing new markets in Japan (distributor survey).
The product audit indicates bottle sizes for fruit wines are mainly 720750 ml, but various other sizes
are used including 180 ml, 200 ml, 250 ml, 300 ml, 500 ml and 600 ml. Cardboard containers in a
wide variety of shapes and sizes such as 1000 ml and 1800 ml are also used (Table 5.4; retail audit,
distributor websites). Distributors offered several recommendations:

Bottle height needs to allow the bottle to be laid down on retail and restaurant shelves

Clear bottles show the wines but imply sweeter and lower priced wine than antique green bottles

A frosted bottle could give sweet wines a positive image

A mysterious darker bottle or can, with no fruit on the label, would prevent consumer
preconceptions by requiring them to buy on taste alone

The 750 ml Bordeaux shape bottle (tall with straight sides) does not indicate fruit wines

Two-packs or three-packs with a story could appeal as most Japanese buy wine on appearance
and prestige

Use 750 ml bottles for dry wine such as mango, and for bars and restaurants

Smaller bottles such as 500 ml for sweet wines would give a premium image and suit the
average couple buying wine to drink with a meal.

Large importers increasingly prefer screw caps and other synthetic closures in response to consumer
resistance to decorking and Bouchonne (cork odour) (Aoki 2007). Distributors recommended screw
caps over corks and Zorks (plastic closures) as well accepted and popular in Japan, being easier to
open, better quality, and more convenient because consumers can open and reseal the bottle as wine
drunk at home is usually not consumed in one sitting. However, one recommended a cork if retailing
at more than 2500 (A$23.80).

54

Fruit wines are usually labelled as fruit wine or tropical fruit wine, with descriptions such as
100 per cent fruit not from grapes, and images of the fruits used (retail audit). Asked if the fruit base
should be depicted on the label distributors commented:

Provide an image of the fruit. This is extremely important as the sample fruit wines would be
new to the Japanese market and consumers may assume mango is a grape variety. The image
should be simple and subtle rather than bright

Use simple classical writing, and make the fruit name prominent

Only show the fruits in the wine, rather than a collection of fruits, to avoid confusing customers

Promote fruit wines as being different to grape wines as they convey an image of the fruits used
while grape wine does not have an image of grape

No, to avoid a cheaper image and lower price.

The distributors advised wine producers to recognise the consumer has a perception and image of the
total package so presentation is extremely important for final priceif it looks expensive wineries can
set their own price. Some suggested a traditional wine label would encourage shoppers to pick up and
try the wines while others felt the wines needed less formal labels that balance quality with fun, such
as those of George Duboeuf wines, and in particular the 2005 George Duboeuf Beaujolais Nouveau
shown on the companys website (George Duboeuf 2007a; 2007b). A Japan Wine Australia study
found shoppers are often confused by wine bottles and shelves full of wine, indicating the need for
simple relevant information, ideally in a style that appeals to young people, with a fun funky image
(AWBC Japan 2006).
Distributors recommended against using animals on labels, as childish and too cute, and to use
souvenir holiday labels only for retail in a tourist area, outside which such labels lose their meaning
and confuse the consumer. Australian icons are not necessary to tell the customer a wine is Australian.
They suggested the front and back labels should be in the original language of the producing country,
to avoid lessening the imported story. An easy to remove Japanese language sticker or swing-tag
would allow the purchaser to present the wine as a gift brought home from Australia. The back label
should carry a story about the wine, producer and place, maybe in Japanese language.
Voluntary industry standards apply to warnings to pregnant women and nursing mothers.
Trade samples valued at more than 100 000 (A$1143) attract normal duty and taxes, and must be
labelled as for commercial shipments.
Distributors said German fruit wines dominate the market, led by Katlenburgers Dr Demuth wines,
due to their attributes, not their German origin. Some labels carry terms such as 100 per cent domestic
fruit to appeal to consumer loyalty to local products and health concerns about imported foods.
New World wines became popular in Japan in the late 1990s when prices rose for the traditionally
imported French and Italian wines due to a supply shortage, and continue to take market share from
domestic and European suppliers (JETRO 2001; Aoki 2007). While wines such as Yellow tail have
succeeded as Australian wines, most Japanese wine consumers do not yet appreciate country of origin
for wine (Yanagawa, 2005). Distributor opinions varied on whether Australian tropical fruit wines
should be marketed under Australias clean and green banner, although recognising that growing
concerns about the safety of Chinese foodstuffs offer a timing opportunity.
Due to growing consumer concern about food safety there is growing interest in organic wines but a
lack of supply. For organic certification in Japan all organic wines need to meet the requirements of
the Japan Agricultural Standards (JAS) (Aoki 2007).
Consumer surveys indicate wine buyers are influenced mainly by price, taste, county of origin, colour,
brand, label design, and recommendation from friends and wine store staff. Barriers to buying wine to
drink at home include resistance to full-sized bottles, high price, removing corks, difficulty in
identifying quality from the label, and not knowing how to store leftover wine (JETRO 2001).

55

Pricing
The product audit indicates a price range of A$8.3019.00 a bottle for fruit wines and A$4.6017.00
for fruit flavoured grape wines, the higher prices being for imported wines (Table 5.4). Distributors
identified these price categories for fruit wine and potentially the Australian fruit wines demonstrated
(at the average currency exchange rate during the market visit):
Under 1000 (A$9.50):

The usual Recommended Retail Price (RRP) for fruit wine is around 900 (A$8.60) for 500 mls

Some German fruit wines retail at around 700 (A$6.70)

Wines at these prices are usually sweet and flavoured

Less than 1000 (A$9.50) would imply artificial colours and flavours.

10002000 (A$9.5019.00):

These wines could retail at 8001200 (A$7.60 11.40), and around 1000 (A$9.50) in
supermarkets

Domestic pineapple wine and cider retail at around 1000 (A$9.50)

Pineapple wine is likely to retail at 1000 (A$9.50) and mango wine 1500 (A$14.30)

An imported blackberry wine retails at 1260 (A$12.00)

Domestic wines from temperate fruits are around A$13.0015.00 a bottle

The wines would sell easily at 1500 (A$14.30) to younger people buying as a fun and casual
drink regardless of quality (provided not offensive to the palate). This is the price ceiling for
fruit wines, because of low consumption and difficulty in persuading trial

Wines of this high quality could sell at up to 1500 (A$14.30) for 500 mls

A restaurant could sell these wines as dessert wines at 1500 (A$14.30) for 750 mls

A New Zealand kiwifruit wine sells at 15002000 (A$14.3019.00) in catalogues

Dr Demuth Mango Sparkling Wine from Germany was priced at 1680 (A$17.10) in an Osaka
department store

Domestic passionfruit wine retails at around A$17.00

The sample fortified Black Sapote wine could retail at 2000 (A$19.00) and the other sample
wines at 1500 ($14.30)

A department store sold Gorde Shu si (finger) strawberry wine at 2000 (A$19.00) for 500
mls

Thai fruit wines incur 200 per cent import tax, so would retail at 2000 (A$19.00)

These wines are likely to retail at under 2000 (A$19.00)

The wines could sell at an RRP of A$19.00, but not with a Zork closure or fruit on the label.

More than 2000 (A$19.00):

The market for wines over 2000 is consumers who understand quality

Consumers are likely to pay 2500 (A$23.80) for own use and 3000 (A$28.60) if for a gift

Focusing on consumers prepared to pay 3000 (A$28.60) would create a quality image

A fortified orange wine could pass as a liqueur at 40005000 (A$38.0047.00), ideally in a tall
bottle with understated packaging such as a classy black and gold label.

56

In summary there appears to be a ready market at around 15002000 (A$14.3019.00) for personal
consumption and around 3000 (A$28.60) for gifts. There is an opportunity to develop a premium
position for premium quality Australian tropical fruit wines.
The distributors recommended against discounting as lowering price would cheapen the wines,
reinforce the low price image already in consumers minds, and appear desperate to sell.
As bottle costs are similar for a standard wine bottle at around 40 (A$0.38) and a fancy bottle at 70
(A$0.67), distributors felt suppliers could easily present fruit wines as attractive and high quality
products in appealing bottles.
Supermarket liquor departments work on a 35 per cent margin, and a prominent department store on
30 per cent mark up. Retail price displays are required to include five per cent consumption tax (Aoki
2007). Examples of final price are an Australian grape wine at A$2.50 FOB for 750 mls, retailing in
Japan at A$7.60 (FOB price being 31 per cent of Recommended Retail Price), and a fruit wine with a
landed cost of 1400 (A$13.35) for 750 mls retailing at 2000 (A$19.00).
For grape wine the main price categories in descending order of demand are (for 750 ml bottles)

10001500 (A$11.4017.10): includes everyday grape wines that retail steadily at around
1500, mid-range wines at 10002000 (A$11.4022.80), Australian wines at 10001500, and
premium domestic wines at up to 1500. Major domestic producers have been shifting from
mid-priced to premium priced wines at under 1500 to compete against New World imports. A
growing segment of consumers educated about wines is prepared to pay these prices for high
quality wines. Price resistance tends to occur at this range.

5001000 (A$5.7011.40): includes the optimum price of 800 (A$7.60), average-priced

imported wines at A$7.0014.00, most Australian wines at A$5.007.50, and domestic wines
struggling against low priced New World wines

15002000 (A$11.4022.80): the higher end of mid-range wines, mainly from France, Italy
and Chile, and the lower end of premium priced wines

20003000 (A$22.8034.30): includes premium price wines and the lower end of gift wines

Below 500 (A$5.70): includes most domestic wine.

Two-thirds of imported wine retail at over 2000, and sales are growing strongly. The preferred price
range for gifts is 30003999 (A$34.3045.00).
Prices have fallen in recent years for several reasons including the deflated economy, growing sales of
more moderately priced New World wines, shorter distribution channels due to direct imports, and
direct retailing and growing sales through supermarkets and convenience stores following the
deregulation of liquor retailing. Around 55 per cent of wine sales are under 1000 (A$11.40) including
price-fighters and discount wines at 380880 (A$4.3010.00 in 2006) which large supermarket and
convenience chains buy by the container. New World wines are particularly strong in this segment,
replacing domestic brands made from imported concentrates and bulk wine, so domestic
manufacturers have begun focussing on moderate and premium price brackets.
(Pricing sources: AWBC Japan, 2006; Austrade Japan 2007; JETRO 2001; US Foreign Agricultural
Service 2002; distributor websites, retail audit).

Distribution
There are numerous distribution channels for fruit and grape wine (Fig 5.6).

57

Overseas manufacturer
of bottled wine

Overseas manufacturer
of bulk wine
Domestic
manufacturer

Importer

Trading
companies

Primary
wholesalers

Secondary
wholesalers

Retail
chains

Mail order
catalogues

Liquor
stores

Discount
stores

Department
stores

Convenience
stores

Internet
mail order

Hotels,
bars

Restaurants

Consumers

Fig. 5.2: Japan: typical distribution channels for fruit and grape wine
Sources: Wine 2000; distributor survey

Fruit wines are sold mostly through the wineries; in metropolitan department, liquor and convenience
stores; and from mail order websites.
For imported wines, distribution channels are shortening to:

Direct imports by large wine manufacturers such as Suntory and Mercian who are often the
authorised import agent for leading brands

Direct imports by large wholesalers and retailers with their own distribution channels, such as
department store alliances and large discount stores

Specialist wine importers retailing direct to consumers through mail order and the Internet

Specialist trading companies (Aoki 2007).

As an example a small retail chain buys Australian wines through distributors and also imports bottled
wine and bulk wine to bottle under its own label.
Distribution of fruit and grape wine is controlled primarily by the four largest alcoholic beverage
manufacturers, Asahi, Kirin, Suntory and Sapporo (Wine Australia, Japan Market Overview, 200506). Anyone may import wine but to retail it requires a liquor vendor's license (Aoki 2007).
Domestic fruit wines are sold at the wineries and local stores with tasting outlets such as Katsunomo
Cave near Tokyo. Major brands such as Choya and Asahi are widely sold in specialist liquor stores,
supermarkets and convenience stores, often displayed with wine-style products such as umeshu but
sometimes in a dedicated fruit wine section or display.
Around two-thirds of grape wine is sold in retail stores including wine and liquor stores, discount
liquor stores, supermarkets, department stores and convenience stores. While liquor retailers are
required to hold a liquor licence, deregulation of liquor retailing, which began in 2003, has reduced
restrictions on licence numbers except where retained in a few areas to protect small retailers. As
numerous retail outlets including supermarket and convenience store chains began to distribute wines,

58

competition intensified, which led to substantial growth of the wine market and the exit of many liquor
wholesalers and specialist retailers. Retail of low priced wines, including Australian wines, continues
to shift from specialist liquor stores to retail and convenience store chains (Aoki 2007; AWBC, 2006;
JETRO 2001). However, as European style grape wines are new to Japan, retailers need to be
convinced to stock wine, and fruit wines face even more resistance because of their poor cousin
image (distributor survey). The remaining one-third of grape wine is mostly sold in bars, restaurants
and other food service outlets. Premium wines with ratings, awards and an image of special occasion
drinks are sold in specialised wine outlets, upper-tier hotels and restaurants (JETRO 2001).
Distributors recommended introducing tropical fruit wines through the food service sector as most
consumers trust restaurants, restaurants are open most of the day so could provide a major window for
fruit wines, and sommeliers and restaurant waiters could push fruit wines to their customers to create
demand. They also suggested approaching an importer with a strong restaurant connection; outlets
such as casual restaurants, bars, pizza home delivery services and railway stations to give the mass
market access to the wines; and also hotels on resort islands, as tropical wines would be considered
appropriate as a seasonal wine with a beach image to drink chilled, and such hotels are very interested
in summer promotions. Restaurants could match the wines with meals, or use them in sauces.
Tokyo has around 20 restaurants specialising in Australian wine, including a Japanese owned
company with restaurants called Uluru and the Rocks, whose owner has a long association with
Australian wines and the Australian Wine Club in Japan.
Domestic and imported fruit wines are also sold on mail order websites. Internet retail companies have
been expanding due to small lot shipments and reduced logistical costs (Aoki 2007).
Wines are also sold through catalogues, which are very popular for gifts, particular for end of year
celebrations when department stores and supermarkets devote whole sections to catalogue displays.
Japan has four major catalogue companies, including omiyage (souvenir) specialists. Japanese people
buy numerous souvenirs as gifts for managers, co-workers, family and friends when travelling. One
reason suggested for this practice is that it maintains harmony in the office environment by
demonstrating that vacationing workers were thinking of their co-workers working hard back in the
office. Souvenir stands are major outlets in Japanese tourist spots, and railway stations stands sell gifts
from distant places to returning travellers who forget to buy a gift or choose not to carry it around
while travelling. In recent years omiyage services have developed to deliver souvenirs from regional
Japan and souvenirs or gifts from foreign countries. Japanese travel agencies now sell omiyage to their
traveller customers before they depart, to relieve them of having to wonder what to buy and to carry
the items while travelling, and have it delivered to the customers home on the day they arrive home.
An omiyage distribution company interviewed handles imports, but not product selection, for the
catalogues of a large Japanese tourist organisation, and also imports wine for its own direct catalogue
business which services other tour operators. It provides catalogues for domestic travel, domestic duty
free shopping on cruise ships, and airlines, and is always looking out for new labels for these markets.
For Japanese visitors to Australia it produces three different catalogues which are mailed to travellers
before departure and also provided with their airline ticket, at the airport, during the flight, and from
tour guides in Australia (Japanese travellers prefer to buy overseas flights through travel companies
rather than the Internet). Its mark-up for a high turnover product is 30 per cent or more, from which it
pays commission to travel agents, tour guides and airlines, and printing costs for brochures which are
published twice a year, with a 60 day lead time. The company can consolidate shipments.
Fruit wine suppliers are advised to provide an exporter with tasting wines to assess on taste, value in
the price range and likely purchase, and to store for up to two years, and to provide technical detail
and the winemaker's philosophy. Importers would continue evaluations for five years, while the
supplier would need to maintain the cool chain in liaison with them.
As a good distributor is critical, Austrade advise exporters to consider a potential companys client
base and track record for organising retail promotions.

59

Promotion
Fruit wines are largely promoted at wineries and consumer tasting centres such as Katsunuma Wine
Cave which represents around 150 local wineries near Mount Fuji (Tokyo Food Page 2007).
As fruit wines are a new category, and consumption of fruit and grape wine is low, promotion will be
needed to create awareness and interest. Distributors advised that a wine is unlikely to sell without
tastings to educate new consumers about a new wine and staff to recommend wines for purchase,
particularly in department stores and supermarkets, giving examples of some successful promotions:

A major department store with four permanent tasting corners in its wine section for up to 600
tasters a day. A third of tasters subsequently buy, providing 60 per cent of wine sales. A typical
tasting serves 10 people for five minutes at a time over 10 hours, and is financed by the importer

Governmentsupported importer tastings for buyers at a department store. Tropical fruit wine
producers could participate in such tastings as these buyers would appreciate the wines unusual
attributes. One store holds its tastings three times a year, mainly in spring and autumn, and
buyers will ask the store to stock wines that consumers like

A promotion for a major Australian grape wine brand where the manufacturer and an
importer/trading company each pay half of the one million yen promotional budget

A chain of stores which function like cellar doors with wine tastings for potential buyers

Demonstrations by manufacturers Baileys and Kahlua on making liqueur cocktails

Catered events such as art show openings, which are very effective at promoting trial of a new
wine into an attractive market. Even if they taste out of curiosity, once consumers try and like
the wines they can be given information directing them to regular retail outlets. Involving the
caterer in the distribution would provide a financial incentive to make the promotion succeed

Enlisting restaurants, such as a Tokyo restaurant which caters for wine lovers with regular food
and wine parties with changing cooking themes such as cheese, spice, and meals cooked with
wine, for example chicken steamed sauce, and follows up with a questionnaire asking diners to
recommend wines for it to stock. Japanese people want to be taught about western wines and to
understand unusual tastes, so suppliers provide education and the restaurant builds loyalty.

Wine importers rely heavily on point of sale material for sales. Some stores have dedicated fruit wine
displays, although most only display price cards. A Japanese distributor has successfully introduced
taste categories for wines in stores, such as light and sweet, and fresh and dry (Holt 2005).
Wineries need to attach and promote a story which should have three elements: a wine story, a people
story and a place story. To list in a catalogue, they should supply photographs to tell the reader the
story of the wine as these are the only sales tool as shoppers flick through and choose their purchases.
Distributors strongly recommended publicity, as Japanese consumers would follow a media story,
particularly one about a respected wine authority discovering how fantastic these tropical fruit wines
are. This would create publicity and demand money cannot buy, and provide rapid penetration of a
market where development can be slow. Potential endorsers could be:

A Wine Master or Champion saying how great the tropical fruit wines are

A pioneer of the fruit wine industry promoting the whole industry

Sommeliers who can promote high quality (although grape wine sommeliers might be
concerned about losing public image and credibility)

A flight attendant, which has increased wine sales in the First Class section of airlines.

The distributors also suggested selling the winemaker to gain publicity, associating Australian
tropical fruit wines with other quality imports, and developing a great catch phrase to build a positive
brand image to replace the current poor image established by poor quality fruit wines in the past.

60

Grape wine consumption doubled in the 1990s due mainly to mass media and other promotions that
excited customer interest, such as:

Media reports of studies that demonstrated health benefits from drinking red wine

The influence of a Japanese sommelier, wine writer and wine authority, Mr Tasaki

Daily reports about wine in television, radio, magazines and newspapers

Strong enrolment in wine school courses

More than 30 new wine books published every month (Kizan Report n.d.).

Manufacturers who export grape wine to Japan and distributors, industry organisations and Australian
government departments use various promotions to develop new markets, such as:

Advertising through television, magazines, newspapers and other media

Educational activities such as tastings in stores, restaurants and wine clubs; advice by sales
staff; newsletters; and wine tasting parties

Generic published information to promote the category of Australian wine

Promotions to retailers, including trade tastings, sommelier contests, and trade shows such as
the annual Foodex Japan (a trade show for the Pacific Rim), the biannual Osaka International
Trade Fair, the biannual International Foods Fair in Kitakyushu, and Hotels & Foodex Kansai.

The Japan Wine Challenge, which has a category for fruit wine, wine made from natural fruit
other than grape (see website).

Japan does not have international wine shows but fruit and grape wines can be promoted at general
trade shows such as Foodex Japan and the Supermarket Trade Show (Takehiro, 2006).

Market positioning
Distributors and other research indicated several positioning options for these tropical fruit wines:
As suited to specific foods

These wines could be matched with or used in sauces of dishes such as duck a lorange; the
Japanese version of Chinese chicken; Thai, Malaysian and Vietnamese food; and cheese
following a meal

The wines should be matched with Japanese food, as traditional wines do not really complement
its flavours and textures and the market has been looking for its own more suitable wine

Tempura restaurants match wines and foods to differentiate their offer (Yanagawa, 2005)

Berry wines are promoted in Japan as cocktail drinks and for drinking with cheese
(International Trade Canada 2005).

Home prepared meals are usually traditional Japanese food, typically beef, port, chicken, grilled fish,
sashimi, cooked vegetables and tofu, accompanied by the standard white rice, miso soup and pickles.
As differentiated from grape wine

Marketing will need to avoid confusing fruit and grape wines

Consumers will not accept tropical fruit wines being sold with high priced grape wine.

On taste: Positioning the wines as sweet wines would appeal more widely, such as to older people
who like sweet drinks.
As a whole new category: These high quality wines will need differentiating from previous lower
quality fruit wines.

61

As tropical versus not tropical: Only one distributor favoured tropical as having a positive consumer
image. The others expressed concern that tropical gives a negative hot and steamy image; indicates
different flavour but not quality; suggests Asian countries or Hawaii, rather than Australia; signifies
lower income Asian countries such as Philippines, Malaysia and Indonesia, and cheapens the image of
the wines; and that the benefit offered by the wines is not tropical.
As Australian fruit wines: Some distributors saw Australian as positive and humble compared with
some countries images, and expected Australian fruit wines to convey a better image to consumers
than tropical fruit wines.
As fruit wine: Distributor opinions varied on this, with suggestions of fruit wine, tropical fruit
wines, aromatic fruit wine or luxurious fruit wine. One felt the market would use the term tropical
fruit wines regardless, and one recommended against any reference to fruit.
As from a specific fruit: One distributor felt mango wine should have its own separate brand.
By drinking occasion

As aperitifs

As after dinner drinks and nightcaps (fortified fruit wines)

As drinks for all year round.

As a liqueur: Fortified tropical fruit wines might fit into a liqueur category.
As a holiday drink

Tropical fruit wines have a resort image, suited to seaside outlets

As the wines are tropical, promote as seasonal wine served chilled, with images of the beach
in summer, and beach or summer labels

As outdoor wines suited to barbeques, beach and sporting situations, with a promotional
campaign around a beach resort.

On hedonistic benefits

As luxurious, relaxing, healing

As comfort wine

As an indulgence, for ones self or a thoughtful gift

As good for both inner and outer beauty, beauty being very important to Japanese woman. The
current fruit vinegar trend has succeeded largely through such a focus on women.

As a health drink

On demonstrated medicinal and health benefits

As a health product for men, to improve blood and the body and provide vitamins

As a healthy drink to a market with growing concern about rising metabolic syndrome

As a health-promoting drink, as with fruit vinegars.

Japanese fruit wines are often positioned as health wines, particularly if not blended with grape wine.
As a souvenir: Tropical fruit wines are highly suited to this purpose.
As trendy, a novelty

As a limited version or seasonal label to make the wines fashionable and trendy, such as a
promotion of a winter label from late September to February

As a fashion that is a fad, but chic, maybe with a chilled glass

62

With an exclusive tag such as Only here or Limited edition. For example, English tea liquor
has made a significant impact in Japan through being unusual and exclusive.

As a range of products

A good variety of wines will sell more than single products by providing choice

The wines could be promoted as Choose your own three pack (the same wines or a mix) with
attractive packaging.

Import regulations and requirements

While there are no quotas or general restrictions, imported fruit and grape wines incur several tariffs,
taxes and other fees which add $2.18 to the landed cost of a $10.00 bottle of Australian wine (Table
5.6).
Table 5.6: Japan - import duties and taxes for wine
Description
HS 2206: Other fermented beverages (for example, cider,
perry, mead); mixtures of fermented beverages and mixtures
of fermented beverages and non-alcoholic beverages not
elsewhere specified or included, more than 1% alcohol
Fruit wines, produced from fermenting fruit or fruit plus
water, with sugar, brandy and other substances added up to
specific limits
Sweetened fruit wine produced by adding brandy or other
alcoholic beverages or sugar to fruit wines above a specified
quantity, less than 13% alcohol
HS 2204: grape wine
Wine of fresh grapes, including fortified wines
Sparkling wine
All wines

Tax
Import tariff
(WTO1 rate)

$ (WTO rates)
42.40 (A$0.43) a litre

Liquor tax

80 (A$0.81) a litre

103.722 (A1.05) a litre

Import tariff
(WTO1 rate)
Liquor tax
Consumption tax
Bottle tax
Recycling fees

182 (A$1.85) a litre

Varies
(CIF + Customs duty +
Liquor tax) x 5%
70.4 (A$0.71) for 750ml

Sources: APEC tariff database; AWBC Japan 2006

More information on importing wine can be obtained from the Japan Wine and Spirits Importers
Association and the Wine Importers Association of Japan.

Summary
Japan has a small but growing market for tropical and other fruit wines with emerging markets of
young women and the health conscious, increasing fruit wine imports, attractive pricing, potential
distributors and no significant import barriers or costs. Australian producers could develop a
significant share of imports by positioning their wines in higher priced outlets as gifts and in lower
priced outlets for personal consumption as high quality, healthy and safe Australian products,
differentiated by exotic and Australian native fruits, premium quality, appealing taste and classy
presentation.

63

Fig. 5.3: Japanese fruit wines

Fig. 5.4: Display of

Japanese fruit wine

Fig. 5.5: Dr Demuth sparkling fruit wines

Fig. 5.7: Japanese health fruit

wines

Fig. 5.6: Chu-hi canned

cocktails

Fig. 5.8: Fruit wine tasting, Fujikyu Fig. 5.9. Restaurant wine-tasting
Highland Tourism centre and
Theme park

64

6. Strengths, weaknesses, opportunities

and threats analysis (SWOT)
This research indicated these major internal and external factors that will determine the industrys
ability to develop future markets.
Table 6.1: Strengths, weaknesses, opportunities and threats for the tropical fruit wine industry
Industry strengths
Production concentrated in high profile tourist region actively marketed to large domestic and international
markets
A large Japanese visitor market that buys wine for souvenirs and gifts
Located in Australias most renowned tropical and exotic fruit growing regions
Ability to use a diverse range of the worlds most popular fruits with excellent flavour and other characteristics
suited to wine-making
Access to large volumes of high quality processing grade mainstream tropical fruits and commercial supply of
unusual and exotic fruits
Ability to produce wine year-round to maximise use of facilities and equipment
Low need for specialist machinery
Flexibility to use a range of fruits minimises risk from crop losses
Low risk to fruit supply from hail and frost
Usually lower production costs than for grape wine
Ability to produce very high quality trophy winning wines
Products new to the Australian market
Most producers using world best practices in winemaking
Most producers focussed on producing high quality wine
Innovation in growing, processing and marketing
Access to highly qualified and experienced wine-maker assistance
Ability to reach substantial tourist and local markets with cellar door and mail order sales to establish a financial
base and research market requirements
Wineries permitted to operate external sales outlets
Growing experience in wine promotion and publicity
Industry association in northern Queensland
Government assistance to research and develop the industry, businesses and markets
Northern Territory producers able to use direct shipping services to Asia
Industry weaknesses
Small industry with no large producers to lead market development
Outside far northern Queensland, the industry spread thinly across northern Australia
No local grape wine industry to learn from
No support from grape wine industry because of market research and market development being limited to
activities funded by industry levies
No promotion of northern Queensland as a wine producing region to tourist markets
Suppliers of wine-making equipment and inputs located in southern Australias major wine producing regions,
adding freight to production costs
Risk from cyclones to fruit and wine supply
Fruits producers growing primarily for fresh fruit market
Fluctuating yields for some fruits
Limited supply of organic fruit available for organic wines
Lack of chemical analysis of the fruits used and availability of suitable analytical services
Small businesses with limited funds for market development
Hostile objections from the grape wine industry to be treated as equals
New producers with varying levels of wine-making knowledge and experience, and lacking in tertiary wine-making
education and experience in wine marketing
Lack of training facilities and courses in wine-making for fruit wine
Lack of local container shipping facilities and services to large wine markets

65

Opportunities
Large undeveloped tourist, local and national markets
International tourists often already familiar with fruit wines
Numerous overseas markets for fruit wine
Growing retail sales of imported fruit wine and fruit-flavoured wine
Geographic proximity to large emerging overseas markets for fruit wine
Retailers seeking drinks as a bridge to introduce young people to wine and ultimately grape wine
Australias international reputation for quality wines that represent value for money
Growing awareness of tropical fruit wine in some attractive country markets
No stigma in overseas markets with a fruit wine tradition
A large domestic wine market with niches seeking fruity styles
Tropical fruit wines accepted as a local souvenir and novel drink for gifts and celebrations
Promotion of benefits from fruit consumption by fruit industries and governments
To reach a wide target market through the Internet
To use of fruit wine competitions to establish quality benchmarks, with awards to reward and promote quality
To develop, monitor and promote industry quality standards
To monitor markets to identify for favourable trends and trade opportunities
To learn from successes of Australian grape wine industry
To collaborate as an industry to promote and build a favourable market image for Australia tropical fruit wines
Threats
Fluctuating currencies affect cost-competitiveness and demand in export markets and from international visitors
No place developed for fruit wine in the Australian culture
Trade perception that fruit wine is low quality, oversweet and a high risk
Oversupply of grape wine
Proliferation of wine products and brands and fruit-flavoured spirits
Retail increasingly concentrated in a few very large retailers
Growing price-sensitivity as grape wine prices fall
More wine retailers selling their own private labels
Lack of agreed quality parameters across the fruit wine industry, with the risk that producers not concerned with
quality will lower its reputation
Industry almost entirely reliant on tourism
Reduced prices and profits from increased competition within industry if new markets not developed

66

7. Discussion of Results
The project has identified and evaluated the current and most likely potential markets for Australian
tropical fruit wines in Australia and internationally. It has also identified appropriate marketing
strategies that the industry can use to develop these markets.

7.1

Australian market

A small emerging market of northern Queensland residents buys local tropical fruit wines for gifts,
special occasions, self-indulgence and some regular consumption. They are familiar with tropical
fruits, increasingly aware of tropical fruit wines, occasionally buying them from local wineries but
purchasing grape wine for everyday drinking. This is the most important market to develop in order to
build regular consumption and champions for the local industry, test promotional strategies, and
provide an income base and platform for expansion beyond the region.
There is an increasing market of Australian visitors to the wine-producing regions, usually comprising
inexperienced grape wine drinkers who may have some experience of fruit wine and tropical fruits,
who buy the wines for souvenirs, gifts and consumption while travelling. They sometimes continue to
buy through mail order, and sometimes visit fruit wineries elsewhere. This is an important market for
expansion, to widen awareness of and interest in fruit wines through word of mouth and
recommendations but will be more difficult to reach with promotion and distribution.
There is a growing market of international tourists, mainly from Japan, the United States, Canada,
Germany and the United Kingdom, who buy small quantities of tropical fruit wines from wineries and
other local outlets. They are often familiar with wine from temperate fruits but do not expect to find
wine in these regions, or wine from tropical fruits, and do not seek local wines in restaurants or bars in
the wine-producing regions. While these consumers can promote the wines through word of mouth in
their home markets, they are unlikely to continue buying the wines without distribution close to home.
Therefore, development of these market segments should be integrated with market development in
their home countries where these have been identified as having strong export prospects, in particular
Japan, the United States and Canada.
While the mass Australian market is undeveloped, tropical fruit wine producers should concentrate
their limited resources on niches with demand for similar drinks. The most likely market appears to be
people new to drinking wine and RTDs, mainly young women, who prefer fruity alcohol drinks. Grape
wine producers and large retailers are offering a number of sparkling fruit flavoured grape wines,
imported fruit wine and small bottles and cans, and RTD manufacturers are also focussing on this
market with low alcohol fruity drinks.
There is also a potential national market of adventurous wine drinkers looking for new wine styles,
who buy from wineries and specialist stores offering a wide product range.
Entrenched grape wine drinkers for whom wine is a high involvement purchase are generally resistant
to trying fruit wine and they are unlikely to become buyers.
Market development activities should include:

Use of quality indicators to overcome negative perceptions and build the confidence of
consumers and trade, including medals, awards and quality standards.

Customising packaging, labelling and promotional items and messages to appeal to each
market.

Repeated tastings and education to build awareness, interest, trial and demand for the wines
through wine and food events, winery visits, and educational events such as wine dinners, wine
classes and wine-maker talks.

67

Promotion of both individual brands and regional industries through media advertising and
publicity, endorsement by product champions, wine maps, wine trails, brochures, and industry
events.

A regional brand for wine or food and wine can be used to build a reputation for key fruit wine
producing regions through promotion by tourism development organisations and agencies in
key tourist markets.

Development of efficient distribution channels to ensure availability of the wines in key

markets, through supply chains that will promote the wines to consumers and provide market
feedback to guide producers in their marketing strategies.

Pricing that will position the wines for regular drinking as well as for gifts and special
occasions, satisfy shoppers expectations of value for money, and motivate trialling and larger
purchases.

Positioning of the wines to fit into the lifestyles of key markets, and promoting several potential
uses so as to encourage trialling and increase usage.

Market expansion will depend on developing distribution, particularly through retail outlets and the
food service and entertainment sectors. However, this will require the building of consumer awareness
and demand, educating service staff about the wines, and competing against large manufacturers
brands with substantial economies of scale and promotional resources.
It may be necessary to introduce the wines to the food service sector through chefs using them in
dishes and matching them with foods, and as cocktail ingredients.
A major barrier to market development will be the prevailing image of fruit wine, particularly in the
wine distribution and food service sectors. To develop trade and consumer confidence will require a
combined industry effort to establish and maintain quality standards across the category of tropical
fruit wines, and influence all fruit wine producers.
Another barrier will be the lack of an appropriate retail category that promotes the wines effectively to
key markets. The various category options will need trialling and developing jointly by the industry
and the national retail and food service sectors.
The industry will need access to research and development facilities and services to enable product
innovation and quality improvement to ensure competitiveness in the mature and sophisticated wine
marketplace.
There is potential for a tropical fruit wine industry across Australias Top End to compliment the
established southern grape wine industry. However, as the industry expands in producer numbers and
production volumes, producers will need to develop new markets to avoid intensifying competition
and eventual price-cutting in existing markets.
Efficient production and distribution will be necessary to compete on price in mature and highly
competitive beverage markets, such as Australia.
The fruit wine industry is not eligible for marketing support from the internal levy funded grape wine
industry. However, it can mirror that industrys successful industry and market development strategies
by establishing strong industry associations to share resources, access support from various agencies
that support industry development, and agree on common quality standards (see Appendix C for a case
study on the Australian grape wine industry). This could be done by collaboration between existing
industry organisations, establishment of a national fruit wine industry organisation, and informationsharing, such as through a limited-access Internet discussion group.

7.2

International markets

The export market with the most potential for Australian tropical wines appears to be Japan. It has an
emerging market for tropical and other fruit wines, reachable consumer segments of novice drinkers
and the health conscious buying domestic and imported tropical fruit wines, attractive pricing, various
68

distribution channels, and potential to position Australian tropical fruit wines as premium products.
Developing this market will require commitment to developing sound relationships with Japanese
distributors, appropriate products, product presentation, promotional strategies for market
development, and on-going monitoring of the market.
The United States and Singapore have good prospects because of their substantial fruit wine markets,
consumption of fruit wine from tropical and exotic fruits, attractive pricing, strong demand and
distribution channels for Australian grape wine, opportunities for promotion, and low import charges.
In-market research will be needed to identify specific markets to focus on and appropriate market
development strategies.
There are other potential markets with favourable demand trends for fruit wine, mostly in Canada and
Europe, which warrant in-market research.
World demand trends indicate a number of expanding country markets for grape wine; large markets
for fruit wine, cider, perry and fruit-flavoured grape wine; governments encouraging consumers to
shift to lower alcohol fruit-based drinks; manufacturers using similar drinks to direct novice drinkers
to grape wine; and growing economies where consumers are beginning to drink wine, often instead of
similar traditional drinks from non-fruit bases (see Appendix A for detailed market trends).
Australian tropical fruit wines are more likely to be competitive in countries that have identifiable and
growing market segments for tropical fruit wine or similar drinks, and for quality wine; access to
suitable distribution channels for fruit wines and Australian wine; and opportunities to promote and
differentiate from competing drinks.
Wine producers can enlist assistance from government trade development agencies located in most
countries or regions to identify and develop overseas markets and participate in promotional activities
such as wine trade shows and market visits.
The emergence of tropical fruit wine and export-focussed industries around the world are raising
awareness of tropical fruit wines in local and visitor markets. However, variable quality and a
common perception of tropical fruits as low value and not wine-making fruits are likely to result in an
image of fruit wines as inferior to the ever-improving grape wines. There is potential for the
Australian industry to take the lead in tropical fruit wines by establishing strong industry branding and
quality standards and promoting these in high profile quality conscious markets.

69

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Appendices
Appendix A: Global trends in wine and related drinks
The research has identified a number of trends in the world markets for grape wine, cider, perry and
flavoured drink markets with implications for the development of markets for tropical fruit wine.

Grape wine

Grape wine is the worlds leading wine, with a world market of 23 987 million litres in 2005
and growing at around 0.9 per cent a year (The Wine Institute 2007)

World wine production of 28 700 million litres has led to a 4670 million litre (19 per cent)
global surplus over consumption in a maturing global market (The Wine Institute 2007)

The largest wine markets are in wine producing countries suited to grapegrowing

Many large country markets are maturing, with high individual consumption, intense price
competition, and aging consumers drinking less wine

Health conscious consumers are shifting to smaller quantities of grape wine of higher quality,
red wine and organic wine

Many countries have emerging grape wine markets, usually starting with international tourists
and expatriates followed by middle class higher income earners influenced by them, and by
promotions by overseas producers, industries and governments

In many countries wine consumption remains limited to market niches such as expatriates and
to religious, cultural and other uses and occasions

Premium quality wine is popular for gifts, and sparkling wine for celebrations

Wine is used to signify social status, sophistication and European culture

More wine is being drunk at home as countries implement drink driving restrictions

In developed markets wine is used to complement food, celebrate, use as a gift, relax, socialise
and for assumed health benefits, particularly the avoidance of cardiovascular disease

Wineries are often clustered in regions, enabling regional wine tourism and promotion,
particularly where appellation or Geographic Indicators are in place

Wine faces growing competition from beer, premium beer and RTDs in young consumer
markets

Many countries are expanding their grape wine industries and improving quality to compete
with imported wine

Old World Europes wine industries, mainly in France and Italy, have traditionally led world
supply but are losing ground to industries in New World countries, led by Australia, Brazil,
Chile and the United States, which have large quantities of lower priced wine of ever-improving
quality from increasingly efficient production systems and distributed through shorter more
efficient and economic distribution channels

The Australian industry supplied 126 overseas markets in 2006, and leads in several

World wine quality is continually improving through product research and development for
grapes and wine and the development and implementation of quality standards

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The International Organisation of Vine and Wine (OIV) has adopted an International Code of
Oenological Practices (see definitions) which defines standards for grape and wine production

Wine quality is conveyed to consumers through trophies and medals, appellation, terms such as
premium and reserve, quality marks and logos, and price

French wines are perceived as the words highest quality and achieve the highest prices
worldwide, due to popular belief that Frances appellation controls produce the best quality
wine (explained in detail in Appendix E)

Countries with limited or no wine grape production often import bulk wine to bottle or produce
wine from imported ingredients

As consumers personal incomes and wine experience grow they buy higher priced and better
quality wine in bottles from countries with a reputation for quality

The main wine categories are red, white, ros, sparkling and dessert, and the fortified wines
sherry, port and vermouth

Wine is increasingly sold by grape variety

Red wine is in strong demand due to promotion of health claims for its polyphenol content

Wine consumers typically progress from sweeter to drier wines as their palates develop

Producers are increasingly using wine-making techniques to reduce preservatives and allergens,
and also organic wines, to allay consumer concern about chemical additives

Wine manufacturers use bottle shape, glass colour and texture to differentiate their products

Convenience packaging such as baginbox, cans and single serve bottles are used to introduce
new consumers to wine and to widen consumption at outside events such as picnics

Consumers have accepted screwcaps, introduced to reduce taint from contamination from corks,
as convenient, easy to use, and suited to occasional drinking

Many thousands of wines and brands are retailed worldwide

Producers are consolidating into major global brands with wide product ranges

Loyalty to wine brands is strongest in new wine drinkers. As their knowledge and experience of
wine grow, people are more likely to experiment with new brands and products

New wine drinkers generally prefer simple modern labels with product information

Australian wines are gradually making inroads into the worlds premium quality markets

Established wine markets are becoming increasingly price-sensitive due to price competition
from New World suppliers and large retail chains, the availability of bulk packaging such as
baginbox, and in some countries high tariffs, taxes, distribution costs and mark-ups

As personal incomes rise demand is growing for mid-priced, premium wines at more than
A$15.00 a bottle and super premium wines at more than A$25.00 in Australia and many
western markets (The marketing decade 200010)

Wine distribution channels are increasingly specialised and competitive

Most wine is sold by retail stores

Wine sales are growing in the expanding hotel, restaurant and bar sectors of many countries

Large retail chains increasingly dominate wine sales and are using direct purchasing,
discounting, and centralised warehousing and distribution to be the price leaders for wine

Young consumers often buy wine in bars when socialising

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Small wineries usually sell directly from the winery and through mail order, and are often
clustered in branded wine tourism regions

Direct retailing is growing through producer, wholesaler and retailer websites with mail order,
and through catalogues

The 126 countries importing Australian grape wine have potential distribution channels for
Australian tropical fruit wine

Wine manufacturers and industry organisations, often with government support, use generic and
brand promotion to develop awareness and trial in new markets through tastings in shops and
restaurants, media articles and advertising, wine courses and wine clubs. To maintain developed
markets they are increasingly using brand promotion such as advertising, store signage, tastings,
incentives such as prizes and price discounts, and wine reviews

Retailers, restaurants and entertainment venues rely on manufacturers to organise and fund
promotion for new products, and often require rebates and other financial incentives

Endorsements by magazine and newspaper wine reviewers, prominent winemakers and wine
judges are often used to promote wine

Wine is often matched with food on wine labels, and by sommeliers and wine reviewers

Many governments restrict promotion of alcohol to reduce over-consumption

Some governments are positioning wine as a healthier low alcohol alternative to spirits

Australian wines are accepted in numerous countries as reasonably priced and value for money,
although industry efforts to reposition them as premium quality are starting to show results

Most countries impose import tariffs and various taxes on wine to reduce over-consumption,
protect local industries and raise government revenue

Members of trading blocs such as the ever-expanding European Union can trade without the
substantial taxes imposed on non-members

Access to emerging wine markets is improving as countries negotiate bilateral Free Trade
agreements and the expanding World Trade Organisation negotiates to reduce quotas and import
tariffs.

Cider and perry

Cider and perry are low alcohol drinks produced from apples and pears respectively by similar
fermentation techniques to wine-making, and also by a similar brewing process to beer

Apple cider is a major drink in many northern hemisphere countries, and widely traded

Still and sparkling perry are used similarly to wine, including meals, celebrations, and quaffing

Both are often produced by large drinks manufacturers

Cider manufacturers are extending their product ranges with flavoured and mulled ciders and
premium grades to add value and expand into new markets.

Flavoured grape wine

This is a large and growing drink category, particularly sparkling wine

Producers blend grape wine with fruit wine, fruit juice, fruit pulp, artificial flavourings, herbs,
spices and sometimes bark, to expand into new markets

The fruits used for blending include tropical fruits such as mango and passionfruit

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Producers are often large wine manufacturers seeking to add value to low priced grape wine as
mulled wines and health drinks

Manufacturers and retailers are offering these drinks to introduce young people to grape wine

Markets include health conscious people seeking low alcohol drinks and novice drinkers who
prefer a fruity taste

These wines are being packaged in both wine bottles and small RTD bottles

Coolers are low alcohol and diluted flavoured grape wines, usually in casks or small bottles

Retail prices are usually lower than for fruit wine.

Non-fruit wines

Many traditional wines are fermented from bases other than fruit, often with sugar added to
achieve the desired alcohol content. Although they rarely have commercial status these drinks
provide competition for fruit and grape wines

Mead is often produced in the same regions as fruit and grape wine, but remains a minor drink

Ginger wine has minor production and markets, mainly in the United Kingdom

Wine is produced from maple sap in Canada

In eastern Asia most wine is fermented from grains, such as rice wine, and often distilled into
high alcohol spirits

In many developing countries where personal incomes are very low, wine-style drinks are often
fermented from low-priced sources of starch into high alcohol drinks for faster inebriation, such
as sugar (producing cacacha a Brazilian drink), palm, coconut and cactus. As individual
incomes and aspirations increase consumers are shifting to imported grape wine

Vegetable and flower wines are usually home-made, but sometimes sold by fruit wineries.

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Appendix B: Wine quality

Quality, where simple mechanical things are concerned, is measurable by how well or how long a
device functions properly, or if it functions properly at all. With wine, pinning down the concept of
quality is not so easy. Winemakers tend to agree that the quality of a wine is connected to its level of
technical flaws. Consumers generally have no understanding about technical flaws and tend to relate
quality to taste; however, what tastes good to one person may taste terrible to another.
The following set of criteria aims to define wine quality by defining the parameters of a quality wine
from a technological viewpoint, starting with basic wine quality and progressing towards increasing
quality. Each point depends on the previous criteria being satisfied before advancing to the next level
of quality. As fruit wines have an uphill battle in being accepted as a quality product, it is imperative
they at least meet the first four parameters:

Level one: The first responsibility is that a wine is stable when it goes into the bottle, and
remains stable for its projected lifespan. Unless it can meet this basic definition of quality, the
wine is a failure. The wine does not need to be sterile but should contain no active spoilage
microbes that will modify its sensory and chemical properties once bottled. Sulphur dioxide
level should be sufficient to minimize oxidative degradation of the wine over its projected
lifespan, and care taken with the bottling process, materials and procedures to minimise
contamination en route to bottling.

Level two: If a wine meets the first criteria, the second step up in quality is that the wine should
be well made and without obvious flaws, faults, off aromas or off flavours. This means it should
have no perceptible volatile acidity, ethyl acetate, sulphide problems, contamination by moulds
or bacteria, non-wine chemicals, or other non-wine aromas or contamination.

Level three: The third step up in quality is that the wine reflects the variety and / or style which
it is labelled to represent. This refers both to basic chemical attributes, which should remain
within acceptable sugar, acid, pH and alcohol ranges, and to aromatic signature and phenolic
composition.
These first three levels are the basic quality levels that a winemaker should achieve before
putting any bottle out for sale or consumption.

Level four: The fourth level of quality is that the wine should be a delicious and pleasant
example of the style which has been chosen consciously by the winemaker. The components in
the wine should be balanced and in harmony with each other.
Until this level of the quality hierarchy, the wine could have met all the previous goals and still
be horrible to drink. This is the first point at which the consumer idea of the wine being nice to
drink is defined. This is the minimum level that fruit wineries should be operating in if they
want the industry to thrive, grow and prosper.

Level five: To rise above a solid commercial wine and into the premium categories involves
attributes such as the textures, character, complexity and personality of the wine. It is here that
elegance and subtlety can be very powerful, and where strong and overpowering can be a
negative. Huge wines can exist here but all components must be in harmony and give a sense of
oneness.

Level six: The sixth quality level includes longevity of the wine, ability to develop interesting
and complementary secondary characteristics, typicity specific to the place where the wine was
made, and absolute trueness to the craft. At this level, quality attributes become more idealistic
and less objective. Where previously defined levels can be applied to wine as a simple consumer
product, this is where wines start to become something more lyrical and worthy of legend and
tradition.

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Appendix C: Case studies

The Australian grape wine industry
This case study was developed from several Australian wine industry reports.
The Australian grape wine industry has grown to 1400 million litres a year, supplying a large domestic
market and exporting more than half its production. Its success has come from not only large land
areas with suitable soils and climatic conditions for wine grapes but a cohesive industry, an
international focus, and strategic management of supply and marketing.
The industry had a sluggish start. Although grape vines arrived with the First Fleet they were quickly
affected by disease, and the first local alcoholic drink for homesick and weary settlers was a strong
peach cider. Vineyards and wineries were established by the 1820s but different climatic conditions
for the growing of the imported vines probably affected grape quality which would have had a hidden
effect on the fermentation and eventual wine quality. Demand for domestic wines only started to grow,
very slowly, late in the 19th century, due mainly to lack of an Australian wine culture, snobbish
resistance to domestic wines by wine drinkers and hoteliers, and the influence of various temperance
and abstinence movements. The small market was easily saturated due to lack of market development
by the fragmented wine industry. Four major production booms were followed by plateauing and a fall
in wine and grape production and producers exiting the industry. Also, large vine plantings were lost
to the disease phylloxera.
In the 1950s immigrants from post-war Europe introduced wine-drinking and European eating patterns
to Australia, while higher personal incomes meant most people could afford wine. However, as
fortified wine travelled better and arrived in good condition it was given a generous export subsidy, so
more fortified wine was produced than table wine. In the 1960s Australians finally started to drink
table wine, persuaded by an Australian Wine Bureau advertising and promotional campaign which
was supported by wine books, articles and columns and food and wine societies. Producers initially
offered sweet sparkling pearl wines such as Gramps Barossa Pearl which appealed to women. In the
1980s demand grew as consumer tastes became increasingly European, and the new baginbox
attracted many new wine drinkers by offering convenience and an image of value for money. From the
1990s eating out at cafes and restaurants became increasingly popular, providing more wine-drinking
occasions, and the market soon expanded from wine enthusiasts to regular wine drinkers and from
lower quality cask wine to quality domestic and imported bottled wine.
The Australia Strategy 2025 plan launched in 1996 presented a vision of Australia capturing 6.5 per
cent of the global wine market by 2025. This led to an increase in total vineyard area to 167 000 ha,
more than half under Shiraz, Chardonnay, and Cabernet sauvignon grapes. In 2005, 6000 grape
growers and 2000 wineries crushed two million tonnes of wine grapes, producing 1400 million litres
of wine of which only 1100 million litres were sold, 40 per cent in Australia and 60 per cent overseas.
By 2006/07 the industry faced another shakeout, especially for producers of red wine, following a
record grape harvest in 2002, and for smaller wineries lacking the marketing clout of the leading
producers with global markets. Some growers have put their vineyards into hibernation, keeping the
vines alive with minimal water, until the stockpile of wine is reduced.
Australia now has the world's fourth largest wine exports, after France, Italy and Spain, with about
two-thirds of its wine exports going to the United Kingdom and United States.
Underlying the strong industry growth has been long-term strategic and financial planning, a strong
export focus, constant research in potential markets around the world for new export opportunities,
and the ability to seize these opportunities and apply strategies to build and maintain new markets, all
made possible by producers ability to band together with a unified focus and support for market
development.
Over the last century several organisations were formed to represent the industry:

92

The Winemakers Federation of Australia (WFA) to give a collective voice for individual
wineries. The WFA's role focuses on the development of policy in response to urgent and
critical problems facing Australian wineries. These include minimising taxes and regulation,
improving access to export markets, improving environmental performance, keeping research
and development relevant to the industrys needs, ensuring a socially responsible industry,
managing changing workforce requirements, developing winery tourism activities, ensuring
technical proficiency and flexibility in wine production, protection from and management of
grape vine disease, and managing changes in packaging for wine and brandy

The Australian Wine and Brandy Corporation (AWBC), incorporated under the Australian
Wine and Brandy Corporation Act to represent the interests of the wine and grape industries and
to promote the generic category of Australian wine

The Wine Overseas Marketing Board, formed in 1929 by the Australian Government to coordinate exports and now a sub-branch of the Australian Wine Export Council

The Australian Wine Export Council (AWEC), founded to manage the AWBCs export
programs and export growth in collaboration with both exporter committees and importer
committees consisting of company representatives and various levels of distributors in major
markets

The Australian Wine Bureau to market Australian wine overseas

The Wine Research and Development Corporation (WRDC) to manage product research and
development

The Grape and Wine Research and Development Corporation (GWRDC) and the University of
Adelaides Australian Wine Research Institute for technical research and development.

Activities with a broad industry benefit are funded by a compulsory levy on all grapes used for wine,
brandy, and spirit used to fortify wine. Producers also pay voluntary levies to participate in specific
promotions.
The Wine Overseas Marketing Board supported development of Australias first wine export market,
Great Britain, in the 1920s by establishing marketing firms there and promoting Australian wines at
various international exhibitions and competitions. In the mid-1980s a new export focus, largely due to
an oversupply of wine and a low dollar against the British pound, led to renewed market growth.
The industry has responded to increasing global price competition and growing demand for premium
wines with a strategy of consistent and reliable quality at affordable pricing, with most wine exports
now bottled and branded table wine.
To develop premium quality wines the industry has invested in extensive product research and
development; state-of-the-art infrastructure and facilities; new and innovative technology;
management of climatic conditions; high standards of processing, bottling and storage; and innovative
inventory and logistics management systems. It has kept abreast of technical developments in the
world wine industry, introducing new technology and adapting imported technologies. Ongoing
support is provided through winemaking training by the University of Adelaides Roseworthy
Agricultural College, Charles Sturt University, other tertiary institutions, and TAFE colleges;
laboratory testing services; and product research and development. Supply chain development with
winemakers, grape suppliers and marketers has improved the quality of grapes delivered to the winery.
Quality standards for products and labelling industry-wide have been developed and maintained
through the Label Integrity Program by the Australian Wine and Brandy Corporation, Australian Wine
Export Council and some 80 producer organisations. This quality assurance program, which applies to
domestic and imported wines and ensures exported wines meet the product standards of the importing
country, is based on the Food Standards Code of Food Standards Australia and New Zealand, with
standards similar to those of the EU and United States.
The industry now offers a wide variety of wine styles, quality options, and packaging choices, and
company consolidation has increased the diversity of product ranges. Research and development has
93

provided differentiated products and innovative packaging such as wine casks to expand the market
into new consumer segments.
After World War II some large firms shifted from bulk sales to bottling under their own labels, and
market recognition of these brands encouraged improving wine quality. In the 1980s large corporate
producers with marketing capability developed Australias first global wine brands: Jacobs Creek,
Lindemans and Rosemount. Australias leading wine companies are now Foster's, Southcorp,
Constellation Wines and Orlando (with the Jacob's Creek brand).
As distribution channels become increasing consolidated by wholesalers, distribution agencies and
retail chains, retail shelf space has been shifting to strong brands with adequate volume. The merging
of producers into large corporate producers has enabled them to ensure supply, achieve costefficiencies through large-scale production and establishment of overseas distribution, and offer a
wide assortment of products. These corporate producers have championed the industry through
product research and development and promotion by brand.
In 1994 the Australian Wine and Brandy Corporation established the Geographical Indications
Committee (GIC), a statutory committee to make determinations of geographical indications for wine
in relation to regions and localities in Australia. This has established numerous regional boundaries
for the registering of Geographical Indicators, and many local producer organisations have since
invested in regional branding and marketing. The Regional Indicators have also enabled the
development of regional wine tourism, which has allowed wineries to educate tourists interested in
wine, and often food; communicate the attributes and brands of their own products, maximise sales
profits; and build a viable business base from which to expand. The strong growth in international and
domestic tourism has provided important new markets, particularly for small wineries. Also, regional
branding from prestigious production regions has been shown to add value to comparable wines,
enabling higher pricing.
Generic promotion of Wine of Australia, the umbrella Brand Australia, by the Australian Wine
Bureau and also brand promotion by individual wine manufacturers has supported the development of
an image of quality, value for price, and reliability for Australian wines in many overseas markets. As
awareness of wine is developed in new markets, branding becomes more significant, and welldeveloped markets typically have a representative range of brands and price points in all distribution
channels, and often an Australian wine category.
Promoting by grape variety has been also been successful. International markets have seen this
Australian marketing initiative to demystify the French style labels as a breath of fresh air and quickly
adopted it, initially in New World markets and recently in Europe, including France. An
industrywide strategy of attractive easy to understand labels has also provided a strong competitive
edge around the world, particularly with new wine buyers daunted by complex Old World labels and
appellation.
Strategic alliances with global manufacturers and wine distributors in key wine markets have led to
more efficient distribution systems and access to new distribution channels.
Flexibility and adaptability have enabled the industry to seize new market opportunities. For example,
Australian producers have met changing global consumer trends by moving to full flavoured wines
and to red wine for increasingly health conscious drinkers, and have been able to develop a range of
wines when Australians began to visit wineries. The United Kingdom became Australias largest wine
market largely because producers quickly responded with large volumes of consistent quality premium
grade and low-priced wine when new laws permitted supermarkets to retail wine at a time when
Europes Common Agricultural Policy made it unprofitable for producers in European Union
countries to divert wine from highly subsidised ethanol production, and there was little supply from
other southern hemisphere producers. Not having appellation controls, which have slowed
diversification in European industries, has also enabled Australian producers to respond more quickly
to new market opportunities.
The industry has developed supply and greater efficiencies by expanding production through market
forecasting and tax benefits for grape producers to attract investment and tax incentives for vineyard

94

development (withdrawn in 2003); consolidation into large producers; and mechanising of pruning and
harvesting. The industry continues to campaign for more favourable tax treatment, including
elimination of the Wine Equalization Tax. However, producers, particularly small wineries, lack the
financial buffers of corporate manufacturers and so continue to be buffeted by fluctuating supply and
demand, price-discounting and changing taxes.
To expand in overseas markets the industry is developing alliances with overseas wine distributors in
the United States and potentially India, China and throughout Asia, and has formed strategic alliances
with other southern hemisphere wine producing countries to negotiate better market access with
individual countries and through the World Trade Organisation.
The industry invests heavily in promotion to build consumer, distribution and media awareness of
Australian wine and individual brands in new markets. The typical market entry campaign consists of
tastings, promotion in wine and other media, promotional support materials such as point of sale
literature, company brochures and videos, trade exhibitions; participation in third party consumer
promotions and events, and the hosting of visiting overseas wine writers and distributors.
Two major strategies underpin the industrys market development.
The Winemakers Federation of Australia, Strategy 2025, launched in 1996, provided a vision that
by the Year 2025 the Australian wine industry will achieve $4.5 billion in annual sales by being the world's
most influential and profitable supplier of branded wines, pioneering wine as a universal first choice
lifestyle beverage.'
Its purpose was to provide objectives and goals for the Australian wine industry for the next 30 years
to address challenges and opportunities facing the Australian wine industry, and to determine a whole
ofindustry vision for the future, with a specific focus on the resource requirements, market
opportunities, competitiveness and government facilitation needed to fulfil the industry vision. The
strategy highlights the need to develop specific strategies to address the industrys key competitive
factors such as marketing, environment, and research and development.
A second strategy, The Marketing Decade, is a joint industryfunded initiative between the WFA and
the AWBC. Expanding on Strategy 2025 it aims to convert the major developments in the past decade,
particularly the growth in exports and wine grape production, into international competitiveness,
market development and the generic branding of wine brand Australia; to communicate the next 10
years of challenges and opportunities to all wine industry participants and stakeholders; and to provide
strategies for market development.

Yellow tail wine

Casella Wines introduced its Yellow tail brand to the United States at a time when retailers were
seeking wines priced between inexpensive jug wines and wines at A$15.00 a bottle, and wine and
spirits importer William J. Deutsch & Sons was looking for a new brand as sales declined for its lead
product, a French Duboeuf Beaujolais. The importer traded distribution within the United States for a
half share of the Casella brand.
Encountering strong resistance to their family brand from established brands with similar pricing,
Casella Wines launched a new chardonnayshiraz blend with a stylised yellow-footed rock wallaby on
the label as Yellow tail through Deutschs established
distribution channels, supported only by point of sale
promotional material. By 2005 Yellow tail was both
the leading imported brand and leading brand in the
United States and it has since been introduced into
Europe, Canada and Asia.
Key success factors were mainly the big fruity
Australian-style taste, consistent quality, pricing of
US$6.00 (A$7.90) a bottle compared with
US$9.0011.00 (A$11.8014.40) for most United
95

Figure C.1: Yellow tail wine logo

States wines, friendly label, and strong distribution. Jon Fredrickson, a Californian industry
consultant, described Yellow tail as the perfect wine for a public grown up on soft drinks.
Casella Wines have since developed more varietals and blends and a reserve line under the Yellow tail
brand in 750 ml and 1.5 litre bottles. The reserve wines produced with the best fermentation treatments
added complexity and aging in oak barrels. It retails at a $2.003.00 premium to the original wine.
Deutsch & Sons have supported product introductions a with multi million dollar promotional
campaign, including billboard advertising.

Ready to drink (RTDs)

This case study was prepared using media articles and interviews with liquor retailers in Brisbane and
Melbourne and operators of nightclubs, clubs and hotels in Cairns.
Ready to drink (RTD) is the term given to a new category of spirits flavoured with fruit juice, fruit
flavours or soft drinks, in small bottles or cans. Since Two Dogs Alcoholic Lemonade, the first
Australian alcoholic brewed lemonade was launched in Australia in 1993 the RTD concept has grown
rapidly into a large global category, taking market share from both beer and spirits. The industry is
now highly competitive with numerous producers, including large global spirit manufacturers; a very
large and diverse category of products from flavoured spirits to various types of wine and cocktails;
intense competition through constant product innovation, numerous brands, pricing strategies, heavy
promotion, and congested distribution channels.
Manufacturers have used packaging, labelling and promotion to position the RTD category as a fun
drink for young adults, particularly fruity styles for young women, using packaging with a fun image,
such as party carry-packs and packaging for home entertaining to appeal to their desire for a
glamorous and sophisticated image. Young adults are attracted to colourful and fluoro labels, good
packaging and point of sale, and an image of cool and well-known. Packaging is also used to signify
quality, and some companies have developed a tier of products based on quality to direct more
experienced consumers toward premium quality lines.
RTDs offer consumer benefits that include refreshing flavours, lower prices, a trendy image, small
convenient containers, bottles to impede drink-spiking, and low alcohol content. Young women often
buy RTDs with similar alcohol content to the beer their male companions drink. Nightclubs and club
managers attribute the popularity of these products to young people starting to drink them early, often
at nightclubs; being always interested in new drinks, and wanting a quick alcohol effect from the
stronger RTDs. However, there are signs that young adults, a stable but heavy drinking market, are
moving on from the RTD category to more adult drinks with an image of maturity and sophistication
such as wine, liqueurs, cream-based drinks and premium beers.
RTDs are characterised by large manufacturer brands; alcohol content of five to seven per cent, small
containers such as 275 ml and 330 ml bottles and 375 ml cans, and often retail party packs. Light spirit
RTDs are typically vodka or schnapps with fruit juice or flavouring, such as Smirnoff Black, UDL,
Bacardi Breezer, IceSkyy Blue, Vodka Cruiser, Archers SPRI, and Malibu Chills Exotic Rush with
passionfruit, mango, peach and apricot. Vodka-based fruit flavoured drinks have been particularly
successful, with attractive price points and strong promotional support to retailers, and Smirnoff vodka
RTDs are a leading drink with young women and increasingly men in Cairns venues. Dark spirit
RTDs are mostly bourbon-based drinks such as Southern Comfort with cola or lemonade, and
represent around 60 per cent of total RTD sales, mainly to men. However, variable quality is affecting
consumers perception of value for money.
Manufacturers have been attempting to position other drinks as RTDs by using smaller containers.
This has been more successful for some drinks than others, even with good promotional support.
Examples are:

Killawarra Dusk (strawberry flavoured) and Yellowglen Pink sparkling wines in 200 ml
piccolos (small bottles) and prepacks in RTD sections as well as in 750 ml bottles with the
sparkling wines

96

St Agnes brandies pre-mixed, such as St Agnes Lime and Soda packaged to appeal to younger
drinkers, supported with promotions such as giveaways

Bluetongue Alcoholic Ginger Beer and Stones Ginger Beers Premium Ginger Beer

Cocktails such as Mudslides (cream liqueurs).

One nightclub sells RTDs at $7.009.00 each. Examples of retail prices are Midori Splice (coconut,
rum and pineapple) with five per cent alcohol at $3.49 for a single or $11.40 for a four-pack; Vodka
with a twist of exotic passionfruit at $8.99 for a four-pack, Vodka Cruisers at $50.00 for a 24-pack
and Yellowglen sparkling wine at $3.99 a bottle or $15.99 for a four-pack.
RTDs are an established category in retail stores, bars and nightclubs. However, there is such a
proliferation of products and new product launches that one large nightclub has opted for distribution
contracts, often exclusive, for a few lines only. Also the wide range of products has increased the need
for good display and signage, and intense competition for refrigerator space in retail stores has led to
some manufacturers supplying their own refrigeration.
Manufacturers support their products with intensive promotion, which results in brand loyalty, word of
mouth and continuing strong sales. Promotions include media publicity and advertising; tasting
samples; giveaway merchandise such as bags, caps, sweat bands and fake tattoos; draws for prizes and
holidays; sponsorship of sporting events; and scratch and win prizes. One new RTD product was
launched with point of sale material, followed by a television and radio advertising campaign, media
publicity, on premise and off premise tastings, and a promotion that provides gifts with purchases. One
nightclub supports manufacturer promotions with signage, video advertisements and tastings offered
by attractive young women. To introduce a new line and create word of mouth a large nightclub
requires rebates and a promotional budget for a month of tastings with discounted stock for tastings,
and point of sale material.
Product development, store tastings and education of trade and bar staff on the RTDs and their
individual brands have fallen behind across the category. RTDs without solid brand backing, and
appropriate pricing, have short product cycles.

97

Appendix D: Harmonised system (HS) codes for wine

International harmonised tariff codes, to six-digits, are administered by the World Customs
Organisation, with fruit wines defined as other fermented beverages e.g. cider, perry, mead; mixtures
of fermented beverages and non-alcoholic beverages not elsewhere specific or included by both the
four-digit code HS2206 and the six-digit code HS2206.00. However, individual countries allocate
their own additional three digits to further break down import categories, so the same fruit wine
product may be classified under several nine digit codes (Hiew 2007).
Table D.1: Harmonised system codes for fruit wine products, grape wine and related products
Harmonised
system code

Country and product

2206.00

Other fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and non-alcoholic
beverages not elsewhere specific or included
New Zealand: Fruit and vegetable wine
Canada: cider
Indonesia, Malaysia, Philippines, Singapore: Cider and perry
Korea: Fermented beverages from fruits
2206.00.10.10: Cider; 2206.00.10.20 Perry; 2206.00.10.90 Other fermented beverages from fruits not
previously specified
Mexico: Wine coolers
United States: Cider
Canada: Prune wine
Korea: Fermented beverages from cereals
Indonesia, Malaysia, Philippines, Singapore: Sake
Taiwan: Fermented fruit beverages
Japan: Sake
Canada: Prune wine, over 7% but not 22.9% alcohol
Japan: Wine with fruit juice added, wine coolers
Japan: Mixtures of fermented beverages (excluding Seishu) and products of HS2009 fruit juices or
HS2202 mineral and other waters
Japan: Other
Australia: Grape wine not with spirits; cider; perry; fruit and vegetable wine not with spirits; mead, sake
2206.00.3020: Grape wine; cider; perry; mead; sake of an alcoholic strength by volume over 10.15%;
fruit or vegetable wine of an alcoholic strength over 8% but not 22%
Canada: Perry
Indonesia, Philippines, Singapore: Toddy
United States: Prune wine
Malaysia: Mead
Taiwan: Mead
Australia: Fortified grape, fruit and vegetable wine and mead
Canada: Other wine, sparkling
Malaysia: Wines from fermented fruit juices such as fig, date or berry, but not grape or vegetable
Indonesia, Philippines, Singapore: Shandy, over 0.5% but not 3% alcohol
United States: Rice wine or sake
Australia: Beverages not specified elsewhere fortified with spirits from HS2207
Indonesia, Philippines; Singapore: Shandy, over 1% but not 3% alcohol
Canada: Fruit wine including, Kosher and blackberry
Australia: Beverages not specified above fortified with spirits

2206.00.1

2206.00.15
2206.00.20

2206.00.200.004
2206.00.2105
2206.00.21.30
2206.00.221
2206.00.2212
2206.00.2293
2206.00.30

2206.00.30.002
2206.00.40

2296.00.45
2206.00.50

2206.00.60

98

Harmonised
system code

2206.00.70

2206.00.80
2206.00.89
2206.00.90

2206.00.90.10
2206.00.99

Country and product

Canada: sake and other wine

United States: effervescent wine
Australia: Beer other than HS2203 (not from malt) with hops, not more than 48 litres
United States: Fermented beverages, excluding cider and sake
Canada: sake and other wine exceeding 21.9% alcohol
Australia: Beer other than HS2203, more than 48L
Canada: Ginger beer and herbal beer
Australia: other
Australia: other
Canada: other HS2206.00.91: Mead
Indonesia, Philippines, Singapore: Mead and other fermented beverages
United States: Fermented beverages other than grape wine, beer, cider, prune wine, sake, vermouth,
or other effervescent wines
Taiwan: Wine coolers; Malaysia: Toddy, bottled or canned
Malaysia: Other

99

Appendix E:
E.1

Country profiles

Country profiles Asia

Research indicates tropical fruit wine markets are emerging in a number of Asian countries and this
section describes the larger potential markets. The Japanese market profile is located separately in
Section 5 and incorporates the preliminary profile used for market selection.

E.1.1 China
A separate profile has been undertaken for Hong Kong because, although it is a Special Administrative
Region of the Peoples Republic of China, it has a more established wine market and different entry
conditions to mainland China.
Market profile
China has a long tradition of fruit wines dating from the Xia Dynasty in the 21st century BC and, until
recent years, all fruit wine was made from fruits other than grapes. Fruit wines are widely consumed
and often with meals. A strongly growing market is indicated by the establishment of several large
commercial fruit wineries in the last 15 years.
Exports of fruit wine related products grew from 26.540.6 million litres from 200205. Annual
exports from 200206 included approximately 7.5 million litres to Japan, the United States and
Canada. Volumes to Australia fluctuated between 81 200 and 151 400 litres (Table E.1).
The main markets for grape wine are:

the wealthiest elite, as a signifier of status

a large and growing middle class of higher income and professional people who can afford
wine, are often conscious of health claims for red wine, and are starting to buy wine on business
and social occasions

1845 year old middle class people who consider wine, particularly red wine, as fashionable to
drink in wine bars, hotels and restaurants

high income earning Chinese and foreigners in large cities, who buy most imported wine

international visitors drinking higher quality wine in hotels and restaurants

people in Shanghai, who buy imported drinks under the influence of westerners

rural people and some minority ethnic groups (Access Asia Limited 2004; AWBC 2002, 2005;
Buckalew 2005; Yantai Best Cellar Consulting Co Ltd 2005; China Wines Information 2005;
Canada Agri-Food Trade Service 2002; WHO 2004).

Grape wine, usually imported, is mainly used to convey high status at major occasions such as
traditional holidays; celebrations such as banquet dinners, particularly in Shanghai, and Government
departmental lunches, where red wine is increasingly replacing clear spirits as banquet toasts; and as
gifts to convey affection and respect at special occasions such as Chinese New Year and
housewarming parties.
Chinese people prefer wine to have both acidity and sweetness and often drink it as a shot or mixed
with lemon, ice, or lemonade, similar to brandy and whisky. However, people are gradually drinking
wine western-style, particularly where influenced by foreigners (Buckalew 2005; Qu 2005).
Regional consumption of grape wine is highest in northern China, (WHO 2004) and growing in the
more affluent major cities and coastal regions, led by Shanghai, Beijing and Guangdong, where most

100

Australian grape wine is also sold. Consumption is highest in Shanghai, an international city fast
becoming the financial centre for Asia, with a large market of people with the highest individual
disposable incomes in China; strong demand for new foods and flavours; growing wine education;
increasing numbers of distributors handling imported wines; and a market of middle and upper class
consumers, young to middle-aged, with sophisticated tastes in food and wine, who drink wine at
corporate events and buy it through luxury hotels and restaurants, western and higher quality chain
restaurants, casinos, western bars, bars, wine bars, boutiques and supermarkets, home delivery
services, and the Internet (AWBC China 2002; Buckalew 2005; Dean n.d.; Business Victoria n.d.).
The market has become increasingly competitive as production volumes and winery numbers increase
while market growth is constrained by high wine prices compared with beer and spirits (although
prices are falling as the industry and market develop and taxes are reduced); poor quality domestic
wines under irregular brands and mostly made from alcohol, saccharin and water with little fruit
content; and the lack of a wine culture. Most Chinese people drink only domestic wine as their
incomes are so low they cannot consider imported wines with import taxes (China Wines Information
2007a; China Wines Information 2006e).
Grape wine was only introduced to China in the 1970s when the Chinese Government launched
commercial production to provide consumers with a healthier and lower priced alternative to high
priced drinks such as imported brandy and local spirits. Consumption has grown strongly to around
432 million litres in 2005, and is forecast to double by 2015, due largely to:

a rapidly growing economy and rising disposable incomes

an emerging professional class, a middle class of around 60 million people and an aspiring
middle class of around 180 million beginning to explore different tastes and lifestyles and
Australian wine

wine increasingly drunk at events such as Harvest Moon festival and Chinese New Year

giving wine for gifts increasingly popular as westernstyle behaviour

people associating wine-drinking with sophisticated western customs and high social status

buying wine becoming very fashionable as many new wine shops open in major cities

consumers accepting health claims for red wine

government promotions persuading consumers to adopt wine as a healthier lower priced

western-style alternative to high alcohol grain spirits

growing wine education and wine appreciation

a growing interest in western lifestyle and tastes

a wide choice of good inexpensive wines as domestic wine quality improves

growing numbers of fine dining restaurants in the leading centres of Beijing, Guangzhou,
Macau, Shanghai and Shenzhen (Access Asia Limited 2004; Buckalew 2005; Dean n.d.; China
Wines Information 2006d; Business Victoria n.d.; Wright 2007).

The market with most growth potential for grape wine is around 60130 million young to middle-aged
people with higher incomes who drink wine in luxury hotels, bars and casinos in coastal cities, five to
ten per cent of the population (Business Victoria n.d.).
However, grape wine remains a new and minor drink in China, with average individual consumption
of only 0.3 litres a year. Chinese people consumed 35 billion litres of alcoholic drinks in 2005, 20 per
cent of the world market. Grape wine accounts for only one per cent of total liquor production,
compared with 24 000 million litres of beer and 5500 million litres of white spirit led by the popular
traditional baijiu spirit distilled from rice, maotai from sorghum; and imported brandy and spirits.
While Chinese people have traditionally drunk alcohol to become inebriated rather than for taste, beer
and spirit production are slowing, and as incomes and health consciousness increase consumers are

101

moving to small quantities of better quality drinks, and likely to adopt increasingly sophisticated
drinks, indicating opportunities for new healthier alternatives to current drinks (China Wine
Information 2007; MacLeod 2006).
Chinas favourite beverage is tea. Many Chinese people do not drink any alcohol, and a 2001 World
Health Organisation sponsored survey of 25 000 people across five regions found 41 per cent to be
lifetime abstainers (WHO 2004).
Fruit winemakers will need to acquire a sound understanding of Chinese cuisine and culture before
they can make inroads into its wine market.
Supply
A very large and growing fruit wine industry is concentrated in four leading regions, which include
Fujian, Guangxi, Hebel, Jiangxi, Lianing and Sichuan provinces (Eijkhoff 2000). Manufacturers are
often conglomerates producing a diverse product range. Rationalisation of the industry saw
manufacturer numbers fall from 246 to 54 from 19972002, resulting in improved financial viability
of the remaining companies and value of production growing to CNY1407 million (A$255 million) by
2005. However, despite the central governments privatisation policy, all fruit wineries remain 100 per
cent state owned, most being poorly run ventures and unattractive prospects for privatisation, with
little incentive for employees to strive to find new markets, so most distribution remains local.
Imports of fruit wine related products halved to 564 000 litres from 200206, while exports almost
doubled to 40.6 million litres, reflecting strongly growing production and an export focus. Total values
were not available. Imports included small intermittent quantities of fruit wine products from
Australia, fluctuated from the United States and ceased from South Africa (Table E.1), and included
various berry wines and fortified wines from Fort Wine, Canada (Luke 2005).
Table E.1: China: trade in fermented drinks HS2206, # 20026
Description
2002
2003
2004
2005
2006
HS 2206.00: fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres ^

Total exports litres
Imports from Australia litres
A$ ^
A$ per litre ^

1 002 440
26 549 970
3 530
7 642
2.16

783 600
28 155 000
0

507 400
36 779 000
0

564 000
40 607 000
135
5 382
39.87

not av.
not av.
7 700
85 637
11.12

2206.00.9000: Fermented beverages other than grape wine, beer, cider, prune wine, sake, vermouth, or
other effervescent wines

Exports to United States (excludes Mongolia) litres

- $ per litre *
Imports from United States (excludes Mongolia) litres
- $ per litre ^
Exports to Canada (A$)
Imports from South Africa (includes Hong Kong) A$ ^

13 300
4.43
0
1.30
28 080
23 969

1 200
6.42
26 100
0.86
16 117
17 216

8 600
4.59
116 100
1.93
33 294
1 911

5 400
2.92
47 500
1.99
14 947
0

2 000
1.30
23 328
0

HS 2206.00.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

- A$ per litre *

8 089 800
3.79

7 553 400
3.24

8 003 700
2.80

7 862 700
2.75

7 602 300
2.72

81 246
1.91

151 386
2.32

HS 2206.00.3020: Grape wine, cider or perry, mead, sake, fruit or vegetable wine

Exports to Australia litres

A$ per litre *

106 980
2.57

71 337
2.15

137 575
2.57

Notes: # Excludes grape wine and beer.* CIF at importing country; ^ FOB from exporting country. Sources:
ABS; Japan Customs Trade Statistics; Department of Industry and Trade; South Africa trade statistics; USDA
Trade Statistics

102

The Chinese Government introduced a commercial grape wine industry when it opened the economy
in the 1970s. Production is concentrated in four main regions: Bahia region, including Hebei,
Shandong, Liaoning, Tianjin and Beijing provinces; around the old Yellow River basin, Xinjiang
province and Yunnan province (Yang 2005).
Production of wine grapes and wine has grown rapidly, with wine production reaching 385 million
litres in 2005 and forecast at 420 million litres by 2010, due mainly to various Government activities:

the current Tenth Five-Year Plan which aims to conserve grain for food and reduce alcohol
consumption by restructuring the liquor industry to move from common alcoholic drinks such
as grain wines to quality fruit wines in a wide product range; from high to low alcohol content;
from distillation to fermentation; and to lower energy processes (Sun 2003)

defining of a single legislative framework that complies with international wine standards

development of geographical indicators for wine producing regions

improving domestic wine quality for domestic and export markets

research and education for producers

improving the grape wine industrys capacity to innovate through new wine technology,
techniques and grape cultivars

establishment of wine tourism, with western-style wine regions, hotels, restaurants and
prominent wineries (Yang 2005).

Poor wine quality has restrained industry growth, partly because of a lack of good quality grapes but
also largely because Chinese people prefer to eat fruits when hard and under-ripe, indicating the need
for a cultural shift if Chinese farmers and workers are to understand the nuances of flavour
development when growing fruit for wine. However, the opening of China's economy has attracted
large European wine producers in joint ventures with Chinese companies who are introducing quality
grape cultivars and world class production technology and expertise (AWBC China 2002; Buckalew
2005; China Wines Information 2006b, Canada Agri-Food Trade Service 2002; Business Victoria
n.d.).
Of around 500 grape wineries, most are small to medium in size with the ten largest producing around
1012 million litres a year, led by Changyu, Dynasty, Great Wall, Weilong and Dragon Seal, with
around 40 per cent of production from Cabernet Sauvignon grapes. The four main categories of winery
are established wineries, manufacturers converting from distilled spirit to wine production, new
manufacturers, and bottling factories in coastal regions handling imported bulk wine. Domestic
producers are focussed on low-priced high volume sales (AWBC China 2002; China Wines
Information 2006a; Business Victoria 2002).
Grape wine imports were around 53 million litres in 2005 and growing strongly, and could reach
450 million litres by 2017 as imported wine becomes more affordable due to economic growth and the
rising living standards. In 2004 almost all imports were bulk wine, at an average price of A$1.60 a
litre, mostly from Chile, but the growth is in bottled wine. While the strong growth could represent a
'speculative spike' similar to the bubble of 1997, current growth is likely to be more solid. In 2004
France led imports with 36 per cent of volume, followed by Australia (20 per cent), the United States
(14 per cent), and Spain and Chile (six per cent each). Only Australia, Spain and Chile have been
increasing their share of imports. Most Australian product is from South Australia, due to strong
support from government and Chinese importers and distributors, good product quality and variety,
competitive pricing and extensive promotion (AWBC 2005; Buckalew 2005; Decanter 2007; China
Wines Information 2006d).
Foreign brands provide a tenth of liquor sales, dominating the quality market, and competition is
intense. The grape wine market perceives the Old World suppliers France and Italy as providing
premium quality, particularly French wines as early promotion has resulted in myths favouring French
wines being entrenched as law or fact in the Chinese psyche and French companies are increasingly
involved in local production and bottling ventures. Chinas accession to the World Trade Organisation
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has improved market access for Australian wine producers, resulting in strong growth in Australian
grape wine exports. Australia is increasingly supplying premium quality wines which are regarded as
attractive mid-range wines that are easy to drink and to buy. Wines from New World entrants
Australia, Chile and the United States are seen as less prestigious than European wines but better value
for money (AWBC China 2002; Buckalew 2005). Large scale Australian fruit wine producers could
take advantage of this perception by also offering value for money.
Product profile
A wide range of fruit wines is made from fruits such as lychee, pineapple, guava, mulberry, orange,
apple, apricot, bayberry, hawthorn berry, kiwifruit, pear, plum, strawberry, tangerine, wolfberry and
waxberry, as well as herbs, roses, olives and other bases. Much of the wine is produced using
traditional fermentation techniques and modern equipment. Manufacturer and distributor websites
indicate these examples of Chinese producers and wine styles:

China Wolfberry Holding Company: Ning Xia Hong brand wolfberry wine from Chinas
leading wolfberry growing region of Ning Xia province

China Brewing: fruit and rice wine blends

China Changhua Pigeon Business Limited, Guangzhou: fruit wine

China Fruits Corporation (through wholly-owned subsidiary Jiangxi Taina Nanfeng Orange Co.
Ltd): fruit wine and juice

Huizhou City S.H. Industry Co. Ltd, Guangdong: lychee, waxberry, and strawberry wines

Jiangxi Zhonghua Kiwi Fruit Brewery: kiwi fruit wine

Lihuang Trading Corporation: Lichee Fairy Dry Wine with added hydrolyzed collagen

Ningbo Tiangong Fazenda Fruit Juice & Fruit Wine Co., Zhejiang Province: Mulberry Red
wines with 10.5 per cent and 12 per cent alcohol

Shanghai La Cigogne: La Cigogne fruit wine.

T.C.C. Ningbo Best Spirits Co. Ltd, Zhejiang Province: plum and Chinese date wine

Vinliz: lychee wine from 100 per cent naturally fermented litchi juice, with no artificial
flavours or colours

Zhejiang ZITIC Import & Export Co.: lychee, mulberry and apricot wines (Alibaba 2007; Actis
News 2004; company websites; Eijkhoff, 2000; Imex Goods website; Trade India 2007;
21Food.com 2007; Wai Yip International 2007).

Fruit wines fall under these definitions:

The National Standard of the Peoples Republic of China, which provides the only standards for
grape wine, refers to fruit wines as Fermented wines in the category of Fermented alcoholic
drink (General standard of the Peoples Republic of China 2005).

The term wine is used for fermented non-distilled drinks, fruit wine made from fruit,
including grapes, with 1020 per cent alcohol; rice wine made from any cereal, with typically
1516 per cent alcohol; and yellow wine from grains, with 1520 per cent alcohol (WHO
2004).

As in Japan wine also refers to low alcohol liqueurs made by alcohol extraction through
mixing fruit or fruit juice with sugar and distilled alcohol. For example, the Heifei Cigarette
Factory website advertises a fermented plum wine and also a plum wine made as a liqueur.

Grape wine is also called putao jiu, or grape alcohol.

104

Some fruit wine labels and websites appeal to the health conscious by describing the wines as organic
or natural, and made with natural fermentation and no artificial ingredients, preservatives or added
sulphites. One manufacturer describes its wines as contamination-free and from first-class European
fruit and pure spring water with no minerals, while another promotes the use of 100 per cent lychee.
Ning Xia Hong Wolfberry wine is positioned as a health product in supermarkets (Actis News 2004).
There is a discerning market for better quality higher priced fruit wines from privately owned
wineries. For example, a manufacturer sold 600 000 bottles of kiwifruit wine a year at around A$20.00
a bottle a few years ago until ceasing production for political reasons. However, most people buy low
priced low quality wine lacking in fruit flavour, usually from Government wineries.
Most grape wine sold is low to medium quality domestic product. Imported grape bulk wine is used
mainly to stretch the local wine, usually an artificial wine made from alcohol, water and food colour.
As Chinese wine mixed with imported bulk wine can be labelled as domestic, most wines labelled as
Chinese contain 30-40 per cent imported product (AWBC 2007; Buckalew 2005).
Until mid-2004 a unique industrial standard permitted grape producers to make half-juice wine from
grape juice, sugar, water and essences. However, the proportion of juice used dropped off
significantly, and Chinas State food and Drug Administration found that many Chinese wines were
only water, alcohol and colour pigment with traces of grape juice, and often had food additives over
maximum allowable quantities. One such product retailed at only one or two yuan (A$0.20 or $0.40).
Under industry pressure the Government has introduced the China Grape Wine Making Technological
Norm. However, while the National Standard of China for Wine only permits colorants in fortified
wines, and prohibits water, alcohol, flavours or pigment being added to grape wine there seems to be
little policing of this in practice (China Wines Information 2005a; China Wines Information 2005;
China Wines Information 2007b).
Red wine, both fruit and grape wine, is popular as a gift because the colour red symbolises happiness,
celebration, health and good luck, and red wine is also perceived as a health drink. While red wine
represents 80 per cent of all grape wine consumed for these reasons, and is the most popular choice in
winter, white wine consumption is also slowly rising, especially in south China, mainly by Chinese
women who prefer lighter styles, expatriates and tourists for pairing wine with food, and people who
prefer to drink chilled wine in summer. Chinese people rarely match wine with food, usually drinking
red wine with all dishes. Imported wine has a positive image as high quality, healthy and the ideal gift
(Access Asia Limited 2004, Buckalew 2005).
The National Standard requires sparkling and semi-sparkling wines to be fermented, with carbon
dioxide pressure of at least 0.35 Mpa for sparkling wines and 0.050.34 Mpa for semi-sparkling at
20C. If any carbon dioxide is added the description carbonated wine is required. However, sparking
wine is known as gas wine and is not popular or understood, and champagne and other sparkling
wines are rarely drunk, and not used as toasts.
While most wine is sold in bottles, Chinese manufacturers are producing various styles of baginbox
(China Wines Information 2006d).
Imported wines need a Food Hygiene Certificate, and import inspection. Labels must be registered in
advance with the Chinese State Administration for Entry and Exit Inspection and Quarantine which
will also provide a chemical analysis and approval for each product for around A$300.00 a label
(AWBC China 2002). Labelling must comply with the National Standard of China for Wine (GB/T
15037-94) and the Wine Labelling Law (GB 10344) administered by the General Administration of
Quality Supervision, Inspection and Quarantine (AQSIQ). Labels are required to contain the product
name in Chinese language, and the product type according to its sugar levels:

Dry: Less than 4 g per litre sugar, or up to 9 g per litre provided total acid (expressed as per litre
tartaric) is within 2 per litre of the sugar

Semi-dry: Between 4 g per litre and 12 g per litre sugar, or up to 18 g per litre if the sugar
content and acid content do not differ by more than 2 g per litre

Semi-sweet: Between 12 g per litre and 45 g per litre sugar

105

Sweet: Greater than 45 g per litre sugar (China Wines Information 2006f).

Distributors of imported wines often stick small, printed adhesive labels over the back label, leaving
the unique and artistic front label untouched, but China's General Administration for Quality
Supervision, Inspection and Quarantine (AQSIQ) is likely to insist on permanent labels in Chinese
language in the future.
Domestic fruit wines are usually labelled as wine and with the fruit used, while domestic grape
wines are labelled by grape variety. A lack of wine education has been compounded by lack of
regulation on appellation and grape varieties on Chinese wine labels, making them less meaningful to
consumers than those on imported wines (Buckalew 2005). Labels that clearly show the grape type,
alcohol and government warning have contributed to strong demand for Australian wines.
Cheng Yui, Great Wall and Dynasty are the leading Chinese brands of grape wine in supermarkets and
other retail outlets, with Suntime, Tonghua and Zangmi emerging as major brands. A China Food
Industry Association Wine & Fruit Wine Committee was established in 2002 to develop branding
strategies for domestic wines. Chinese consumers are strongly brand-loyal and suppliers can benefit
from brand development (China National Food Industry Association 2005; China Wines Information
2006; Reiss n.d.). French premium wines have strong clout in China as wealthy elite Chinese consider
Bordeaux the ideal wine style.
Pricing
The main price ranges for fruit wine (for 750 ml bottles) are:

Under CNY15 (A$2.35): low quality wines, inferior quality, often watered down

CNY1530 (A$2.354.70): everyday wines sold in supermarkets

CNY3150 (A$4.907.90): good quality wines

Over CNY50 (A$7.90): high quality wines, such as lychee at CNY8085 (A$12.6013.50).

While prices for imported fruit wine products are generally low, Australian fruit wine was exported to
China at an annual average price of A$11.12 a litre FOB in 2006 (Table E.1).
Local wines retail at CNY1025 (A$1.603.90) a bottle for low-end wines (mainly low-priced
domestic wine and imported bulk wine blended with domestic grapes for the price-sensitive) and
CNY3055 (A$4.708.65) for medium-end wines.
Most imported grape wines retail at CNY4065 (A$6.2010.20) for 750 mls of low-end wine,
CNY70200 (A$11.0031.45) for medium-end and CNY500 2000 (A$78.65314.60) for premium.
In Shanghai imported grape wine typically retails at around CNY55 (A$9.20), and A$10.20 in bars
and restaurants in upmarket locations. Wines for formal functions are usually priced at around
CNY140 (A$22.00), while new wealth customers look for quality wines at a reasonable price of
around CNY$200 (A$31.45). High end wines are all imported and bought mainly by expatriates and
wine buffs, with several supplying countries competing strongly on price. French premium wine
producers have been actively promoting in China, and one importer cited these wines as his strongest
growth category (AWBC China 2002; Blanchard 2007; Buckalew 2005; Business Victoria n.d.).
Supermarkets have strong price competition and discounting, and usually price local wines at around
CNY2050 (A$3.147.85) and imported wines from CNY90 (A$14.15) for white and CNY120
(A$18.90) for red (Maxwell 2007).
The average price of imported bulk wine fell to A$0.64 per litre by 2005, making it increasingly
difficult for domestic grape wine producers to compete with manufacturers using bulk wine (China
Wines Information 2006c).

106

Distribution
Large fruit wine manufacturers do not retail direct to consumers, but ship their wines to distribution
centres around China. For example, Ningbo Tiangong Manor Fruit Juice & Wine Co. Ltd has offices
and branches in several major cities (Ningbo Investment Fair Online 2005).
Chinese distribution channels are relatively restricted. Obtaining an import licence is a complex
process so most private importers and distributors import, distribute and market wine under a sublicense from China National Cereals, Oils & Foodstuffs Import and Export Corporation (CEROILS),
the state monopoly wholesaler and distributor of alcoholic beverages. Wine is imported mainly by
specialist import companies, sometimes on behalf of wine distributors. In 2002 most wine was
imported directly into China through Shijianzhuagn, Tianjin and Shanghai as improving infrastructure
and distribution, falling tariffs and increasing regulation of imports have reduced transhipments via the
traditional informal channel of Hong Kong and Gangzhou (AWBC China 2002; USDA 2004).
Some importers and distributors offer full marketing and sales services, from climate-controlled
warehousing through to promotion, and importers usually handle all documentation and licensing.
Larger importers and distributors of wine offer lists of imported labels and assist with importing and
registering of product, but most distributors tend to be order-takers, not sellers, and generally do not
actively market new wines, requiring sellers to maintain regular contact with buyers. However, cool
storage, warehousing and distribution facilities are limited, so distributors usually make small frequent
deliveries to restaurants and bars. There is potential to work with distributors to access buyers, register
wine for import and bring in samples for trade shows and tastings (Buckalew 2005; Dean n.d.; USDA
2004). While larger importers like to set up exclusive deals with wine suppliers this does not suit most
wine producers as the Chinese market is too large for just one distributor to cover. However, this
approach could help smaller Australian fruit wineries gain a foothold in the Chinese market.
Retailing of wine has expanded from the initial duty free stores controlled by China Travel Services to
supermarkets, boutique stores, specialist wine stores and discount stores as consumers seek wine for
gifts and lower prices. Wine and cheese stores have been opening in high-end retail shopping areas
and WineMart Guangzhou, Chinas first permanent wine and spirits centre, opened in 2005, with plans
to expand into major population centres such as Shanghai. The supermarket sector is expanding
strongly with large retailers with refrigerated storage and delivery systems, led by Chinese
Governments chains such as Lianhua, Carrefours and other major European retail chains, and United
States retailer Wal-Mart which is developing 400 stores with wine divisions across China. Grape wine
is usually bought from retail chains for toasts or gift presentations, not home consumption. Imported
products are usually disadvantaged by low consumer awareness of their brands and these stores offer
limited opportunity to focus on specific market segments (AWBC China 2002; Buckalew 2005; China
National Food Industry Association; USDA 2004; Maxwell 2007; Business Victoria n.d.).
Fruit wines are widely sold in supermarket wine sections, with domestic wines usually in a dedicated
fruit wine category or with grape wines of similar colour, and imported fruit wines usually displayed
with grape wines from the same country of origin. Staff in these wine sections are often hired by large
wine companies so their advice and promotion regarding other products is variable, and this, coupled
with typical pricing of A$3.00 a bottle or less for both fruit and grape wines, indicates little
opportunity in supermarkets for Australian fruit wines.
Restaurants offer more potential for fruit wines, as they sell fruit wines for drinking with meals, at
more than CNY50 ($7.85) a bottle, and wines can be promoted on the winelist and by waiters.
Fruit wines are also popular in karaoke bars which are popular venues for business entertainment,
often reciprocal entertaining by public servants. These bars are also an attractive potential outlet for
Australia fruit wines, as the owners stock a very narrow range of wines and will promote specific
product attributes and benefits to their customers.
Seventy per cent of grape wine is sold through food service, mainly four and five star restaurants and
hotels in southern and eastern China, often joint ventures or foreign-owned hotels, and clubs and bars.
Access to the hotel market is largely limited to a few wine companies who control access and have
large portfolios across a number of supplying countries and brands. Prices are typically CNY350
107

(A$55.00) and higher. Sales have been expanding from five star hotels serving expatriates to exclusive
hotels, clubs, trendy restaurants, bars and boutiques. Restaurants and karaoke bars usually do not
refrigerate wine but serve it at room temperature (Maxwell 2007; USDA 2004; Decanter 2007;
Business Victoria n.d.). Wine, mainly red, is mostly consumed at karaoke lounges, nightclubs, discos,
wine clubs, wine bars, some high-class restaurants, and banquets, with growing demand through
exclusive hotels and clubs, trendy restaurants, and bars, being used mostly in public settings as toasts
or gifts rather than drunk at home. Some chain restaurants also sell private label imported wines
(AWBC China 2002; Buckalew 2005; Yantai Best Cellar Consulting Co 2005).
A typical restaurant creates an extra income stream by charging a steep annual fee, usually calculated
on the perceived turnover of the exporters product. Such entrance fees do not buy loyalty, or even
exclusivity, and by being often excessive and demanded up front can stifle business growth.
Restaurateurs tend to be less concerned with the product than the profit they make from sales and the
entrance fee. In addition, wineries are often required to provide and pay for young women to hand-sell
the wine. Access depends on building a sound relationship with the individual restaurant, and
organising in-house promotions with gifts (Maxwell 2007).
Wedding banquets serve large volumes of wine, usually in a restaurant or hotel environment. Banquets
and governors' functions typically negotiate a price based on volumes for that occasion and subsequent
functions, with a small commission to the buyer in the catering office (Maxwell 2007).
While fruit and grape wines are widely promoted on manufacturer and distributor websites, and
Internet sales are growing, most Chinese people lack internet access outside the workplace.
Australian fruit wine suppliers will need to start by establishing relationships with experienced local
importers and distributors.
Promotion
Fruit wines are not usually promoted with point of sale displays in retail stores, indicating little
opportunity to attract customers attention. Restaurants typically promote fruit wines on their
winelists, usually up to 12 wines in low priced, everyday (commercial) and expensive categories.
Numerous websites promote Chinese fruit wines, although they often lack product detail.
Poor consumer knowledge of Australian wine indicates a need to increase demand through wine
appreciation and information courses to educate food and beverage managers, restaurant owners and
waiters, and new high earning consumers. Business dealings between the two countries have been
raising awareness of Australias premium wines (AWBC China 2007; Reiss n.d.).
A number of trade shows offer opportunities to promote Australian wines:

Beijing International Food & Wine Experience

Beverage & Beveragetec Shanghai

Chengdu International Alcoholic Drink, Soft drink processing & Packaging Technology Show

China (Zhuhai) International Wine and Spirits Trade Fair

China International Exhibition on Beverage & Brewery Processing Technology

China International Wine Expo, Shanghai, organised by China National Food Industry
Association

HOFEX in Hong Kong an Asian international exhibition that includes food and drink

International Brew & Beverage Processing Technology & Equipment Exhibition for China

Interwine China

Shanghai SIAL

Spring National Sugar & Alcoholic Commodities Fair

108

The International Exhibition for Food & Drink South China

Zhengzhou Sugar, Alcoholic Drink & Food Trade Show.

Smaller producers of premium quality fruit wines are advised to emphasise the uniqueness, history and
quality of their products to distributors in quality outlets; and to promote value for money to
distributors, importers and restaurants seeking larger supplies. A good importer or distributor can
assist with promotion and arranging visits to current and potential buyers or participation in trade
shows and tastings, and Austrade and state government offices can also provide support. Promotions
could coincide with seasonal demand for gifts, such as Chinese New Year.
Table E.2: China - import regulations and requirements
Product description

Duties and taxes

Rate

Bottled wine

Import tariff
Value added tax on landed cost + tariff
Consumption tax
Total import duty payable (cumulative)
Import tariff
Total import duty payable

14%
17%
10%
48.2%
20%
45%

Bulk wine, more than 2 litres

Source: Wine China, 2007

Imports of bottled wine attract 14 per cent import duty, 17 per cent VAT (on landed cost plus tariff)
and 10 per cent consumption tax (landed cost plus tariff plus VAT), adding A$4.80 to a landed price
of A$10.00 for a bottle of Australian wine (Table E.1). Bulk wine (containers exceeding than two
litres) incurs an Import Tax Rate for Bulk Wine of 20 per cent, with tariffs and taxes totalling 56 per
cent (AWBC China 2002; Business Victoria n.d.). Samples and gifts are subject to full import duties.
Having labels and products approved for import can take anywhere from three months to more than
nine. Exporters have had difficulty interpreting and enforcing Chinas regulations (AWBC 2005).
Quotas and high tariffs protect Chinas wine industry from competition from imported wine and,
although falling with Chinas accession to the WTO, are likely to remain constant for the near future.
However, if imported wine starts to overwhelm the domestic wine market the Government may raise
the consumption tax to level the playing field for its domestic industry.
The Australian Wine and Brandy Corporations submissions to the Australia-China Free Trade
Agreement seek removal of tariffs on grape wine between Australia and China; calculation of tariffs
on declared value rather than minimum values; identification of any preferential agreements between
China and other countries and regions; clarification of the likelihood of internal taxes being raised;
more transparency in the implementation of Chinas tax system; acceptance of internationally
recognised winemaking and labelling practices; better enforcement of intellectual property laws;
improved access for Australian companies; acceptance of Australian products and labels in China
without registration, approval and acceptance of analytical results from Australian laboratories;
clarification of regulations regarding wine composition, additives and residues; and faster processing
by Chinese Customs (AWBC 2005).
Summary
China has a medium to large and growing fruit wine market with increasing domestic supply of very
low-priced temperate fruit wines of variable quality distributed in restaurants, bars and retail stores;
emerging market segments for small quantities of imported fruit wine; and growing consumption of
Australian and other imported grape wines. There is a moderately strong opportunity for Australian
tropical fruit wines in restaurants and bars where promotion can differentiate the wines on premium
quality and the use of familiar and exotic tropical fruits. However, China is not an easy market due to
low awareness of wine and a significantly different culture to Australia, so suppliers will need
patience, commitment and perseverance to slowly build and maintain long-term distributor
relationships.

109

E.1.2 Hong Kong

Market profile
A very small market for fruit wines is indicated by imports of 3.5 million litres of fruit wine related
products in 2005, which probably include lower alcohol drinks such as ciders and coolers (Table E.2).
Grape wine consumption was 5.4 million litres in 2005, and growing, the main market being around
140 000 18 to 45 year expatriates who drink in bars and hotels, more than 21 million overseas visitors
a year, Hong Kong citizens returning from living overseas and middle class and higher income
earners. Wine consumption is expected to grow steadily due to:

an undeveloped market of Chinese people

a rapidly growing economy and rising disposable incomes

wine representing half of total liquor consumption

wine becoming popular at events such as Harvest Moon festival and Chinese New Year

increasing wine education and wine appreciation

consumers shifting from beer and spirits to wine for its purported health benefits

wine-drinking associated with sophisticated western customs, the social elite and health
(Austrade Hong Kong 2007; AWBC Hong Kong 2007; Buckalew 2005; Dean n.d; Sun 2003;
Business Victoria n.d.).

Hong Kong is Asias second largest regional market for Australian grape wine and a major port for
reshipment into China, although imports for China are moving to Shanghai and Tianjin as China
enforces import regulations and its infrastructure and distribution improve (USDA 2004).
Supply
Hong Kong has no wine production. Growing exports and declining imports of fruit wine related
products from 200205 probably reflects the shift in imports to directly to mainland China. Annual
average export prices fell from A$3.60$0.75 a litre, indicating mostly very low priced products,
which may include rice wine, to China (Table E.3).
Table E.3: Hong Kong: trade in fermented drinks HS2206#, 200206
Description
2002
2003
2004
2005
2006
HS 2206.00: Fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres

5 987 000
4 560 490
3 938 000
A$ per litre *
3.09
3.13
3.26
Total exports litres
891 820
590 610
1 222 480
A$ per litre ^
3.63
5.16
2.68
Imports from Australia litres
126 946
144 859
75 800
A$ ^
275 487
339 507
162 906
A$ per litre ^
2.17
2.34
2.15
Imports from Canada A$
25 612
21 799
1 849
HS 2206.00.70: fermented beverages not specified elsewhere, excluding cider and sake
Imports from United States litres
85 400
36 100
20 600
A$ ^
3.38
5.04
1.85

3 489 000
3.51
3 705 330
0.72
42 570
86 420
2.03
33 541

Not av.
Not av.
Not av.
Not av.
51 402
99 950
1.94
13 917

6 000
2.41

11 900
2.34

Notes: # Excludes grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS; FAO 2007; USDA trade statistics

110

From 200206 imports of Australian grape wine grew from 2.23.7 million litres with an average
export price of A$6.50 a litre in 2006 (ABS). Australia has been Hong Kongs second largest supplier
of grape wine for a decade, and continues to take market share from the leader France as distributors
and consumers increasingly recognise Australias wine quality and reputation as consistent and value
for money (Austrade Hong Kong 2007).
Product profile
Imported fruit wines include cider, berry wines and fortified wines from Canada (Luke 2005).
There is a wide range of wines from many countries, but major importers are shifting from numerous
suppliers to building up a few well-performing brands, and are increasingly hesitant to introduce new
tomarket products. Around 80 per cent of grape wine sales are of red wine, because wine is a popular
gift and often served at banquets and weddings; the colour red symbolises happiness, celebration,
health and good luck; and because there has been heavy media promotion of red wines health
benefits. Demand is also strong for premium wines (Austrade Hong Kong 2007; AWBC Hong Kong
2007; Buckalew 2005; Business Victoria n.d.).
Labelling can be in either English or English and Chinese, although important information should be
in both languages. Labels are required to include an ingredient list and, in recent years, Hong Kongs
Food and Environmental Hygiene Department has begun enforcing labelling requirements for
allergens and additives for prepackaged food. Under the Food and Drugs (Composition and Labelling)
Regulations, wine is exempt from having to be labelled with a list of ingredients, including potentially
allergenic substances such as egg, milk and nut products and added sulphites. However, if an exempt
pre-packaged food such as wine is labelled with such a list, this list must detail these substances.
Unlike most countries, Australian domestic wine labels usually carry allergen and sulphites
statements, which are mandatory under the Australian New Zealand Food Standards Code, so if the
Department regards these as an ingredient list it may require the label to detail all the ingredients.
Pricing
Low annual import prices for fruit wine related products indicate mostly lower value drinks such as
coolers and rice wine rather than fruit wines (Table E.3).
In 2004, 78 per cent of grape wine sales were at around HK$150 (A$26.00) a bottle, with quality New
World and other wines at HK$100200 (A$17.5035.00. Restaurant prices range from US$15.00
(A$20.00) for New World wines to $1000.00 (A$1350.00) for French wines. Australian grape wines
tend to retail in the very low or premium price categories (Austrade Hong Kong, 2007; Buckalew
2005; Business Victoria n.d.).
Distribution
Importers of wine must be licensed with the Hong Kong Customs and Excise Department (Austrade
Hong Kong 2007). Import agents usually distribute direct to retailers and food service users.
Around 60 per cent of wine is retailed, mainly through the large supermarket groups Parkn Shop and
Wellcome, who prefer to buy large lines direct and have their own warehousing and distribution
centres, although they still buy through local agents, as do second tier supermarket groups and
convenience stores. Other outlets include specialty wine stores, convenience stores, and higher-end
retail stores such as Great Food Hall, Citysuper and Olivers which buy smaller volume niche products
through Australian and other consolidators. The other 40 percent is sold by clubs, bars and hotels,
(Austrade Hong Kong 2007; AWBC Hong Kong 2007; Business Victoria n.d).

111

Promotion
Fruit wines can be promoted at the annual HOFEX trade show. Grape wines are typically promoted
through retailer wine tastings and promotions, wine exhibitions, winemaker dinners, incentive
programs and direct marketing (AWBC Hong Kong 2003).
Import regulations and requirements
According to the Hong Kong Customs and Excise Department, wine imports incur 40 per cent tax, 17
per cent VAT and 10 per cent consumption tax, adding A$8.00 to the landed price of A$10.00 a bottle.
While ease of access has resulted in a market that is highly competitive on quality and price,
Australias clean and green production and food standards provide some competitive advantage
(Austrade Hong Kong 2007).
Summary
Hong Kong has a very small market for imported fruit wine and related drinks, and minor but growing
demand for high quality and red Australian grape wine, with attractive pricing but high import
charges. It offers a minor opportunity to promote Australian tropical fruit wines from familiar fruits on
quality, Australian origin and red colour.

E.1.3 India
Market profile
India has small emerging domestic and export markets for fruit wines (Table E.4) and regular
consumption of major tropical fruits.
Grape wine consumption was only five million litres in 2005, but has grown strongly in recent years,
boosted by the removal of restrictions on liquor imports, a lowering of import duties (formerly 265 per
cent), and the increasing popularity of wine clubs in major regional markets, although market growth
is constrained by state excises, limitations on distribution and poor domestic wine quality. Key
markets for grape wine includes young professional women, who are often well educated, have
worked overseas, and embrace wine as a healthy lifestyle choice. Liquor consumption is higher in
southern India, and most grape wine is drunk around Mumbai, and to a lesser extent New Delhi,
Bangalore and Goa. Around 35 per cent of Indias 200 million consumers of alcoholic beverages drink
wine. Indias middle class of 250 million represents a huge potential market for grape wine, with
interest in wine expected to grow as people travel and socialise with wine drinkers.
Tea remains the favourite drink in India. Annual average individual liquor consumption is only around
1.5 litres of mainly beer, and alcoholic drinks are customarily drunk as an aperitif rather than with the
meal. The legal drinking age is 25. India has traditionally been a non-drinking country, and most
Indians abstain from any alcoholic drinks. The Constitution prohibits consumption of intoxicating
drinks, but state governments have been relaxing the implementation of this due to illicit distillation,
the attraction of excise revenue from alcohol, and difficulties in enforcing prohibitions.
However, consumption, mainly of wines but also RTDs and premium spirits, has been growing due to
more favourable consumer attitudes, less illegal selling, more drinking by both sexes in restaurants and
at home, and increasing sophistication, while beer sales are increasing with expanding distribution and
the promotion of national brands (India Agro Industry 2007; Arora 2006; Business Monitor
International 2006; AWBC India 2006; Dean n.d.; Euromonitor India 2007; Fernandez 2006).
Supply
Indias small emerging fruit wine industry produces fruit wines and fruit and grape wine blends, with
Indias leading grape wine producer The Indage Group also claiming more than 80 per cent of the fruit

112

wine market (Menon 2000; Chauhan 2005). Annual imports of fruit wine related products fluctuated
from 200205, from countries that included the United States, South Africa and Italy, and in 2006 a
small quantity of high priced product from Australia (Table E.4).
Table E.4: India: trade in fermented drinks HS2206#, 200206
Description
2002
2003
2004
2005
2006
HS 2206.00: Fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres

Total exports litres
Imports from Australia litres
A$ ^
A$ per litre ^
Imports from United States
A$ per litre ^
Imports from South Africa (A$) ^

55 150
25 000
0

2 200
1.84
1 410

5 000
29 000
0

11 400
1.54
2 254

133 840
16 000
0

500
1.36
2 973

27 980
146 000
0

1 000
1.31
0

not av.
not av.
293
11 738
40.06
0

not av.

Notes: # Excludes grape wine and beer. * CIF at importing country, ^ FOB from exporting country. Source:
ABS; South Africa trade statistics; USDA trade statistics

Indias new wine industry also produced 3.9 million litres of grape wine in 2005, with strong growth
likely to continue due to new vineyards, new producers entering the industry, improving product
quality, widening product and price ranges, and wineries lobbying against legal constraints in order to
grow, although market development for grape wine has been affected by poor quality in domestic
wines. The Indage Grover Group exports grape wine to more than 60 countries (Arora 2005; Chauhan,
2005; Euromonitor India 2007; Fitzgerald & Daw 2006).
Indias very large population attracts considerable interest from wine exporters around the world.
Imports of red, white and sparkling grape wines reached 1.1 million litres in 2005 following strong
growth in recent years, mainly from France, the United States, Chile, Italy, South Africa and Australia
(Arora 2006; Dhruva 2003; Fernandez 2006). From 200206 imports of Australia wine grew from
89 000 to 632 000 litres at an average A$3.70 a litre FOB in 2006 (ABS 2007).
Product profile
These products indicate the range of fruit wines and blends in the Indian market (Table E.5).
Table E.5: India: examples of fruit wines
Company and brand
Domestic

Description

Price

Future Wine & Spirit (P) Ltds Sutter House

brand
Hygeia Fruit And Veg. Processors Private
Limited
Sula
The Indage Group

Apple wines, peach, plum and strawberry

flavoured wines; apple cider
Fruit wine, fruit cider

Rs 150 (A$4.95) for

750 mls

Fruit wine
Cherry, plum and kiwifruit wines; fruit and grape
wine blends; apple cider

Imported

Riunitys Riunite, Italy, imported by Future

Wine & Spirit

Flavoured white wines Strawberry White

Merlot, Peach Chardonnay

Rs799 (A$23.50) for

750 mls

Sources: Chauhan 2005; Dhruva2003; Menon 2003

Research projects on mango, banana, apple, apricot, coconut, kinnow (a citrus), peach, pear,
pineapple, plum and strawberry wines indicate further expansion in tropical and other fruit wines
(Reddy & Reddy 2005, Shanmugasundaram et al. 2005).

113

Wine quality is now regulated under the new Food Safety Act (AWBC India 2007).
Pricing
Future Wine & Spirit retails its own Sutter House brand of fruit wines at around R150 (A$4.35) a
bottle and imported Italian fruit wines at R799 (A$23.10) (Table E.5)
Most grape wine retails at under R500 (A$14.50) a bottle, although sales have been increasing for
local wines at up to R2000 (A$57.80) (Dean n.d.).
Distribution
Fruit wineries largely sell from the winery and mail order websites.
In 2006 India had around 45 grape wine importers, with 60 per cent of imports handled by Brindco,
Sansula and Global Tax-Free Traders, 25 per cent by another ten companies including Herma
Connoisseurs, Sovereign Impex and SV, and most handling less than 9000 litres a year.
Around 75 per cent of grape wine is sold in restaurants and bars and the rest, budget wines only,
through retail stores, mainly those certified and controlled by the government but also a large number
of independent specialists, mostly in West India. However, in 2005 few shops displayed or stored wine
properly or had staff trained in selling wine, except in modern towns and new shopping malls. Sales
have been growing as more bars and restaurants open in large cities. In recent years hotels and
restaurants earning foreign exchange could spend five and 10 per cent of this respectively on duty free
wines. However, such hotels often mark up the wines by 500700 per cent, so a A$10.00 bottle of
wine can be around A$102.00 after taxes and mark-ups). The domestic industry has been pressuring
the government to reduce duties on wines sold to hotels and retailers and to centralise the collection
and distribution of taxes (Arora 2006; Chandran 2007).
Promotion
Fruit flavoured wines have been positioned to appeal to the curious consumer as easy drinking; fun
wines to be drunk at any time, not necessarily for certain occasions; and with specific foods. They
could potentially be promoted as highly compatible with Indian food (Dhruva 2003).
While advertising is prohibited, wine is promoted through wine appreciation, education and wine
clubs; advertorials and articles in newspapers and magazines; events such as wine dinners; buyer trips;
wine shows such as IFE India in Delhi and Annapoorna India in Mumbai; and importer promotions
(Arora 2006; AWBC India 2007; Euromonitor India 2007).
Import regulations and requirements
Barriers to market entry are considerable. The Central Governments basic customs duty is 100 per
cent and additional and extra-additional customs and duties can total 250 per cent, while VAT is
20 per cent, adding up to A$37.00 to a landed price of A$10.00 for a bottle of Australian fruit wine.
Each of Indias 28 states and seven union territories then has its own tax regime. Combined Federal
and State taxes can push the retail price over 500 per cent. Also, complex regulations over distribution
and sale of wine, including individual state excise and retail policies, are aimed at inhibiting liquor
consumption and protecting the domestic wine industry from import competition. However, some
states are eliminating state excise and sales tax on local wine to give their industries a cost advantage.
Access to distribution channels varies between states as state policies on retail and protection of
domestic wine production vary as to whether an imported wine can be sold through a wine and liquor
shop or supermarket. Some state governments have relaxed laws to allow sales of alcoholic drinks in
supermarkets and department stores (Euromonitor India 2007).

114

Summary
India has a very small emerging and low priced market for tropical and other fruit wines and
distribution channels for Australian and other imported grape wines, with attractive prices for
imported fruit wine reflecting very high import and distribution costs. There is little opportunity for
Australian tropical fruit wine to compete until tariffs fall and distribution channels are deregulated.

E.1.4 Indonesia
Indonesia has a fruit and herbal wine market of around nine million litres, located mainly in the
production region of Bali, amidst a very large tourist market and small tropical fruit industry. From
200205 around one million litres of fruit wine related products were exported annually (Table E.6).
The leading markets for grape wine are tourists and expatriates, due to 88 per cent of Indonesians
being Muslims and to very high import charges. Around 60 per cent of grape wine is sold in Bali,
35 per cent in Jakarta and five per cent in other large cities (AWBC Indonesia 2001).
Most supply is from fruit and herbal wine producers in Bali (where the Hindu religion dominates),
including the leading winery Ultra Prima Abadi with its Orang Tua range, and the Dukuh Lestari
Salak farmers group at Sibetan with salak wine (from zalacca or snakeskin fruit) (Harsaputra 2005).
From 200205 small and declining imports of fruit wine related products included varying volumes
from Australia, at low average prices indicating coolers and cider rather than wine (Table E.6).
Table E.6: Indonesia: trade in fermented drinks HS2206, # 200206
Description
2002
2003
2004
2005
2006
HS 2206.00: Fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and
non-alcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre*
Total exports litres
Imports from Australia litres
A$ per litre ^

26 000
2.55
1 234 590
1 452
3.13

13 000
5.34
1 053 000
11 292
2.21

2 000
1.36
756 780
180
2.16

1 240 000
0

not av.
not av.
not av.
225
1.90

Notes: # Excludes grape wine and beer. * CIF at importing country, ^ FOB from exporting country. Sources:
ABS; FAO 2007

There is minor and slowly growing consumption of grape wines, largely by middle and upper class
consumers in hotels, restaurants and cafes, and members of wine clubs who often sell high quality
imported wines to each other. There is a small supply of lower priced domestic wines from a few local
wineries using local grapes, led by Hatten Winery in Bali, but most wine is imported from Australia
and Chile. From 200206 imports of Australian grape wine rose 20 per cent to 849 700 litres
averaging A$6.00 a litre in 2006 (ABS). Demand for alcoholic drinks is generally low, and
distribution of drinks with more than five per cent alcohol is restricted to Hotel and Restaurant
Industry Association members (AWBC Indonesia 2001; Euromonitor Indonesia 2007).
Distribution is limited to Government-run importers and approved distributors, with most sales
through duty free stores, supermarkets and specialist stores. Promotion is limited to non-public areas
such as duty free stores and restaurants (AWBC Indonesia 2001).
In 2001 fruit and grape wines incurred 170 per cent import tariffs (for Most Favoured Nations
countries), Rp 10 000 (A$1.30) a litre, excise tax, 40 per cent sales tax, 10 per cent VAT at each stage
of sale, and regional government levies and labelling levies. Indonesia is obliged to reduce its import
tariffs as a WTO member (AWBC Indonesia 2001).

115

Summary
Indonesia has a small price-sensitive market in Bali for local fruit and wines, a substantial tourist
market, high awareness of tropical fruits, and minor imports of Australian and other grape wine. There
may be a minor opportunity for Australian tropical fruit wines to be differentiated on quality, tropical
and exotic fruits, and Australian origin to international tourists through tourist-oriented outlets.

E.1.5 Republic of Korea

Market profile
The Republic of Korea (Korea) has a small fruit wine market, although shrinking imports and stable
exports suggest consumption is growing. From 200205 exports of fruit wine related products were
around 20 million litres a year, including to Japan, Australia, the United States and Canada, but as the
tariff code HS 2206.00 includes wines from cereal these are assumed to be mostly rice wine (Table
E.7).
Korea is one of the world's largest liquor markets, averaging 78.1 litres per person in 2005, with the
drinking of liquor considered an important part of everyday life and encouraged at social and business
occasions. The wine market is immature, being only 16 million litres in 2004, with wine representing
only two per cent of liquor sales, average individual consumption of around 0.5 litres a year, low
consumer and distributor awareness of wine, and beer the preferred alcoholic drink. However, wine
has taken market share from low priced traditional drinks such as shochu or soju (distilled spirit) and
rice wine. The main markets for grape wine are young professionals and young women generally as
they have more social and work lunch meetings than men and usually buy wine at department stores;
and older people with high incomes living in cities, although they are drinking less alcohol due to
health concerns and media warnings about excessive drinking of alcohol. Premium wines retailing at
over KRW50 000 (A$65.00) a bottle retail are mostly bought by affluent Koreans who are well
travelled and familiar with foreign wine brands. In 2004, 77 per cent of wine was consumed in Seoul
(Austrade Korea 2007; Oh 2004).
Growth in consumption of grape wine is expected to continue, due to growing demand for low alcohol
and healthy drinks, young people shifting to western style alcoholic drinks, more young women
drinking alcohol; economic growth and increasing incomes; growing interest in wines; and media
publicity of health benefits from red wine. Around 60 per cent of wine is drunk at home and 40 per
cent in restaurants. Wine is an increasingly popular gift, particularly for anniversaries and birthdays,
with wine gift sets replacing liquor gift sets for the traditional Korean giftgiving holidays, Korean
Thanksgiving Day (Chu-Sok) in mid-September, Christmas, Lunar New Years Day in late January,
and Parents Day in May (Austrade Korea 2007; Brehm 2004; Sangyong n.d; Oh 2004, 2006).
Supply
Production of fruit wines (which would include grape wine) is minor, but with Government support
grew from 409 to 1 125 litres of alcohol (estimated at approximately 4 090 to 11 250 litres of wine,
assuming 10 per cent alcohol) from 1998-2004. Exports of up to 20 million litres a year from 200205
are probably mostly wines from cereals, such as rice wine (Han 2004; Oh 2006; Table E.7).
Annual imports peaked at 1.27 million litres of fruit wine related products between 2002 and 2005,
while imports from Australia have shrunk (Table E.7).

116

Table E.7: Republic of Korea: trade in fermented drinks HS2206, # 200206

Description
2002
2003
2004
2005
2006
HS 2206.00: Fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^
Imports from Canada A$ *
Exports to Canada A$ *
Imports from Australia litres
A$ ^
A$ per litre ^

1 273 320
2.38
555 750
4.96
0
66 995
199 450
372 636
1.87

1 220 040
2.03
18 072 110
1.08
0
98 467
161 903
296 935
1.83

683 000
2.22
20 072 260
1.03
0
104 457
8 316
17 640
2.12

987 040
3.14
19 758 180
1.20
23 398
170 018
0

not av.
not av.
not av.
not av.
133 760
139 849
162
2430
15.00

3 600
27 518
7.64

32 518
204 305
6.28

HS 2206.00.3020: Grape wine, cider, perry, mead, sake, fruit or vegetable wine

Exports to Australia litres

A$ *
A$ per litre *

8 882
41 126
4.63

8 550
52 679
6.16

8 517
46 181
5.42

HS2206.00.70 : fermented beverages not specified elsewhere, excluding cider and sake

Imports from United States litres

A$ per litre ^

411 300
1.40

121 000
2.27

205 600
1.43

35 700
2.87

not av.
not av.

HS2206.00.900: Fermented beverages other than grape wine, beer, cider, prune wine, sake, vermouth,
or other effervescent wines

Exports to United States litres

A$ per litre *

1 400
9.21

71 100
7.37

109 800
7.96

25 600
8.46

not av.
not av.

399 700
4.18

400 200
3.93

502 300
3.70

602 700
3.16

579 600
3.02

HS2206.00.221: wine coolers

Exports to Japan litres

A$ per litre *

Notes: # Excludes grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS 2007; Japan Customs Trade Statistics; United States trade statistics

Domestic grape wine production has almost ceased due to imported wines being more competitive on
quality and price, high land prices, and a climate unsuited to grape-growing, and is limited to local
tourism products and blending with imported bulk wine. Major Korean liquor companies, led by
Doosan Corporation Liquor BG and Gooksoondang Brewery (formerly Haitai Liquor) now either cobottle with overseas wineries supplying Korea or import bulk wines to blend and bottle. Imports grew
strongly in recent years, mainly from France (mostly medium and premium wine), the United States
and Chile. From 200206 imports from Australia tripled to 1.74 million litres averaging A$5.40 a litre
FOB in 2006 (Austrade 2007a; ABS; Dean n.d; Euromonitor Korea 2007; Oh 2004, 2006).
Product profile
Several winery websites promote wines from fruits such as apple, cherry, pine fruits, pomegranate,
quince, and native berries on their websites, examples being:

Chungmaesil Farm: cider and liqueurs

Naju Bonghwang Agricultural Cooperative Pear Wine Processing Centre: Naju pear wine, in
375 ml glass and ceramic bottles

Bokbunja: Wild raspberry wine, which is exported to Singapore

117

Applease Korea Brewery Co Ltd: pomegranate wine, which it promotes as a beauty enhancer,
and Zujimong wine from pure cherry and apple juice and promoted as a palate cleanser

Jirisan Solsongju Co Ltd: medicinal wines and liqueurs such as Wild strawberry and rice with
fine pine needles, with ISO quality assurance certification, and exported to four countries.

There is opportunity to supply the local fruit wine industry with bulk berry wines, mainly from
blueberry, for blending (Oh 2006).

Similar products are traditional berry liqueurs made from blackberries and raspberries in a light port
style, with around 15 per cent alcohol, and a wine-type liqueur made by steeping fruits such as Prunus
mume (maesil) in soju, a popular spirit. However, these products present no direct competition to
imported wines, but have helped consumers to develop a taste for table wines.
Information on food safety regulations is on the Korean Food and Drug Administration website.
Manufacturers have been modifying existing alcoholic drinks and introducing new products to meet
growing demand for healthy drinks.
Around 50006000 grape wine brands are imported, providing a wide variety of wines from around
the world. Red wine is most popular due to its highly publicised health benefits, but demand is
growing for white, sparkling and dessert wines. Consumers are strongly influenced by known brands,
choosing them ahead of taste, but are also interested in new-to-market wines, and new places of origin
so as to expand their wine experience and knowledge. Strong branding is needed to differentiate
(AWBC Korea 2007; Brehm 2004; Kang 2005; Oh 2006).
Pricing
While very low annual average prices indicate most trade is in low value drinks such as coolers or rice
wine, prices of A$5.00$6.80 a litre CIF to Australia and A$7.409.20 CIF to the United States
indicate higher value products such as fruit wine (Table E.7).
In grape wines the most stable and more profitable price segments are mid-priced wines in liquor
stores, supermarket and discount stores, and premium priced wines sold mostly in restaurants at more
than KRW50 000 (A$65.00) a bottle. With mark-ups, tariffs, taxes, and distribution costs, an imported
wine with a landing price of A$13.00 CIF retails at around A$30.0033.00 in discount stores,
A$38.0045.00 at supermarkets and liquor stores, and A$90.00150.00 in luxury hotel restaurants.
Wines incur higher distributor mark-ups than other alcoholic drinks. Importers mark-ups are around
40 to 50 per cent to supermarkets and liquor stores, 30 per cent to discount stores, 40 per cent to
luxury hotels and 1530 per cent to wholesalers. Retailer mark-ups are typically 3040 per cent by
supermarkets and liquor stores, 820 per cent by discount stores and 200400 per cent by restaurants
in luxury hotels (Brehm 2004).
As sales grow for premium priced wines and whisky, the price-sensitive are shifting to lower priced
drinks such as New World grape wine, shochu, beer and whisky (Euromonitor Korea 2007).
Distribution
Of the numerous licensed liquor importers, around 30 actively import wine, with a few handling
80 per cent of imports. Distributors cannot buy wine from other businesses at the same level of
distribution, so importers can supply wholesalers, retailers and restaurants, but not consumers, and
some operate chains of retail outlets. Established importers usually have their own warehousing and
logistics, while smaller companies use service providers.
Wholesalers mostly supply small retail stores and restaurants. Distribution tends to be fragmented and
inefficient; few companies have a national distribution system or full product range; and several
distributors are needed to reach the national market.
Seventy per cent of wine is sold through retail, mainly in supermarkets and hypermarkets which often
have a designated wine section with a large selection of lower to mid priced wines, and buy through
118

importers rather than directly. Many new wine shops have opened in recent years, mostly independent
franchises, specialty liquor stores which can carry 5001000 mostly middle or premium priced wines,
and convenience stores. Internet retailing of wine is increasing, and some fruit wine manufacturers sell
through their websites.
Restaurants and bars handle 30 per cent of wine sales, including traditional bars rather than hotels, and
growing numbers of wine bars and wine restaurants in metropolitan areas offer serious drinkers wider
ranges of wines at various price and quality points. Restaurants in five-star hotels sell mainly middle
to premium quality wines; traditional Korean restaurants are increasingly offering wine, and growing
numbers of western style food outlets, family restaurants and pizza houses can sell wine (Austrade
Korea 2007; Oh 2006).
Promotion
Wine exporters can exhibit at the annual Seoul Food & Hotel, Seoul Wine Expo trade show and Seoul
International Wine & Spirits Show. Considerable development of the wine market in recent years,
largely by overseas manufacturers, has included wine exhibitions, trade shows, wine bars, Internet
based wine communities to educate new consumers on wine-drinking, manufacturer tasting seminars,
cultural events coupled with tastings, providing wine samples to wine schools, briefing local wine
experts, and positioning of grape wine as a healthy drink through social events and sponsorship of
cultural events. Austrade also recommends restaurant tastings focused on young couples, in-store
tastings, and supplying Korean language promotional materials to local distributors (Austrade Korea
2007; Euromonitor Korea, 2007, Oh 2006).
Import regulations and requirements
Wine attracts lower import tariffs, liquor tax and education tax than beer and spirits (USDA Korea
2005, 2006). However, import charges add around A$7.70 to a landed price of A$10.00 for a bottle of
Australian fruit wine (Table E.8).
Table E.8: Republic of Korea: import duties and taxes on fruit wine products
Description

Tax

2206.00.10: Fermented
beverages prepared from
fruits cider, perry, wine
cooler, other

Import tariff
Liquor tax
Education tax
VAT (refunded to the importer)

15% of CIF
30% of CIF plus import duty
10% CIF plus import tax plus liquor tax
10% of CIF plus import duty, liquor tax and
education tax
8%

Customs clearance
Source: AWBC, Korea 2007; USDA, Korea 2005

Labelling and tax requirements on imported wine are complex, as are the documentation and
inspection processes for new-to-market products for which the first shipment is subject to a detailed
chemical food safety inspection from samples supplied by importers, and subsequent shipments
receive visual inspection and random detailed chemical inspections (Austrade Korea 2007).
Information on Customs requirements is available from the Korean Customs website and on taxes and
excise from the Korean National Tax Service website.
Summary
The Republic of Korea has a very small but probably growing market for temperate fruit wines,
emerging defined market segments for imported Australian and other grape wine, use of wine as a gift,
experimental consumers, attractive pricing and wide distribution for wine, but strong competition from
rice wine, spirits, a large innovative liquor industry and high brand consciousness. There may be a
minor opportunity for Australian tropical fruit wine to be differentiated on novelty, wide assortment,
and Australian branding.

119

E.1.6 Malaysia
Market profile
Malaysia has a very small market for local tropical fruit wines, and high awareness of tropical fruits.
Grape wine consumption was 43 million litres in 2004, and has been growing at around 13 per cent a
year. Liquor consumption averaged only 6.6 litres per person in 2005, led by brandy, whisky and beer.
Market growth is constrained by 60 per cent of Malaysians following the Muslim religion which
discourages alcohol consumption; and by high import duties and excise. Key market segments are
Chinese, Indians, expatriates and foreign tourists, and increasingly affluent, sophisticated, welltravelled, and young Malaysians, with further market growth indicated by:

growing imports of grape wine, the fastest growing alcoholic drinks category

increasing health consciousness, with wine perceived as healthier than brandy and spirits

more young Malaysians drinking wine as a modern drink that signifies cultural refinement

more women drinking wine

students returning to Malaysia as wine drinkers

increasing affordability of wine

an increasingly international cuisine

frequent wine promotions by hotels and wine import agents and regular media articles on wine

a growing supermarket sector with cool storage facilities (Austrade Malaysia 2007; Chang
2006).

Supply
Malaysia has a small wine industry producing mostly tropical fruit wine, with some exports of
fermented drinks, including to Japan and Singapore (Rem Corporation n.d; Table E.9). Imports of fruit
wine related products rose at an average 25 per cent a year from 200205, but declined from Australia
and ceased from the United States (Table E.9).
Table E.9: Malaysia: trade in fermented drinks HS2206, # 200206
Description
2002
2003
2004
2005
2006
HS 2206.00: Fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^
Imports from Australia (litres)
A$ ^
A$ per litre ^

105 000
3.91
90 650
2.23
60 921
183 381
3.01

173 960
4.79
247 890
2.13
22 923
71 208
3.11

147 000
6.01
67 000
6.90
24 235
59 009
2.43

306 80
3.52
117 000
4.48
2 664
7 064
2.65

not av.
not av.
not av.
not av.
189
557
2.95

HS 2206.00.700: fermented beverages not specified elsewhere, excluding cider and sake

Imports from United States litres

A$ per litre ^

12 400
3.41

119 400
1.21

not av.
not av.

HS 2206.00.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

A$ per litre *

1 800
6.11

400
12.50

1 100
5.45

1 400
4.29

2 700
5.19

Notes: # Excludes grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS; FAO trade statistics; Japan Customs trade statistics; USDA trade statistics

120

Around 4.7 million litres of wine are imported annually, of which about one million litres are exported
to other Asian countries. Australian wines leads the imports with a 42 per cent share, and from
200206 imports from Australia grew strongly to 2.58 million litres averaging A$6.50 a litre FOB in
2006. Preferred wines are red (80 per cent of sales) and bolder styles, such as Australian grape
wines. There is a high level of counterfeiting and smuggling in of higher priced drinks such as spirits,
largely because of rising alcohol or sin taxes (so-called because of the largely Moslem population)
(ABS; Austrade Malaysia 2007; AWBC Malaysia 2007; Euromonitor Malaysia 2006).
Product profile
The larger fruit wineries include:

Rem Corporation Sdn Bhd: Rambola brand wines from carambola (starfruit)

Kluang: Pitaya Red Wine (dragonfruit), in Classic, Vintage and Reserve grades

Amsyar Resources, Malacca: fruit wines (see company websites, Imex Goods 2003).

Also popular is a traditional low quality drink fermented from coconut juice and drunk as a wine.
There are no industry standards for wine production, but label design and content has to comply with
Department of Public Health guidelines, and alcoholic beverages must be clearly identified for the
protection of Muslim consumers.
Pricing
No retail prices were identified for fruit wines. From 200205 import prices per litre for fruit wine
products fluctuated between A$3.30 and $6.00 a bottle, and between A$2.40 and $3.10 for Australian
product. Export prices varied between A$2.10 and $6.90 (Table E.9)
In 2004, 33 per cent of grape wines sales sold at RM30 (A$10.80) and below, 46 per cent at RM3050
(A$10.70 to $28.00), and 21 per cent at more than RM50 (A$28.00) (AWBC Malaysia 2007).
Distribution
Fruit wines are sold through wholesalers, retailers and entertainment venues. The local coconut wine is
sold widely through restaurants, stores and karaoke bars, generally unrefrigerated. Several fruit
wineries sell by mail order via their websites, and through distributor websites.
Major importers supply grape wine to large retailers and distributors, while medium sized importers
also cater to casual customers. Larger distributors are usually sole agents for leading Australian and
European grape wine brands, and resist taking on new suppliers, but new exporters can use a mediumsized importer. Importers focussed on niche markets have been seeking small sustainable quantities of
boutique and dessert wines. Around 40 per cent of imported grape wine is sold through retail, with
lower priced wines mostly through supermarkets and hypermarkets and middle and higher priced
wines mainly through liquor stores, and increasingly mail order. The rest is sold mostly in restaurants,
hotels and entertainment outlets, but at very high prices due to large and ever-increasing tariffs and
excise tax and large trade mark-ups (Austrade Malaysia 2007; Chang 2006).
Promotion
Fruit wines are mainly promoted on manufacturer websites. Grape wines are publicised through
tabloids and trade magazines, including The Edge, Hospitality Asia, Beverage Today and
Malaysia Retailer and often matched with foods at wine tasting sessions in fine dining restaurants
and hotels. Australian wines can be exhibited at the major trade fair Food and Hotel Malaysia in Kuala
Lumpur (Austrade Malaysia 2007; AWBC Malaysia 2007).

121

Import regulations and requirements

Wine incurs no import quotas or restrictions. Import tariffs and taxes add A$6.50 to a landed price of
A$10.00 for a bottle of Australian fruit wine (Table E.10). Importation must comply with the Food
Safety Information System of Malaysia regulated by the Ministry of Health, and the Royal Customs
and Excise Department usually uses one bottle per case to assess alcohol content (Austrade Malaysia
2007).
Table E.10: Malaysia: import tariffs and taxes on fruit and grape wine
Description

Tax

Rate *

HS 2206.00.400: Wines from the fermentation of juices of fruit other

than from grapes (including fig, date and berry) or vegetables
HS 2204: Grape wine

Import duty

RM 1.085 a litre (A$0.39)

All wine

Excise
Sales tax
Stamp duty

Still: RM7 a litre (A$2.55)

Sparkling: RM23 a litre (A$8.39)
RM12 a litre (A$4.38)
20% of value
RM0.50 (A$0.18)

Sources: Asia-Pacific Economic Corporation 2007, Austrade Malaysia 2007

Summary
Malaysia has a very small market for domestic tropical fruit wines and other non-grape wines, high
awareness of tropical fruits, strong demand for Australian branded grape wines from several defined
segments, distribution channels for fruit wine, attractive pricing and moderate import costs. There is a
minor opportunity for Australian tropical fruit wines to be differentiated on quality, novelty, range of
fruits used, and Australian branding to middle class consumers.

E.1.7 Singapore
Market profile
Singapore has a small fruit wine market, mainly women new to wine-drinking who prefer sweet wines
(Teo 2006), and is supplied entirely by imported products. A retailer of imported fruit wines sees
potential for wines of all types, and for fruit wines to lead new wine drinkers to grape wine (Lin 2006).
Exports from 200206 were small and intermittent and are assumed to be re-exports to other Asian
countries (Table E.11).
Grape wine consumption was around 10 million litres in 2004. While wine is a minor drink compared
with beer, the market has been growing, due to more people drinking wine; greater wine knowledge
and appreciation; acceptance of media messages of health benefits; a shift from cognac, spirits and
beer to wine; more wine drunk at weddings and other celebrations and taken to parties; and more wine
sold through supermarkets, restaurants, wine bars and other venues. Wine is usually seen as a formal
drink with western-style meals and increasingly popular as a gift and a substitute for the traditional
bottle of spirits in gift hampers. Consumption is highly seasonal, mainly November to February
around the traditional events of Christmas, the Calendar New Year, Chinese New Year and for
expatriates American Thanksgiving Day. (Austrade Singapore 2007; AWBC Singapore 2006;
Euromonitor Singapore 2007; Stanton, Emms & Sia 2001a). The leading markets for grape wine are

around 200 000 expatriates with middle to upper incomes who are knowledgeable about wine;
confident in purchasing it; concerned with wine type, origin, quality and price; and buy from
specialist wine shops, wine bars and restaurants rather than supermarkets

122

a growing segment of younger middle to upper income people, usually aged 25 to 40 years.
These are the trend-setters, who see wine-drinking as fashionable; have some knowledge of
wine from experimentation, wine appreciation courses and media articles; and are influenced by
price, taste, label, and reasons to buy such as gifts and special occasions

middle to upper income earners, 60 per cent of the population, who prefer lower alcohol and
healthier drinks such as wine to spirits

a larger emerging market of more than 300 000 middle income Singaporeans under 50, with low
understanding of wine or how to choose it. They follow rather than lead fashion, are influenced
by peer groups when buying wine, and are concerned with value for money and product taste.

Wine knowledge is generally low outside these market segments, and the market appears to have
matured, with strong competition by numerous suppliers, products and labels, competitive pricing, and
strong promotion on nationality and brand, particularly by Australian and French suppliers, although
Singapore continues to be an important wine destination because of its large re-exports. Austrade
recommends Australian suppliers offer boutique wines with competitive pricing and promotional
support (Austrade Singapore 2007; Stanton, Emms & Sia 2001a).
Supply
There is no domestic wine production. FAO statistics indicate only small occasional imports of fruit
wine related products but Australian export statistics report between 155 430 and 248 900 litres of
fruit wine products to Singapore a year from 200206, and USDA trade statistics show imports from
Canada (Table E.11). Imports are likely to include small quantities of tropical fruit wine from northern
Queensland and mango wine from the Northern Territory (Wright 2007).
Table E.11: Singapore: trade in fermented drinks HS2206, # 200206
Description
2002
2003
2004
2005
2006
HS 2206.00: Fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^
Exports by Canada A$ ^
Imports from Australia litres
A$ per litre ^

0
248 930
3.24

0
0.51
3 000
0.51
0
253 550
2.80

1 360
1.36
2 000
1.36
54 791
155 432
2.65

30 184
1.45
1 820
1.45
28 647
182 508
2.66

not av.
not av.
not av.
not av.
29 848
184 935
2.69

3 591
2.60

2206.00.3020 Grape wine, cider or perry, mead, sake, fruit or vegetable wine

Export to Australia litres

A$ per litre *

Notes: # Excludes grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS; FAO 2007; USDA trade statistics

Most grape wine is imported from France and Australia. From 200206 Australian imports more than
doubled to 7.45 million litres averaging A$5.60 FOB a litre in 2006, largely for re-export to larger
Asian markets (Austrade Singapore 2007; AWBC Singapore 2006; Stanton, Emms & Sia 2001a).
Product profile
Fruit wines include Mijiah brand mango, soursop, berry and plum wines from the Philippines (Lin
2006), with small quantities of Australian tropical fruit wine in recent years.
Grape wines are mostly red table wines in 750 ml bottles. Singapores Chinese consumers consider red
wine signifies quality and white wine has inferior taste and is too acidic, and accept media messages
about health benefits from red wine. Organic wine has not found a market position. Labels such as
123

from Australia and United States, that explain the wine and appropriate usage situations, are preferred
over labels focussed on place of origin. With a large choice of products from almost every wine
producing country, Singaporeans exhibit little loyalty to country of origin and will readily try new
wines and tastes (Austrade Singapore 2007 Stanton, Emms & Sia 2001a).
Pricing
As Mijiah tropical fruit wines from the Philippines have been retailing in Singapore at A$22.10 (Lin
2006), the low annual average prices for imports and exports of these fermented drinks indicate most
are low value drinks such as rice wine or coolers (Table E.11).
In 2000 grape wine sales fell into these retail price categories:

low-price under S$18.00 (A$18.50): 50 per cent of wine

mid-price S$18.5025.00 (A$18.0025.70): 25 per cent

high price S$25.8040.00 (A$25.0041.20): 10 per cent

premium price over S$40.00 (A$41.20): five per cent. Prices can reach A$79.00 for premium
Australian or French wines.

Total distributor mark-up on the average bottle of wine was 3050 per cent of retail price in 2001, and
bar prices are usually 4060 per cent higher. Large supermarkets also require listing fees, promotional
costs and period price discounts from their suppliers. While retail prices are relatively high because of
high taxes, wine attracts lower excise duties than cognac and brandy (Austrade Singapore 2007;
AWBC Singapore 2000; Stanton, Emms & Sia 2001a).
Distribution
Numerous distributors handle grape wine for the Singapore market and for transhipment elsewhere in
Asia. The principal importers are specialist wholesale wine merchants and general trading companies
who act as agents and distributors to retailers, particularly supermarkets, hotels and the food service
sector. Wine is also imported by specialised wine retail stores, the import and wholesale division of
major retailers, and some smaller wine importers, often with retail outlets. Commodity traders often
handle wine, particularly during the peak shopping season of November to February. As wine quality
has been affected by lack of cool storage, some distributors have been offering appropriate training.
There is wide and growing distribution of wine as retail stores move away from cognac, brandy and
beer. Supermarkets and hypermarkets are led by Fairprice and Shop nSave, and often have dedicated
wine shops or large wine sections, and wine is also sold in convenience stores, minimarts, grocery
stores, and specialist food and wine shops. Low to mid priced grape wines are usually sold in
supermarkets and specialist outlets used by expatriates, such as the Cold Storage group (which owns
the popular Jasons Wine Cellar) and Fairprice-Liberty. Cold Storage group, which owns the popular,
sells private wine labels, and has sales staff to advise consumers. Premium wines are usually sold in
specialist wine shops, which sell boutique wines at more than S$30 (A$23.70) a bottle, and wine bars
and fine dining restaurants. Hotel menus, particularly at the high end, usually offer French brands.
Wine sales are also growing in the expanding food and beverage service sector, with more hotel
restaurants and bars selling wines to local consumers, expatriates and tourist, and numerous new
western and Chinese restaurants, often with wine cellars, although restaurants have discouraged an
emerging trend of BYO with corkage fees as high as A$40.00. Other outlets are pubs; bars; wine bars,
golf, country and other social clubs; duty free stores; airline catering businesses and around 500 ship
chandlers to passenger cruise liners (Austrade Singapore 2007; AWBC Singapore 2006; Stanton,
Emms & Sia 2001a).

124

Promotion
Wine launches in large retail stores are typically supported with promotional campaigns of store
displays, media advertising, national wine promotions including education of shoppers; and bulk
promotions during the festive season. Manufacturer sampling and media advertising are also common,
and direct marketing, wine tastings, wine appreciation seminars, club and business functions, and
direct mail from supermarkets can be used to educate new consumers (Austrade Singapore 2007;
Stanton, Emms & Sia 2001a).
Wine trade shows include the biennial Food & Hotel Asia, the annual Wine for Asia for trade and
consumers, and the annual Australian Wine Fair held in a shopping mall. Australian wine can also be
exhibited at Fair-Price and Cold Storages annual Australian Food Fairs. The AWBC and Retail
Development Victoria included fruit wine producers in delegations to Wine for Asia in 2006 and 2007
(producer interviews).The Singapore Hotel Association and Training Education Centre (SHATEC)
and the Singapore Australian Wine Importers Group organise an annual Singapore-Australian Wine
Education Award to promote Australian wine to the food service industry (Austrade Singapore 2007).
Many Singapore residents who have previously lived, studied or travelled in Australia continue to buy
Australian wines and promote them by word of mouth (AWBC Singapore 2006).
Import regulations and requirements
There are no import duties on wine, but excise and GST add A$6.95 to the landed cost of a bottle of
wine (Table E.12).
Table E.12: Singapore: wine taxes
Description

HS 2206.00.90: Mead and other fermented

beverages (includes fruit wine)
HS 2206.00.10: Cider and perry
HS 2204: Grape wine
All wine

Tax

Rate

S$70.00 (A$47.30) per litre of alcohol (A$6.15 for 750

mls of wine with 13% alcohol)
S$3.30 (A$2.23) a litre
S$9.50 (A$6.42) a litre
5% of base retail price (CIF + commission, duties and
incidental charges)

Excise

GST

Source: Asia-Pacific Economic Corporation 2007; Austrade Singapore, 2007

Summary
Singapore has a very small market for imported tropical and other fruit wines, high awareness of
tropical fruits, a growing market and distribution for Australian and other grape wines, attractive
pricing, consumers interested in new products, and numerous promotional opportunities. However,
there is strong competition between numerous wine brands and other alcoholic drinks, and import
charges are high. There is a moderately strong opportunity for Australian tropical fruit wines to be
differentiated by quality, novelty, fruit assortment and Australian origin, but strong promotion of
brands will be needed to attract attention.

E.1.8 Taiwan
Market profile
While Taiwan does not have a tradition of wine from fruits, a small fruit wine market is developing,
supplied by an emerging domestic industry. Taiwan is also a large producer of, and market for,
tropical and sub-tropical fruits. Wine is a popular gift, particularly for Chinese New Year, the MidAutumn Festival, Dragon Boat Festival and Fathers Day (Euromonitor Taiwan 2007).
Stable exports of around 130 000 litres a year of fruit wine related products from 200205, including
to Japan and the United States, although these are likely to include rice wine. Export statistics conflict
125

with Japanese Customs statistics which show substantially higher imports of fruit wine related
products from Taiwan (Table E.13).
Taiwan also has a small growing market for grape wine, representing around four per cent of Taiwans
A$5 billion a year liquor market, and including buyers of premium wines who have good incomes and
wine knowledge and like to try different products. However, the traditional market of business people
and white collar workers is shrinking as tight political and economic conditions lead to businesses
shifting to China (Austrade Taiwan 2007; AWBC Taiwan 2007; Euromonitor Taiwan 2007).
Supply
Taiwans Council of Agriculture has been supporting the development of a fruit wine industry through
nine new wine villages around Taiwan so that fruit producers can develop new markets in the face of
greater competition from imported fruits since Taiwans accession to the World Trade Organisation.
An example is the Dahu Farmers Associations Dahu Winery producing strawberry and plum wines in
this leading strawberrygrowing region, mainly for a pre-existing farm tourism market of Taiwanese
tourists who stay at leisure farms, enjoy the flowering orchards and later pick their own fruit, but
also for export to Japan and Hong Kong. The Government has assisted producers through regulation,
food safety management, and a quality evaluation system. However, although the Governments
Taiwan Tobacco and Wine Monopoly has relaxed control of wine production, volumes continue to be
capped (Cheng 2004; Chu 2007; Taiwan Review 2004).
From 200205, imports of fruit wine related products fell from 272 000 to 98 000 litres, fluctuated
from Australia and Canada and grew from the United States, although it should be recognised that the
various country statistics conflict with FAO data (Table E.13). Low annual average prices indicate
mostly low value drinks such as rice wine or coolers.
Table E.13: Taiwan: trade in fermented drinks HS2206, # 200206
Description
2002
2003
2004
2005
2006
HS 2206.00: Fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and
non-alcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^
Imports from Australia litres
A$ per litre ^
Imports from Canada (A$) ^

272 250
4.15
119 370
5.03
52 560
2.59
23 079

205 000
3.68
149 350
4.49
104 355
2.54
0

109 000
4.27
129 370
3.34
87 984
2.19
38 333

98 000
5.19
117 940
4.16
13 248
4.68
42 722

not av.
not av.
not av.
not av.
2 882
2.62
not av.

HS2206.00.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

A$ per litre *

541 300
5.08

521 800
4.04

345 400
3.90

319 100
3.77

244 700
4.23

HS2206.00.70: fermented beverages, excluding cider and sake

Imports from United States litres

A$ per litre ^

246 600
3.26

279 400
3.04

505 700
2.29

466 100
2.42

477 900
2.48

5 000
2.60

2 700
7.41

HS2206.00.90: excluding cider and sake

Exports to United States litres

A$ *

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS; FAO 2007; Japan Customs trade statistics; USDA trade statistics

Relaxation of the same Government monopoly has also led to many new grape wineries. Taiwan
imports wine from all major wine producing countries, led by France with a 50 per cent market share
in 2006, against growing competition from low priced quality wine from Australia, the United States,

126

Chile and Argentina. From 200206 Australias supply grew fourfold to 1.78 million litres at an
annual average price of A$6.75 FOB in 2006 (ABS; Austrade Taiwan 2007).
Product profile
Domestic fruit wines are made from a range of subtropical and temperate fruits, examples being:

Chateau Shu-Sheug grape wine blended with imported blueberries

Dahu Winery semi-sweet strawberry wine aimed at women aged 18-35, and a semi-dry plum
wine, both with around 11 per cent alcohol

Dongshi Tangerine Grove Winery tangerine wine

Puli Agriculture Village Chateau rose petal and other flower wines

Taipeis First Winery of Taiwan Tobacco & Wine Board lychee, plum and rose wines, white
grape wine and honey grape wine (a sweet blend of white wine and honey)

Taiping Winery longan, loquat and lychee wines, onion and chive wines and fruit liqueurs

Taiwan Tobacco and Liquor Corporation Aronia berry fruit wine and a grape wine blend

Yiquing Ranch and Winery plum and grape wine blends, plum liqueurs. Tourists are
permitted to make their own wine (Cheng 2004; Wieman 1995).

Imported fruit wines include Fort Wine Canadas berry wines (Luke 2005).
Demand in grape wine is strongest for red wine with medium body in long bottles with classic simple
labels, due to the influence of French wine promotions (Austrade Taiwan 2007).
Imported wines are required to comply with Tobacco and Alcohol Administration Law standards, with
labels containing mandatory information in Chinese language (Austrade Taiwan 2007).
Pricing
The market is price-sensitive and competition between large retailers is bringing down prices. Grape
wine sales fall into five main price categories:

Low price A$20.0030.00 a bottle: Very large volumes of imports, including lower quality
French and Spanish wines imported at A$2.00 and retailed at around A$8.0012.00

Table wines A$30.0060.00: Includes most Australian and other New World Wines, retailing
at A$12.0030.00 in supermarkets, department and convenience stores, restaurants and
nightclubs

Premium range A$60.00200.00: Sold in restaurants, hotels and selective bottle shops, with
strong competition from around the world

Ultra premium range A$200.00 and higher: Mainly sold at wine dinners, and in five star
hotels, premium clubs, and VIP wine clubs

Collectable range, such as Penfolds Grange (Austrade Taiwan 2007; AWBC Taiwan 2007).

Distribution
Imported grape wines are generally distributed and promoted by import agents. Wine is mostly sold
through restaurants, pubs, hotels and retail stores, and fruit wines are also sold from the wineries and
distributor websites. Specialist liquor stores, independent food stores and duty free shops are facing
increasing competition from supermarkets, hypermarkets and convenience stores such as RT-Mart,
Carrefour, Costco, Jasons the Market Place and 7-Eleven, which have been introducing wine sections
with wide product range, service staff, discounting and lower prices, and sales promotions (AWBC
Taiwan 1997; Euromonitor Taiwan 2007).
127

Promotion
Fruit wines are mostly promoted to domestic tourists through the wineries. Grape wines are promoted
at dinners and wine clubs, various Australian events and the Taipei International Food Show, and
reviews from RPJ, Decanter and Wine Spectator magazines are particularly influential. Wine
marketers have focused on young consumers through celebrity events, themed social gatherings and
event sponsorships, and the French wine industry has provided extensive education in the selection
and drinking of grape wine. Promotional literature should be in Chinese language (Austrade Taiwan
2007; Euromonitor Taiwan 2007).
Advertisements and other promotion to vulnerable consumers are regulated under the Tobacco and
Alcohol Administration Act, and have to carry conspicuous health warnings such as excessive
drinking endangers health (AWBC Taiwan 2007).
Import regulations and requirements
Import duty and various taxes add more than A$5.00 to a landed cost of A$10.00 per bottle (Table
E.14).
Table E.14: Taiwan: import taxes and tariffs on wine
Description

Tax

Rate

Fruit and grape wine

Import duty

20%
Still 10%; Sparkling 20%
NT$7 (A$0.2546) per % alcohol per litre, i.e. A$2.51 for 750 mls with
13% alcohol *
5%

Wine tax
GST
Business tax

Source: Asia-Pacific Economic Corporation 2007; Austrade Taiwan 2007

Wine production, hygiene, imports, marketing and advertising are controlled and regulated under the
Tobacco & Wine Control Act, the Tobacco & Wine Tax Law and the Tobacco and Alcohol
Administration Act. Samples and gifts are subject to full import duties.
Summary
Taiwan has a small growing market for quality domestic fruit wines, high awareness of tropical fruits,
demand for quality imported grape wines including Australian branded wines, attractive pricing,
moderate import tariffs and taxes, and distribution channels for fruit wine and Australian wine. There
is some opportunity for Australian tropical fruit wines to be differentiated by fruit type, premium
quality, fruit range, and Australian branding if strong promotional support is provided.

E.1.9 Thailand
Market profile
Thailand does not have a long-standing fruit or grape wine tradition, but a fruit wine market and
industry have developed in recent years. Sales of fruit and herbal wines reached 1.4 million litres in
2007, to markets that include Japanese and Korean tourists. Distributors of wine coolers focus on
young people aged 20 and over, indicating potential markets for fruit wine (Aeusvrivongse 2002;
AWBC Thailand 2007; Mattei 2006; Rivard 2007a).
Exports of fruit wine related products grew from 5.9 to 7.3 million litres from 200205, including
small quantities of tropical and other wines and blends with grape wine by Chiang Rai Winery,
Weereeya Rattana Thai Wine and The Siam Winery to Japan, Norway, Sweden, Laos and Myanmar,
for outlets such as Thai restaurants (Mattei 2006; Rivard 2007b). Large volumes and low average
prices indicate mostly lower priced drinks such as coolers or rice wine (Table E.15).
128

Grape wine represents 20 per cent of total liquor sales, with stable consumption of around eight
million litres a year for some years but with signs of growth in 2006. Key markets include young
people beginning to drink alcohol, a growing tourist market, and people switching from traditional
drinks such as whisky to wine for its lower alcohol content and reputed health benefits. Grape wine is
drunk with both western and Thai foods and often to celebrate significant events and fine dining with
wine is growing. However, market growth has been constrained by low understanding of grape wine
and low incomes (Austrade Thailand 2006; AWBC Thailand 2007; Euromonitor Thailand 2007;
Mattei 2006).
Supply
Thailand has around 1000 producers of fruit wines and liqueurs, led by the Chiangmai Wine Cooperative Co. Ltd which represents several farming organisations in Chiangmai Province and has
research and development facilities. Kasetsart University in Bangkok also provides industry support
through seminars and workshops in wine making and quality control, and product research. Industry
growth has been helped by the lack of Government restrictions on production of lower alcohol drinks
with up to 15 per cent alcohol, but smaller wineries usually lack the finances to meet new industrial
standards and to buy imported equipment, chemicals and bottles. Also a requirement that producers be
Thai registered companies with a majority of Thai national shareholders has deterred foreign
investment and access to expertise needed to improve the quality and competitiveness of the wines
(Aeusrivongse 2002; Mattei 2006; Chaingmai Mail 2004; Chaingmai & Chaingmrai Magazine n.d.).
From 200205 imports of fruit wine related products were stable at around 430 000 litres most years,
include small declining quantities of low priced fruit wine products from Australia and the United
States (Table E.15).
Table E.15: Thailand: trade in fermented drinks HS2206, # 200206
Description
2002
2003
2004
2005
2006
HS 2206.00: Fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included)

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^
Imports from Australia litres
A$ per litre ^

413 000
2.17
5 884 000
0.97
81 464
3.29

431 000
2.06
7 028 000
0.78
1 769
1.67

1 385 000
1.74
7 989 000
0.70
9 700
1.00

445 000
1.64
7 319 830
0.68
0

not av.
not av.
not av.
not av.
0

HS2206.00.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

A$ per litre *

9 900
2.83

14 400
3.68

10 900
3.39

13 500
2.52

HS2206.00.70: fermented beverages not specified elsewhere, excluding cider and sake

Imports from United States litres

A$ per litre ^

15 900
2.55

16 700
2.12

4 000
1.70

6 800
1.74

3 000
2.21

Notes: # Excluding grape and beer. * CIF at importing country; ^ FOB from exporting country. Sources: ABS;
FAO 2007; Japan Customs trade statistics; USDA trade statistics

Thailands grape wine industry is around ten years old, with only a few businesses producing around
three million litres of wine a year, mainly tourist wineries near the Khao Yai National Park and in
hydroponic floating vineyards on Central Thailands wet flood plains. The Royal Project Foundation
provides technical support, equipment and imported grape cultivars (Rivard 2007b).
Grape wine imports fell from 3.4 to 3.15 million litres from 19982004 due to high import taxes.
Thais strongly prefer red, still and dessert grape wines, while expatriates and the large foreign tourist
market buy red and white (Austrade Thailand 2007). France is the leading country of supplier
followed by Australia, Italy, Chile and the United States. Australian grape wines are regarded as good

129

quality and value for money, and from 200206 imports from Australia grew steadily to 1.5 million
litres averaging A$5.10 per litre FOB in 2006 (ABS; Austrade Thailand 2006; Mattei 2006).
Product profile
Wineries are using a wide range of tropical, exotic and medicinal fruits, examples being:

B. J. Garden Winery: Chateau de Klaeng mangosteen, noni, Black ginseng and mamao wines

Chiang Rai Co-operative Co. Ltd: around 40 000 bottles a year of Le Sant lychee, mangosteen,
noni, Black ginseng and herbal Tokay wines (Le sant is French for health)

Phisith Industrial Co. Ltd: Wine de Lapoon longan wine, which tastes like fruit juice and
nourishes the heart according to the company website

Siam Winery: Spy wine coolers and grape wine. The winery also offers tours and wine classes

Thiptipa Company: mangosteen, bignay, Black ginseng, sparkling lemon, sparkling strawberry,
and grape wines

Weereeya Rattana Thai Wine: Wines from jackfruit, noni, longkong, mangosteen, passionfruit,
rosella, salak, santol and rose apple (Syzygium jambos Alston); Black galangal; honey; apple;
olive; sticky rice with Thai herbs; and a rosellagrape wine blend

Zearch Wine Coolers: Mangosteen, apple, peach, lychee, lime, grape, orange, pineapple and
strawberry blends with five per cent alcohol, in 330 ml bottles (company websites; Alibaba
2007; JETRO 2006; Mattei 2006; Fuzing.com 2007).

Fruit wines and herbal wines such as krachai, noni and ginseng wines are generally positioned as
health drinks. One winery states on its website that it does not add water to its wines, so as to preserve
typical flavour and aroma (Mattei 2006).
All winemakers are required to comply with Government standards across the entire winemaking
process, including hygiene and waste management standards, with a TISI 20892544 bottle logo for
compliant wines (Mattei 2006; Thailand Illustrated Magazine n.d.).
Pricing
Chaing Rai Co-operative retails its fruit wines at 320 baht (A$11.90) a bottle. Grape wine retail prices
have been around A$15.0030.00 for table wines, A$50.00100.00 for premium wines, and
A$260.00400.00 and more for super-premium wines. Growing consumer resistance to high prices
has led to distributors seeking lower-cost supplies (Austrade Thailand 2007).
Distribution
Some fruit wineries sell direct to the consumer, particularly in tourist regions, and via mail order
websites and local restaurants. A joint venture between a group of liquor producers and leading gas
and oil firm PTT has been retailing fruit wines and traditional liquors in booths in service stations
under the One Village, One Product brand (Chaingmai Mail 2004).
Grape wine is sold mainly through hypermarkets, five star hotels, and higher quality Thai hotels and
restaurants.
Promotion
The Government Public Relations Department website provides suggestions for matching fruit wines
with various Thai dishes. Wine and winemaking have been promoted at a fruit wine tasting festival at
Assumption University, Bangkok, the International Food & Hospitality Show National Contest and the
Thai Fruit Wine Satho competition, and through Siam Winerys winemaking and wine-tasting classes
at its education centre (Assumption University 2006; Chiangmai Mail 2004; Tupchai 2003).

130

Continual product launches, media publicity of wines reported health benefits, distributors client
dinners, wine-tastings and other promotions have contributed to growing sales of grape wine.
However, the Thai Government is expected to prohibit liquor advertising to reduce liquor consumption
(Euromonitor Thailand 2007).
Import regulations and requirements
Import tariffs on Australian wines are 36 per cent of CIF value, having been reduced from 60 per cent
in the Free Trade Agreement between Australia and Thailand. Import tariffs are to be phased out by
2015. Wine also incurs excise tax of 60 per cent on CIF Value and import duty; municipal tax of
10 per cent of excise tax; health tax of four per cent of excise tax; and VAT of seven per cent of the
combined CIF value and charges, reimbursed by the importer (AWBC Thailand 2007). The total fees
would add around A$9.15 to a landed price of A$10.00 for a bottle of Australian fruit wine.
Summary
Thailand has a small emerging market for domestic fruit wines from a wide range of domestic tropical
and temperate fruits, and growing demand for Australian grape wine, but strong competition from beer
and spirits, limited distribution and high taxes. There is little opportunity for Australian tropical fruit
wines to differentiate except on premium quality to high income quality-focused Thai niches.

E.1.10 Vietnam
Market profile
Fruit wines comprise around three quarters of Vietnams wine market, although there is some shift to
grape wine due to the influence of western culture and grape wines reputation for health benefits.
There is also a shift to beer as growing competition makes it more affordable (Worldsurface.Com n.d).
Vietnam is also a large producer of and market for tropical and sub-tropical fruits.
Annual exports of fruit wine related products fluctuated between 9600 and 646 000 litres from
200205, and included 30 00055 000 litres a year to Japan (Table E.16). Recent export statistics are
likely to include exports to Germany from a Vietnamese-German joint venture, and VWD lychee wine
(Vietnam News 2004).
Minor but growing grape wine consumption reached 22 million litres in 2005, mainly by a small
expatriate community and a growing tourist industry. Strong growth in wine consumption is due to
increasing disposable incomes, a growing middle class, westernisation of the culture, more eating out
as a family and buying wine in restaurants. It is also due to the perception of wine as a stylish drink
and healthier than spirits due to lower alcohol.
All categories of alcoholic drinks have been growing, with wine and beer expanding ahead of spirits.
However, wine remains a minor drink compared with beer (97 per cent of liquor sales volumes in
2005). Imported vodka, brandy, cognac and whisky continue to be widely used to celebrate weddings,
other ceremonies, and parties since French colonialists established production and domestic
distribution of distilled spirits in Vietnam in the 1930s (AWBC Vietnam 1997, 2007; Global Business
Management n.d.; Euromonitor Vietnam 2006; Worldsurface.Com n.d).
Supply
Most fruit wine is produced in elevated regions of northern Vietnam by commercial and cottage
producers, led by Thang Long Liquor Company. A small emerging industry of local producers such as
Hanoi Alcohol Company and Gia Lam Fertiliser Company and joint ventures of Vietnamese and
European producers supply domestic and export markets with fruit wine, grape wine and coffee
liqueurs (AWBC Vietnam 1997).

131

Most wine is made from imported fruit according to the Viet-Nam Wine and Beer Association,
although this is changing with the growing wine grape supply (Euromonitor Vietnam 2006;
Worldsurface.Com n.d; Highland News 2004).
Imports of fruit wine related products grew strongly from 98 000 to 723 000 litres from 200205
(Table E.16). Although import values are not available, these are assumed to be lower value drinks
such as rice wine or coolers, given the slowing wine market. Small quantities of fruit wine products
were imported from Australia in 200506.
Table E.16: Vietnam: trade in fermented drinks HS2206, # 200206
Description
2002
2003
2004
2005
2006
HS2206.00: Fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres *

Total exports litres ^

97 840
66 000

513 000
9 650

761 000
645 790

723 000
42 280

not av.
not av.

HS2206.00.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

A$ per litre *

32 200
4.10

54 700
4.33

53 300
0.54

36 700
5.42

36 900
1.49

Notes: Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS; FAO 2007; Japan Customs trade statistics

Grape wine is also imported from France, the United States, some eastern European countries and
Australia. French wines dominate retail and food service sales, due largely to former colonial ties. The
preferred grape wine style continues to be Bordeaux, although often blended or substituted with poor
quality product, or faked. Australian grape wines are priced lower than French wines of equivalent
quality and perceived as premium quality at a reasonable price, and from 200206 imports of
Australian grape wine grew strongly to 537,000 litres with an average price of $5.80 a litre FOB in
2006 (Austrade China and Vietnam 2003; ABS; Euromonitor Vietnam 2006; Taipei Times 2006).
Product profile
These examples demonstrate the range of commercial fruit wines being produced:

Lam Dong Food Joint Stock Company: Dalat still and sparkling apricot, orange, lemon and
strawberry wines, and a mulberry-grape blend in 375 ml, 500 ml and 750 ml bottles and a three
litre baginbox (Dalat Wine 2006)

Huong Son Commune: Huong Tich apricot wine. However, this is made as a liqueur through
steeping apricots in rice wine, not by fermentation (Vietnam Travel 2007)

Kimbien Fruit Processing Co-operative: White wine from fresh lychee juice and red wine from
dried lychee fruits (mainly the Thieu cultivar), with 13 per cent alcohol, in 600 ml bottles.
Wines are fermented for at least six months (ecw.com 2007)

Soamai Co Ltd: Fruit wine, spirits, juice and beer (Imex Goods 2007)

Van Nguyen Joint Venture Company: a recent co-operative arrangement with German company
Weingut Gres Gutsabfuling to produce fruit wine (Vietnam News 2004).

Fruit and grape wines are often promoted on their health benefits, such as one winerys claim to aid
digestion, appetite, and sleep, and lower coronary disease (Worldsurface.Com 2006).
Pricing
Trade statistics and other sources provide little indication of pricing for fruit wine; however,
Australian product was imported at A$5.80 a litre FOB in 2006.
Rising wine prices due to rising fuel costs, the introduction of VAT and high import tariffs have
constrained market growth for wine. Prices vary widely due to significant quantities of alcoholic
132

drinks, including around half of all spirits sold, being smuggled in and sold illegally at prices well
below fully taxed imported drinks (AWBC Vietnam 1997, 2007; Euromonitor Vietnam 2006).
Distribution
Several fruit wine producers retail from the winery and by mail order through their own and distributor
websites. A Hanoi restaurant specialises in fruit wines and liqueurs from local hill tribe villages.
Grape wine is handled by import, trading and distribution companies and sold by large chains such as
Metro Cash & Carry, small shops, hotels and restaurants (Austrade China and Vietnam 2003).
Promotion
Domestic fruit wines are often promoted through producer and distributor websites. Wine promotions
include the International Wine Challenge of Vietnam.
Import regulations and requirements
Wine imports are regulated by the General Department of Vietnam Customs and the Ministry of
Finance, and product testing is administered by the Ministry of Science, Technology and Environment.
Imported wines require a Certificate of Analysis and a lengthy process of product registration.
High import tariffs of 65 per cent, excise tax of 60 per cent, VAT of 10 per cent and Special
Consumption Tax of 20 per cent would add around A$25.00 to an Australian wine with a landed price
of a A$10.00. The granting of Most Favoured Nation (MFN) status has entitled Australian products to
Privileged import tax tariffs, a reduction of 150 per cent on Ordinary tax tariffs, on presentation of a
Certificate of Origin from an Australian state chamber of commerce. As Vietnam has now accessed
the World Trade Organisation, MFN tariffs are to reduce to 50 per cent by 2012 (AWBC 2007). More
information is available on the Vietnam Customs website.
Summary
Vietnam has a medium sized, stable and low priced market for domestic temperate fruit wines and
strong demand for French and Australian grape wines, but limited distribution for fruit wine, very high
import tariffs and taxes, and French wines perceived as epitomising premium quality. There is no
apparent opportunity for Australian tropical fruit wines to compete until import costs fall.

E.2

Country profiles North America

E.2.1 Canada
Market profile
Canada has a moderately sized fruit wine market of mostly tourists buying from wineries in wine
producing regions of western Canada. Consumption is expected to grow as domestic supply increases
(The Canadian Wine Industry, 2002; Dyck 2006).
In 2006, 14.4 million litres of cider, fruit wine, perry, mead, hard lemonade and related drinks valued
at A$34.5 million were exported to 16 countries (at low average prices indicating mostly low value
drinks such as coolers and flavoured wine). In 2006 export markets were led by the United States
(although volumes fell from 34.6 to 5.7 million litres since 2002), followed by Japan, Taiwan, the
Republic of Korea, Singapore, Belgium, the United Kingdom, Hong Kong, Italy Vietnam, Spain,
China, Australia, Denmark and the Philippines. Exports to Korea, Japan and Taiwan include Fort
Wines berry wines (Luke 2005; USDA Trade Statistics; Table E.17).
Grape wine consumption was 358 million litres in 2005, with annual average individual consumption
increased from 11.0 to 14.7 litres since 1997, and growing demand for quality wine. While young

133

professionals are drinking more wine, wine remains a drink for special occasions rather than every day
for most Canadians (AWBC Canada 2007; The Canadian Wine Industry 2002; US Foreign
Agricultural Service 2006).
Supply
A moderately sized fruit wine industry is concentrated in British Columbia, Alberta and Quebec, and
grew strongly in recent years due to fruit wineries expanding and grape wineries, often larger
companies, diversifying into fruit wines, ciders and hard lemonade (alcoholic lemonade) (Dyck 2006).
With government support the industry has formed the national Fruit Wines of Canada Association and
associated regional and provincial organisations.
While there are inconsistencies between some trade statistics, imports of fruit wine related products,
mostly fruit wines, wine coolers and ciders, were relatively stable at around six million litres from
200206, and mainly from the United States (58 per cent by value), the United Kingdom (26 per cent)
and Japan (eight per cent), followed by Spain, Belgium, Ireland, Italy and Korea, with small quantities
from France, Germany, Denmark, China, Poland, South Africa, Finland and Argentina (USDA Trade
Statistics). From 200206 imports from Australia were small and fluctuating, peaking at 224 000 litres
averaging $4.00 a litre FOB in 2003 (ABS).
Table E.17: Canada: trade in fermented drinks HS2206, # 200206
Description

2002

2003

2004

2005

2006

HS 2206.00: fermented beverages such as cider, perry, mead, hard lemonade, mixtures of fermented
beverages and non-alcoholic beverages not elsewhere specific or included

Total imports litres

A$ a litre *
Total exports litres
A$ a litre ^
Imports from Australia litres
A$ ^
A$ per litre ^
Imports from United Kingdom A$ *
Imports from Japan A$ *
Exports to Japan A$ *
Imports from France A$ *
Exports to France A$ *
Imports from Spain A$ *

6 485 000
3.73
36 784 000
3.23
70 960
18 729
3.79
2 400 420
1 205 988
18 017
18 400
252 106
346 385

6 661 910
3.95
20 027 000
2.93
224 638
55 821
4.02
2 830 233
1 416 293
4 113
42 860
20 900
560 827

5 555 000
4.55
10 700 000
2.61
61 158
17 136
3.57
4 419 827
1 611 754
28 018
50 890
65 500
491 222

6 010 900
4.50
14 384 550
2.40
33 668
9 036
3.73
5 127 556
1 883 529
86 471
112 540
73 500
748 692

not av.
not av.
not av.
not av.
0

6 746 696
2 119 492
165 857
64 090
518 210
800 447

HS 2200.600.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

A$ per litre *

3 000
22.0

4 700
21.1

357 200
1.2

538 600
1.5

4 300
45.1

HS 2206.00.9000: Fermented wine beverages other than grape wine, beer, cider, prune wine, sake,
vermouth, or other effervescent wines

Imports from United States litres

A$ ^
Exports to United States litres
A$ ^

5 138 900
3.21
34 635 700
3.28

7 275 400
2.41
18 336 300
2.96

8 246 000
1.97
9 231 100
2.68

8 863 000
1.92
12 698 100
2.47

9 728 000
2.12
5 698 500
2.78

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS; FAO 2007; Japan Customs Trade Statistics; USDA Trade Statistics; Statistics Canada

Canada has a small grape wine industry with around 170 wineries, although production is concentrated
in five large firms which produce 90 per cent of total domestic wine, led by two large national
wineries. It is a leading producer and exporter of icewine, made from grapes frozen on the vine.
Production is again concentrated in Ontario (around 82 per cent), British Columbia and Quebec and
growing, largely due to planting of grapes better suited to the growing conditions, but most regions are

134

not suited to grape growing, and the industry has lost market share to increasingly competitive imports
from New World suppliers (The Canadian Wine Industry 2002).
In 2004, 290 million litres of grape wine, two-thirds of total supply, were imported, mainly from
France, Australia and the United States (AWBC Canada 2007). From 200206 imports of Australian
wine grew strongly to 49.5 million litres and a 14.5 per cent market share, while average import price
per litre fell from A$8.30 to $4.90 FOB (ABS; US Foreign Agricultural Service 2006).
Product profile
Most fruit wines are made from apple, berries, cherries, kiwifruit and stonefruit, with some grape wine
blends, maple wine from maple tree sap, and ice wine from fruits (Table E.18).
Table E.18: Canada: product audit for fruit wines
Manufacturer and brand

Products

Pricing *

Archibald Orchards Estate

Winery, Ontario

Apple, cherry, currant, and peach wines; ciders and

fruit flavoured ciders; maple wines
Cherry-chocolate wine
Fruit wines and blends with grape wine

C$10.0017.00 (A$11.70 20.00)

Bellamere Country Market &

Winery, Ontario
Blossom Winery, British
Columbia
Elephant Island, British
Columbia
Fort Wine Company, British
Columbia

Lunenburg Country Winery

Sunnybrook Farm Estate

$19.00 ($22.00)

Blossom brand berry wines

Apple, apricot, berry, crabapple and pear wines;
icewine from Fuji apple
Apple, apricot, berry, kiwifruit, peach and
strawberry wines, blends and fortified wines
Fortified dessert wines
Iced apple wine (dessert wine)
Apple, blueberry, pear, rhubarb and River cherry
wines; maple wines
Apple, berry, cherry, pear and stone fruit wines

Wine C$13.0025.00 (A$14.00

28.00); port C$37.00 (A$42.00)
C$14.00 (A$16.40)
C$15.0020.00 (A$17.6023.40) for
375 mls
C$23.00 (A$27.00) for 375 mls
C$11.00 (A$12.45)
C$15.0025.00 (A$17.0028.00)

Note: * Assumed to be 750 mls unless otherwise stated. Sources: Company and distributor websites; Luke 2005

The Fruit Wines of Canada National Quality Standards and Regulations, which were developed to
provide a standard of quality and credibility and to support market development and training, provide
these definitions for fruit wine:

Fruit wine: the alcoholic fermentation of the juice of sound ripe fruit, fruit juices or
concentrate, other than juice from fresh grapes; and an alcoholic beverage produced by the
complete or partial alcoholic fermentation of fresh fruit or fruit juice, with an alcoholic content
not less than 7.1 per cent. Wines exceeding 14.9 per cent alcohol may be labelled dessert or
aperitif

Iced fruit wine: fruit wine fermented from fruit juice obtained through cryo-extraction

Fortified fruit wine: fruit wine with food-based alcohol added to not less than 14 per cent
alcohol

Sparkling fruit wine: derived from primary or secondary fermentation or impregnation with
carbon dioxide. The terms traditional method and Charmat method (tank-fermented under
pressure) are permitted (Food & Drink Weekly 2000).

The standards also specify the fruits permitted for use in fruit wine, including apples, pears, stone fruit,
berries, cherries, kiwifruit, various native fruits and rhubarb (Dyck 2006; Fruit Wines of Ontario n.d.).
Canadas Food and Drugs Act and Regulations also provide definitions and compositional
requirements, and the Canadian Food Inspection Agency administers a Code of Practice for the
Production and Distribution of Unpasteurised Apple and Other Fruit Juice/Cider. Wines also need to

135

comply with the Consumer Packaging and Labelling Act and Regulations, with labels in both English
and French language (AWBC Canada 2007; Dyck 2006).
Pricing
Fruit wines, ciders and hard lemonade retail in three price ranges: low, low-to-medium with domestic
table grape wines, and mid-to-premium with branded items such as icewines. Winery prices are
generally A$11.0025.00 a bottle for fruit wines and $18.0025.00 for 375 mls of fortified and dessert
fruit wines (Dyck 2006; The Canadian Wine Industry, 2002; Table E.19).
Distribution
Where state laws permit, many small fruit wineries sell through the cellar door, mail order and the
Internet. Around 85 per cent of grape wine is also sold through retail stores. With some exceptions,
provincial liquor boards control wine distribution, either through retail stores that they operate or
through their local agents who supply restaurants and hotels. Several wine manufacturers bottle and
blend imported bulk wine in Quebec as wine sold in grocery stores has to be bottled within the State.
Outside Quebec and Ontario most provincial restrictions have now been replaced by national
treatment, where imported wines have equal interprovincial access to domestic product (AWBC
Canada 2007; Dyck 2006; The Canadian Wine Industry, 2002).
Promotion
Fruit wines are mostly promoted on producers websites. Wine competitions that include fruit wines
include the Canadian Wine Awards, All Canadian Wine Championships, Fruit Wines of Canada
National Awards and Northwest Wine Summit.
Import regulations and requirements
The harmonised code HS 2206.00 provides several specific domestic subcategories for fruit wines for
Canada, indicating fruit wines are a significant imported category. Imported wines are subject to
tariffs, excise, GST, levies and provincial taxes (Table E.19).
Table E.19: Canada: import taxes and tariffs on wine
Description

HS 2206.00: Non grape wine

2206.00.501: Fruit wine (not sparkling)
not exceeding 13.7% alcohol
HS 2204: Grape wine
Imported still grape wine not exceeding
13.7% alcohol and sparkling grape wine
not more than 22.97% alcohol
All wine

Tax

Rate

Customs duty
(equals excise duty on domestic
products)

Can$2.82 (A$3.14) a litre

Can$3.74 (A$4.17) a litre

Federal Excise Tax
Federal Goods and Services Tax
(GST)
Wine and bottle levy
Environment fee
Provincial Sales Tax collected on
behalf of provinces
State Wine Excise Tax

Can$0.69 ($0.76) per litre

7% of retail price, includes
Harmonised Sales Tax in some
states

715% (varies by state, includes

GST in some states)
Varies with states

Source: Asia-Pacific Economic Corporation 2007; AWBC Canada 2007; Canada Customs: Excise Act and
Excise Act 2001

Each province has a liquor control board which controls distribution, regulations on liquor licensing,
importation of alcohol beverages, and labelling and packaging standards, and sets prices and quotas,
136

so wine exporters are advised to liaise with the relevant board (AWBC Canada 2007). More
information can be obtained from the Canada Border Services Agency website.
Summary
Canada has a medium sized market of mostly regional market segments in wine producing regions,
growing domestic production of quality temperate fruit wines which appears to be satisfying local
demand, export-focussed producers, attractive pricing and growing demand for Australian grape wine.
While there may be an opportunity for quality Australian tropical fruit wines to provide novelty and
variety under strong Australian branding, in-market investigation is needed to clarify potential markets
and distribution channels.

E.2.2 Mexico
There is a market for domestic fermented fruit drinks, such as persimmon wine; colonche, a sweet
fizzy drink from fermented juice of the fruits of the prickly pear cacti; tepache, a light sweet drink
made by fermenting fruits such as pineapple, apple and orange with natural yeasts and sugar for only a
couple of days; and wines from the sap of coconut and other palms (The Gale Groupe 2007). A recent
research project made fruit-flavoured wines by blending wine from cane sugar with passionfruit juice
and rosella flower (Rivera-Espinoza et al.2005).
From 200205 annual exports of low-priced fruit wine related products varied between 141 000 and
1 595 000 litres, mostly to its United States neighbour, while imports grew steadily to 6.8 million
litres. Low annual average prices and specific tariff codes for wine coolers and blends of wine with
soft drink and wine with beer indicate most trade is in these drinks (Table E.20; Asia-Pacific
Economic Corporation 2007).
Table E.20: Mexico: trade in fermented drinks HS2206, # 2002-6
2002
2003
2004
2005
2006
Description
HS 2206.00: fermented beverages such as cider, perry, mead, mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
A$ a litre ^

5 230 470
3.76
1 595 460
3.40

5 183 000
2.72
141 000
2.14

6 447 000
2.08
265 000
2.05

6 807 610
2.19
598 300
1.53

not av.
not av.
not av.
not av.

HS 2206.00.90: Fermented beverages other than grape wine, beer, cider, prune wine, sake, vermouth, or
other effervescent wines

Imports from United States litres ^

A$ a litre
Exports to United States litres *
A$ a litre

618 100
3.65
367 200
3.12

927 400
2.49
247 700
3.04

5 433 300
2.06
308 200
2.30

5 752 500
2.09
735 500
1.74

6 125 000
1.99
978 300
1.32

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country Sources:.
ABS; FAO 2007; United States trade statistics

Grape wine consumption is growing due to more young people drinking wine and higher disposable
incomes (Euromonitor Mexico 2007). However, from 200206 imports of Australian grape wine
halved to 257 000 litres, while annual average price fell from A$8.30 to $6.00 per litre FOB,
indicating a highly competitive market (ABS).
Fruit wine products incur 20 per cent import duty (Asia-Pacific Economic Corporation 2007). High
taxes, including a 50 per cent Special Products and Services Tax and five per cent VAT, have curbed
growth in alcoholic drinks consumption, and encouraged illegal production and importing
(Euromonitor Mexico 2007).

137

Summary
A substantial market for specialised domestic fruit wines and uncertain imports of low priced fruit
wine products from Mexicos neighbour and close trading partner the United States, indicate little
opportunity for Australian tropical fruit wines. Further research may identify a minor opportunity but
falling imports of Australian grape wine indicate a lack of competitive advantage.

E.2.3 United States

Terms used for fruit wines in the United States include fruit wines and country wines. Hard cider
is used for fermented apple juice, and cider for unfermented apple juice (The Wineman.com 1999;
NSW DPI 2002).
Market profile
There is a large fruit wine market of mostly people buying from their local wineries, and a potential
market of 32 to 44 year olds. The market is much larger for cider and flavoured grape wine, usually
from large manufacturers. Cider was widely drunk in colonial America as a safer alternative to water
until water treatment and sanitation practices were developed, when the emerging Temperance
movement influenced cider-drinkers to switch to low alcohol beer. Cider consumption has revived in
recent decades, particularly with people of both sexes aged 2130, and still and sparkling perry (pear
cider) are also popular. Young Americans are also buying more of a large and growing range of
flavoured spirits as RTDs, energy drinks and cocktails (The Wineman.com 1999; Euromonitor United
States 2007; Merwin 2005; McGourty & Butzke 1998).
From 200206 annual exports of fruit wine related products fluctuated, peaking at 62.06 million litres
in 2004, with 21.48 million litres to 108 countries in 2006. In 2006 markets for fruit wine drinks were
led by Canada (doubled to 9.73 million litres since 2002) and Mexico (a tenfold increase to 6.12
million litres), followed by Japan and Taiwan, with exports to Australia growing from 1200 to 8160
litres a year over the same period (Table E.21; United States Trade Statistics).
Grape wine consumption was 2660 million litres in 2005, having grown steadily and consistently in
the past decade due to strong growth in wine-drinking in households with above average incomes,
people drinking wine earlier as young consumers moved from beer and spirits to wine (mostly red),
recognition of health benefits from moderate alcohol consumption, and improved marketing
campaigns. Annual average individual consumption is around 9.8 litres and rising, with around 25 per
cent of adults drinking wine at least once a week; however 43 per cent of adults are abstainers.
Consumption is higher on the east coast, where people are often wealthier, sophisticated and well
travelled (Austrade United States 2007; AWBC USA 2007; AWBC Winefacts 2007; Wine Institute
2003; US Foreign Agricultural Service 2006; Datamonitor 2006).
Supply
Around 200 mostly small fruit wineries are located across the country, mainly on the east coast and
usually in fruit growing regions and regions unsuited to grape-growing. Several liquor manufacturers
have diversified into fruit wines and fruit flavoured grape wines. Tropical fruit wines and blends with
grape wine are produced in Hawaii and Florida and wines from berries, stonefruit, apples and
indigenous fruits in the countrys northeast and northwest (Healey 2006; Wine basics 2006; The
Wineman.com 1999)
In 2005/6 total wine production of 1243 million litres of wine included unspecific quantities of fruit
wine, 8.37 million litres of cider and 121 million litres of wine coolers (fruit flavoured grape wines. In
2006, 10.7 million litres of cider were imported, mainly from the United Kingdom, Ireland, Canada
and Spain. These statistics indicate strong demand for fruit wine related products (Table E.21; US
Department of Treasury 2007).

138

Table E.21: United States: trade in fermented drinks HS2206, # 200206

Description
2002
2003
2004
2005
2006
HS 2206.00: fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^
Imports from Australia litres
A$ ^
A$ per litre ^

49 383 500
3.53
11 014 100
2.93
20 997
1 156
0.06

32 451 300
3.39
23 655 500
1.71
270
2 390
8.85

24 043 400
3.44
62 065 900
1.18
0

29 588 500
3.25
33 672 700
1.75
45
375
8.33

25 110 200
3.55
21 483 300
2.10
63
119
1.89

HS 2200.600.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

A$ per litre *

108 600
6.39

48 900
6.30

113 700
5.79

71 600
5.91

79 500
6.39

2 648
8 107
3.06

8 163
28 290
3.47

HS 2206.00.3020: fruit wine, cider or perry, mead, sake, grape wine blends

Exports to Australia litres

A$
A$ per litre ^

1 269
7 583
5.98

1 362
6 452
4.74

1 023
4 284
4.19

HS 2206.00.900: fermented beverages other than grape wine, beer, cider, prune wine, sake, vermouth, or
other effervescent wine, and HS 2206.00.300: prune wine

Imports from Canada litres

A$ per litre *
Imports from Spain litres
A$ per litre *
Imports from Mexico litres
A$ per litre *
Imports from Ireland litres
A$ per litre *
Imports from Japan litres
A$ per litre *
Imports from Italy litres
A$ per litre *
Imports from Denmark litres
A$ per litre *

34 635 700
3.73
1 070 500
3.62
367 200
3.12
95 400
8.12
484 700
6.61
1 507 800
2.97
55 400
6.31

18 336 300
3.62
1 170 600
3.08
247 700
3.04
204 100
8.22
335 300
6.43
708 400
3.08
152 100
5.51

9 231 100
3.97
1 133 400
2.22
308 200
2.30
369 800
6.83
475 900
5.90
327 600
2.83
122 700
5.10

12 698 100
3.53
1 389 400
2.19
742 900
1.72
363 800
7.27
433 400
6.08
308 200
3.31
199 600
2.93

5 698 500
5.78
1 668 500
2.23
978 300
1.49
782 000
6.84
497 300
6.02
388 600
3.13
135 400
5.27

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. HS
2206.00.900 is the United States export code for fermented wine products not specified elsewhere, and
HS 2006.00.700 is its code for imports of the same products. Sources: ABS, Japan Customs trade statistics;
USDA trade statistics; U.S. Census Bureau Foreign Trade Statistics

While a large wine industry of some 4000 wineries produced 2700 million litres of grape wine in
200405, the United States imported 30 per cent of its wine supply in 2005 (US Foreign Agricultural
Services 2006) (Note: these statistics conflict with Department of the Treasury, Alcohol and Tobacco
Tax and Trade Bureau data, see US Department of Treasury 2007). Australia is the second largest
supplier after Italy and ahead of France and Chile, with 28 per cent of imports. From 200206 imports
from Australia almost doubled to 218 million litres averaging A$4.10 a litre FOB in 2006 (ABS).
Product profile
Most commercial fruit wines are made from apple, berries and stone fruit, with tropical fruits such as
jaboticaba, guava, lychee, mango, papaya, pineapple, passionfruit and various citrus used mainly in
Florida and Hawaii. (Table E.22).

139

Table E.22: United States: examples of fruit wines

Winery and brand
Tropical fruit wines

Product description

Pricing *

Florida Orange Groves & Florida Tropical Fruit Wine from mango, guava,
Winery, Florida
passionfruit, pineapple and watermelon, with 100%
Florida fruit
Florida Citrus Wine, from 100% fruit pink grapefruit,
Key lime, orange, tangelo, tangerine
Florida Specialty Wine orange, pineapple and coconut
blend; cream and chocolate blends; mead
Berry and stone fruit wines
Carrot and tomato wines
Orchard Heights Winery, Hawaiian brand mango, papaya, passionfruit, pineapple
Oregon
and tropical blend
Schnebly Winery, Florida Caramobola, guava, lychee, mango and passionfruit
wines
St Armands, Florida
Still and sparkling wines and blends from 100% mango,
grapefruit, lime, passionfruit, orange, peach, tangerine,
tangelo, watermelon, berries, cherry and carrot, some
with chocolate or coffee flavouring
Tedeschi Vineyard, Hawaii Pineapple, passionfruit, berry and other fruit wines and
blends, e.g. Maui Blanc Pineapple Wine Maui Splash
Cross Creek Groves,
Mango, passionfruit, orange, pineapple, pink grapefruit,
Florida
tangerine, Key lime, tangelo, cranberry blueberry,
orange chocolate and Pina colada wines
Island Princess Tropical Pineapple, passionfruit, mango, papaya and tropical
Wines, Hawaii
wines
Volcano Wine, Hawaii
Blends of grape wine with jaboticaba, guava,
macadamia and honey; mead

Wine US$16.0019.00 (A$19.1222.70),

sparkling mango $25.00 (A$29.90)
Wines US$16.0017.00 (A$19.12
20.30), sparkling US$21 (A$27.90)
US$16.0019.00 (A$19.1222.71)
US$16.00 20.00 (A$19.1223.90)
US$16.00 (A$19.12)

US$14.0019.00 (A$16.7022.70)
US$25.00 (A$29.90)

US$16.0020.00 (A$19.1223.90)

US$16.0017.00 (A$19.1222.30)

Wineries with temperate fruit wines

Carlson Vineyards,
Colorado
Cream Ridge Winery, New
Jersey

Apple, cherry, pear, stone fruit and grape wines and

US $8.00 (A$9.60)
blends
Berry, cherry and grape wines, blends with almond and US$10.0015.00 (A$17.9019.30)
chocolate; Sangria with citrus

Linganore Winecellars,
Maryland
Lynfred Winery, Chicago

Apple, berry, stone fruit, grape and dandelion wines,

sangria, spiced wine and mead
Apple, apricot, berry, cherry, pear, plum and rhubarb
wines
Berry, orange, stone fruit, grape, and pecanflavoured
wine
Wild plum, wild chokeberry, wild buffalo berry and
rhubarb wines

Piney Woods Country

Wines, Texas
Prairie Berry Winery,
South Dakota

US$8.0012.00 (A$10.6014.30)

US$13.0014.00 (A$15.5016.70)

Imported fruit wines

Vinliz, China
Kiuchi, Japan
NV Kijafa, Denmark

Lychee wine
Yuzu wine, 500 mls
Danish cherry wine

US$18.00 (A$21.50)
US$15.00 (A$19.30)
US$12.00 (A$14.30)

*Note: Assumed 750 mls unless otherwise specified. Currency conversion is average for 2006. Source: Winery
websites, WINEwarehouseinc.com; Wallys n.d.

Many fruit wineries also make other drinks including blends of fruit and grape wine, fruit juice and
grape wine; blends of fruit wine with foods such as coconut, cream and chocolate; flower wines, and
mead, sometimes from honey produced around specific flowers such as macadamia and citrus.
Imported wines include wines from traditional Asian fruits such as lychee and Japanese yuzu.

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Large manufacturers of fruit wines, flavoured wines and in some cases also grape wines include
Canandaigua with the Arbor Mist brand; The Wine Group with Lyrica; Matt Brewing with Mountain
Blush; Gallo; Trinchero Family Estates Portico, Soleo and Sutter Home brands (US Foreign
Agricultural Service 2002; Khermouch 1999; Khermouch & Howard, 1999).
Around 50 cider makers range in size from corporations producing carbonated six-packs such as
HardCoreTM to small producers of naturally sparkling and still ciders and apple wines in 750 ml
bottles. Millers, Strohs and other large brewers have moved into cider production, and large
European cidermakers have invested in North American ciders such as the WoodchuckTM brand, to
access the United States market (Merwin 2005).
Major perry brands include Halewoods Internationals Lambini Perry. The highest quality sparkling
perry is made by 'Mthode champenoise' where a secondary fermentation occurs in the bottle
(Beverage Industry 2001).
Imports of grape wine have been shifting from French wines to wines from Australia, New Zealand,
Italy, Spain, Portugal, Chile and South Africa. Australian wine is recognised as value for money at all
points, and particularly in the premium sector. The markets leading brand is Australian wine company
Casella Wines Yellow tail. Demand is also shifting to premium and super premium brands (often with
limited production runs) as manufacturers educate wine drinkers to appreciate the production process
and superior quality of these wines. Younger wine drinkers respond to imported critter labels such as
Yellow tail, unconventional product names and single-serve packaging (AWBC USA 2007;
Euromonitor United States 2007; US Foreign Agricultural Service 2006).
Imports of wine need to comply with the Code of Federal Regulations, which include labelling and
packaging, administered by the Alcohol Tobacco Tax and Trade Bureau (see US Department of
Treasury 2007a), and the Fair Packaging and Labelling Act and Bioterrorism Act administered by the
Food and Drug Administration (AWBC USA 2007). Labelling regulations are detailed on the websites
of the ATF Bureau of Alcohol, Tobacco, Firearms and Explosives and the Bureau of Alcohol,
Tobacco, Tax & Trade (US Department of Treasury).
Pricing
Winery websites typically advertise tropical fruit wines at around A$16.0025.00 a bottle. Import
prices reached A$8.22 a litre for Irish fruit wine drinks and A$9.33 for prune wine in 2003, but low
annual average import and export prices indicate most trade is in low value drinks (Table E.23).
Most domestic grape wines retail at either under US$4.25 (A$5.10) or over US$10.00 (A$11.95) a
bottle, while imported wines are typically between US$4.25 (A$5.10) and US$10.00 (A$11.95).
Demand has shifted from higher priced French wines to lower priced drinks, particularly from young
drinkers, and world oversupply has led to significant discounting in recent years (AWBC USA 2007;
Euromonitor United States, 2007; US Foreign Agricultural Service 2006).
Distribution
Fruit wine is mostly sold by producers through the wineries or their Internet or mail order services,
with some sold in liquor stores and restaurants and on distributor websites such as Alibaba, Blanchards
Wines & Spirits, and Wallys Wineshop. A San Francisco restaurant uses lychee wine in cocktails.
Major brands of flavoured fruit wines and cider are sold in supermarkets and other stores. Importers of
fruit wine include Paleewong Trading Incorporated, LeDati Wine; and wine.com.
Around 4500 wholesalers handle grape wine, although sales through brokers and the Internet are
increasing. Eighty per cent of wine is sold through retail stores, mainly supermarkets and liquor stores,
and the rest mostly in bars and restaurants (Austrade United States 2007).
Wine distribution has been restricted significantly by state laws that have only allowed wineries to
retail wine to consumers within their own states and required them to use licensed wholesalers or
distributors for interstate sales. A recent legal challenge has resulted in most states now permitting
direct sales, so the national wine market is likely to be increasingly competitive. New exporters are
141

advised to liaise with a licensed importer and to contact the U.S. Alcohol, Tobacco, Tax & Trade
Bureau which regulates the sale and movement of alcoholic drinks within the United States (AWBC
USA 2007; Austrade United States 2007; Euromonitor United States 2007). The Wine Institute
website provides information on market regulations and requirements and interstate shipping laws, and
the Free the Grapes website also provides information on State regulations and laws.
Foreign wine producers usually enter the market via licensing agreements or joint ventures with an
established domestic manufacturer. For example, Casella Wines joined with a local distributor to
introduce its successful Yellow tail brand (Appendix C: Case studies; Austrade United States 2007).
Promotion
Many fruit wineries promote their wines on their websites, and numerous websites feature fruit wine
articles. There is some trade promotion, such as the 2003 Fruit Wine Faire organised by a New York
wine store, giving tastings of more than 40 fruit wines (Vintage New York 2003). Fruit wines can
compete in several wine competitions including the annual Indy International Wine competition run
by Purdue University in Florida and the Illinois State Fair (Bardgett 2006; Indiana State Fair n.d.).
The most popular and most cost-effective promotions for grape wine have been media articles and
advertisements in wine trade and food publications. Manufacturers are focussing on younger drinkers,
and promoting wines at events in clubs and bars in large cities, including with celebrity endorsements
(AWBC USA 2007; Euromonitor United States 2007).
Import regulations and requirements
Fruit wine incurs similar tariffs and taxes to grape wine, but lower excise. Import duty and excise add
only A$1.10 to a bottle of Australian wine with a landed price of A$10.00 (Table E.23).
Table E.23: United States: import duties and taxes on wine
Description

Duties and taxes

Rate

22060090 Fermented beverages (other than grape wine, beer,

cider, prune wine, sake, vermouth, or other effervescent wines)

Import duty
Federal Excise Tax
Import duty
Federal Excise
Federal Excise
State Excise tax
Sales tax
Wholesale taxes
Other taxes

US$0.69 (A$0.85) a litre

US$0.21 (A$0.25) per litre
US$0.069 (A$0.85) per litre
US$0.98 (A$1.07) a litre
US$0.87 (A$1.04) per litre

2204 Grape wine, not more than 14% alcohol

Naturally sparkling wine
Artificially carbonated wine
All wine

Source: Asia-Pacific Economic Corporation 2007; AWBC USA 2007

The maximum alcohol content for wine to be classed as table wine is 14 per cent, compared with
Australias 15 per cent, with higher tariffs if more than 14 per cent. Most Favoured Nations including
the Andean countries, Canada, the Caribbean, Israel and Mexico, benefit from lower tariffs on wine
(Austrade United States 2007). The websites of the Alcohol, Tobacco, Tax & Trade Bureau and the
United States Customs Service provide more information on tariffs, taxes and import requirements and
the United States Government website lists all state excise, sales, wholesale and other taxes.
Summary
The United States has a large market for tropical and other fruit wines, with strong demand and
established distribution for related products, Australian grape wine and quality wines. There is a good
opportunity for Australian tropical fruit wines that can be differentiated on quality and fruit type for
fruit wine enthusiasts, Asian consumers, and novel contemporary presentations for young drinkers.

142

While the market is very complex and highly regulated, rewards could be very lucrative for businesses
prepared to invest to support market entry.

E.3

Country profiles Europe

E.3.1 European profile

Market profile
Europe has a long tradition of fruit wines which, like grape wines, have been made in the home for
centuries, using various fruits and vegetables containing sugar, and often beet sugar, honey and other
sources of sugar. Production has been highest in northern countries too cold for grapes.
Europe has very large markets for fruit wine, cider and perry produced in Europe and imported from
countries outside the European Union (EU), the largest fruit wine and cider markets being in the
United Kingdom, Ireland, Belgium, Denmark, Germany, Finland, and the Netherlands, with smaller
fruit wine markets in Sweden and Russia and a large cider market in France. Around one million litres
of fruit wine were exported from the EU in 2002 (AICV 2005, AICV n.d.).
In 2007 the EUs members were Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark,
Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg,
Malta, Netherlands, Poland, Portugal, Romania, Spain, Slovakia, Slovenia, Sweden and the United
Kingdom (Europa 2007a).
Several nations are major markets for Australian grape wine, including the Australias leading market,
the United Kingdom, which takes 35 per cent of Australias export volumes; Denmark; Germany;
Ireland; the Netherlands and Sweden. In 2006 Australia supplied the EU with 388 million litres of
wine valued at A$1.2 billion, 51 per cent of its wine exports (AWBC EU 2007). More wine trade
information can be found at the Eurostat and European Union Trade websites.
Much of Europes fruit wine production was established in eastern European countries formerly in the
United Soviet Socialist Republic (USSR) to supply other USSR countries. Until the 1980s, the USSR
produced 870 million litres a year of fruit wine and 4200 million litres of still and sparkling grape
wine, and imported around 235 million litres of grape wine. Although individual consumption
averaged only 17 litres a year, 80 per cent was fortified jug wine, resulting in high alcoholism, so in
1985 the administration of President Gorbachev began a campaign against high alcohol drinks. This
inadvertently ended the production of fruit wine and importation of all wine and, compounded by
restrictions placed on retail hours, led to an 80 per cent fall in wine production and the closing of
85 per cent of liquor stores, from which the industry has never recovered (Litvak 1992; Hesse n.d.).
Several countries including Bulgaria, Georgia, Lithuania and Moldova continue to produce very large
volumes of fruit wine, usually low priced and low quality, most of which is exported within Europe.
Supply
The Association of the Cider and Fruit Wine Industry of the EU (Association des Industries des Cidres
et Vins de Fruits de lEU-ICV) based in Brussels represents the fruit wine industries of Belgium,
Denmark, France, Finland, Germany, Denmark, Ireland, Lithuania, Netherlands, Spain, Sweden and
the United Kingdom. Members includes more than 180 cider and fruit wine manufacturing companies,
including some large producers from mainly Belgium, France, Germany, Ireland, Spain and the United
Kingdom; national industry associations; and directly affiliated producers of fermented fruit wines and
fortified fruit wines. In 2000 AICV members produced 50 million litres of fruit wine and 930 million
litres of cider and perry (AICV 2005; AICV n.d.).
The combined European grape wine industry produced 15 million litres of wine in 2005, but is not
expected to expand significantly in the medium term due to policy controls and growing competition.
The major European wine producing nations France, Italy, Germany, Portugal and Spain dominated
world wine trade in 2005 with 64 per cent of exports (AWBC European Union, 2007; US Foreign

143

Agricultural Service 2002). However, Europe has a large wine surplus, resulting in a government
program to subsidise grape growers who remove vineyards until 2011 and much of Europes wine
production being diverted to industrial ethanol.
Product profile
Europes leading fermented fruit wine drinks are fruit wines, cider and perry.
Cider is usually drunk as a less alcoholic sparkling alternative to sparkling white wines in Belgium,
France and Spain, and is a popular celebration drink. Cider was once a popular traditional drink in
Europe but was largely replaced by beer in northern countries and wine in the south; however, it has
made a comeback in recent decades in the historically Celtic regions of northern Spain, Brittany and
Normandy in France, and western England, as both an important beverage and a tourist attraction,
being sold in restaurants and cellar doors and along cider routes. The EU has been promoting and
supporting cider production to rejuvenate rural economies, use out of grade fruit, and develop exports.
Products range from low priced high alcohol products to rough English scrumpies and premium high
priced limited-production cidre bouchon (corked cider) in trendy French restaurants (AICV n.d.;
Johnston 2004; Merwin 2005).
Perry, or pear wine, was drunk in Roman times as Castomoniale and remains an important fruit wine
in England and northern France (AICV n.d.; Shea 2007).
The AICV provides general production rules under its Code of Practice for fruit wine, cider and perry;
an Analytical Method Manual that specifies methods to measure parameters for quality it considers
important; and technical support for producers. The European Union (EU) requires imported wines to
have the same production methods and labelling as local wines, and its labelling laws specify informal
and optional additional information for EU members and non-members (Brans 2006). Details of EU
production, packaging and labelling standards are available from the Food Standards Agency website.
The AICV Code of Practice requires all fruit wines to be obtained by the fermentation of the juices of
fruits, other than grape, and to contain at least some alcohol derived from the fermentation of the
relevant fruit (or other vegetable matter) that gives them the character of fruit wine. Wines can be still
or sparkling, and range from dry through to sweet, with the adding of sugar permitted. The Code
requires between 1.2 and 14 per cent alcohol by volume, and permits fortification with distilled
alcohol of agricultural origin, to a strength of up to 22 per cent of alcohol by volume (Denmark and
Germany have their own limits of 20 per cent). In colder countries, mainly Denmark, Finland,
Lithuania and Sweden, alcohol is often added to provide the same levels as similar grape wines.
Cider and perry must be made solely by fermentation (sugar may be added during the fermentation) to
up to 8.5 per cent alcohol, and alcohol content can vary between 1.2 and 8.5 per cent. If fermented to
more than 8.5 per cent alcohol, or if alcohol is added, cider is classed as apple wine with added alcohol
and perry as pear wine with added alcohol. Both drinks can be still or sparkling, with secondary
fermentation or the injection of carbon dioxide being used to produce sparkling wine.
Distribution
Within the EU around 47 per cent of cider and perry sales are through pubs, hotels, restaurants and
catering, and the rest in supermarkets, specialised stores and other retail outlets for home consumption.
Other fruit wines are drunk only in the home (AICV n.d.). Controls on licensing, promotion,
distribution and taxes vary by country according to the degree of influence by various organisations to
reduce or abstain from alcohol consumption for health and social reasons.
Import regulations and requirements
As fruit wine is not traded in large volumes it is not included in the EU classification of Fermented
Beverages other than Wine or Beer but attracts the tariff rate for similar grape wine (Table E.24).

144

Table E.24: Import tariffs on bottled wine European Union

Description

Import duty per litre

Still wine

0.137 (A$0.25) for up to 13% alcohol; 0.154 (A$0.25) if exceeding 13% but not
15%; and 0.186 (A$0.35) if exceeding 15%, but not 18%
0.32 (A$0.52)

Sparkling wine, any strength

Source: AWBC, EU 2007

Excise tax and VAT vary between countries, and are often the same as for grape wines (Table E.25).
Table E.25: European Union: Excise and VAT on imported fruit and grape wine, 2007
Country and
code

Austria AT
Belgium BE
Bulgaria BG
Czech Republic
CZ
Denmark DK

Estonia EE
Finland FI
France FR
Germany DE
Ireland IE
Italy IT
Lithuania LT
Luxembourg LU
Hungary HU
Netherlands NL
Poland PL
Spain ES
Sweden SE
United Kingdom
UK

Description

HS220600: Fermented
beverages other than
grape wine
Excise duty per litre
National
EUR
currency

Still
Sparkling
Still
Sparkling
615% alcohol still
615% sparkling
1522% still
1522% sparkling
Still
Sparkling

CZK 23.40
DKK 6.14
DKK 9.2
EEK 10.40
EEK 10.40

Still
Sparkling
Still
Sparkling
Still
Sparkling
LTL 1.50
13% alcohol & over
Below 13% alcohol
Still
Sparkling
Still
Sparkling

HUF 80.00
HUF 122.00

POL 1.36
Still and sparkling
Still
Sparkling

SEK 22.08
GBP 1.7799
GBP 2.2799

HS200400: Grape wine

All
wine

Excise duty per litre

National
EUR
currency

VAT#
%

0
0.470998
1.611308
0
0
0.8272
CZK 23.40
0.8234
DKK 61.4
DKK 9.20
1.2337
DKK 9.20
DKK 12.26
0.6647
EEK 10.40
0.6647
EEK 10.40
2.12
0.034
0.034
0
1.36
2.73
5.4601
0
0.4344
LTL 1.50
0
0
0.2909
0.4436
HUF 122.00
0.5902
2.0124
0.3434
PLN 1.36
0
2.3661
SEK 22.08
2.6256
GBP 1.7799
3.3631
GBP 2.2799

0
0.470998
1.611308
0
0
0.8272
0.8334
1.2337
1.2337
1.644
0.6647
0.6647
2.12
0.034
0.084
0
1.36
2.73
5.4501
0
0.4344
0
0
0
0.4436
0.5902
2.0124
0.3434
0
2.3661
2.6256
3.3631

Notes: Minimum excise duty. Average conversion rate of 1.63592 in 2007. # VAT is Valued Added Tax.
Sources: Taxation and Customs Union, European Commission, 2007

145

20
21
20
19

25
18
22
19.60
19
21
20
18
12
15
20
19
22
16
25
17.50

More information on taxes and tariffs can be found on the European Union Trade website.
As individual countries are accepted into the EU they have been required to reduce restrictions on
wine trade between members. While this has been done by the countries to varying degrees, numerous
regulations and restrictions continue, particularly on production and on promotion to vulnerable
people such as children (Osterberg & Karlsson n.d.). More information on wine industry reform is
available on the European Commissions European Agriculture and Rural Development website.

E.3.2 Austria
Market profile
Austria has a small fruit wine market of mainly cider and perry. Fruit wine is drunk with meals. In
2006, 186 300 litres of fruit wine related products were exported, mainly to Switzerland and Russia,
with small quantities to Australia and Japan (European Commission, 2007).
Alcohol plays an important part in everyday social life and festivities, mainly beer followed by wine,
but consumption of wine and liquor in general is falling as people adopt healthier lifestyles. In 2004
Austrians drank 215 million litres of wine, averaging around 30 litres each, mainly women, with men
and younger people drinking mostly beer (AWBC Austria 2006; Osterberg & Karlsson n.d.).
Supply
From 200206 imports of fruit wine related drinks fluctuated, with 2.18 million litres in 2006. That
year, 1 071 100 litres were imported from outside the European Union, mainly from China with
984 500 litres averaging A0.66 a litre CIF (likely to be rice wine), and 64 600 litres from Switzerland
averaging A$2.07 a litre, while 200 litres averaging A$5.00 a litre came from Canada (European
Commission, 2007).
Around 72 per cent of grape wine is supplied by a domestic industry of around 263 million litres of
wine a year from some 32 000 wineries, including around 2500 larger producers. Most is white wine,
as those grapes are more suited to Austrias soil and climate than red wine grapes.
In 2004, 38 million litres of grape wine were imported, mainly from Italy, Spain and France. Australia
leads the New World suppliers, with 540 500 litres of mostly red wine averaging A$4.10 a litre FOB
in 2006 (ABS; AWBC Austria 2007; Osterberg & Karlsson n.d.).
Product profile
Fruit wineries produce mainly apple, pear and berry fruit wines, cider and perry. Members of the
Association of the Cider and Fruit Wine Industry of the EU (AICV) follow its quality standards which
are aligned to European and national regulations (AICV n.d.). Production, hygiene and labelling have
to meet European Union regulations. Labelling in German language assists with marketing.
Consumption is similar for red and white grape wine, with growing demand for sparkling wines
(following removal of a luxury tax), red wine, bottled wines and premium wines. Consumers are
highly conscious of quality (Austrade Austria 2007; AWBC Austria 2006).
Distribution
Fruit wines are sold at the wineries and also in wine taverns, particularly in Upper Austria.
Around 53 per cent of grape wine is drunk at home, 38 per cent in restaurants and 9 per cent in wine
taverns (AWBC Austria 2002, 2006).
Promotion
Wine taverns promote fruit wines, particularly from apples and pears during their harvest seasons.

146

Grape wine is mostly mainly promoted by group tastings, word of mouth and trade shows such as
Viennas annual VINOVA International Wine Fair. The Austrian Wine Marketing Service promotes
domestic wines with funding from the industry and wine producing provinces (AWBC Austria 2002).
Import regulations and requirements
Fruit wine incurs EU import duty of 0.137 (A$0.22) a litre for still wine with up to 13 per cent
alcohol and 0.154 (A$0.25) with 13 to 15 per cent alcohol, and VAT of 20 per cent, but no excise,
adding from $2.30 to a bottle of Australian fruit wine with a landed price of A$10.00. Exporters are
advised to obtain a written customs duty ruling known as a Binding Tariff Information (BTI) from the
Austrian Customs Service, which control wine imports, and a certificate of quality issued by an
approved authority must accompany wine imports to meet EU requirements (AWBC Austria 2006).
Summary
Austria has a small attractive market for domestic fruit wine from temperate fruits and low priced
imports of fruit wine and related drinks, strong demand for grape wine and Australian brands, and
distribution channels for fruit wines and Australian wine. There maybe an opportunity for quality
Australian tropical fruit wines to broaden the existing product range.

E.3.3 Belarus
Market profile
Fruit wines from berries and other fruits are amongst the most popular drinks in Belarus, particularly
for people on lower incomes, although demand is growing for local and imported grape wine.
Consumers are used to low priced high alcohol drinks, and have resisted government efforts to shift
them from fortified fruit wines and vodka to lower alcohol beer to counter high levels of alcoholism.
From 200205, exports of fruit wine related products fluctuated, with 4.7 million litres in 2005.
Annual average import prices ranged between A$1.00 and A$1.50 a litre.
Large fruit wine producers include liquor manufacturer Akvadiv which produced 9.5 million litres in
2005 and liquor and vodka manufacturer Minsk Kristall EU which makes blueberry, blackcurrant,
cranberry and grape wine under ISO quality assurance certification. Fruit wines are often fortified.
From 200205 imports of fruit wine related products doubled to 28 million litres while annual average
import price fell from A$0.65 to A$0.47 a litre, indicating low quality drinks.
In 2005 fruit wine production was 18 million litres, down eight per cent from 2006. In 2007 the
Governments alcohol production quotas were 257 million litres for berry and fruit wines and
44 million litres for grape wine. The Government plans to increase production and imports of natural
fruit and berry wine, and does not limit imports of fruit wine, unlike grape wine.
In 2005 grape wine production was 950 000 litres and growing, usually special fruit wine (chernila)
made from dry and fermented concentrate imported mainly from Moldova and from other eastern
Europe countries due a lack of grapes. Domestic supply of a narrow range of mostly low priced
domestic grape wines is supplemented with imported wine mainly from Moldova but also other
eastern European countries, and Italy, France and Germany, often for blending with local product.
Import quotas and production subsidies support the domestic grape wine industry against competition
from imports. During the 200206 period 18 100 litres of grape wine averaging A$6.00 per litre FOB
were imported from Australia in 2006.
In 2007 retail price ranges were:

BYR40008000 (A$2.244.48): local berry and fruit fortified wines

BYR600012 000 (A$3.366.72): local bottled grape wine from imported materials

BYR11 00032 000 (A$6.1617.92): imported grape wine.

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Liquor distribution is confined to state-controlled kiosks, state food shops, and universal shops in
outlying villages, giving little access to illegal and counterfeit products, unlike neighbouring Russia.
However, modern retailing is emerging. Restaurants usually sell a few wines from
BYR22 000111 000 (A$12.3262.15) a bottle.
Summary
Belarus has a large price-sensitive market with strong demand for low quality low priced high-strength
domestic and imported fruit wines and grape wines, restricted distribution, and no apparent channels
for Australian wine. There appears to be little opportunity for Australian bottled tropical fruit wines,
except possibly for bulk wine to bottling and re-export.

E.3.4 Belgium
Belgium has moderately sized fruit wine and cider markets. Annual exports of up to 19.5 million litres
of fruit wine related products from 200206, mostly to Canada, Switzerland, and Taiwan, probably
included Fruit Lambics, beers fermented from wheat, malt and fruits such as stonefruit and berries in
the Brussels region (AICV n.d.; Ogletree 2001; European Commission 2007). From 200205 imports
of these fermented drinks doubled to 7.4 million litres, although very low annual average prices again
indicate these are mostly lower value drinks such as cider (Table E.26). (Note: European Commission
and FAO trade data conflict). In 2006 imports of 277 700 litres of fruit wine related products from
outside the European Union were mostly from China, Japan and Taiwan, presumable rice wine
(European Commission 2007).
Individual grape wine consumption in Belgium and Luxembourg averages 23 litres annually and is
growing, although beer remains the most popular drink. The northern Flemish are more likely to
experiment with new drinks than the French-speaking Belgians in the south.
Table E.26: Belgium - trade in fermented drinks, 200206
Description
2002
2003
2004
2005
2006
HS 2206.00: fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^

3 629 000
2.31
19 576 000
1.59

3 612 000
1.81
13 709 000
1.64

4 017 000
2.47
13 801 830
1.48

7 423 000
3.18
16 682 150
1.27

not av.
not av.
not av.
not av.

Notes: * CIF at importing country; ^ FOB from exporting country. Source: USDA trade statistics; Japan
Customs Trade Statistics, FAO 2007; ABS

The combined grape wine production of Belgium and Luxembourg was 6.3 million litres in 2004, and
Belgiums small wine industry has started to focus on improving product quality. Most grape wine is
imported, usually bottled wine from France and South Africa, against strong competition, and imports
of Australian wine, mostly red and bulk wine, grew four-fold from 200206 to 19.6 million litres at a
low average price of A$1.88 a litre a litre FOB in 2006. Around 65 per cent of wine is sold in
supermarkets and hypermarket chains led by Carrefour, Delhaize, Colruyt and ALDI, and 25 per cent
in hotels and restaurants (Austrade Belgium 2007; ABS; AWBC Belgium & Luxembourg 2007;
AWBC EU 2007; Tigelman 2007).
Fruit wine imports are subject to EU tariffs of 0.137 (A$0.22) a litre for still wine with up to 13 per
cent alcohol and 0.154 (A$0.25) for 13 to 15 per cent, and 0.32 (A$0.52) for all sparkling wine;
excise of 0.470998 (A$0.77) a litre for still wine and 1.611308 (A$2.63) for sparkling; and 21 per
cent VAT, adding from A$3.00 to a bottle of Australian fruit wine with a landed cost of A$10.00.
Information on duties and tax is available from the Belgian Ministry of Finance and Foreign Trade
Board.

148

Summary
Belgium has medium sized affluent and experimental markets for domestic and imported fruit wines
and related drinks, and strong demand and established distribution for Australian grape wines. There
may be a minor opportunity for Australian tropical fruit wines to provide novelty and variety to the
current fruit wine range, supported by Australian branding.

E.3.5 Bulgaria
Bulgaria is a substantial producer of fruit and grape wine. When Bulgaria was in the USSR its fruit
wine was substandard as peels and skin were used as the primary flavouring in the wine. This practice
has ceased in recent years as better farming techniques have increased fruit supply, reducing the need
for substitutes. Up to 198 000 litres of fruit wine related drinks were exported annually from 200205,
and Bulgarian fruit and grape wine is advertised internationally on the Alibaba website.
No imports of fruit wines have been identified. While Bulgarians have a taste for fruit wines, they lack
the means to buy imported products and so are content to drink their own inferior product. Bulgaria
has imported small intermittent quantities of grape wine from Australia in recent years (ABS).
Higher income earners are drinking more wine, mainly low priced brands but some of higher quality,
as a result of promotions and product launches and expanding distribution. However, the main drinks
remain beer and spirits.
Wine is mainly promoted through media publicity and store promotions including discounting and
giveaways (Euromonitor Bulgaria 2007).
Summary
Like most former Eastern Bloc Countries, Bulgaria has a price-sensitive fruit wine market with low
quality expectations and focussed on exports for revenue rather than imports for luxury consumption.
There are few if any opportunities for Australian fruit wines unless personal incomes rise.

E.3.6 Denmark
Market profile
Denmark has a long tradition of fruit wines, which are typically drunk before and after meals. It is one
of Europes largest markets for fruit wine and cider, with fruit wine representing 10 per cent of the
total wine market in 1995. From 200205 export markets including the United States and Canada,
although low average export prices indicate mostly lower priced fermented drinks such as cider (AICV
2007; Osterberg & Karlsson n.d.).
Grape wine consumption was 180.7 million litres in 2004, averaging around 33.6 litres per person, and
mainly with meals. Wine represents 45 per cent of liquor consumption, and is steadily taking market
share from beer (AWBC Denmark 2007; Austrade Denmark 2007; Osterberg & Karlsson n.d.). From
these statistics the fruit wine market has been roughly estimated as averaging around 20 million litres a
year, with a value of A$200 million, assuming stable consumption and a retail price of A$10.00 a litre.
Supply
Fruit wine is made from local fruits (AICV n.d.). Imports of fruit wine related products declined from
3.7 to 2.5 million litres from 200205, with fruit wine imports including intermittent quantities from
the United States and Canada, and 2600 litres from Australia averaging A$5.23 a litre FOB in 2004.
Low annual average prices indicate most trade is in drinks such as coolers (Table E.27).

149

Table E.27: Denmark - trade in fermented drinks HS2206, # 200206

Description
2002
2003
2004
2005
2006
HS 2206.00: fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^
Imports from Australia litres
A$ per litre ^

3 715 810
1.45
1 847 110
4.00
0

3 492 350
1.97
2 452 000
3.23
0

2 610 650
2.11
1 921 000
3.65
2 610
5.23

2 486 450
2.74
1 694 920
4.19
0

not av.

not av.

HS2206.00.70: fermented beverages not specified elsewhere, excluding cider and sake

Exports to United States litres

A$ *
Imports from United States litres
A$ ^
Exports to Canada (A$) *
Imports from Canada (A$) ^

55 400
6.31
0

49 436
0

152 100
5.51
0

42 163
0

122 700
5.10
11 700
3.49
27 922
12 528

119 600
4.89
11 600
3.39
26 245
0

135 400
5.27
21 700
1.84
27 558
1 581

HS 2206.00.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

A$ per litre *

1 600
5.62

1 800
5.55

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Source:
ABS; FAO 2007; United States trade statistics

In 2006 imports of 53 500 litres of these fermented drinks from outside the European Union included
20 500 litres from Norway at an average price of A$5.00 a litre CIF and 6200 litres from Switzerland
at an average A$15.20 a litre CIF (European Commission, 2007).
There is no domestic grape wine production. In 2004 grape wine imports reached 180.7 million litres,
65 per cent being bottled wine. In 2006 the leading countries of supply were France, Chile, Italy and
Australia. From 200206, imports of Australian grape wine grew steadily to 21.5 million litres
averaging A$2.50 a litre FOB in 2006 (ABS). Danish travellers also bring home wine from countries
with lower VAT, estimated at 30 million litres in 2000 (AWBC Denmark, 2007; Osterberg & Karlsson
n.d.).
Product profile
Fruit wines include blackcurrant, elderberry, strawberry and cherry wines, including NV Kijafa
Danish Cherry Wine which is exported to the United States and Europe. One winery promotes its
International Food Standard certification as valueadding its fruit wines in supermarkets (Cuisine of
Denmark n.d., Taster Wine n.d; Wallys n.d.).
In grape wine Danes prefer bottled, red, and increasingly Australian wine. Labelling needs to meet EU
regulations, and include a declaration of any sulphites and sorbates (Austrade Denmark 2007; AWBC
Denmark 2007).
Pricing
Kijafa Danish Cherry wine is advertised on a distributors mail order website at US$12.99 (A$17.25) a
bottle. Consumers are highly pricesensitive, usually buying from supermarkets and on promotional
discounts (Austrade Denmark 2007).

150

Distribution
Around 60 importers handle more than 200 brands of grape wine, and 40 import Australian grape
wine, mostly around Copenhagen; however, most of Denmarks 1000 wine importers are hobbyists or
garage-importers. Around 80 per cent of grape wine is retailed in supermarket chains and other self
service outlets, 10 per cent through hotels, pubs and restaurants, and the rest by numerous specialist
wine shops. Wholesaler and retailer mark-up is around 20 per cent, and restaurant mark-ups can reach
300 per cent (Austrade Denmark; AWBC Denmark 2007; Neilsen 2006; Tigelman, M, 2007).
Promotion
Advertising and other promotion of liquor is restricted, so product promotions are needed to create
consumer awareness. The leading trade show is the biennial TEMA Trade Fair, which includes the
Copenhagen Wine and Spirits Show (AWBC Denmark 2007; Osterberg & Karlsson n.d.). There may
be an opportunity to build brand loyalty to Australian brands through Princess Marys connection.
Import regulations and requirements
Fruit wine imports incur EU tariffs of 0.137 (A$0.22) a litre for still wine with up to 13 per cent
alcohol and 0.154 (A$0.25) for 13 15 per cent, and 0.32 (A$0.52) for all sparkling wine; excise of
0.8234 (A$1.34) a litre for still wine and 1.2337 (A$2.12) for sparkling wine; 25 per cent VAT; and
bottle tax (including VAT) of DKK2 ($0.45) per bottle, paid by the importer, adding from $4.40 to a
bottle of Australian fruit wine with a landed price of A$10.00. EU members exemption from import
duty provides a cost advantage over non-member countries (AWBC Denmark 2007).
Summary
Denmark has medium sized and affluent markets and distribution channels for fruit wine, strong
demand and developed distribution, including for Australian branded wines. There is a moderately
strong opportunity for Australian tropical fruit wines to be differentiated by new and exotic fruits to
provide novelty and wider choice, supported by Australian branding.

E.3.7 Estonia
Estonia is a very large fruit wine producer with a long fruit wine tradition, a substantial fruit wine
market and growing cider consumption that reached four million litres in 2006. From 200206 exports
of fruit wine related products grew strongly to 8.4 million litres a year, including small quantities to
Australia in 2003 and regular exports to the United States. Annual average export prices fell from
A$1.31 to $0.70 a litre over the same period, indicating mostly lower value drinks such as coolers and
cider, and growing competition or falling demand in most export markets (Table E.28). In 2006 the
only exports to outside the EU were 100 litres to Norway (European Commission 2007). From
200206 imports of these fermented drinks were stable at around 8.5 million litres, again at very low
prices (Table E.28).

151

Table E.28: Estonia - trade in fermented drinks HS2206, # 200205

Description
2002
2003
2004
2005
HS 2206.00: fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre ^
Total exports litres
A$ per litre ^

8 284 000
1.41
1 030 000
1.31

6 235 000
1.45
1 688 740
1.13

8 796 000
1.43
2 110 000
0.81

8 543 000
1.34
8 402 000
0.70

HS2206.00.70: fermented beverages not specified elsewhere, excluding cider and sake

Imports from United States litres

A$ ^

62 100
1.93

117 600
1.66

96 500
1.49

54 900
1.51

HS 2206.003020: Grape wine, cider or perry, mead, sake, fruit or vegetable wine

Exports to Australia litres

A$ a litre *

0
0

10 579
1.45

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Source:
ABS; FAO 2007; USDA trade statistics

Only 9600 litres of these fermented drinks were imported from outside the European Union in 2006,
from Russia and Thailand (European Commission 2007).
Examples of large fruit wineries are:

Polstsamaa Felix winery, which produces up to one million bottles a year of still and sparkling
apple, blackcurrant, gooseberry and redcurrant wines with 8 to 15 per cent alcohol, for the
domestic, Lithuanian, Latvian and Finland markets (Fruits of their labours Estonian
winemakers are wasting no time in getting back into production, 2002)

Saku lletehase Brewery, which supplies around 37 per cent of the market. Products include the
KISS range of canned apple and pear ciders and blends with carbonated water (Saku 2007).

From 200206 imports of Australian grape wine grew strongly to 168 000 litres averaging $4.40 a
litre FOB in 2006 (ABS).
Wine laws are harmonised with EU regulations, with EU imports tariffs of 0.137 (A$0.22) a litre for
still wine with up to 13 per cent alcohol, 0.154 (A$0.25) for 1315 per cent, and 0.32 (A$0.52) for
all sparkling wine of any strength; excise of 0.6647 (A$1.09) a litre and 18 per cent VAT, adding at
least A$2.95 to a landed price of A$10.00 for a bottle of Australian fruit wine.
Summary
Estonia has large markets for domestic and imported fruit wines and distribution channels and strong
demand for Australian branded grape wines. It offers a minor opportunity for Australian tropical fruit
wines to develop a niche in higher income markets through differentiating on fruit type, product
quality and Australian branding, to provide novelty and wider choice.

E.3.8 Finland
Market profile
Finland has a long tradition of fruit wines and ciders, and one of Europes largest markets for these
drinks, totalling around 10.4 million litres a year. In the 1990s fruit wine and cider represented half of
all wine consumed (AICV website; Osterberg & Karlsson n.d.).
Exports of fruit wine related products grew strongly from 5.58 to 8.47 million litres a year from
200205, including small quantities annually to Japan, although at very low annual average prices.
152

Grape wine consumption is around 153.2 million litres a year and growing steadily due to a trend
towards lower alcohol drinks, growing interest in grape wine, rising disposable incomes, a strong
continental influence on food and drink, and introduction of lower priced baginbox wines. Wine is
the strongest growing alcoholic drink category, although beer still held a 71 per cent market share in
2005 and vodka remains popular (AWBC Finland 2007, Euromonitor Finland 2006).
Supply
Domestic fruit wine production was 2.6 million litres in 2005, having fallen by a third since 2003,
probably due to a shift to grape wine (Nielsen 2006 pers. comm.). While commercial fruit wine
production began in the 1930s as an outlet for fruit producers, Finland had only four fruit wineries
until 1994 due to restrictions on the production, import, export, wholesale and retail of alcoholic
beverages by Alko, a Government statutory authority used by the Ministry of Social Affairs and
Health to discourage excessive alcohol consumption. When Alko relinquished these controls on
Finlands accession to the European Union in 1995, fruit wine producers could obtain production
licenses and sell wine with less than 13 per cent alcohol from the cellar door, and by 2000 53 wineries
were licensed to produce berry and fruit wines, mostly farmers making small quantities of wine, while
home production declined. However, Alko still dominates production through its subsidiary Primalco
which manufactures wine and bottles domestic and imported wine (Osterberg & Karlsson n.d.).
Imports of fruit wine related products grew from 11.5 to 16.3 million litres a year from 200205,
including up to 64 900 litres of low priced fruit wine products from Australia in some years (Table
E.29).
Table E.29: Finland - trade in fermented drinks, 200206
Description
2002
2003
2004
2005
2006
HS 2206.00 (fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included)

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^
Imports from Australia litres
A$ ^
A$ per litre ^

11 570 700
1.37
5 853 120
1.64
60 566
237 057
2.15

10 844 000
1.42
5 182 000
1.63
0

11 608 000
1.32
7 847 000
1.55
43 686
37 923
1.75

16 289 000
1.27
8 468 000
1.41
64 909
155 814
1.81

not av.
not av.
not av.
not av.
0

HS 2206.00.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

A$ per litre *

7 700
5.71

1 100
30.00

17 400
6.67

10 000
5.20

13 800
3.62

Note: Excludes grape wine and beer. *CIF at importing country; ^ FOB from exporting country. Source: FAO
2007; Japan Customs trade statistics, ABS, USDA trade statistics

In 2006 34 600 litres of fruit wine related products were imported from outside the European Union,
mainly from Thailand at an average landed price of A$2.20 a litre and from the United States at an
average price of A$7.00 a litre (European Commission 2007).
Finland has no grape wine industry, importing mainly from Chile, France, Italy, South Africa and
Spain. From 200206 imports of Australian wine more than doubled to 3.6 million litres averaging
A$3.90 a litre FOB in 2006 (ABS; AWBC Finland 2007; Austrade Finland 2007).
Product profile
Finnish fruit wines include blackcurrant, cherry, strawberry and blueberry, and are often fortified. In
2007 monopoly retailer Alkos product list of fruit wines listed only domestic products, offering
11 sparkling, seven non-sparkling and 20 fortified wines, both domestic and imported (the list does not
specify brands or fruit bases). Alkos assortment reflects the retail market (Neilsen 2006, pers.
153

comm.). In related drinks, demand has been shifting from perry to flavoured cider and perry, and to
spirit-based FABs (flavoured alcoholic beverages). In grape wine, red wine is preferred (AICV 2005;
AWBC Finland 2007; Euromonitor Finland 2006).
Pricing
Alkos website lists fruit wine from 2.96 to 13.86 (A$4.84 to $22.67) a bottle.
Australian grape wines have moved from budget to mid-priced, and are considered good value and
easy to understand. The wine market is highly price-sensitive, with 85 per cent of table grape wines
under 10.00 (A$16.30) in 2005 (Austrade Finland 2007; AWBC Finland 2007).
Distribution
While more than 150 businesses are licensed to import and wholesale wine, only ten handle 90 per
cent of wine imports. Alko imports some wine but mainly concentrates on retailing, having retained its
monopoly on the retail of drinks with more than 4.7 per cent alcohol. It handles around 85 per cent of
wine sales through some 327 Alko stores and another 138 points where customers can order from its
price list. The rest is mainly sold through some 7300 grocery stores and 5000 restaurants and cafes,
including an Alko-owned chain of hotels and restaurants. Domestic fruit wine producers are permitted
to sell wine with less than 13 per cent alcohol direct to the consumer (Austrade Finland 2007;
Osterberg & Karlsson n.d.).
Promotion
Government restrictions apply to wine advertising. Wine is promoted through media publicity; Alkos
generic campaigns and product price lists (as a state monopoly Alko has to act transparently and treat
all products and brands impartially so does not promote single brands); importer tastings in hotels and
restaurants; the annual Viniexpo wine fair and a biennial food fair. Australian grape wine is also
promoted by Australian Wine Bureau regional tasting tours and promotions (Austrade Finland 2007).
Import regulations and requirements
Taxes are prohibitively high to discourage the drinking of alcohol. Import regulations comply with
those of the European Union, with import tariffs of 0.137 (A$0.22) a litre for still wine with up to
13 per cent alcohol, 0.154 (A$0.25) for 1315 per cent alcohol, and 0.32 (A$0.52) for all sparkling
wine; excise of 2.12 (A$3.47) a litre for still and sparkling wine; VAT of 22 per cent; alcohol
beverage tax; and a surcharge on retail containers unless refillable or recyclable. Combine d these add
more than A$5.60 to a bottle of Australian fruit wine landed at A$10.00. The Finnish Customs, Europa
and Ministry of Agriculture and Forestry websites provide more information.
Summary
Finland has a medium sized fruit wine market with moderate demand and attractive pricing for
domestic and imported fruit wine and similar drinks, and strong demand for Australian branded grape
wines, but limited distribution and promotional opportunities There is a minor opportunity for
Australian tropical fruit wines to be differentiated on fruit type to extend the current choice, and on
Australian branding, but suppliers may have difficulty promoting product attributes to consumers.

154

E.3.9 France
Market profile
France has minor fruit wine and perry markets and Europes fourth largest cider market. Cider and
perry consumption have been stable at around 100 million litres in total, with a value of 274 million
(A$447 million) in 2005. Cider and perry are drunk mainly with meals and used in cooking, as a lower
alcohol substitute for sparkling white wine (AICV 2005 n.d.; Euromonitor France 2006).
Exports of fruit wine related products were relatively stable from 200205, with 23 million litres
valued at A$47 million in 2005. Annual exports included 200 000300 000 litres of fruit wine drinks
(not coolers) to Japan, and exports to the United States and Canada, but low annual average prices
indicate most trade is in low value drinks such as cider, not fruit wine.
Grape wine consumption was 2730 million litres in 2004, wine-drinking being a traditional part of
French life, and around a third of wine is drunk with meals. Individual annual consumption fell from
60.2 to 47.6 litres from 1996-2005 due largely to a campaign against alcohol abuse, fewer working
people taking long lunches, and a long-term shift from wine to distilled spirits and beer (AWBC
France 2006; AWBC Winefacts 2007; Osterberg & Karlsson n.d.).
Supply
While most production is of cider and perry, an internet search identified some fruit wines.
Large volumes of fruit wine related products are imported, with 14.59 million litres in 2005, including
fermented fruit drinks from the United States and Canada and small quantities intermittently from
Australia (Table E.30).
Table E.30: France - trade in fermented drinks HS2206, # 200206
Description
2002
2003
2004
2005
2006
HS 2206.00 (fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included)

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^
Imports from Australia litres
A$ ^
A$ per litre ^
Exports to Canada (A$) *
Imports from Canada (A$) ^

12 720 000
1.49
26 744 730
1.37
552 000
1 864 357
3.38
18 446
252 106

18 742 000
1.97
19 856 450
1.89
0

42 865
20 908

15 046 000
2.15
22 559 800
1.80
1 656
3 938
2.38
50 888
65 522

14 593 740
1.53
23 320 370
2.02
0

112 542
73 507

not av.
not av.
not av.
not av.
0

64 091
518 209

HS2206.00.70: fermented beverages not specified elsewhere, excluding cider and sake

Exports to United States litres

A$ *
Imports from United States litres
A$ per litre ^

60 700
1.37
62 400
3.39

22 000
1.89
50 700
4.90

14 500
1.80
20 800
2.09

21 300
2.02
88 000
2.12

17 200
1.37
45 000
2.89

HS 2206.00.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

A$ per litre *

273 400
3.67

245 400
4.21

370 100
2.97

232 100
3.31

220 700
3.59

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS; FAO 2007; Japan Customs trade statistics; South Africa trade statistics; United States trade statistics

In 2002 imports of 775 000 litres of fruit wine products came from outside the EU, mainly from China
and Japan (assumed to be mostly rice wine) and the United States (European Commission 2007).

155

France leads the world in grape wine production, with 5850 million litres of table wine production and
exports of 1472 million litres of exports in 2005, but is increasingly affected by overproduction and
shrinking exports as world competition grows. In 2005, 682 million litres of wine were imported,
representing 24 per cent of supply. From 200206 imports from Australia doubled to 8.8 million litres
(mostly bulk wine) averaging A$1.60 a litre FOB in 2006 (ABS, Austrade France 2007; US Foreign
Agricultural Service 2006).
Product profile
Examples of French fruit wine producers and products are:

Horizon Biere Sarl: sparkling wines from raspberry, redcurrant and Mirabelle plum using only
fruit juice and natural fermentation with no added sugars, concentrate, alcohol or carbonation

Perle: sparkling fruit wine from redcurrant, raspberry and mirabelle plum juice

Sparkling Framboise wine from 100 per cent unfiltered fruit, made by the champenoise method,
with no added alcohol, fruit concentrate or carbonated water

A winery in Alsace making rhubarb, yellow plum, red currant and raspberry wines using pure
fruits, natural carbonation and no added sugar, and exporting to Germany and the United States
(Alibaba n.d.; Fruit wines from Alsace 2005).

Producers belonging to the Association of the Cider and Fruit Wine Industry of the EU (AICV) follow
its quality standards which are aligned to European and national regulations (AICV n.d.). Wine
producers and importers are responsible for recycling or disposal of packaging, and alcoholic
beverages are required to carry health warnings for pregnant women (Austrade France 2007).
Under French law grape wines are classed as quality or table wines. If they meet the required
production standards they may be labelled as Appellation Contrle or first quality to guarantee
quality and origin or V.D. Q.S. (Vins Dlimits de Qualit Superire) for second quality, otherwise
they are classed as table wines (Osterberg & Karlsson n.d.). French wines are also classified by region
of production (Vine de Pays).
French grape wines are perceived as the best quality and achieve the highest prices worldwide. This is
largely due to legal quality controls introduced in the early 1920s to protect consumers and guarantee
wine quality from certain regions. Chateauneuf du Pape in the Rhone Valley pioneered the
development of a set of rules for the regions wine producers defining the area allowed to produce
Chateauneuf du Pape; the grape varieties permitted; production, harvest and grapesorting systems;
and minimum alcohol levels, and set production quotas. This became the framework for the
Appellation Contrle laws implemented by the National Institute for Appellations of Origin (INAO)
founded in 1936 to control and provide rules for grape growing, wine production and production
standards for every key wine region in France, with regional standards for geographic limits of the
production area, vine planting density, trellis systems, pruning style and standards, yields per hectare,
vineyard practices, permitted grape varieties, wine making techniques, standards for laboratory
analysis, and mandatory tasting by a certification panel. While creating an enormous number of rules
the system successfully established quality standards, and most countries regulating their wine
industries have used it as the model.
Despite strong loyalty to French wines, particularly in wine producing areas, consumer interest in
imported wines is growing. As awareness of Australian wine grows due to French investment in the
Australian industry and Australian winemakers working in France, Australian wine is promoted by
country rather than by product or region, and on its clean and green image. Novice wine drinkers also
appreciate the simple easy-to-understand labels of New World wines (AWBC France 2006).

156

Pricing
Distributor websites list Perle sparkling fruit wines at 3.80 ($6.20) for 750 mls and Cave de
Massillargues orangeflavoured grape wine at 15.00 (A$24.50) (Alibaba 2007; 123Lozere 2007).
Key price points for grape wines in Paris are: budget price A$5.70, mid price A$10.00 and premium
price A$15.00. Consumers increasingly buy on quality over price (AWBC France 2006).
Distribution
About 25 importers handle imported Australian grape wine, mainly bulk wine for bottling in France
for buyers own brands for retail in United Kingdom supermarkets. Distribution has been increasingly
consolidated through mergers and alliances between leading hypermarkets and supermarkets and five
central buying offices across the seven largest retailers, and chain bottle shops in larger cities use
central purchasing to allow attractive prices at higher margins than supermarkets. Specialist wine
stores are more likely to promote lesser known brands to customers. Some large hypermarkets and
supermarkets sell mid-range foreign wines, including around 20 per cent of Australian wine,
particularly in northern Channel ports to British travellers avoiding United Kingdom excise.
Consumers tend to buy small quantities of above average quality wine from mostly hypermarkets or
supermarkets in northern France, and larger quantities with lower alcohol content from these and other
outlets in the south. The catering and food service sector has been growing steadily, and wine is
popular drunk with meals in bars, restaurants and cafes (Austrade France 2007; AWBC France 1997).
Promotion
Television advertising of alcohol is banned and French law limits other media promotion and
sponsorships, particularly to young audiences (AWBC France 2006).
Import regulations and requirements
Wine laws and tariffs are harmonised with EU regulations, with EU duty of 0.137 (A$0.22) a litre for
still wine of up to 13 per cent alcohol, 0.154 (A$0.25) for 1315 per cent, and 0.32 ($0.52) for all
sparkling wine; 0.034 ($0.0556) a litre excise and VAT of 19.6 per cent; adding from A$2.40 to a
landed price of A$10.00 for a bottle of Australian fruit wine, depending on alcohol content.
Summary
France has a small market for mainly domestic fruit wines, large markets for related drinks, and some
awareness of tropical fruits, but fruit wines face intense competition from grape wine, and there is
limited demand or distribution for Australian branded grape wines. There is a minor opportunity at
best for Australian fruit wines to be differentiated on fruit type and novelty.

E.3.10 Germany
Market profile
Germany has a long tradition of fruit wines, and one of Europes largest fruit wine and cider markets,
including around 3.6 million litres a year of mulled fruit wine and punch. Fruit wines are usually
drunk before and after meals (AICV n.d.).
Exports of fruit wine related products fell from 19.24 to 13.8 million litres a year from 200205,
including up to 54 700 litres annually to Japan and up to 38 900 litres (not cider) to the United States
(Table E.31). Low annual average prices indicate these were mostly very low value products such as
coolers. In recent years German fruit wines and related drinks were exported to Australia and Japan.

157

Alcoholic drinks, mainly beer, are drunk at numerous occasions, and often throughout the day. Wine
represents around a third of consumption. Germany has the worlds fourth largest grape wine market,
with annual consumption stable at around 2000 million litres, averaging 23 litres a person, and very
large exports (AWBC Germany 2006; Osterberg & Karlsson n.d.).
Supply
A large fruit wine industry is led by manufacturers such as Katlenburger which has capacity for
300 000 bottles a day and exports to Europe, America, Asia and the Pacific (Katlenburger 2007).
Strong demand for fruit wine related products is indicated by imports which from 200205 grew to
39 million litres a year, including intermittent quantities of low-priced fruit wine products from
Australia, Canada and increasingly the United States (Table E.31).
Table E.31: Germany - trade in fermented drinks HS2206, # 200206
Description
2002
2003
2004
2005
2006
HS 2206.00 (fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included)

Total imports litres

A$ per litre ^
Total exports litres
A$ per litre ^
Imports from Australia litres
A$ ^
A$ per litre ^

31 649 000
0.98
18 246 010
1.83
124 530
322 436
2.59

23 445 980
1.16
19 060 710
1.81
21 862
50 607
2.31

31 238 790
1.51
15 125 070
1.97
0

39 180 000
1.54
13 861 330
1.98
0

not av.
not av.
not av.
not av.
0

HS 2206.00.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

A$ per litre *

32 200
4.10

54 700
4.33

53 300
0.54

36 700
5.42

36 900
1.49

HS 2206.00.900: Fermented beverages other than grape wine, beer, cider, prune wine, sake, vermouth, or
other effervescent wines

Imports from United States litres

A$ per litre ^

59 000
0.57

156 000
0.72

166 000
0.81

218 000
0.95

368 000
0.90

HS 2206.00.3030: Grape wine, cider or perry, mead, sake, fruit or vegetable wine

Exports to Australia litres

A$ per litre

96 753
2.43

122 945
2.57

118 839
2.37

137 627
2.27

116 523
2.43

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS; FAO 2007; Japan Customs Trade Statistics; United States trade statistics

In 2006 imports of 2.56 million litres of these drinks from outside the European Union were mainly
from China, Ukraine, Japan, Russia and the United States. While 56 per cent were from China and
Japan these are likely to be mostly rice wine (European Commission 2007).
The large German grape wine industry produced 990 million litres of wine in 2005, and is shifting
from white to red wine to meet market demand. Germany is also the worlds leading import market for
grape wine, with annual imports of around 1560 million litres representing nearly 80 per cent of
supply, including large volumes of bulk wine. In 2004 its leading suppliers were Italy, Spain and
France. From 200206 annual imports of Australian wine, mostly bulk wine, doubled to 25 million
litres, with an average price of A$2.10 a litre FOB in 2006 (ABS; AWBC Germany 2006; US Foreign
Agricultural Service 2006).

158

Product profile
A wide range of fruit wines is produced, as well as mulled fruit wine and punch, cider, fruit and grape
wine blends and wine-based cocktails. As an example, prominent manufacturer Katlenburger makes a
diverse range of fruit wine products under the Dr Demuth brand, including pure fruit wines from
mango and various berries; Tropica Fruit Wine Cocktails from fruits such as pitaya (dragonfruit), lime,
cherry, kiwano melon, kumquat, lemon, peach and strawberry; fruit wine cocktails with mango and
berry; fruit wine coolers with pineapple, strawberry, peach and raspberry; mulled wines from apple,
blueberry, cherry, cinnamon, sloeberry and elderberry; blends of yoghurt with strawberry, peach,
apple and blueberry wine, and a blend of fruit wine, exotic juices and vitamins. Katlenburger wine is
Japans leading imported fruit wine brand (Japanese trade interviews, Katlenberger 2006). It is also
sold by an Australian retail chain.
Mulled fruit wine and punch are growing categories, mulled wine being particularly popular as a
winter alternative to traditional mulled grape wine, with new products such as Christmas drinks,
winter drinks based on apple wine, and variations on mulled apple wine adding value in a beverage
market suffering price decline (AICV 2005 n.d.; Agriculture and Agri-Food Canada 2007).
Members of the Cider and Fruit Wine Industry of the EU (AICV) follow its quality standards aligned
to European and national regulations, and wine importers expect products to meet exact specifications
and comply absolutely with all EU and German standards (AICV n.d.; Austrade Germany 2007).
While Germany is the worlds leading market for sparkling grape wine, with domestic sparkling wine
an affordable every day drink with around 20 per cent market share, demand is shifting to still wine,
red wine (60 per cent of the market), dry and semi-dry styles, and from bottled to bulk. Domestic
organic wines have two per cent of the market, with growing demand from increasingly health
conscious consumers. There are numerous wine brands, and brand loyalty is low (Austrade Germany
2007; AWBC Germany 2006).
Pricing
The wine market is pricesensitive, with competition between large retail chains lowering price. Most
sales are under A$10.00 a bottle, including 80 per cent of white wine imports, with small but growing
sales for higher quality products including red wines and boutique lines. Australia supplies mostly
bulk wine for bottling, of which two-thirds retail at $2.50 and under a bottle, and the rest mostly at
between A$2.50 and $4.99 (AWBC Germany 2006).
Distribution
Fruit wine distribution includes winery sales and internet retailing.
Two-thirds of grape wine is sold in supermarkets and discount stores (AWBC Germany 2006).
Australian wines enter Germany through external borders of the European Union or through ports such
as the Bremerhaven and Hamburg seaports and Frankfurt airport (Austrade Germany 2007).
Promotion
Wine shows include the annual Pro-Wein international trade fair and the biannual ANUGA Foodtec
Fair. The industry has voluntary codes of conduct for advertising and promotion (Osterberg &
Karlsson n.d.).
Import regulations and requirements
Fruit wine laws are harmonised with EU regulations, with EU tariffs of 0.137 (A$0.22) a litre for still
fruit wine with up to 13 per cent alcohol, 0.154 (A$0.25) for alcohol of 1315 per cent, and 0.32
(A$0.52) for all sparkling wine; excise of 1.36 (A$2.22) a litre for sparkling wine and none for still

159

wine; and 19 per cent VAT, adding at least A$4.00 to a landed price of A$10.00 for a bottle of
Australian fruit wine, depending on alcohol content.
Summary
Germany has a medium sized, affluent, mature and innovative market for domestic and imported fruit
wines, including some tropical fruit wines, and a large market for related drinks, but minor demand
and distribution for Australian branded wines. It offers a moderately strong opportunity for Australian
tropical fruit wines to differentiate on fruit and product variety to provide novelty and more choice.

E.3.11 Ireland
Market profile
Ireland has one of Europes largest fruit wine markets, its leading cider market of around 66 million
litres a year with strong growth, perry consumption of 11 million litres in 1998, and a tradition of
home-made wines (AICV 2005; Wine consumption to grow 15.4% to 2010; Osterberg & Karlsson
n.d., Shea n.d.).
Strongly growing exports of fruit wine related products, including to Australia, Japan and the United
States, are probably cider, given their low annual average prices (Table E.32).
Liquor consumption is amongst the worlds highest but has declined in recent years because of tighter
regulation of public smoking and excessive drinking of alcohol, high excise duties, higher living costs
and less leisure time for socialising in bars (Euromonitor Ireland 2006).
Grape wine consumption was 31.5 million litres in 2000 and annual average individual consumption
grew strongly from 7 to 18 litres from 19972006 at the expense of beer and spirits. Around 45 per
cent of people now drink wine, due largely to higher incomes, an increasingly well travelled and
cosmopolitan market, European cultural influence, more wine drunk with meals, and wines healthier
image than beer and spirits. There is a growing market of women. Smoking bans in hotels and
restaurants have led to more wine-drinking at home (Austrade, Ireland 2007; AWBC Ireland 2006).
Supply
There is little wine production, with Bunratty Mead & Liquor Co. one of Irelands few wineries. Cider
and perry production grew fivefold from 19902000, led by drinks group C&C with the prominent
Magners and Bulmers brands, and Diageo Ireland Ltd, Irelands leader in alcoholic drinks including
the iconic Baileys, Smirnoff and Guinness brand and its second largest manufacturer of cider, perry
and RTDs (Euromonitor Ireland 2006; Griggs 2006).
Liquor production is dominated by whisky and beer, with almost all grape wine imported except
made wine produced from imported concentrate, and a shift from Old World to New World
suppliers. Australian wine has a 20 per cent market share, and from 200206 imports of Australian
wine grew steadily to 12.3 million litres averaging A$4.60 a litre FOB in 2006 (ABS; Austrade Ireland
2007; AWBC Ireland 2006; Osterberg & Karlsson n.d.).
Imports of fruit wine related products grew from 5.8 to 11.3 million litres from 200205, including
minor imports from the United States. Annual average import prices indicate these are mostly low
value drinks such as wine coolers (Table E.32).

160

Table E.32: Ireland trade in fermented drinks HS2206, # 200206

Description
2002
2003
2004
2005
2006
HS 2206.00 (fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included)

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^

5 852 890
2.07
9 210 000
4.29

6 457 000
1.72
10 605 000
4.33

8 069 000
1.50
15 411 000
4.43

11 303 000
1.30
34 306 000
4.07

not av.
not av.
not av.
not av.

HS 2206.00.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

A$ per litre *

1 200
5.00

2 100
4.76

3 000
5.33

7 000
4.29

8 900
4.72

HS 2206.003020: Grape wine, cider or perry, mead, sake, fruit or vegetable wine

Exports to Australia litres

A$ per litre ^

72 100
3.30

50 636
3.20

126 048
3.48

HS 2206.00.70: fermented beverages not specified elsewhere, excluding cider and sake

Imports from United States litres

A$ per litre ^

50 600
1.84

182 200
1.54

12 100
1.31

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS; FAO 2007; Japan Customs trade statistics; United States trade statistics

Product profile
No product detail was found for fruit wines. Packaging and labelling for domestic and imported wine
needs to comply with EU and Irish legislation, and more information can be obtained from the
websites of the United Kingdom Department of Food and Agriculture and the Wine Development
Board of Ireland.
Demand is similar for white and red grape wines. Consumers are strongly loyal to brands, expect
quality packaging and presentation, and accept Australian branded wines as value for money with
informative labelling (AWBC Ireland, 2006; Austrade Ireland 2007).
Pricing
Annual average export prices for fruit wine related products indicate wholesale prices of up to A$8.22
a litre for fruit wine and around A$4.00 a litre for major drink categories such as cider and RTDs
(Table E.32).
Ireland is a price-sensitive market, with 76 per cent of retail sales of grape wine under 10 (A$16.70)
in 2006 (AWBC Ireland 2006).
Distribution
Around 70 per cent of wine is retailed, mainly through large Irish retail chains with centralised
purchasing and category management, which expect suppliers to handle all distribution problems, and
specialist liquor stores. While the rest is sold in pubs, hotels and restaurants, sales are shifting to retail
outlets as more wine is drunk at home (Drinks Industry Ireland 2007; Euromonitor Ireland 2006).
Import regulations and requirements
Imported fruit wines incur EU import duty of 0.137 (A$0.22) a litre for still wine with up to 13 per
cent alcohol, 0.154 (A$0.25) for 1315 per cent, and 0.32 (A$0.52) for all sparkling wine; excise of
2.73 (A$4.46) per litre for still wine and 5.4601 (A$8.93) for sparkling; and VAT of 21 per cent,

161

combining to add from A$6.35 to a landed price of A$10.00 for a bottle of Australian fruit wine. Wine
exporters should consult the Irish Customs Authority before shipping product (AWBC Ireland 2006.
Summary
Ireland has a large, affluent but price-sensitive market for fruit wines and related drinks and for
imported grape wines, particularly Australian brands. There may be a minor opportunity for Australian
tropical fruit wines to be differentiated as a novelty drink with strong Australian branding.

E.3.12 Italy
Market profile
Italy does not have significant fruit or cider markets (AICV 2007). However, relatively stable imports
of around 21 million litres of fruit wine related products a year from 200205 indicate demand for
such products. Over that time exports declined from 50.06 to 43.93 million litres, including fruit wine
products to the United States, Canada and Japan (Table E.33).
Italy has one of the worlds largest grape wine markets, 2.6 billion litres in 2005, with wine the
leading alcohol drink and considered an important part of the daily diet, particularly with meals at
home. However, average personal consumption fell from 54.5 to 48.1 litres from 19962005. Wine is
drunk more by the lower social classes, mainly men but increasingly young women. Demand has
shifted from lower priced traditional wines to higher in quality and price; to sparkling wines for
special occasions and dining out; to less wine with lunch; and to drinks with little or no alcohol. Italy
is the worlds third largest wine exporter, with 1.4 billion litres of exports in 2004 (AWBC Italy 2006;
Osterberg & Karlsson n.d., Wine Australia Winefacts; US Foreign Agricultural Service, 2006).
Supply
Annual imports of fruit wine related products fluctuated at around 20 million litres from 200205
(Table E.33).
Table E.33: Italy - trade in fermented drinks HS2206, # 200206
Description
2002
2003
2004
2005
2006
HS 2206.00 (fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included)

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^
Exports to Canada (A$) *

19 119 000
0.65
52 059 270
1.21
8 650

11 585 970
0.78
42 503 980
1.41
231 800

21 745 000
0.98
46 532 350
1.51
13 437

19 950 000
0.68
43 933 010
1.31
43 565

not av.
not av.
not av.
not av.
213 191

HS 2206.00.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

A$ per litre *

0
5.71

1 400
5.00

1 400
12.00

500
6.50

2 000
5.71

HS 2206.00.9000: Fermented beverages other than grape wine, beer, cider, prune wine, sake,
vermouth, or other effervescent wines

Imports from United States litres

A$ *
Exports to United States litres
A$ ^

1 400
13.15
1 507 800
2.97

15 300
3.33
708 400
3.08

7 300
4.84
327 600
2.83

12 300
2.03
308 200
3.31

388 600
3.13

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS; FAO 2007; Japan Customs Trade Statistics; United States trade statistics

162

In 2006, 2.84 million litres of these fermented drinks were imported from outside the EU, of which
70 per cent was from China and Japan, probably mostly rice wine (European Commission 2007).
Some 800 000 wineries produced 5300 million litres of grape wine in 2004. Despite ideal growing
conditions for wine grapes, production has declined over decades. Imports reached 283 million litres
and 10 per cent of consumption in 2004, mostly of bulk wine and prestige products such as
champagne, port and sherry from neighbouring European countries, with minor growing imports of
New World wines (AWBC Italy 2006; US Foreign Agricultural Service 2006). Imports of mostly bulk
wine from Australia have stabilised, with 1.3 million litres averaging A$2.00 a litre FOB in 2006
(ABS).
Product profile
These examples of fruit wine products are promoted on distributor websites:

Perl Wine: Italian Lemon and Blood orange wine in 500 ml bottles, sold in Japan (Mercian)

Vin Up: Tropical fruit wine from grape must and fruit juice, 4.5 per cent alcohol, described as
sweet with tropical fruit taste and a trendy drink that can be served frozen (Alibaba).

Consumers are drinking better quality wine but less often, with demand for red, white and ros
styles.

Wine labels require a recycling statement, a wastepaper basket symbol or the phrase non
dispedere il vetro nell ambiente (do not dispose of the glass in the environment) (AWBC Italy
2006).

Pricing
The grape wine market is price sensitive, with higher quality bottled wine typically retailing at around
A$6.55 (AWBC Italy 2006; ABS).
Distribution
Sixty per cent of grape wine, including mid-priced imported wines, is sold mainly in supermarkets and
hypermarkets, and the rest in food service outlets. Premium imported wines are usually sold in
specialist wine shops and leading restaurants, or direct to the consumer (AWBC Italy 2006).
Promotion
Italys main wine trade fair is the annual Vinitaly (AWBC Italy 2006).
Import regulations and requirements
Import duty and excise comply with EU regulations, with EU import duty of 0.137 ($0.22) a litre for
still wine with up to 13 per cent alcohol, 0.154 (A$0.25) for 1315 per cent, and 0.32 ($0.52) for all
sparkling wine. Fruit wine does not attract excise but is subject to VAT of 20 per cent and a strip
stamp levy of 0.3873 (A$0.63) per stamp for a 750 ml bottle. The combined tariffs and taxes add at
least A$2.80 to a landed price of A$10.00 for a bottle of Australian fruit wine.
Summary
Italy has a small market for domestic fruit wine, including tropical fruit flavoured grape wine, and low
demand and limited distribution for Australian branded grape wine. It offers a minor opportunity at
best for Australian tropical fruit wines, provided distribution channels are available.

163

E.3.13 Lithuania
Lithuania has large fruit wine and cider markets and had annual exports of around two million litres of
fruit wine related products from 200205 (AICV 2005). Fruit wine producers include Anyksciai
Winery; AB Alita; which makes apple and berry wines, grape wine and fruit juices and has production
capacity of three million litres; and the Mejer Berger factory which produces fruit wine, carbonated
water and lemonade (AB Alita 2006; Museums of Lithuania 2006).
Annual imports of fruit wine related products rose from 1.8 to 16 million litres from 200205 as
annual average prices fell from A$1.12 to $0.63 per litre, indicating low value drinks (FAO statistics).
In 2006 only 8900 litres were imported from outside the EU, from Armenia and Belarus (European
Commission 2007). Imports of Australian grape wine were insignificant (ABS).
Lithuania is a member of the European Union, and imports of fruit wines are subject to its import
tariffs and the same excise of 0.4344 (A$0.71) a litre and 18 per cent VAT as grape wines, adding
from A$2.60 to a landed price of A$10.00 for a bottle of Australian fruit wine.
Summary
Lithuania has medium sized markets for low-priced domestic fruit wine and related drinks but falling
imports of these drinks and low demand for Australian grape wine. There appears to be limited
opportunities for Australian tropical fruit wines.

E.3.14 Luxembourg
While Luxumbourg lacks significant markets for fruit wine and cider, growing demand for related
drinks is indicated by a doubling of imports of fruit wine related products to one million litres a year
from 200205, with small declining exports, although low annual average prices indicate most trade is
in low value drinks such as cider or coolers (FAO statistics). No fruit wine products were imported
from outside the European Union in 2006 (European Commission 2007).
Individual grape wine consumption of around 55 litres a year is amongst the worlds highest. Markets
include numerous political and business travellers, tourists, and cross-border shoppers seeking lower
priced wines. Wine is sold through liquor stores and grocery stores, and many workers bring in wine
while commuting from neighbouring countries. Around 1.5 million litres of mainly white wine are
produced annually but the climate is too unstable for major production so most wine is imported.
Imports from Australia from 200206 were minor, with 5500 litres averaging A$10.00 a litre in 2006
(AWBC Belgium & Luxembourg 2007; ABS).
Fruit wines incur EU import tariffs of 0.137 (A$0.22) a litre for still wine of up to 13 per cent
alcohol, 0.154 (A$0.25) for 1315 per cent, and 0.32 (A$0.52) for all sparkling wine; 15 per cent
VAT, and no excise, adding from A$2.00 to a bottle of Australian fruit wine landed at A$10.00.
Summary
Luxembourg has a small affluent market for domestic fruit wine which competes with a large and
maturing market, and little demand or distribution for Australian grape wine. It offers a minor
opportunity at best for Australian tropical fruit wines to provide variety.

E.3.15 Republic of Moldova

Moldova is one of the worlds largest producers of fruit wine, using berries and other fruits. It has
been the leading supplier of low-priced fruit wines to Russia, and supplies large quantities of grape
wine to mainly eastern European countries (Feller 1977; Grapes & Barley Co. 2006).
Imports of fruit wine related products fluctuated between 0.27 and 6.07 million litres annually from
200205, while exports fell from 86.7 to 67.6 million litres, all averaging below A$1.00 a litre (FAO

164

2007; ABS). While the research indicates a large domestic fruit wine market, the large trade volumes
may include transhipments of imported drinks to other countries in the region.
There were no imports of grape wine from Australia from 200206 (ABS).
Summary
Moldova has a large but price-sensitive market based on domestic fruit wine, with little opportunity
evident for Australian tropical fruit wines

E.3.16 Netherlands
Market profile
The Netherlands has a long tradition of fruit wines, and is one of Europes largest markets for fruit
wine and cider. Fruit wines are typically drunk before and after meals. The De Simonehoeve cheese
farm serves Dutch berry wines with cheese tastings. Growing demand for the category is indicated by
increasing imports, although low prices suggest these are drinks other than fruit wine.
Exports of fruit wine related products fluctuated between 7.21 and 10.97 million litres from 200205.
While these included small quantities of fruit wine to Australia and the United States, low average
prices indicate mostly low value drinks (AICV n.d.; Simonehoeve 2007; Table E.34).
Grape wine consumption of 325 million litres in 2004 represented a third of liquor consumption.
Average individual wine consumption rose from 15 to 23 litres a year from 19962005, mainly by
2550 year olds, and is likely to continue growing as consumers switch from spirits in response to
health concerns and a government campaign to reduce alcohol abuse, which has included an increase
in excise on spirits (Austrade Netherlands 2007; AWBC Netherlands 2006; AWBC Winefacts 2007).
Supply
Domestic producers make fruit wines from local fruits (AICV n.d.). Demand for fruit wines is further
indicated by growth in imports of fruit wine related products from 3.06 to 3.74 million litres from
200205, including fluctuating quantities from the United States (Table E.34).
Table E.34: Netherlands - trade in fermented drinks HS2206, # 200206
Description
2002
2003
2004
2005
2006
HS 2206.00: fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre ^
Total exports litres
A$ per litre ^
Imports from Australia litres
A$ per litre ^

3 068 000
3.20
7 207 540
1.68
10 922
1.89

3 979 360
3.61
10 970 380
1.13
0

3 748 100
3.30
8 873 930
1.30
0

3 738 960
2.77
10 684 530
1.25
71
not av.

not av.
not av.
not av.
not av.
634
not av.

1205
5.60

HS 2206003020: grape wine, cider or perry, mead, sake

Exports to Australia litres

A$ per litre *

HS 2206.00700: fermented beverages not specified elsewhere, excluding cider and sake

Imports from United States litres

A$ per litre ^

46 000
2.74

215 800
1.63

200
30.00

71 800
1.11

122 400
0.90

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS; FAO 2007; USDA trade statistics

165

In 2006 the main imports of fruit wine related products from outside the European Union were from
China and Japan (presumably rice wine) and 239 000 litres from the United States which may include
fruit wine and cider (European Commission 2007).
Due to a lack of suitable growing conditions for grapes, all grape wine is imported (Osterberg &
Karlsson n.d.). While France remains the leading country of supply, imports have been shifting from
Europe to Australia, Chile, South Africa (due to historic cultural ties) and the United States (Austrade
Netherlands 2007). From 200206 imports from Australia grew steadily to 25.1 million litres
averaging A$2.70 a litre FOB in 2006 (ABS).
Product profile
Fruit wines are made from fruits such as blackcurrant, red currant and strawberry.
New World grape wines are considered good value, with easy-to-read labels that educate and assist
shoppers (AWBC Netherlands 2006).
Pricing
Due to intense competition between retail chains, 99 per cent of grape wine retails at less than A$4.50
a bottle (AWBC Netherlands 2006).
Distribution
There are some 800 wine importers, including more than 30 companies distributing a large range of
Australian wines across the country. Around 90 per cent of wine is sold by retail, mainly through large
chains such as Ahold, C1000 and the Laurus group, and in liquor stores (AWBC Netherlands 2006;
Austrade Netherlands 2007).
Import regulations and requirements
Imports incur EU import tariffs of 0.137 (A$0.22) a litre for still wine to 13 per cent alcohol, 0.154
(A$0.25) for 1315 per cent, and 0.32 (A$0.52) for sparkling wine of any strength; excise tax of
0.5902 (A$0.96) a litre for still fruit wine and 2.0124 (A$3.29) for sparkling wine, and VAT of
19 per cent, adding at least A$3.00 to a landed price of A$10.00 for a bottle of Australian fruit wine.
Summary
The Netherlands has medium sized and affluent markets for fruit wine and related drinks, demand for
quality wines, and demand and distribution for Australian grape wines, but strong price competition
between large retailers. There is a minor opportunity at best for Australian tropical fruit wines to
provide variety, novelty and Australian branding.

E.3.17 Norway
Market profile
Norway does not have a significant fruit wine market, although demand for the category is indicated
by imports of up to seven million litres of fruit wine related products a year from 200205 (Table
E.35).
Grape wine consumption is growing as consumers become more knowledgeable about wine through
media publicity, books and overseas travel. Demand is seasonal, being strongest for red wine in cooler
months and white in summer.

166

Supply
Imports of these fermented drinks fluctuated between 3.05 and 6.99 million litres a year from
200205, but declined overall, indicating weakening demand for the category (Table E.35).
Table E.35: Norway - trade in fermented drinks HS2206, # 200205
Description
2002
2003
2004
2005
HS 2206.00: fermented beverages such as cider, perry, mead, mixtures of fermented beverages and
non-alcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^

4 632 000
2.27
54 000
1.67

6 990 810
2.55
206 000
2.04

3 054 300
1.77
80 650
1.65

2 844 000
1.35
37 000
2.06

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS; FAO 2007; USDA trade statistics

Most grape wine is imported, including bulk wine which is bottled locally by private businesses (Wine
News 2006). From 200206 imports of Australian wine grew strongly to 3.9 million litres averaging
A$3.90 a litre FOB in 2006 (ABS). More trade information is on the Statistics Norway website.
There is a high level of illicit production and importing of grape wine, and returning travellers bring in
around 10 per cent of supply, mainly from Sweden, to avoid Norways high liquor prices and taxes
(Euromonitor Norway 2007).
Product profile
Imported fruit wines include tropical fruit wine from Thailand (Mattei 2006).
In grape wines, demand is mainly for red wine, and shifting from mostly bulk and baginbox to
bottled wine (AWBC Norway 2000).
Information on production standards and requirements can be obtained from the Norwegian Food
Safety Authority (Mattilsynet) website.
Pricing
No prices were found for fruit wine.
Grape wine consumers are very price conscious due to high retail prices which reflect some of
Europes highest taxes and distribution costs. Sales have been growing in the low price range below
NOK80 (A$15.60), with around 60 per cent of sales in the mid-price segment of NOK 80130
(A$16.3326.55) including European Union and Australian wines. Wines at more than NOK 130
(A$26.50) are mostly from France (AWBC Norway 2000).
Distribution
Wine can only be sold through licensed restaurants or retailed through the government monopoly
Vinmonopolet which was formed during a temperance campaign in the mid 1800s to control imports
and sales of major alcoholic beverages. When the monopoly was divided in 1996, Vinmonopolet
retained control of retail sales for wine, spirits and strong beer, and it now operates 200 retail stores
which handle 90 per cent per cent of wine sales. Importers of alcoholic drinks must be listed with
Vinmonopolet to access Norways retail sector. The split also resulted in former state-owned company
Arcus AS, which was privatised in 1998, taking over the importing, wholesale and export of wine and
bottling of imported bulk wine. While Arcus AS remains the largest importer and supplier of wine and
spirits to Vinmonopolet and the hotel and restaurant trade, new private companies formed to distribute
wine, and in 2006 Norway had around 200 licensed wine importers who supply Vimonopolet and

167

licensed restaurants, usually as agents on an exclusive basis, and 450 wholesale wine companies
(AWBC Norway 2006; Osterberg & Karlsson n.d.).
Vinmonopolet, who previously provided customers with only minimal product information and price
lists in its stores and only sold over the counter, has recently restructured the stores so customers can
read wine labels and point of sale material and choose from off-the-shelf displays.
Promotion
While media advertising is almost totally banned, media publicity about wine, including new product
launches, is increasingly stimulating consumer interest. Promotion is largely confined to tastings
staged by agents in hotels and restaurants. The Australian Wine Bureau promotes Australian grape
wines at tastings, seminars and the biennial Vinexpo Wine Fair in Oslo (AWBC Norway 2006).
Import regulations and requirements
Although not a member of the EU, Norway is closely aligned to it as a signatory to the Agreement on
the European Economic Area (EEA). Wine imports comply with EU legislation and tariffs but may
require an EAN or UPC code for sale through Vinmonopolet. Fruit wines are subject to import tariffs
of 0.137 (A$0.22) a litre for still wine to 13 per cent alcohol, 0.154 (A$0.25) for 1315 per cent,
and 0.32 (A$0.52) for all sparkling wine; excise of NOK3.67 (A$0.75) per percentage of alcohol per
litre; and VAT of 23 per cent which is refunded if for use by a VAT chargeable business. A recycling
tax of 1.8 per cent is charged on alcoholic beverage containers with return rates below 25 per cent. The
combined charges add from A$1.20 to a landed price of A$10.00 for a bottle of Australian fruit wine.
Exporters are advised to contact the Norwegian Ministry of Agriculture (AWBC Norway 2006;
Osterberg & Karlsson n.d.). More information is available from the Directorate of Customs and Excise
website.
Summary
Norway has a small affluent market for local and imported fruit wines, including some tropical fruit
wine, and demand for Australian grape wine, but is a price-sensitive market with high import costs and
restricted distribution and promotion, indicating little opportunity for Australian tropical fruit wines.

E.3.18 Poland
Market profile
Poland has a fruit wine tradition dating from the 13th century, with fruit wines representing around
60 per cent of all wine consumed. Poles continue to prefer low priced sweet fruit wines, despite more
choice in recent years. Wine consumption is strongest over Christmas, during winter carnivals in
February, and in spring when religious observances inhibit vodka consumption (Ganczewska n.d.;
Jelonkiewicz 2001).
Exports of fruit wine related products grew strongly from 17 000 to 5.63 million litres from 200205,
although low average prices suggest these are mostly lower value drinks such as coolers rather than
wine (Table E.36).
Annual grape wine consumption is around 700 million litres, averaging around 5.6 litres a person, and
expected to grow at 10 to 15 per cent a year due to consumers switching from beer and vodka to wine,
growing consumer acceptance of health claims for wine-drinking, rising incomes in the fast-growing
economy, and widening retail distribution (Ganczewska n.d.; Jelonkiewicz 2001).
Supply
Annual wine production grew from a total of 211 million litres in 1990 to around 300 million litres of
fruit wine and 120 million litres of grape wine in 2000, but fruit wine production is declining as

168

consumers shift to grape wines and to wines from outside Eastern Europe. Fruit wine producers
include large juice processors and other businesses as well as wineries. It was expected that imports of
European bottled and bulk fruit wines would increase as Poland accessed the European Union,
supported by strong growth in imports of fruit wine related products from 77 000 to 554 700 litres a
year from 200206. These imports included a small quantity of Australian fruit wine in 2005
(Jelonkiewicz 2001; Table E.36).
Table E.36: Poland - trade in fermented drinks HS2206, # 200206
Description
2002
2003
2004
2005
2006
HS 2206.00: fermented beverages such as cider, perry, mead, mixtures of fermented beverages and
non-alcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
$A ^
Imports from Australia litres
A$ ^

77 000
3.54
17 000
6.17
0

131 000
3.58
140 000
4.93
0

806 290
1.05
1 664 400
2.27
0

554 750
2.36
5 635 850
0.68
554
6.90

not av.
not av.
not av.
not av.
0

HS 2206.00.9000: Fermented beverages other than grape wine, beer, cider, prune wine, sake,
vermouth, or other effervescent wines

Imports from United States litres

A$ ^

9 400
11.16

1 400
2.20

36 500
7.90

4 500
12.83

1 900
3.50

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Source:
ABS; FAO 2007; USDA trade statistics

There is no large-scale grape production, and around 200 businesses bottle import bulk wine. Imports
of grape wine have resulted in more than 10 000 wine brands, with demand strongest for red and
sparkling, and falling for dessert wines. Consumers are conscious of country of origin and increasingly
buying bottled wine imported mainly from Australia, Chile, France, Germany, South Africa and the
United States (Ganczewska n.d.). From 200206 imports of Australia wine grew strongly to
680 000 litres averaging A$3.30 per litre FOB in 2006 (ABS).
Product profile
Examples of Polish fruit wine producers and products are:

Nalewka Babuni - Fruit wines from cherry and peach

18 brand - Dessert wines, including Currant 18 from blackcurrant and apple, and Cherry 18, a
blend of cherry, apple, blackcurrant, bilberry and sloe, made in the madeira style with 1618 per
cent alcohol and 1315 per cent sugar.

Other fruits used include white and red gooseberries, apple and aronia. Hot mulled wines from
grape wine and spices are also popular (Stawski Distributing 2003).

Wine consumers respond to exotic and ecological messages and value-adding promotions such as
providing a corkscrew with the bottle (Ganczewska n.d).
A law on the production, bottling and trade of wine products, which was developed to harmonise
Polish law with European Union standards, provides three categories for wine that is not solely from
grape: Fermented wine beverages, which includes fruit wines and wine-derived drinks; Fermented
aromatised wine product if mixed with herbs, such as vermouth; and Grape wine products. Grape
wine produced from concentrate is defined as Polish Wine under EU legislation. Polish law permits
the use of non-grape sugar, but not colorants (Ganczewska n.d; Jelonkiewicz 2001).

169

Pricing
Annual average price per litre of these fermented drinks declined significantly from 200205 as
imports and export rose, indicating a shift in product type, while annual average import prices of up
toA$6.90 FOB a litre Australia and A$12.83 a litre from the United States indicate demand for high
quality and higher priced products (Table E.37).
Retail prices for wine reflect type, country and region of origin and perceived quality, and range from
8100 zlotys (A$3.46$43.32) in supermarkets and 201200 zlotys (A$8.66520.00) in wine
specialty shops. Most are in the low-price category, reflecting low consumer incomes and ability to
purchase (Ganczewska n.d.; Ganczewska & Gregory n.d.).
Distribution
Around 200 firms import and bottle bulk wine. Large importers are usually also wholesalers or supply
independent wholesalers to hypermarkets, speciality shops and small retail stores in large cities. Most
retail sales are through around 30 specialist wine stores in larger cities and supermarkets and grocery
stores; with some home delivery (Ganczewska, n.d; Jelonkiewicz 2001).
Promotion
Specialist retailers provide advice and tastings to customers, unlike supermarkets. Wine promotion has
largely been through television advertising, word of mouth and wine-tasting events such as the Polish
National Wine Competition and Austrades annual Taste of Australia in Warsaw (Austrade 2004;
Ganczewska n.d.).
Import regulations and requirements
Fruit wine is subject to EU import tariffs of 0.137 (A$0.22) a litre for still wine with up to 13 per cent
alcohol and 0.154 (A$0.25) for alcohol of 1315 per cent, and 0.32 (A$0.52) for all sparkling wine;
excise of zl 1.36 (0.58) a litre and 22 per cent VAT, adding at least A$2.90 to a landed price of
A$10.00 for a bottle of Australian fruit wine, depending on alcohol content (Jelonkiewicz 2001).
Summary
Poland has a large mature market for domestic and imported fruit wines, but with strong competition
from grape wine; growing demand for premium quality, healthy, environmentally conscious wines and
Australian grape wines; and attractive pricing for premium quality grape wines. There is a moderately
strong opportunity for Australian tropical fruit wines to be differentiated on fruit type, quality and
Australian branding.

E.3.19 Russia
Market profile
Russia has a large fruit wine market, consuming around 15 million litres of domestic fruit wine in
2003 and large quantities of imports from countries such as Moldova, and also one of Europes largest
cider markets (AICV n.d.). Fruit and grape wine represented around seven per cent of Russian liquor
consumption in 2003. Annual exports of fruit wine related products fluctuated between 48 000 and
798 000 litres from 200205 (AICV 2005; Davydova 2003; Table E.37).
Grape wine consumption is estimated at one billion litres a year and growing at around 20 per cent a
year with rising incomes and demand for lower alcohol alternatives to vodka. Key markets are a
substantial expatriate business community, mainly in Moscow, and an emerging market of younger
more affluent Russians. In 2006 grape wine represented 12 per cent of total alcoholic drinks,
averaging 9.2 litres per person annually, but wine-drinking is not established, with only 10 per cent of

170

Russians drinking wine at least once a week (Austrade Russia 2007; AWBC Russia 2007; Hesse n.d.;
The Department of Trade and Industry SA 2005). Young Russians drink mainly RTDs and highstrength premixes which are Russias fastest growing alcoholic drinks sector and supported with
strong manufacturer promotions (Euromonitor Russia 2007).
Supply
Wine production has struggled to recover from the USSRs anti-alcohol campaign in the 1980s. Fruit
wine production was around 15 million litres in 2003 but has been declining (Austrade Russia, 2004).
Manufacturers include Moscow wine bottling factory Rubin which in 2003 produced up to one million
bottles (around 750 000 litres) a month of Ke-Co brand fruit wine (Davydova 2003).
Imports of very low priced fruit wine related products fluctuated between 126.77 and 171.43 million
litres a year from 200205 (Table E.37).
Table E.37: Russia - trade in fermented drinks HS2206, # 200206
Description
2002
2003
2004
2005
2006
HS 2206.00: fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^
Imports from Australia litres
A$ per litre ^

134 745 000

0.75
117 000
1.22
0

171 432 000

0.66
798 000
1.52
0

126 772 300

0.66
691 000
1.93
0

159 166 350

0.61
48 000
1.52
72
31.00

not av.
not av.
not av.
not av.
0

HS 2206.00.70: fermented beverages not specified elsewhere, excluding cider and sake

Imports from United States litres

A$ per litre ^

29 500
2.94

17 100
1.96

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Source:
ABS; FAO 2007; USDA trade statistics

Grape wine production was 316.7 million litres in 2004, although largely from imported materials, and
has declined steadily to well below production capacity. Poor quality has also inhibited market
development for domestic products (AWBC Russia 2007; Austrade Russia 2007).
In 2004 a third of the grape wine market was supplied by imports of 350 million litres. Imports have
grown strongly for several years, with around 85 per cent being low-end wines from eastern Europe,
mainly from Moldova at around A$3.40 a bottle, and some higher priced wines from France, Hungary,
Italy and Spain, while the Australian, Argentina, Chile, South Africa and United States industries are
making efforts to develop a market share (Austrade Russia, 2007; Hesse n.d.). From 200206
Australias exports almost tripled to 650 000 litres at an average price of A$3.90 FOB in 2006 (ABS).
Product profile
Plum wine is a particularly popular fruit wine, produced locally and imported from China, Japan and
Germany. Manufacturer Rubin produces Ke-Co brand wines from fruits such as white plum and rose
plum, apricot, bilberry, chokeberry and mango in 725 ml and 1.45 litre bottles from ingredients
supplied by Ke-Co Japanese Bottlers Limited and imported fruit. Other Russian products include
Cornelian cherry wine (Weaver 2005; Davydova 2003).
In grape wines Russians prefer red, semi-sweet, pure and natural, and have been switching from semisweet Moldovan wines to higher quality products from Western Europe and New World suppliers.
Loyalty to Russian brands remains strong, but not in people aged under 20 (Austrade Russia 2007).
Wine imports need to comply with food safety, additive, labelling and other regulations. The Russian
Government has introduced controls on production, importation and sales of alcoholic drinks to curb

171

illicit production and trade; quality controls, which have affected imports from major wine suppliers
Moldova and Georgia; and trademark protection (AWBC Russia 2007; Euromonitor Russia 2007).
Pricing
Retail prices were not found for fruit wine. Grape wines retail at around A$5.30 a bottle, and
Australian grape wines usually from A$2.50 to $4.99 or over A$10.00 (AWBC Russia 2007).
Distribution
Around 50 wine traders in Moscow and St Petersburg import, wholesale and distribute through trading
houses that often have one division to supply specialty stores and supermarkets and a second for hotels
and restaurants. DP-Trade, Rus Import, Svarog-M and White Hall are among the largest importers.
Fruit wine distributors include Euroservice. Most grape wine is sold in restaurants and boutique wine
outlets, and increasingly supermarket chains that include the Russian companies Mosmart, Patersson
and Perekrestok and western chains such as Auchan, Metro Cash & Carr and Ramstore. Wine shops
are sophisticated with high standards of presentation and display (Austrade Russia 2007; AWBC
Russia 2007; Davydova 2003; Hesse n.d.).
Promotion
The annual DRINKS St. Petersburg trade show includes a category for fruit wines. Austrade promotes
Australian wine at events such as Australia Week in Moscow, a wine website aimed at Russian
importers, and advertisements in specialised Russian media.
Import regulations and requirements
Wine imports attract 20 per cent import tariff, excise of US$0.80 (A$0.95) a litre, and 28 per cent
VAT, adding A$6.27 to a landed price of A$10.00 for a bottle of Australian fruit wine. Austrade
advises taking local partners to navigate the complex Customs system (Austrade Russia 2007; AWBC
Russia 2007).
Summary
Russia has a large market for low quality low-priced and mostly imported fruit wines, growing
demand for wine-style drinks and Australian branded wines, and market segments with rising incomes
and demand for quality wine, but substantial import tariffs. There is a moderately strong opportunity
for Australian tropical fruit wines to be differentiated on quality and fruit type to provide novelty and
variety, and on Australian country of origin.

E.3.20 Spain
Market profile
Spains market for fruit wine related products was 34.6 million litres valued at A$203 million in 2004,
mainly cider and sangria, a traditional grape wine and fruit juice blend often drunk with ice (AICV
2005; Shea 2007; USDA Spain 2006). Around 70 per cent of fruit wine is drunk at home. Exports of
these drinks, probably cider and sangria, grew from 15 to 34 million litres from 200206, including
small quantities to Japan (Table E.38).
Grape wine consumption was 1100 million litres in 2004, with markets that include up to 70 million
tourists a year. Average individual consumption has been stable at around 33 litres a year and is likely
to remain so as demand shifts to lower consumption of better quality wine and from wine to beer and
soft drinks (Austrade Spain 2007; USDA Spain 2006). Local lighter grape wines are generally drunk
with meals, and high quality wines at special occasions and away from the home.

172

Supply
Spain has substantial production of fruit wine, cider and sangria and strongly growing imports of
mostly low priced fermented drinks such as cider and coolers from 200205 (Table E.38). In 2006
most imports from outside the European Union were from China, with small quantities from Japan,
Korea and the United States, presumably rice wine (European Commission 2007).
Table E.38: Spain - trade in fermented drinks HS2206, # 2002-6
Description
2002
2003
2004
2005
2006
HS 2206.00: fermented beverages e.g. cider, perry, mead; mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^
Exports to Canada (A$) ^
Imports from Canada (A$) *
Imports from Australia litres
A$ ^
A$ per litre ^

5 291 000
1.74
15 355 000
1.13
346 385
0
1 350
3 226
2.39

6 193 000
1.72
23 812 310
0.93
560 827
5 501
6 285
12 143
1.93

9 764 000
1.46
33 523 730
0.79
491 222
0
1 800
2 934
1.63

11 449 830
1.46
34 347 390
0.76
748 692
59 524
9 960
20 365
2.04

not av.
not av.
not av.
not av.
800 447
4 954
840
1 575
1.88

HS 2206.00.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

A$ per litre ^

100
60.00

2 500
4.40

6 000
1.67

10 100
4.36

5 500
3.09

HS 2206.00.70: fermented beverages not specified elsewhere, excluding cider and sake

Imports from United States litres

A$ per litre ^

200
34.00

15 300
4.20

8 500
3.75

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS; FAO 2007; USDA trade statistics

In the 2005/06 year Spain produced 3 300 million litres of grape wine and exported around
1350 million, mainly to other EU countries. Growing imports of grape wine reached 33.5 million litres
in 2005, half from Italy, and almost all from within the EU. From 200206 imports from Australia
grew strongly to 505 000 litres averaging A$2.40 a litre FOB in 2006. The wine industry is focussing
on improving product quality as competition grows (Ramos 2006; ABS; Austrade Spain 2007).
Product profile
Sangria is a traditional Spanish drink of red or white still or sparkling grape wine mixed with juices
such as citrus and peach. Brands include Bodegas Sanvivers Sangria Lolailo and Hermanos Alberca
Martinez, S. L. (Alibaba 2007; Shea 2007). In grape wine, demand is mainly for red wine, and
increasingly new and different wines, while young consumers are preferring imported wine over
domestic (Austrade Spain 2007; USDA Spain 2006).
Distribution
Wine is imported by specialist importers and some retailers. Specialist distributors supply most hotels
and restaurants, and wholesalers and retail chains also supply smaller outlets, Australian wine often
enters Spain via the United Kingdom as an English language point, pushing up the freight cost.
Wine is mostly retailed through mainstream wine retailers, their online mail order services, specialist
wine outlets, department stores, hypermarkets, small convenience stores, discounters and other mail
order services. Higher-end supermarket chains usually carry more international wines than lower end
stores. While 45 per cent of wine is drunk at home, hotels, bars, restaurants and caterers are important
outlets, particularly for high quality, sparkling and table wine (Austrade Spain 2007).

173

Import regulations and requirements

Fruit wine imports have to meet EU regulations, with EU duty of 0.137 (A$0.22) a litre for still wine
of up to 13 per cent alcohol, 0.154 (A$0.25) for 1315 per cent alcohol, and 0.32 (A$0.52) for all
sparkling wine, and VAT of 16 per cent (but no excise), adding at least A$1.80 to a landed price of
A$10.00 for a bottle of Australian fruit wine (Austrade Spain 2007; Table E.38).
Summary
Spain has a small fruit wine market with strong demand for related drinks and for Australian grape
wine. Further research may determine limited opportunities for Australian tropical fruit wines.

E.3.21 Sweden
Market profile
Swedens fruit wine and cider markets consumed a total of 60 million litres in 2003, mostly cider
(AICV 2005; Dahlbacka 2004). Demand is seasonal, so leading retailer Nya Systembolaget caters for
this by promoting seasonally oriented products (Systembolaget 2007).
From 200205 fluctuating exports of fruit wine related products reached 21.6 million litres in 2005,
low annual average prices indicating these were mostly of cider (Table E.39). Grytthyttan Winerys
berry wines retail in IKEA stores in Europe, the United States and Canada.
Grape wine consumption was around 161 million litres of imported wine in 2003 and around
45 million litres a year are brought in by Swedish travellers returning home from other EU countries.
Individual consumption averages 25 litres a year, and is expected to continue growing as consumers
shift from traditional vodka and beer to wine, develop a taste for quality wines, and drink more wine
with evening meals. Women are the main wine market while younger people are increasingly drinking
beer (Dahlbacka 2004; Osterberg & Karlsson n.d.).
Supply
Sweden has some private manufacturers of fruit wine (AICV n.d.). From 200205 declining imports
of low priced fruit wine related products included small growing volumes of fruit wine from Australia,
the United States and Canada (Table E.39).
Table E.39: Sweden - trade in fermented drinks HS2206, # 200206
Description
2002
2003
2004
2005
2006
HS 2206.00: fermented beverages such as cider, perry, mead, mixtures of fermented beverages and
non-alcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
A$ per litre *
Imports from Australia litres
A$ per litre ^

4 923 000
1.84
12 376 000
1.32
0

4 146 800
1.92
11 694 090
1.41
0

3 314 000
2.04
4 941 300
3.54
250
15.56

2 468 000
2.02
21 612 280
1.06
339
19.04

not av.
not av.
not av.
not av.
0

HS 2206.00700 fermented beverages not specified elsewhere (excludes cider)

Imports from United States litres

A$ per litre ^

11 800
6.24

27 000
5.20

14 000
4.57

28 100
4.39

43 600
3.23

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Source:
ABS; FAO 2007; USDA trade statistics

174

In 2006, 87 700 litres of fruit wine related products were imported from outside the European Union,
led by Thailand with 29 000 litres at an average price of A$2.39 a litre, while 8400 litres at A$9.08 a
litre came from Switzerland (European Commission 2007).
Despite recent wine grape plantings, grape wine is not traditionally produced in Sweden as the climate
is unsuited to grape-growing. Most manufacturers use imported grape must, including former
Government agency Aktiebolaget Vin & Spiritcentralen (Vin & Spirit) and other licensed producers.
In 2003 6.7 million litres of grape wine were exported to other European Union countries (Dahlbacka
2004; Osterberg & Karlsson n.d.).
Although most imported grape wine is from Europe, mainly Spain and Italy, demand has been
growing for New World wines from Australia, South Africa and Chile (AWBC, Sweden 2007;
Dahlbacka 2004). From 200206 imports of Australian wine grew from 7.8 to 9.4 million litres with
an average price of A$4.30 a litre FOB in 2006 (ABS).
Product profile
An example of Swedish fruit wine producers is Grythyttan Winery which uses hand-picked and wildharvested fruit for its Bjork Vin still and sparkling wines from raspberry, lingonberry, blueberry,
juniper berry and cloudberry, and Forestglgg, a mulled spiced blueberry and lingonberry wine from
forest-picked fruit, in 750 ml and 375ml bottles (Grytthyttan Winery n.d.).
Demand in grape wines is growing for high quality, red wine, new products, screwcaps, and soft
packaging such as baginbox, particularly for outdoor outings and small serves. While Australian
bulk grape wines are considered value for money, sales are declining and better quality wines are
moving into higher price brackets (AWBC Sweden 2006; Dahlbacka 2004; Systembolaget 2007).
Pricing
Grythyttan wines are priced at SEK 93 (A$16.45) for 750 mls for still wines, SEK 129 (A$22.80) for
sparkling, and SEK 99 (A$17.50) for 375 mls of Raspberry Red on the companys website. While low
average import prices reflect mostly low value drinks, imports of Australian fruit wine products
averaged A$15.50 and $19.00 a litre FOB in 2004 and 2005 respectively (Table E.39).
These 2003 price categories indicate retail pricing for grape wine:

under SEK61 (A$11.60) 50 per cent of sales

mid-price SEK6170 (A$11.6013.35) 30 per cent and growing

over SEK70 (A$13.35): 20 per cent (Dahlbacka 2004).

Distribution
A strong Temperance influence has resulted in a public health policy with considerable controls and
restrictions on alcohol distribution and promotion to prevent financial gain from supplying liquor so as
to reduce the negative effects of consumption. Since the Government relinquished control of liquor
production, import, sale and exports on joining the European Union in 1995, allowing domestic
producers and private licensed importers to distribute wine and spirits, more than 600 licensed
importers have emerged. However, the Government continues to control retail sales through its
company Nya Systembolaget which holds a monopoly on all retailing of wine, spirits and full strength
beer through its 400 liquor stores. Even wineries cannot sell direct to customers. Nya Systembolaget
sold 142 million litres of wine, 64 per cent of total wine sales, in 2003, but has lost market share to
direct imports (AWBC Sweden 2007; Dahlbacka 2004; Grythyttan n.d.).
Vin & Spirit continues to distribute wine but no longer has a monopoly on wholesaling. Wholesalers,
restaurants and caterers are increasingly importing and distributing wine direct;u, and relaxed private
alcohol import quotas now allow individuals to bring in up to 90 litres of wine from neighbouring EU
countries with lower prices and taxes (AWBC Sweden 2007; Dahlbacka 2004).

175

Promotion
In recent years media advertising of alcoholic drinks has been permitted, but within strict guidelines
that exclude television, radio and billboard advertising, so newspaper and magazine wine writers have
become very influential. Fruit wines are also promoted at events such as Aker Brygge Foodfestival,
and Nya Systembolaget provides product lists in its stores which are updated twice a year and more
frequently for temporary product ranges, and lists its products on its website and in a monthly
newsletter. Promotion for grape wines includes product launches and exhibits for Australian and other
imported wines, tastings, courses, wine appreciation through wine clubs and societies, and the
biannual Vinordic wine fair (AWBC Sweden, 2006; Dahlbacka 2004).
Import regulations and requirements
Imported fruit wines are subject to EU regulations and incur EU import tariffs of 0.137 (A$0.22) a
litre for still wine with up to 13 per cent alcohol, 0.154 (A$0.25) for 1315 per cent, and 0.32
(A$0.52) for all sparkling wine, as well as excise of SED 22.08 (A$3.90) a litre, 25 per cent VAT and
glass bottle duty, adding more than A$4.30 to a landed price of A$10.00 for a bottle of Australian fruit
wine (Austrade Sweden 2007; Tables E. 38, E.39).
Summary
Sweden has a small attractively priced market for local and imported temperate fruit wines, and strong
demand for similar drinks and for imported grape wine, including Australian brands, but restricted
liquor distribution. There may be a minor opportunity to differentiate Australian tropical fruit wine
products on novelty and Australian branding.

E.3.22 Switzerland
Switzerland has no significant fruit wine consumption (AICV 2005), but large and growing imports of
fruit wine related products, including fruit wine products from Australia, suggest demand for the
category (Table E.40).
It also has one of the worlds wealthiest and highest-consuming grape wine markets291.6 million
litres with average individual consumption of around 40 litres in 2004mostly by older people living
in the south, but the market is slowly shrinking, due in part to a government campaign against drinkdriving (AWBC Switzerland, 2006; AWBC Winefacts 2007).
Table E.40: Switzerland - trade in fermented drinks HS2206, # 200205
Description
2002
2003
2004
2005
HS 2206.00: fermented beverages such as cider, perry, mead, mixtures of fermented beverages and
non-alcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
Imports from Australia litres
A$ ^
A$ per litre ^

2 869 020
3.61
90 890
8 274
22 064
2.60

3 704 850
3.62
110 250
0

4 250 260
3.61
141 510
0

4 808 380
3.46
98 520
21 605
53 468
2.47

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country.
Source: ABS; FAO 2007

Switzerland produces sufficient white grape wine for domestic requirements but the more popular red
wine is imported (AWBC Switzerland 2006). From 200206 annual imports of Australian grape wine
fell from 4.6 to 1.37 million litres with an average price of A$4.60 a litre FOB in 2006 (ABS).

176

Switzerland is not an EU member. Wine imports incur a monopoly tax of CHF 29 (A$22.90) per litre
of pure alcohol, with a reduced rate of CHF 14.50 ($14.45) per litre of pure alcohol for natural wines
such as fruit and berry wines with alcohol of more than 15 per cent but not exceeding 22 per cent, and
VAT of 7.6 per cent, adding A3.10 to a landed price of A$10.00 for a bottle of Australian fruit wine
with 13 per cent alcohol. Imports are regulated by the Federal Trade in Wine Control Commission, the
Federal Office for Agriculture and the Federal Customs Office. More information on tariffs and taxes
is available at the websites of TARES, the Swiss Portal and the Swiss Federal Office of Agriculture.
New exporters are advised to engage an experienced wine agent (AWBC Switzerland 2006).
Summary
Switzerland has an uncertain market for fruit wines, heavy grape wine consumption and imports of
Australian fruit and grape wine but declining fruit and grape wine markets and high import taxes,
indicating minor potential at best for Australian tropical fruit wine.

E.3.23 Turkey
Market profile
Turkey has a small market for local fruit wines. Exports of fruit wine related products fluctuated from
200205, which low annual average prices suggest were mainly low value drinks such as cider (FAO
2007).
Despite 99.8 per cent of people following the Islamic religion, Turkey is not governed by Sharia law
so alcohol consumption is permitted, and Christians and Jews have produced and consumed wine in
Turkey since before the Ottoman Empires 500 year dominance. Grape wine consumption is around
69 million litres a year, averaging one litre per person, but is increasing with wider choice and
distribution, urbanisation, the growing economy, around 15 million tourists visiting each year, and
some exports, mainly to Europe and Japan. Turkish grape wine drinkers are usually young, educated
and sophisticated, and living in Istanbul, Ankara or Ismir (Leone 2004 n.d. USDA Turkey 2007).
Supply
A small fruit wine industry appears to meet domestic demand as imports declined from 200205. Low
average prices indicate most imports are lower value drinks such as cider or coolers rather than wine
(FAO 2007).
Some 80 wineries produced around 60 million litres of grape wine in 2004 using indigenous and
imported grape cultivars, with production forecast to expand to meet increasing demand. Production
was dominated by government monopoly Tekel and a few favoured wineries that were protected by
high import duties, until the industry was opened to new producers in the 1990s. There is also a large
illicit industry of around 12 million litres a year (Brosnahan n.d.). While most imports of grape wine
have been from Italy, France and Chile in recent years, small quantities have come from Australia,
including 13 000 litres averaging A$6.30 a litre FOB in 2006 (ABS).
Product profile
Fruit wine producers include Artemis Winery at Sirence, who retail from the winery, and Asya Fruit
Juice and Food Industrial Corporation and Olivo Organics Ltd who advertise on distributor websites
such as Imex Goods and Alibaba. Research conducted on fruit wines from mulberry, blackberry,
quince, apple, apricot, melon raspberry, bilberry, sour cherry and strawberry for their pharmaceutical
potential indicates these are significant fruits used in wine-making (Yildirim 2006).

177

Pricing
No prices were found for fruit wines. Medium quality grape wines retail at around A$9.3013.30 and
higher quality at around A$19.5022.40. Prices can be prohibitively high, particularly in restaurants
(Brosnahan n.d.).
Distribution
Wine imports are handled by independent importers, agents and distributors, rather than retailers
buying directly. Wine is sold mostly through retail stores such as domestic and international
supermarket chains (42 per cent), wine shops, duty free stores, restaurants and a growing sector of
hotels and resorts (USDA Turkey 2007).
Promotion
Fruit wines are mainly promoted through winery tastings and internet distributor websites.
Grape wines are often promoted through articles in newspapers and food magazines, and at tastings in
luxury hotels, often during food festivals (USDA Turkey 2007).
Import regulations and requirements
Taxes on wines are prohibitively high. Imported wines are subject to import duty of 70 per cent, VAT
of 18 per cent, special consumption tax of 63.3 per cent (import duty is 50 per cent for EU wines) and
customs clearance fees of 10 per cent, which add A$11.28 to a landed price of A$10.00 for a bottle of
Australian fruit wine. Additional costs such as storage, distribution and importer mark-up add another
A$9.00 or more. Also, supermarkets charge high fees for shelf space, and luxury hotels mark up the
prices of imported wines by around 200300 per cent. If Turkey is accepted into the European Union,
import taxes will fall to EU levels (USDA Turkey 2007).
Summary
Turkey has a small market for domestic fruit wine and Australian grape wine but high tariffs and taxes
on imported wines. While there may be a minor opportunity for Australian tropical fruit wines to be
differentiated by fruit type and quality, they are unlikely to be cost-competitive against domestic wines
free of import taxes.

E.3.24 United Kingdom

Fruit wines are also called country wines and British wines. Production and trade are reported under
three different product codes. HM Revenue and Customs use the harmonised code HS 2206 and also
SITC 11226 for fermented fruit products, while the Office of National Statistics use PCC 15941000
for cider and other fruit wines which includes perry, mead and fortified wines such as vermouth and
grape wines flavoured with plants or aromatic substances, but not beer or grape wine. These different
combinations of products in each code make comparison and analysis of trade data difficult.
Market profile
The United Kingdom has a long tradition of non-grape wines made from fruit, honey (mead), ginger,
flowers and vegetables, led by cider, perry and ginger wine. It has one of Europes largest fruit wine
markets, with stable consumption of around 40 to 50 million litres a year. Annual average
consumption rose from 10.2 to 12.6 litres per person from 19942004 and major British drinks
manufacturers and an emerging Scottish fruit wine industry have revealed large and growing sales of
fruit wine in recent years (Hibberd 2003; Johnston 2004).

178

Total fruit wine, cider and perry consumption grew from 597 to 750 million litres from 200105,
while exports fell from 30 to 19 million litres, indicating strong demand (Table E.41; Osterberg &
Karlsson n.d.; Wilson 2006). Growing consumption, production and imports and shrinking exports
indicate continuing demand, although mainly for cider and perry.
The United Kingdom is Europes second largest cider market. The key market segment has
traditionally been young working-class men drinking cider as an alternative to beer and often buying
bottled or draught cider in pubs, but manufacturers are also now attempting to win RTD drinkers over
to cider (AICV n.d.; Blake & Boyle, 1992; Solley 2004, 2006).
The market for semi-sparkling perry is estimated at around 100 million litres a year, based on
manufacturer Halewoods claim of a 50 per cent market share with 50.4 million litres in sales. Perry
has become a leading wine-style drink, and sales have grown for manufacturers such as Matthew
Clark who have successfully repositioned their long-standing Babycham perry from a cider to a
sparkling wine by promoting to young female shoppers in retail stores (Hibberd 2003).
These demand trends indicate further market growth for fruit wines, cider and perry:

2025 year olds who want light and fruity wines with a clear explanation of their taste features

continuing demand for coolers

development of new distribution channels, such as regional retail chains

consumer interest in novel and innovative products

strong recent growth in ginger wine sales, expected to continue

consumers shifting to lower alcohol wines and other drinks (AICV 2005, Austrade United
Kingdom 2006; Bacot & Lewis 2007; Chapman 1991; Hibberd 2003).

However, fruit wines have limited popularity and appear to sell best in their local area of production.
Department stores have experienced no consumer demand for fruit wines, and efforts to sell Australian
mango wine have encountered low consumer awareness and a need for strong promotion (Austrade,
United Kingdom 2006; Rochetau-Hasan 2007).
Exports of fruit wine related products (mainly cider), fell from 19.16 to 12.9 million litres a year from
200205. In 2004 two-thirds were to other European Union countries, followed by the United States,
Canada and the Middle East (National Statistics). From 200206 exports to Australia grew strongly to
42 415 litres in 2006, but in low value drinks such as cider (Table E.41).
Grape wine consumption was 1259 million litres in 2004 and growing steadily, but the market may be
maturing as two-thirds of British people now drink wine. The main wine market is men and women
aged over 35 with above average incomes, and growth in wine sales is attributed to higher
consumption in this segment rather than young people adopting wine. Individual consumption rose
from 12.0 to 21.1 litres from 19962005, largely because of to a shift from beer to wine due to more
European lifestyles, more wine drunk with meals at home, higher individual disposable incomes, and a
high level of women in employment. Australian wines are particularly popular with women and with
men aged 2035 (Austrade United Kingdom 2006; AWBC United Kingdom 2007; AWBC Winefacts
2007; Wilson 2006; US Foreign Agricultural Service 2006).
A British survey by VINEXPOS found 2025 year olds saw wine as trendy, fashionable and beneficial
to health, rather than as a means to inebriation, and all respondents aspired to drink more wine. They
saw wine drinkers as refined, educated and older, and suggested wine with a younger image would
appeal more to their age group, provided it did not target them specifically. They liked traditional
bottles and labels. Key concerns inhibiting purchase were anxiety about knowledge of wine, how to
match it with food, if it provide value for money, and an assumption that enjoying wine requires
knowledge and effort. Respondents complained wine labels were confusing and uninformative, and
should guide them on when and how to drink a wine. They saw quality wine as expensive, including
by the glass at GBP4.006.00 (A$9.6014.35) (Bacot & Lewis 2007).

179

Supply
In 2005 domestic production of fruit wines and cider was 750 million litres (mostly cider), having
grown 26 per cent since 2001 (Table E.41). Producers include numerous small fruit wineries across
the country, large manufacturers expanding in fruit wine production, and an emerging Scottish
industry which produced around 330 000 litres of fruit and flower wines in 2004 (Johnston 2004).
Table E.41: United Kingdom - production, imports and exports of fruit wines, cider, mead, fortified
wines, vermouth and herbal grape wine *
Volumes (litres)

2001

2002

2003

2004

2005

Manufacturer sales
Total imports
Total exports
Net supply (market size)

612 443 000

15 559 000
30 001 000
597 616 000

644 898 000

17 712 000
25 928 000
636 682 000

664 834 000

19 460 000
19 564 000
664 860 000

525 287 000

26 134 000
19 771 000
531 650 000

735 359 000

34 040 000
19 236 000
750 163 000

Note: * Product code is PCC 15941000. Source: The Office of National Statistics 2007

Cider and perry manufacturers include some very large companies and international brands, and are
represented by The National Association of Cider Makers. Gaymer Cider Company, owned by the
worlds leading wine company Constellation Brands, has been expanding its cider and apple
production in recent years, but falling cider sales have led to other large manufacturers shifting to the
more profitable Flavoured Alcoholic Beverages, light wine and spirits categories (Hibberd 2003;
Parson 2006; Solley 2004; Merwin 2005).
Imports of fermented drinks, including fruit wine, cider, perry and mead, grew from 52.8 to
72.1 million litres from 2001-04 according to Food and Agriculture Organisation statistics. Imports
included growing quantities of fruit wine (excluding cider) from the United States and occasional
small volumes from Australia, Canada and South Africa. Low annual average import and export prices
indicate most trade is in lower priced drinks such as cider and coolers rather than fruit wines.
However, National Statistics data for 2004 indicates imports of 19.4 million litres of fruit wines and
cider; 16.7 million litres with from other European Community countries and 2.7 million litres from
non-EU countries. The discrepancies appear to reflect different combinations of products in the codes.
Table E.42: United Kingdom - trade in fermented drinks HS2206, # 2001-05
Description

2001

2002

2003

2004

2005

HS 2206.00: fermented beverages such as cider, perry, mead, mixtures of fermented beverages and nonalcoholic beverages not elsewhere specific or included

Total imports litres

A$ per litre *
Total exports litres
A$ per litre ^
Imports from Australia litres
$ per litre ^
Imports from Canada A$ ^
Exports to Canada A$ *
Imports from South Africa A$ ^

52 855 339
2.74
19 166 120
11.26
2 402
11.77
0
2 400 420
58 688

58 507 211
2.97
14 289 460
11.70
0

0
2 830 233
18 855

68 925 717
2.74
18 680 280
8.79
45
69.33
0
4 419 827
21 021

72 113 430
2.14
12 297 990
13.05
0

42 895
5 127 556
0

not av.
not av.
not av.
not av.
not av.
not av.
15 522
6 746 696
not av.

HS 2206.00.3030: Grape wine, cider or perry, mead, sake, fruit or vegetable wine

Exports to Australia litres

$ per litre *

8 945
2.76

10 377
3.50

20 724
2.61

41 117
1.75

42 415
1.98

HS 2206.00.70: fermented beverages not specified elsewhere, excluding cider and sake

Imports from United States litres

A$ per litre ^

88 100
0.37

59 000
7.43

99 000
3.10

106 800
2.51

not av.
not av.

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS; National Statistics 200205; FAO 2007; USDA trade statistics

180

A small domestic grape wine industry supplies around 0.01 per cent of the market with an estimated
1.9 million litres of grape wine. While most wine is produced from white domestic grapes, some is
made wine or British wine produced from grape concentrate imported mainly from Italy (US
Foreign Agricultural Service 2006; Wilson 2006).
Grape wine imports were 1396 million litres in 2004. Australia has overtaken France as market leader,
with six of the ten leading brands by value, and from 2002 Australian supply grew steadily to
261 million litres at an average price of A$3.60 a litre FOB in 2006. New World wines have eroded
the market shares of traditional European suppliers and caused increasing price competition (ABS;
AWBC United Kingdom 2007; Austrade, Wilson 2006; US Foreign Agricultural Service 2006).
Product profile
There is a diverse range of fruit wines from temperate fruits, with smaller wineries often also
producing drinks such as cider, perry, grape wine, mead and ginger wine (Table E.43).
Table E.43: United Kingdom - examples of fruit wine producers and products
Manufacturer
Domestic fruit wine
Large manufacturers

Products and brands

Price *

Broadlands
CWF Harvest Fruits

Berry and plum wines, and blends with grape wine

5.99 (A$14.35)
Apricot, peach, cherry and damson fruit wines; meads; perry (7.5%
alcohol); mulled wine with citrus; green ginger wine

Small producers

Avalon Vineyard and

Pennard Organic Wines,
Somerset
Broughton Pastures

Organic wines from apple, elderberry, gooseberry, plum, raspberry, 6.0010.00

tayberry, ginger and grape
(A$14.3523.90)

Blackcurrant, elderberry, elderflower, blackberry and gooseberry

fruit wines, ginger wine and mead, organic wines
Cairn O'Mohr, Scotland
Strawberry, raspberry, brambleberry, elderberry, and gooseberry
wines; wines from flowers and leaves
Celtic Country Wines, Wales Old Grumpys Allotment berry wines flavoured with silver birch,
gorse or autumn oak
Lurgashall Winery
Premium wines from elderflower, elderberry, rose petals and birch
Lyme Bay Classic Fruit
Wines, Devon
Orkney Wine Company,
Scotland

5.95 (A$14.30)
7.23 (A$17.30)
6.95 (A$16.6)

7.25 (A$17.30) for

700 mls
Country wines including apricot, elderberry, blackberry and apple, 5.95 (A$14.30)
cherry, cranberry, damson, peach and strawberry; cider; flower
wines; birch wines and mead
Blackcurrant, crabapple, cranberry, blueberry, elderberry, rhubarb, Wine 10.00 (A$23.30),
rowanberry, and grape wines and blends
fortified 12.00 (A$28.70)

Large manufacturers of cider, perry and ginger wine

Halewoods Lambrini
Gaymer Cider Company

Scottish & Newcastle

Constellation Brands

Semi-sparkling Perry, 700 mls

Lambrini Perry, 250 mls
Babycham (semi-sparkling perry); Blackthorn, Olde English and
Diamond White ciders; fortified wines Stones Ginger Wine, Old
England, Tudor Rose, QC and VP
Strongbow cider
Stones Green Ginger Wine

5.38 (A$12.85)

Cristallo Vin de Fraise strawberry wine, medium-dry style, 13%

alcohol

14.50 (A$34.65) for 375

mls

Imported fruit wines

Peter Knapp, Switzerland

Note: * Assumes a 750 ml bottle unless otherwise stated. Source: Producer websites, Parson 2006; Hibberd
2003; Gary 2002; Vinceremos Organic Wines 2006; Continental Wine and Food n.d.; Rocks Organic 2005;
DoRewards Hall n.d.; Dinky-Drinks 2004

181

Internet distributor Hip Pocket Wine Company lists 50 English fruit wines, 50 country wines, and
34 cider and perry products on its website.
No evidence was found of recent tropical fruit wine sales.
Large manufacturers such as Broadlands and CWF (the Harvest Brand) have been extensively
developing new fruit wines following strong demand for products with around 13.5 per cent alcohol
(Bacot & Lewis 2007; Hibberd 2003).
Fruit wine producers use various strategies to differentiate on quality and branding, including organic
wine, labels referring to use of domestic fruit, premium wines (from single fruit) and traditional
winemaking methods, and strong branding.
Brothers Drinks have extended their cider range with premium quality pear and apple ciders and a
strawberrypear blend, while Gaymer Cider Company is focusing on RTD drinkers by positioning its
ciders as premium alcohol branded drinks with quality packaging, promotion of place of origin for
ingredients, and introducing a premium reserve. Cider drinkers are strongly brand-loyal, and cider
production has shifted substantially from private/own-label to major brands (AICV n.d.; Blake &
Boyle 1992; Solley 2004, 2006; Hibberd 2003).
While EU legislation for grape wine does not extend to fruit wine, in recognition of the United
Kingdoms long tradition of making wine and wine products from imported grape must and juice, EU
regulators have given a special dispensation for British producers to use the term British or made
wines when sold in the United Kingdom. Accordingly the British Wine Producers Committee of the
Wine and Spirit Trade Association, whose members follow its Code of Practice, provides general rules
on the definition, description and presentation of made wines or British Wines, and standards of
quality parameters and monitoring procedures.
British wine refers to fruit wine and grape wine, including wines from grape concentrate or dried
grapes, juice or must (crushed grapes). The finished wines may contain other fruits or vegetables or
honey, ginger, added sugar, added water; wine, cider, flavourings, permitted colours or preservatives,
carbon dioxide, nitrogen or other legally permitted additives. Wines with aromatic ingredients such as
herbs and spices are defined as Aromatised British wines. Wines with 15 per cent alcohol and above,
including fortified wines, are called British fortified wines. This category includes fruit wine, ginger
wine and so-called tonic wine, but is mostly the fortified grape wines sherry, port and vermouth
(herb-flavoured grape wine). Products must have four to 22 per cent alcohol or at least 30 per cent
single strength grape must or juice. While made wine products can be called wine, wines made
from vegetables or fruits other than grape require a composite name of the ingredient characterising
the product and the word wine prefixed with a term such as British or the fruit, for example
Strawberry wine (Department for Food, Environment and Rural Affairs 2007; The Wine and Spirit
Trade Association 2007).
Fruit and made wines are required to comply with the labelling requirements of the Food Standards
Agency. More information on wine standards is available on its website and those of the Wine
Standards Board and the Wine & Spirit Trade Association.
In grape wines, demand has been increasing for still and sparkling ros but stable for vermouth and
other aromatised wines to lack of uptake by young consumers (Wilson 2006). Around 77 per cent of
wine imports are bottled, with growing sales of softpacks (AWBC United Kingdom 2007). EU
regulations apply to production and labelling.
Pricing
Prices for domestic fruit wines on producer and distributor websites range from 1.5010.00
(A$3.6023.90) for 750 mls, with fortified wines at around 12.00 (A$28.70) (Table 43).
More than 80 per cent of still grape wine retailed at below 5.00 (A$11.95) for 750 mls in 2005.
Supermarkets have been discounting major brands to build market share, particularly Australian wine
in recent years due to its oversupply (Austrade United Kingdom 2006; Wilson 2006).

182

Distribution
Most fruit wine producers retail directly via their wineries, websites or mail order services. Some
supply bulk wine to other manufacturers to blend with grape juice and bottle as flavoured wine
(Hibberd 2003). Most wines sold by wineries and in country towns and villages are local wines from
local fruits such as berries and elderflower. Fruit wines are also sold through large retail chains;
regional retail chains such as Scotlands Asda stores selling Scottish products; a small chain of stores
operated by the National Heritage Trust; gift catalogues and farmers markets. Large manufacturers
such as Matthew Clark Drinks and Broadlands distribute fruit wine, cider and perry mostly through
large retail chains, small stores, delicatessens and markets, and some have their own import, wholesale
and export operations. The emergence of RTDs and similar drinks categories has reduced the
availability of shelf space for traditional categories such as fruit wine (Johnston 2005; Hibberd 2003).
In 2000 alcoholic drinks were sold through around 42 000 liquor shops including specialist liquor and
grocery stores, 70 000 pubs and bars, 32 000 clubs and 31 500 licensed restaurants. The major retailer
chains Tesco, Sainsbury, Asda, Safeway, Dwik Save, Somerfield, Morrisons and Waitrose handle
most of the 80 per cent of grape wine sold through retail. Sales have been shifting from smaller stores
to supermarkets, and to more direct selling such as mail order (Austrade United Kingdom 2006;
Osterberg & Karlsson n.d.; Wilson 2006).
Promotion
Advertising of alcoholic beverages is not regulated but voluntary standards apply, and the alcoholic
drinks industry supports a Government campaign for drinking in moderation. Fruit wines are
promoted on company and distributor websites and in wine competitions such as the annual National
Fruit Wine, Mead & Liqueur Association Awards, while large cider and fruit wine manufacturers use
major promotional campaigns. The main grape wine trade shows are the trade-only International Food
and Drink Event in odd-numbered years in London and the annual London International Wine and
Spirits Fair (AWBC United Kingdom 2007).
The previously mentioned survey found that 2025 year old consumers want more merchandising and
education aimed at their age group in wine bars and retail stores (Bacot & Lewis, 2007).
As tropical fruit wines are new to the British market, a successful market introduction would require a
strong consumer educational campaign and capacity to supply large retailers (Rocheteau-Hasan 2007).
Import regulations and requirements
Import tariffs on imported fruit wines, cider and perry comply with EU regulations (Table E.44).
Table E.44: United Kingdom - duties and taxes on fruit wine products
Product

Tax

Rate (2007)

Less than 2 litres

Still wine
More than 5.5% alcohol but less than 15%
More than 15% alcohol but less than 22%
More than 22% alcohol
Sparkling wine
All fruit wine

Import tariff

0.07 (A$0.11) per litre

Excise

VAT

1.78 (A$4.25) per litre

2.37 (A$5.67) per litre
19.56 (A$46.75) per litre
2.228 (A$3.65) per litre
17.5%

Source: HM Revenue and Customs

Fruit wine imports incur EU tariffs of 0.137 (A$0.22) a litre for still wine of up to 13 per cent
alcohol, 0.154 (A$0.25) for 1315 per cent, and 0.32 (A$0.52) for all sparkling wine; excise of
2.62 (A$4.38) a litre for still and 3.36 (A$5.50) for sparkling; and VAT of 17.5 per cent, adding
from A$5.80 to a landed price of A$10.00 for a bottle of Australian fruit wine, depending on alcohol
content.

183

While import duty is lower than for grape wine, it gives domestic producers and those from other
European Union countries a substantial cost advantage (Hibberd, 2003).
Potential exporters are advised to obtain a written customs ruling from HM Revenue and Customs
before shipping wine (AWBC, United Kingdom 2007). More information can be found on import
tariffs at the HM Revenue and Customs website, on liquor laws and regulations at the Wine and Spirit
Trade Association website, and on the United Kingdom wine industry and industry organisations at
the Department for Environment, Food and Rural Affairs website.
Summary
The United Kingdom has a medium sized and growing market with attractive pricing, some retail
distribution for domestic fruit wines, and strong demand for similar drinks, with Australian brands
leading in the grape wine market. There is a moderately strong opportunity for Australian tropical fruit
wines to be differentiated by fruit type for novelty and variety, and by quality and Australian origin.

E.4. Pacific region

E.4.1 New Zealand
Market profile
New Zealand has a small fruit wine market which appears to have shrunk from 6.2 to 3.8 million litres
from 200205, according to net supply volumes (Table E.45). Over the same period exports of fruit
wine related products fluctuated between 58 930 and 835 000 litres a year, including up to 87 000
litres a year to Japan, up to 2100 litres a year to the United States, and small intermittent quantities to
Australia (ABS; Japan Customs Trade Statistics, USDA trade statistics).
Grape wine consumption was 111 million litres in 2006, averaging 20.8 litres per person, following
several years of steady growth (New Zealand Wines Online; Austrade New Zealand 2007).
Supply
Around 40 fruit wineries, with annual production ranging from 3 000780 000 litres a year, are
concentrated mainly around Hawke's Bay, Nelson/Marlborough, Taranaki and Auckland (NZ Ministry
of Agriculture and Forestry n.d.). Annual production almost halved, to 3.8 million litres, from
200206 (Table E.45), indicating a lack of market development.
Table E.45: New Zealand - production of non-grape wine, 200206
Year

Not more than 14% alcohol

More than 14% alcohol

Total

104 000
87 000
75 000
76 000
78 000

6 179 000
5 928 000
4 578 000
4 952 000
3 770 000

Litres

2002
2003
2004
2005
2006

6 075 000
5 841 000
4 503 000
4 876 000
3 692 000

Source: Mair; Non-grape wine available for consumption 2006

The industry is represented by the Fruit Wine and Cider Makers Association of New Zealand, founded
in 1985 to represent commercial producers of fruit wines, ciders, liqueurs and fruit juices. Initially
funded voluntarily by members, the association has been developing a compulsory levy system (Fruit
Wine and Cider Makers of New Zealand n.d.).
Annual imports appear to have stabilised at around 200 000 litres and average prices of around A$5.00
a litre (Table E.46), although these are likely to include cider and flavoured wines.

184

Table E.46: New Zealand - trade in fermented drinks HS2206, # 200206

Description
2002
2003
2004
2005
2006
HS 2206.00: fermented beverages such as cider, perry, mead, mixtures of fermented beverages and
non-alcoholic beverages not elsewhere specific or included

Total imports litres

A$/litre *
Total exports litres
A$/litre ^
Imports from Australia litres
A$ per litre ^

100 280
5.51
835 170
3.79
10 190
8.22

224 000
4.81
62 960
5.53
188 841
3.15

194 540
4.95
58 930
5.45
184 068
2.92

197 240
5.34
75 510
5.09
239 246
2.99

not av.
not av.
not av.
not av.
86 476
8.59

HS 2206.00.229: fermented beverages including cider, perry and mead, but not sake or wine coolers

Exports to Japan litres

A$/litre *

87 000
6.88

59 400
5.64

79 200
5.30

47 400
6.14

42 400
5.89

HS 2206.003020: Grape wine cider or perry, mead, sake, fruit or vegetable wine

Exports to Australia litres

A$/litre *

12 617
1.74

1 512
5.50

HS 2206.00.9000: Fermented beverages other than grape wine, beer, cider, prune wine, sake,
vermouth, or other effervescent wines

Exports to United States litres

A$/litre *

2 100
12.3

1 000
10.8

1 500
9.1

2 100
10.0

2 000
9.3

Notes: # Excluding grape wine and beer. * CIF at importing country; ^ FOB from exporting country. Sources:
ABS, FAO 2007; Japan Customs Trade Statistics, USDA Trade Statistics

From 200206 grape wine production grew strongly from 89 to 133 million litres a year, due largely to
a focus on exports which more than doubled to 57.8 million litres annually from 200206, and
improved quality (Wine Online New Zealand 2007; Benson-Rea et al, 2003). Products include
Pernod Ricards Lindauer Fraise, a white grape wine flavoured with strawberry essence, which is
exported to Australia (Pernod Ricard 2007). New Zealand Winegrowers represents the wine and grape
industries, being funded by levies, user-paid activities and sponsorships, while the Wine Institute Of
New Zealand, also levy funded, supports domestic and international market development, research and
other representation for grape wines (NZ Ministry of Agriculture and Forestry n.d.).
From 2001/22005/6 grape wine imports fell from 41.8 to 36 million litres a year as demand shifted
from imported to domestic wine. Australia leads with around 75 per cent of imports, supplying
32 million litres averaging A$3.20 a litre FOB in 2006 (ABS; AWBC New Zealand 2006).
Product profile
The fruit wine industry produces a wide range of fruit wines, led by kiwifruit wine, as well as cider,
vegetable wines and mead (Table E.47). Two per cent of production is fortified (Table E.45).
Table E.47: New Zealand - examples of fruit wine producers and products
Brand

Products

Bay Classic Fruit Wines, Hawkes Bay

Mamaku Blue, Rotorua
Prestons Kiwifruit Winery, Taurana
Purangi Estate, Coromandel Peninsula, North Island

Boysenberry, feijoa and kiwifruit wine, still and sparkling

Blueberry wine
Kiwifruit wine
Fruit wines, fortified wines and liqueurs from organic fruit and
herbs, and grape wine
Apple, kiwifruit, boysenberry and feijoa wines
Boysenberry, kiwifruit & feijoa wines; cider; juices
Fruit wines, ports, ciders and cream liqueurs

Robbs Fruit Winery and Rocket Caf, Bay of Islands

Sentry Hill Winery, Lepperton
Unique New Zealand Fruit Wines, Taupo

Sources: Fruit Wine and Cider Makers of New Zealand n.d.; dmoz 2000; company websites, Gary 2002

185

Imported wines need to comply with the manufacturing standards in Standard 2.7.4 of the Food
Standards Code developed by Food Standards Australia New Zealand (FSANZ) and administered by
the New Zealand Food Safety Authority (NZSFA), which provides general definitions for wine and
wine products and standards for production, composition, labelling and exporting, and regulates those
foods that can be added during production. Wines must also meet Maximum Residual Levels and
other regulations (AWBC, New Zealand, 2006). More information is available on the New Zealand
Food Safety Authority, the Food Standards Australia and New Zealand and New Zealand Wine
websites.
For the trading of grape wines, New Zealand and Australia are signatory countries to the Mutual
Acceptance Agreement on Oenological Practices (see Definitions).
Grape wine consumers are quality, brand, and health conscious, and usually living in cities. They are
shifting from cask to bottled wine and to screwcaps and, while loyal to domestic white wine, are
buying more imported sparkling wine and red wine, particularly Australian red wines which are seen
as value for money with consistent quality at a range of prices. Importers seek Australian wines with
known brands and a point of difference (AWBC New Zealand 2006; Austrade New Zealand 2007).
Pricing
Winery websites advertise fruit wines from NZ $13.0023.00 (A$11.4020.20) a bottle, while Bay
Classic fruit wines are advertised on the Products from New Zealand.com website at A$26.90 for
760 mls for boysenberry and feijoa wines and A$28.06 for kiwifruit wine.
From 200206 annual import prices were around A$5.00 a litre, indicating mostly lower priced
products such as cider and coolers, while export prices per litre of up to A$6.88 to Japan and A$12.30
to the United States indicate fruit wine.
Almost half of Australian grape wine retails at A$2.504.99 a bottle. This competitive pricing has
contributed to growing imports from Australia (AWBC New Zealand 2006).
Distribution
Fruit wines are increasingly retailed by producers via their wineries, websites or mail order. National
retailer Woolworths sells apricot wine on its website and passionfruit, boysenberry and strawberry
wines on its Foodtown website. Preston Kiwifruit wine is advertised on a Japanese distributors
website and sold on flights to and from Japan (Foodtown 2007; Japanese trade interviews).
Around 60 per cent of grape wine is sold by retail chains, led by Foodstuffs Limited (NZ) and
Progressive Enterprises (owned by Woolworths Australia), and the rest by independent liquor stores,
specialist wine retailers, restaurants, hotels, online retailers and direct mail companies. New exporters
can access the supermarket, wine retail and food service sectors through a local agent or importer;
through direct sales to supermarket groups for large volumes of lower priced product, where they will
generally be expected to fund marketing; and through specialist wine retailers who often prefer
exclusive products or deals (Austrade New Zealand 2007; AWBC New Zealand 2006).
Promotion
Fruit wines are promoted on company, distributor and retailer websites. The Fruit Winemakers
Association runs an annual Fruit Wine and Cider Competition for domestic and international fruit
wines, and lists New Zealand and overseas members on its website with links to their own websites.
Grape wine promotion includes importers and other wine tastings for consumers, trade and the wine
media, often in wine shops and supermarkets; promotional pricing; co-operative advertising in
consumer magazines, in conjunction with supplier-funded discounting; co-operative advertising with
large retailers; and reviews in food, wine and lifestyle publications. Suppliers of new products need to
provide promotional support for up to five years to hold retail shelf space (Austrade New Zealand
2007; AWBC NZ, 2006).

186

Import regulations and requirements

Wines with 50 per cent or more Australian content are duty free under the Australia-New Zealand
Closer Economic Relations Trade Agreement but incur excise of NZ$2.2592 (A$1.98) a litre, an
Alcohol Advisory Council (ALAC) levy on all alcoholic beverages of NZ$4.93 (A$4.33) cents a litre
for unfortified wine, GST of 12.5 per cent of Customs value, anti-dumping and countervailing fees.
Import permits are not required (Asia-Pacific Economic Corporation 2007; AWBC, NZ, 2006;
Austrade, New Zealand 2007). The combined taxes and charges add A$6.60 to a bottle of Australian
fruit wine with a landed cost of a $10.00. ALAC levies, freight and insurance only apply to producers
with gross annual turnover exceeding NZ$40 000 (A$35 140). More information on tariffs is available
on the New Zealand Customs website.
Summary
New Zealand has a shrinking fruit wine market but with attractive pricing, similar quality standards,
established distribution channels, potential for industry co-operation and a close trading relationship
with Australia. Further research may identify limited opportunities to differentiate Australian tropical
fruit wines on fruit type, range, value for money and Australian branding.

E.4.2 Regional profile Pacific (Oceania)

This region has been included because although its countries have small populations and minor wine
imports, most have significant tourist markets; substantial expatriate communities; high consumer
awareness of tropical fruits; and trade, distribution and cultural links with Australia.
Table E.48: Pacific countries - leading imports of fermented drinks HS2206, # 200206
Imports of fermented drinks HS2206
Country

Christmas
Island

Trade

From Australia litres

A$ per litre
Total imports litres
Fiji Islands
A$ per litre
From Australia litres
A$ per litre
Total imports litres
French
A$ per litre
Polynesia
Total exports litres
Total imports litres
Guam
From Australia litres
A$ per litre
Total imports litres
New
From Australia litres
Caledonia
A$ per litre
Total imports litres
Papua New
From Australia litres
Guinea
A$ per litre
Total imports litres
Tonga
From Australia litres
A$ per litre
Total imports litres
Vanuatu
From Australia litres
A$ per litre

2002

2003

2004

2005

2006

1 486
3.23
15 000
1.35
21 981
2.52
92 810
1.96
1 110
7 000
473
1.90
160 020
462
8.79
10 000
10 124
0.61
13 000
0

0
396
2.53

1 102
3.02
17 680
2.88
4 103
8.07
468 420
0.31
3 250
11 540
401
7.07
201 000
0

1 000
705
16.05
92 000
0

1 280
0

121
2.98
87 920
0.59
0

1 125 540
0.14
7 290
4 900
17
25.94
153 000
0

4 000
90

121 000
0

2 000
0

5 736
1.06
33 000
2.13
0

89 570
2.55
56 190
19 000
0

181 530
0

2 000
74
6.89
123 000
0

1 510
0

3 556
2.86
not av.
0

not av.

not av.
0
not av.
0

not av.
0

not av.
18
5.67
not av.
801
2.61

Australian grape
wine imports in
2006, 5-year
trends

19 683 litres at $8.90

a litre, growing
704 293 litres at
$5.70 a litre, growing

5184 litres at $7.00 a

litre, stable
43 782 litres at $4.40
a litre, stable
218 992 litres at
$3.50 a litre, growing
452 950 litres at
$3.70 a litre, growing
44 000 litre at $3.00 a
litre, stable
119 000 litres at
$2.67 a litre, stable

Notes: # Excluding grape wine and beer. All import values FOB from exporting country. Sources: ABS; FAO
2007

187

Most imports of these fermented drinks have been to Fiji, French Polynesia, New Caledonia and
Tonga, which have substantial tourist industries and often transhipment to neighbouring countries.
Low average prices indicate most was low priced drinks such as coolers and cider. Imports of grape
wine from Australia to most countries have been substantial (Table E.48).
While countries in this region often have enduring political, cultural and trading ties with New
Zealand, France and the United States, eastern Australias proximity and shipping services provide
some freight advantages, and grape wine exports indicate distribution channels for Australian wines.
Summary
Further investigation may identify some potential markets such as international tourists familiar with
fruit wine and seeking tropical drinks. Australian tropical fruit wines could be differentiated on
popular fruits, novelty, quality and Australian branding, and distributed through similar channels to
Australian grape wine.

E.5

Regional profile Central and South America

E.5.1 South America

Table E.49 indicates South Americas leading country markets for imported fruit wine related
products. These countries are familiar with most fruits used in Australian tropical fruit wines, and
often have colonial links with wine producing countries, a wine culture and industries producing grape
wine, including fruit-flavoured wine. Trade with Australia is included, and Australian grape wine
exports in 2006 indicate demand and distribution channels for Australian wine.
In 2006 Paraguay and Venezuela had the largest imports of these fermented drinks, and volumes were
growing to Chile, Columbia, Peru and Uruguay.
Argentina, Brazil, Paraguay, Uruguay and Venezuela have a common market union, MERCOSUL,
with tariffs close to zero between member countries, giving them a trading advantage in each others
markets.

188

Table E.49: South America - leading imports of fermented drinks HS2206, # 200206
Country

Imports of fermented drinks HS2206#

Trade

Argentina

Brazil

Chile

Colombia

Ecuador

El
Salvador
Nicaragua

Paraguay
Peru

Uruguay

Venezuela

Total imports litres

A$ per litre
Total exports litres
To Australia litres
A$ per litre
Total imports litres
A$ per litre
Total exports litres
Total imports litres
A$ per litre
Total exports litres
Total imports litres
A$ per litre
Total exports litres
Total imports litres
A$ per litre
Total exports litres
Total imports litres
A$ per litre
Total exports litres
Total imports litres
A$ per litre
Total exports litres
Total imports litres
A$ per litre
Total imports litres
A$ per litre
Total exports litres
Total imports litres
A$ per litre
Total exports litres
Total imports litres
Total exports litres
A$ per litre

2002

2003

2004

2005

2006

15 000
2.24
14 708 000
4 140
1.84
181 000
3.50
1 403 000
144 000
1.69
3 955 700
23 000
2.09
37 000
579 000
1.82
5 000
508 000
1.45
0
394 000
1.29
0
1 071 000
0.83
288 940
1.97
6 000
108 000
0.66
40 000
2 020 140
66 000
3.24

35 700
2.20
9 605 420
5 725
1.62
236 000
2.97
1 360 000
84 000
1.50
3 803 240
150 850
1.82
27 000
895 110
1.39
4 000
562 000
1.23
0
183 260
1.23
60
3 960 320
0.68
198 590
2.15
10 000
104 000
0.64
0
2 015 000
213 000
0.98

42 000
2.22
9 349 000
2 117
3.65
144 000
2.45
2 074 540
88 000
1.47
5 810 730
153 530
1.78
108 000
333 000
1.61
11 000
474 120
1.22
0
143 000
1.23
0
3 277 000
0.73
235 600
1.70
25 000
168 000
0.56
1 000
1 901 250
232 000
1.04

21 000
1.90
10 085 000
11 529
1.23
257 000
2.36
2 335 190
614 000
not av.
2 439 900
291 000
1.32
107 000
350 000
1.92
136 000
228 000
0.00
2 000
185 000
1.19
0
5 172 000
not av.
331 860
1.36
29 040
181 000
0.00
1 830
2 108 000
126 000
1.43

not av.
not av.
not av.
2 713
1.27
not av.
not av.
1 403 000
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
not av.
3.24

Imports of
Australian grape
wine 2006; 5year trend

1585 litres at
$18.09, emerging
market

234 202 litres at

A$6.10, growing
603 litres at
A$14.50 a litre
4221 litres at
A$7.50
0

1 978 825 litres at

A$0.85, new
0
9290 litres at
A$5.34, stable
9900 litres at
A$7.23, growing
10 098 litres at
A$3.50, fluctuating

Notes: # Excluding grape wine and beer. All prices are annual averages. Codes used are HS2206 (fermented
drinks excluding grape wine and beer) for total imports and exports. Total import prices are CIF, total export
prices are FOB. Sources: FAO 2007

Argentina
A fruit wine industry is indicated by internet advertisements for fruit wine from manufacturers
Bizzarri Miguel Angel and Beverage S.A. (Imex Goods 2007) and annual exports of up to 14.7 million
litres of fruit wine related products from 200206, including small quantities to Australia at prices
fluctuating between A$1.23 and $3.65 a litre CIF.

189

Grape wine consumption was 1300 million litres in 2005, averaging around 30 litres per person, with a
third of supply imported, mainly from Chile and Europe. From 200206 the only imports of
Australian grape wine were 1585 litres averaging $18.09 a litre FOB in 2006, suggesting an emerging
market for premium quality Australian wine. The wine industry is export focussed, introducing new
technology and premium cultivars and switching from bulk to bottled wines to improve its
competitiveness (US Foreign Agricultural Service 2006; ABS).
Brazil
A fruit wine market is indicated by annual imports of up to 257 000 litres of fruit wine related
products from 200206 at low average prices of up to A$3.50 a litre. Manufacturers of fruit wines
include Angulo Agro Industrial Ltda, Caninha 51, Cereser S/A, and Bebidas Primor, Bocche
Importacao E Exportacao de Alimentas ldta, and Bomfigio Commercio (Imex Goods 2007).
Grape wine consumption is around 340 million litres a year, mainly by British and American
expatriates, and growing steadily due to an expanding middle class, acceptance of health claims for
red wine, a shift from spirits and high alcohol drinks motivated by health concerns, growing
sophistication and wine knowledge, the introduction of BYO in restaurants, more wine being drunk in
the home, and a strong European influence in the southern wine producing region. However, Brazil
does not have a developed wine culture, with individual consumption averaging only 1.8 litres a year,
and wine represents only six per cent of the liquor market, against strong competition from beer and
cachaca, an alcoholic drink distilled from fermented sugar cane juice.
Grape wine production is around 320 million litres a year, and growing despite often unsuitable
growing conditions for wine grapes due to increasing domestic demand and exports as quality
improves. In 2005, 44.8 million litres of wine were imported mainly from Argentina and Chile. From
2002 Australias supply grew steadily to 23 400 litres averaging A$6.10 a litre FOB in 2006.
Red wine is preferred because of its purported health benefits and compatibility with Brazilian cuisine.
Demand is growing for high quality wines from Europe and other South American countries,
particularly through the growing restaurant and hotel sector. Production standards follow CODEX
Alimentarius recommendations, with a maximum of 14 per cent alcohol, and product information in
Portuguese on labels or stickers. Most domestic wine is lower quality, and retails at less than A$7.00 a
bottle to people on lower incomes. Supermarket prices are mostly under A$12.00 a bottle. Around
75 per cent of wine is sold through retail, with better quality wines mainly in supermarkets, specialised
wine stores and good restaurants.
The annual Australia Festival in Brazil is the Australian Governments largest trade show in Latin
America.
Considerable barriers to entry include a 40 per cent import tax on wine; up to 40 per cent in other state
and federal indirect taxes; sales tax, customs fees and various other taxes; poor road and rail services;
long sea journeys; four weeks to clear customs and ports; and the need for air conditioned
warehousing. Imported wines need to be registered with The Secretariat of Foreign Trade of the
Ministry of Development, Industry and Foreign Trade and the Ministry of Health. (Sources: ABS;
AWBC 2007; Figueivedo-Stevenson 2003).
Chile
A large fruit wine industry and market are indicated by annual imports of up to 614 000 litres and up
to 5.8 million litres of exports of fruit wine products, which include Fresita sparkling wines flavoured
with tropical fruit juice sold in Australian retail chains. Grape wine consumption was 390 million litres
in 2005, averaging 16 litres a person. Approximately 800 million litres of wine are produced annually
from table grapes and increasingly wine grapes, supplemented with around 60 000 litres of imports,
including small and declining quantities from Australia with 603 litres averaging A$14.50 a litre in
2006. Fruit wines incur eight per cent import tax (Asia-Pacific Economic Corporation 2007; ABS; US
Foreign Agricultural Service 2006).

190

Columbia
A domestic fruit wine industry and market are indicated by research projects on wines from fruits such
as plantain, and by minor growing trade in very low priced fruit wine related products from 200206.
Meanwhile, imports of Australian grape wine fell to 4221 litres averaging A$7.50 a litre FOB in 2006,
indicating poor competitiveness (ABS; Carreo & Aristizbal 2003).
Peru
Imports of fruit wine products rose to 330 000 litres from 200206, while exports reached
29 000 litres. Domestic products include Maloca Restaurant & Winerys Gran Maloca fruit wines
and brandies from fruits such as star fruit, mamey sapote, camu camu and carambola, aged for a
Madiera port-style effect. Imports include 9290 litres of Australian grape wine averaging A$5.34 a
litre FOB in 2006. Wine imports incur a 12 per cent import tariff (Asia-Pacific Economic Corporation
2007; ABS; Glan Maloca 2006).
Summary
There are a number of small markets for fruit wines and related drinks, supplied by domestic and
imported product, larger grape wine markets, and small emerging markets for Australian grape wine.
Further research may identify opportunities to position Australian tropical fruit wines in more affluent
market niches as quality wines from familiar fruits with Australian branding, and overseas trade
agencies could assist in finding distributors.

E.5.2 Central America

Several countries have small fruit wine markets, tourist markets, expatriate communities, and high
awareness of tropical and exotic fruits. Minor fruit wine exports indicates some domestic production
and a number of countries have been importing significant quantities of fruit wine related products
(Table E.50).
Wine producers are using a wide range of fruits. Panamas Tropic Wines and Leap of Faith Farms
produce wines from pineapple, naranjilla, noni, borojo, passionfruit, nance, cashew fruit, tropical
raspberry, tropical strawberry, tropical blackberry, tropical rhubarb and aloe vera, which they market
as Tropical fruit wines (Alibaba website). A cottage industry in Barbados makes wine from banana,
guava, temperate fruits and breadfruit (Grant n.d.).
Despite mostly low annual average prices, there are some indications of higher priced drinks such as
fruit wine. Some countries import growing volumes of Australian grape wine, indicating demand,
distribution channels and competitiveness for Australian wines. The United States is an important
supplier to some countries, but others import most of these drinks from elsewhere (Table E.50).

191

Table E.50: Central America - leading imports of fermented drinks HS2206, # 200206
Imports of fermented drinks HS2206#
Country

Bahamas

Trade

Total imports litres

From USA litres
A$ per litre
Barbados
Total imports litres
A$ per litre
Total exports litres
From USA litres
A$ per litre
Bermuda
Total imports litres
From USA litres
A$ per litre
Cayman
Total imports litres
Islands
Total exports litres
From USA litres
A$ per litre
Costa Rica Total imports litres
A$ per litre
Total exports litres
Jamaica
Total imports litres
Total exports litres
From USA litres
A$ per litre
Panama
Total imports litres
A$ per litre
Total exports litres
From USA litres
A$ per litre
Trinidad and Total imports litres
Tobago (Port A$ per litre
of Spain)
Total exports litres
From USA litres
A$ per litre

2002

2003

2004

2005

2006

200 000
11 400
7.59
100 000
4.05
12 000
5 700
4.52
122 000
109 200
10.94
680 000
16 080
583 800
3.20
190 710
1.88
6 000
222 300
241 000
400
13.81
697 000
2.78
14 310
84 200
3.50
264 000
2.15
790 710
9 300
9.50

314 000
90 300
2.44
97 000
3.45
14 630
0

66 000
42 600
2.82
876 000
16 620
875 700
2.41
82 000
1.54
2 000
16 000
283 000
0

630 000
2.57
6 710
85 200
3.66
387 000
1.51
1 448 000
19 500
2.13

433 000
179 500
2.42
22 000
2.04
13 000
0

50 000
33 600
7.61
787 000
4 150
781 900
1.98
104 000
1.44
0
55 000
265 000
16 300
4.09
575 000
2.46
18 000
113 800
4.64
1 320 260
0.71
549 000
0

242 000
107 200
2.86
178 000
1.66
11 000
2 500
1.57
60 000
31 600
3.99
82 000
17 690
78 900
2.69
131 930
1.36
1 000
81 000
499 000
15 300
1.97
692 000
2.29
2 000
128 100
3.21
289 000
1.10
816 210
0

not av.
320 300
2.42
not av.
not av.
not av.
5 500
3.86
not av.
34 600
3.65
not av.
not av.
78 900
0.00
190 710
1.88
not av.
not av.
not av.
5 500
3.14
not av.
not av.
not av.
19 900
1.74
Not av.
Not av.
Not av.
12 900
1.85

Australian grape wine

imports for 2006 and
5-year trends

32 141 litres at
A$4.06/litre, growing
88 159 litres at
A$3.88/litre, growing

141 208 litres at

A$6.00/litre, growing
20 205 litres at
A$2.74/litre, fluctuating

24 468 litres at $7.28/litre,

growing
493 562 litres at
A$3.06/litre, growing
strongly
246 321 litres at
A$2.78/litre, growing
strongly

41 060 litres at
A$5.57/litre, growing

Notes: # Excluding grape wine and beer. All prices are annual averages. Codes used are HS2206 (fermented
drinks other than grape wine or beer) for total imports and exports, and HS220600700 and HS220600900 for
United States exports and imports respectively of fermented beverages not specified elsewhere and excluding
cider, rice wine and prune wine. Total imports are CIF, total export prices and United States export prices are
FOB. Source: ABS, FAO 2007; USDA Trade Statistics

Summary
Several countries have small markets with high awareness of tropical and exotic fruits, imports of fruit
wine products, and demand and distribution channels for Australian grape wine. Further investigation
may reveal opportunities for Australian tropical fruit wines to compete on quality, use of traditional
fruits, and Australian branding, through similar channels to grape wine.

192

E.6

Regional profiles Africa

While most African countries are unlikely markets for Australian fruit wines, these countries are
mentioned as they have fruit wine and tropical fruit wine production, and significant imports or
exports of fruit wine products. Producers range from cottage operations to tourist wineries, with
commercial trials and wine training programs indicating further growth in fruit wine production.
Egypt has produced wine in the Nile delta for 5000 years, and has the largest market for cider and
perry in the African and Middle East region, valued at around $13.9 million in 2004 and predicted to
reach $16.3 million by 2009 due to expanding middle and upper classes and tourist markets, and more
advertising, promotion and choice of wine products and brands. Still grape wines are preferred, and
small stable quantities were exported from Australia from 200206, with 576 litres averaging A$15.00
FOB a litre in 2006 (Datamonitor 2005; Euromonitor Egypt 2006).
Malawi villagers have learnt to make wine from bananas, tangerines and papaya through courses by
aid programs, with on-going support from the Development of Malawian Enterprises Trust. The
Mkondezi Wine co-operative advertises banana wine at K150 (A$2.80) a bottle, mainly for religious
and other mass celebrations (Biodiversity International 2005).
A project in Namibia has trialled wine from the indigenous Eembe fruit (Barrion, Keya et al. 2001).
In Nigeria, fruit wine is made from fruits such as black plum, and research projects on banana,
carambola and black plum wines indicate a growing commercial industry (Anim & Tano-Debra 2004;
Akubar et al. 2002; Okigbo 2003). While demand has grown for fruit wines from South Africa, the
United Kingdom and the United States, total annual imports of fruit products fell from 637 000 to
155 000 litres from 200206 (Daya 2005; Table E.51).
Kenya has a small fruit wine market for new low-priced wines from tropical fruits such as mango,
papaya and passionfruit, as well as some white grape wine from local producers such as Naivasha
Wineries and palm wine fermented from coconut and doum palms (Rough Guides 2007).
South Africa had growing imports of fruit wine products from 200206, and exports which fell from
8.1 million litres to 368,000 litres, and included small annual quantities to Australia. A 90 per cent
tariff applies to fruit wines from Most Favoured Nations. Grape wine consumption was 566 million
litres in 2005 (Daya 2005; US Foreign Agricultural Service 2006).
Tanzania has some fruit wine production including pineapple, banana and papaw. Banana Investments
retails three banana wine products locally at US$0.25 to $0.40 (A$0.33 to $0.43) for 250 to 400 mls
(Department for International Development 2007).
Members of a banana farmers association in Uganda have begun producing and selling banana wines
fermented with maize flour, with plans to expand (Kapanze 2006).
Most countries export fruit wine related products, with large quantities from South Africa and Tunisia,
and some have substantial imports. As fruit wine statistics were available for Australia, the United
States and South Africa, these are provided, and exports of Australian wine have been included to
indicate the existence of distribution channels for Australian wine (Table E.51).

193

Table E.51: Africa - leading imports of fermented drinks HS2206, # 200206

Imports of fermented drinks HS2206#
Country

Trade

Angola

Total imports litres

From South Africa A$
Total imports litres
A$ per litre
Total exports litres
Total imports litres
A$ per litre
Total exports litres
Total imports litres
A$ per litre
Total exports litres
Total imports litres
A$ per litre
From South Africa A$
Total imports litres
A$ per litre
From South Africa A$
Total exports litres
Total imports litres
From South Africa A$
Total imports litres
A$ per litre
Total exports litres
Total imports litres
A$ per litre
Total exports litres
From South Africa A$
Total imports litres
A$ per litre
Total exports litres
To Australia litres
A$ per litre
From Australia litres
A$ per litre
Total imports litres
A$ per litre
Total exports litres

Egypt

Ghana

Kenya

Malawi

Mauritius

Mozambique
Namibia

Nigeria

South Africa

Tanzania

2002

2003

2004

2005

2 782 000
313 531
21 000
3.16
3 000
299 000
1.66
21 000
351 270
2.05
22 000
164 600
1.15
39 125
131 570
3.23
4 406
9 000
1 884 000
432 845
976 000
0.65
411 000
638 000
0.51
1 000
20 268
48 190
3.36
8 092 750
326
1.76
2 306
7.47
10 910
2.03
0

1 740 000
297 997
4 000
1.54
13 000
304 210
not av.
0
14 000
3.19
33 000
76 500
2.06
7 788
142 950
3.71
205
12 000
787 000
298 612
1 488 050
0.72
46 000
306 000
Not av.
1 000
0
50 290
3.84
5 918 000
2 518
2.63
0

118 000
1.27
15 000

1 422 000
73 254
44 000
3.06
0
289 000
not av.
14 000
1 868 000
0.61
2 000
89 000
not av.
1 274
150 000
3.44
6 582
9 000
316 000
68 370
0

0
90 260
not av.
710
0
54 130
1.92
3 811 790
3 908
2.34
0

64 000
1.19
2 000

647 000
0
18 000
0
6 000
641 000
not av.
24 000
95 000
Not av.
0
108 000
not av.
0
164 000
3.14
0
21 000
444 000
0
1 000
not av
0
155 410
not av.
7 000
0
156 780
1.70
2 367 820
113
9.93
0

86 020
1.31
2 030

Australian grape
wine imports in
2006, and 5-year
trends

7376 litres at A$3.70,

emerging
576 litres at A$15.60,
stable
20 600 litres at $4.73,
stable
10 900 litres at
A$4.97, declining
800 litres at A$18.60,
new exports
47 800 litres at
A$6.63, stable

0
9198 litres at A$3.12,
new exports
106 300 litres at
A$3.50, fluctuates

52 825 litres at
A$8.50, growing

Notes: # Excluding grape wine and beer. All prices are annual averages. Import and export values are not
available for some countries. Codes used are HS 2206 (fermented drinks excluding grape wine and beer) for total
imports and exports and HS2206003020 (fruit wine) for Australia. Sources: ABS, FAO 2007; South Africa trade
statistics; USDA Trade Statistics

194

Summary
Regional markets are developing for local low-priced tropical and other fruit wines of variable quality
and imports and distribution channels are growing for higher priced Australian grape wines. Further
research may identify minor prospects for Australian tropical fruit wines that can be differentiated on
quality and Australian branding.

E.7

Regional profile Middle East

E.7.1 Israel
Israel has a small fruit wine market, mainly for domestic product. Fruit wines are accepted as kosher
by religious Jews, unlike grape wine where production has to be supervised by a rabbi (Stub 2006).
Many residents are immigrants from eastern European countries where fruit wine is a tradition. Grape
wine consumption and exports have been growing at more than 10 per cent a year.
While most wine production is grape wine, with growing numbers of boutique wineries, there is some
commercial and home production of fruit wines. Kibbutz Amiads Galil Winery produces a range of
feijoa, kiwifruit and cumquat wines, and retails its own and other domestic and imported wines
(Rogov n.d.). Rimon Wineries, which has a large pomegranate farm, has begun producing large
quantities of pomegranate wine in dry, dessert, rose and port styles, and plans to export these to Asia,
the United States, Europe, and South America. The wines retail at US$15.5024.50 (A$20.6032.50)
a bottle, in the same price range as fine grape wines (Stub 2006).
From 200206 imports of fruit wine related products fluctuated between 160 000 and 266 000 litres a
year, with annual average import prices of around A$3.00 a litre, and no apparent exports (FAO 2007).
Over this period Australia supplied fluctuating volumes of grape wine, with 142 000 litres at an
average price of A$4.60 a litre FOB in 2006.
Summary
Israel has a small fruit wine market with attractive pricing and distribution channels for domestic and
imported fruit wine and Australian grape wine, where further investigation may identify minor
opportunities for Australian tropical fruit wines.

E.7.2 Arab Nations

Liquor consumption is very low in these countries, where Sharia law prohibits consumption by
Moslem people and restricts distribution and retailing of alcoholic drinks to others. A literature search
located little evidence of fruit wine markets or production. However, the region is included as most
countries are importing fruit wine related products, including from Australia; most permit expatriate
residents to buy and consume alcohol drinks; awareness is high for tropical and exotic fruits; and the
region is the focus of various Australian trade development efforts.
While imports fluctuated from 200206, several countries appear to have new imports of fruit wine
products recently, and some are receiving significant import quantities of grape wine (Table E.52).

195

Table E.52: Middle East - leading imports of fermented drinks HS2206, # 200206
Imports of fermented drinks 2206#
Country

Lebanon

Trade

Total imports litres

A$ per litre
Total exports litres
From Australia litres
A$ per litre
From United States litres
A$ per litre
Oman
Total imports litres
A$ per litre
Qatar
Total imports litres
A$ per litre
United Arab Total imports litres
Emirates
A$ per litre
From Australia litres
A$ per litre
Total exports litres
From United States litres
A$ per litre

2002

2003

2004

2005

15 000
1.60
166 910
0
0
0
0
146 000
2.85
173 140
1.72
985 000
2.52
0

78 550
0

25 000
1.85
380 370
18 548
14.97
179 700
$0.79
1 000
3.08
0

45 000
1.18
370 000
0

73 000
0.80
85 000
not av.
556 500
0.03
137 400
0

42 000
not av.
41 960
0

61 090
1.22
32 000
2.62
155 940
not av.
0

37 090
5 100
1.80

459 780
1.63
0

3,000
0

Imports of
Australian grape
wine in 2006 and
5-year trend

52 825 litres at A$7.00

a litre
255 780 litres at
A$3.40 a litre
2.43 million litres at
A$4.00 a litre

Notes: # Excluding grape wine and beer. Codes used are HS 2206 (fermented drinks other than grape wine and
beer) for total imports and exports and HS 220600700 and HS 220600900 (fruit wine) for trade with the United
States, and HS2206003020 (fruit wine) for Australia. All prices are annual averages. Import prices from the
United States and Australia are FOB. Some import and export values are not available. Sources: ABS, FAO
2007; South Africa trade statistics; USDA Trade Statistics

Summary
The Middle East has very small but highly affluent markets for wine, but with significant barriers to
consumption and distribution. Further research may identify minor opportunities for Australian
tropical fruit wine to be differentiated as a novelty, from preferred fruits, and for gifts.

196

Appendix F: Questionnaire for distributor survey

Name and company:

Date:

A. Regarding wholesaling and distribution

Q.A1: To understand the structure of the industry, what operations does your business operate?
Q.A2: What retail outlets do you supply?
Q.A3: Do you supply other wholesalers and/or distributors? If yes, please describe category.
Q.A4: Are you in any marketing groups, co-operatives, etc? If yes, please describe.
Q.A5: What warehousing and transport facilities do you have?
Q.A6: How many staff do you employ?
Q.A7: How many sales staff?
Q.A8: Do the various levels of the liquor distribution system work on any typical margins?
Q.A9: What are your main product lines?
Q.A10: What fruit-based alcoholic drinks do you distribute?
Q.A11: What consumer promotions do you use for new products?
Q.A12: What trade publications do you read, promote through and find new products through?
Q.A13: Would wholesalers and distributors handle volumes of less than a pallet?
B. Regarding the market for fruit wines
Q.B1: What commercial fruit wines are you aware of in Australia, and who are the markets for them?
Q.B2: How would you rate these products (1 7) in terms of their perceived quality position? (please
mark 7 for high quality, 4 for medium and 1 for low)
Fruit wines __ Tropical fruit wines __ Fruit flavoured wines __ Coolers __ Ciders __ Fruit ports
__Fruit flavoured RTDs __ Fruit wine liqueurs __ Other fruit alcoholic beverages __ (please name)
Q.B3: Are there any consumption trends indicating current or future markets for fruit wines?
Q.B4: In your opinion, who are the most likely markets for fruit wines? (i.e. the typical customer)
Q.B5: What are these consumers drinking now?
Q.B6: What strategies could motivate these potential consumers to switch to fruit wine?
Q.B7: What fruit wines and/or similar alcoholic beverages have you handled, when and where?
Q.B8: What was your experience with them?
Q.B9: How likely are you to sell fruit wines in the future?
C. Regarding marketing of fruit wines
Q.C1: What image do fruit wines have in the marketplace?
Q.C2: If unfavourable, what strategies can the industry use to create a positive image?
Q.C3: What attributes of fruit wines are most likely to appeal to consumers?
Q.C4: What type of fruit wine product would you prefer to sell?
Q.C5: How should positive attributes be conveyed to the consumer for these products?
Q.C6: How useful is a regional brand for this kind of product?

197

Q.C7: What retail category should fruit wines be marketed under? (given that products being called
fruit wines often have various combinations of grape wine, fruit wine and/or fruit juice)
Q.C8: How should fruit wines (i.e. with no grape juice) be differentiated at the point of sale?
Q.C9: Could fruit wines and cider be marketed in the same category?
Q.C10: How could a range of wines from different fruits be displayed in retail outlets?
Q.C11: Can you suggest indicative retail price for the following products (750ml equivalent)?
Fruit wines _ Tropical fruit wines _ Fruit ports _ Fruit wine liqueurs _ Comments?
Q.C12: How should fruit wines (without grape wine) be positioned in early markets?
Q.C13: Does any particular fruit provoke a higher quality image that wine can be made from?
Q.C14: Does any particular fruit provoke a lower quality image that wine can be made from and
therefore should be avoided?
Q.C15: What distribution channels would best suit this product, and for what reasons?
Q.C16: What type of retail outlets might be interested in fruit wines?
Regarding retail promotions to the consumer
Q.C17: What marketing can best be used to introduce this kind of product to the market?
Q.C18: Who in the distribution channel should be involved?
Q.C19: Who do you believe should fund such marketing, and how can this be best managed?
Q.C20: What are the most likely market barriers fruit wines will encounter?
Q.C21: How can the industry overcome such barriers?
Q.C22: Who might champion an Australian fruit wine industry, and what effect would this have?
Q.C23: Are there any successful product introductions or models this industry could learn from?
Q.C24: Are you interested in receiving more information on fruit wines?
Q.C. 25: Any additional comments?

198

Appendix G: Questionnaire for consumer survey

Date:

Place:

1. Where do you live?

2. Have you ever bought, tried or seen fruit wines?
2. Which of these wines have you come across before today?
3. What wines would you like to try? (self select - number 1, 2, 3 etc )
What did you think of it?
4. What alcohol drinks do you usually drink?
5. If not wine, is there a reason?
6. What do you drink at parties? Restaurants? Home?
7. Where on this scale do you prefer drinks to taste:
Very fruity ... ... Not at all fruity
Sweet

... ... Very dry

8. Could you see yourself drinking these wines?

If yes, in what situations?
9. Would they be good gifts, and for what occasions?
10. Where would you expect to buy them?
If bottle shop, in what section?
11. Where do you usually buy your drinks?
12. What do think about these bottles?
13. Whats a good bottle size for someone with your lifestyle?
14. What do you think about these labels?
15. What should be on the label for these wines?
16. What information would you need to buy a new drink like these in a bottle shop, and how should it
be provided?
17. Would you buy a drink like these without having tasted it first?
18. How important is the type of fruit?
19. How important is where the wines are made?
20. How important are medals?
21. Are food-matching suggestions helpful when buying wine?
22. Is tropical fruit wine the best name for this category?
23. Do healthy ingredients matter in wine?
24. Who do you get advice from when buying wine?
25. What would you expect to pay for these wines?
26. Would you expect some wines to be dearer than others?
27. In what circumstances might you pay more for a wine?

199

28. How likely are you to buy wines like these in the future?
29. Who usually buys the wine at your place?
30. Who decides what to buy?
31. How often would you visit a winery?
32. How knowledgeable about wines do you feel?
Male Female

Age group: Under 25 25-35 35-55 55+

Nationality (if not Australian) .

200

Glossary
Ad valorem: Tariffs that are a constant proportion of the value for duty
Alcopops, FAB: Terms used mainly in Europe for flavoured alcoholic beverages, described as RTDs
in this report for convenience
Appellation: Usually the name of a precise geographic region where specific grape varieties are
permitted to be grown and certain wine-making practices allowed under a countrys laws. The term is
used as a guarantee of quality and authenticity. Australia's version of the appellation system is known
as Geographical Indicators
Baginbox, soft-pack, cask: Plastic container in a cardboard outer, from 2 to 20 litres
Cider: Fermented apple wine with low alcohol
Cooler: Grape wine diluted to below seven per cent alcohol, the legal lower limit for wine, with added
fruit flavour and sugar
Country wine: A fermented alcoholic beverage made from ingredients other than grapes. Also
everyday wines for the average person
Fermentation: The conversion of sugar in the juice into alcohol by yeast metabolism
Fortified wine: Wines to which alcohol is added so as to extend shelf life once opened.
Fruit flavoured wine: Usually grape wine that has been changed by adding fruit flavours or juice
Fruit liqueur: A normally sweet spirit, highly flavoured by mixing with fruit or a fruit product,
containing more than 15 per cent alcohol by volume at 20C
Fruit wine: Wine made from fermented fruit other than grapes (Food standards Australia and New
Zealand)
Fruit wine related product: Alcoholic drinks traded under the classification of HS2206, which
includes fruit wine, cider, perry, rice wine, wine coolers, fruit beers and mixtures of fermented
beverages and non-alcoholic beverages not elsewhere specific or included
Hard lemonade: Alcoholic lemonade
Herbal wine: Herbal flavoured wine, usually grape wine
HS code: The Harmonised System (HS) code is an international method of classifying products for
trading purposes and used to determine duties, taxes and regulations.
In some Asian countries the term wine includes rice wines such as sake, mistelles, and wine
fermented from any fruit, including grapes. The Code International des Pratiques Oenologiques of the
International Organisation of Vine and Wine (O.I.V.) states: Wine is exclusively the beverage
resulting from the complete or partial alcoholic fermentation of fresh grapes, whether crushed or not,
and from the grape must. Its acquired alcoholic strength should not be less than 8.5 %/ vol.
Nevertheless, considering climatic conditions, soil or grape variety, special qualitative factors or
individual traditions specific to certain vineyards, the total minimum alcoholic strength can be reduced
to 7%/ vol. by special legislation of the region in question. The present standard does not apply to
special wines defined by the said Code.
Liqueur: A spirit flavoured or mixed with other foods, which contains more than 15 per cent alcohol
by volume, measured at 20C
Mead: Wine from fermented honey
Mistelle: Wine made by adding alcohol to a fruit juice, also called liqueurs
Mulled wine: Sweetened wine heated with spices and sometimes fruit or peel

201

New World Wines: From Argentina, Australia, Canada, Chile, New Zealand, South Africa, the United
States and Uruguay
Old World Wines: France, Germany, Italy, Portugal and Spain
Perry: Fermented pear wine with low alcohol
Prune wine: Wine from fermented prunes
Quality: See Appendix B for a discussion of wine quality
RTD: readytodrink alcoholic beverages in small containers, usually bottles or cans
Sake: Wine from fermented rice
Sparkling wine: Wine with bubbles in it
Tariff: Customs duty on imports, as a fixed rate per measure or based on the value of the import
(Australian Department of Agriculture, Forestry and Fisheries)
The Mutual Acceptance Agreement on Oenological Practices: This agreement recognises differences in
countries winemaking practices and accepts that wine made in another signatory country should be
allowed to be sold in its market regardless of differences in oenological practices. Signatory countries
are Australia, Argentina, Canada, Chile, New Zealand, South Africa and the United States
Tropical fruit wine: Made from fermented tropical fruit
Wine: While wine is a fermented drink, the legal definition is commonly restricted to grape wine in
Australia and most wine producing countries.

202

Markets for Tropical Fruit Wine Products

RIRDC Publication No. 09/033
By Judy Noller and Brian Wilson

A small emerging industry exists in northern Australia

producing wine from various fruits. This industry seeks
to expand sales as production volumes increase and more
producers enter the industry.

regions. It discusses the competitive situation for Australian

wines produced from tropical, exotic and Australian native
fruits and the strategies needed to develop existing and new
markets.

The Australian fruit wine market has remained small and

under-developed compared with the grape wine market. In
contrast, many overseas countries have large fruit wine markets
and strong traditions of wines produced from fruit other than
grapes.

The Rural Industries Research and Development Corporation

(RIRDC) manages and funds priority research and translates
results into practical outcomes for industry.

This report describes the current and potential markets for

fruit wines in Australia and Japan, and provides information
on fruit wine markets in 37 other countries and several

Our business is about developing a more profitable, dynamic

and sustainable rural sector. Most of the information we
produce can be downloaded for free or purchased from our
website: www.rirdc.gov.au, or by phoning 1300 634 313 (local
call charge applies).

Cover photo: Australian tropical fruit wines

Most RIRDC books can be freely downloaded

or purchased from www.rirdc.gov.au or by
phoning 1300 634 313 (local call charge
applies).

www.rirdc.gov.au

Contact RIRDC:
Level 2
15 National Circuit
Barton ACT 2600
PO Box 4776
Kingston ACT 2604
Ph: 02 6271 4100
Fax: 02 6271 4199
Email: rirdc@rirdc.gov.au
web: www.rirdc.gov.au