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THE COMPETITION IN 1997
U.S. and
Competitor Expenditures on Export Promotion and
Export Subsidies for Agricultural, Forestry and Fishery Products
Taiwan
Production agriculture on Taiwan has been declining for the past two decades, and in March 1997, the robust animal production sector sustained a severe setback when Foot and Mouth Disease broke out in the swine herd on the island. However, Taiwan maintains markets in neighboring countries for some specialty products and its food processing sector manufactures items that find ready markets in Chinese populations world-wide. The past decade of economic growth has given Taiwan an international reputation for having some of the biggest spenders in the world. Many Western suppliers are interested in the Taiwan market for its sophisticated western tastes. While the United States currently supplies a third of Taiwan’s agricultural imports, competition from other suppliers is growing rapidly.
Taiwan Promotion Activities:
During fiscal year 1996/97 (July-June) the Taiwanese government spent about $1 million on export promotion for processed foods, fresh fruits and vegetables , tea and flowers. Expenditures were almost evenly split between the Council of Agriculture (COA) and the Board of Foreign Trade (BOFT). These budgets are used mainly to fund private industry’s participation in international food shows. A small portion of the money is used for educational programs via the media. About 60 percent of the COA budget is used in the Japanese market and 20 percent in the United States. The BOFT support is mainly to fund export marketing efforts for fruits.
Industry expenditures for export promotion are derived from check-offs on the export of pork, fruits, shrimp and eel. These expenditures totaled $1.3 million in 1996/97, mostly for pork and fish products. Pork check-offs are used to fund the Taiwan Meat Development Foundation. Because of the foot-and-mouth disease outbreak, exports and check-off funds have declined considerably. The foundation has laid off half of its 60 employees and may have to make further reductions as a result. Fruit check-offs fund the Taiwan Provincial Fruit Marketing Cooperative, while fishery check-offs fund the Taiwan Shrimp Development Foundation and the Taiwan Eel Development Foundation.
In addition to export promotion activities, Taiwan subsidizes the export of rice and sugar by selling surplus domestic stocks at the lower world price. During FY1996/97 Taiwan spent $18.5 million on subsidizing rice exports and $2.5 million on sugar export subsidies. The sugar is exported exclusively to the United States.
Competitor Activities:
Australia, New Zealand, Canada, European Countries, Japan and Iran are our main competitors on Taiwan. Trade show participation is a major activity for all countries conducting market promotions. A major annual show is the Taipei International Food Industry Show.
Taiwan is one of the major export markets for Australian food products. Red meat is the main focus of Australia’s marketing efforts, but other products, including wine, fresh fruits (especially apples), vegetables and seafood also receive attention. The Australian Meat and Livestock Corporation (AMLC) has been aggressively marketing beef on Taiwan since its establishment in the early 1990s. It has spent over $200,000 annually. In November 1997 the AMLC office will close and its activities will be taken over by a local public relations agency. In the past, AMLC has focused on in-store sampling, but more recently it has shifted to consumer-oriented product give-aways. It is currently conduction a merchandising contest in six Makro warehouse stores. It has also conducted several menu promotions in hotels and restaurants.
The Canadian Trade Office in Taipei (CTOT) is one of the most active on Taiwan, sponsoring activities for a wide range of products and actively engaging traders, customers and consumers throughout the island, not just in Taipei. CTOT sponsored supermarket/hypermarket promotions this year focusing on seafood, beef wine, confectionery, snacks and processed food. The Canadian Beef Export Federation (CBEF) established an office in Taipei in October 1996, with the main purpose to help organize buying missions to Canada. In 1997, the CBEF sent three buying delegations to Canada. It is expanding its activities to include a joint television advertising campaign and in-store promotion with the Makro warehouse store chain. CTOT has also promoted canola oil by holding educational seminars. Forest products, especially softwood lumber, are also important Canadian exports to Taiwan which are receiving additional promotion efforts.
European countries primarily market wine in Taiwan. Combined, they supply two-thirds of Taiwan’s wine imports. France is by far the biggest supplier and promoter, spending as much as $16 million on advertising, wine tastings, seminars, trade shows and trips to France for key importers. Spain is reported to have spend over $100,000 on wine promotion in Taiwan, primarily for organizing trips to Spain for Taiwanese importers. Italy and Germany also promote their wines, along with a number of other processed foods, including chocolates and confectionery, cakes and biscuits. The Netherlands has promoted its flowers and bulbs, fresh fruits and vegetables, confectionery and cigars in trade shows on Taiwan. In addition, several EU members have organized hotel and menu promotions to highlight their distinctive food and culture.
New Zealand uses extensive advertising, including television ads, to promote its image of natural beauty with a clean environment. Fruit and vegetables from New Zealand are regarded as clean, premium agricultural products by Taiwan consumers. Kiwifruit is heavily promoted and New Zealand is the dominant supplier. New Zealand also promotes its beef, lamb and dairy products at food shows, as well as beer, fruit juice and vacuum packed vegetables.
Other notable competitors for specific products include Norway and Iran. Norway, the primary supplier of salmon to Taiwan, has been aggressively promoting "Salmon in Chinese Food". Promotions include cooking technique seminars and development of recipes to meet local tastes. Iran has substantially discounted its pistachio prices during the 1990s and now supplies over 90 percent of Taiwan’s imports.
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