Saturday, January 12, 2013


Trade, distribution, customs, tax and IP issues:
The 10 South East Asian countries better known under the acronym of “ASEAN” have a combined population of nearly 600 million. ASEAN is a mixture of developed and developing countries and range from wealthiest countries to poorest in the world. 

Import & production countries
Although most ASEAN countries are importer of gape based wine, some also produce such wine. Thailand, Vietnam and more recently Myanmar produce wine focusing on supplying local markets and Thai and Vietnamese restaurants abroad. If local wines have strong demand however local wines do not have any “market-shaping” power in those countries.
Consuming countries
Wine imports to the ASEAN countries have been in a long term growth trend since France started developing its market as early as 1980s. Australia and the USA followed France in market development activities in the early 1990s, and, since then, most wine producing countries have become involved in the market. South American wine exporters were the last major entrants over the past 10 years, and they are now building strong presences and niche markets in the region. All of this market development activity by countries, regions with countries, brand-owners and winery companies has led to a highly fragmented and inconsistent situation in all ASEAN markets when it comes to leading supply countries, market shares and products and labels/brands that are available to consumers. Australia and USA are leader countries supplying wines to Malaysia and Philippines, while France is leader in Singapore, Vietnam and Italian wine is leader in Thailand. Most multinationals normally use Singapore as an ASEAN region re-export base for its premium and super premium wines, which is the key reason why it has a large apparent share of the market. The reality is that Australia is the market leader in the Singapore market in terms of of volumes consumed.

French wine has strong demand in Vietnam because of demand for “all things French” from the Vietnamese due past links with France, and also because of quite high profile marketing and distribution of French wines in the key urban areas;
Italian wine has a strong presence in Thailand because it has a sizeable expatriate Italian population, many Italian restaurants and is also a major tourist destination for Italian tourists. Italian wines also have strong and loyal distributors in Thailand. Trade sources comment that this situation exists because of a long history of commercial links between the two countries and active contribution of Italian wine importers such as ItalThai Group, and also because Italian tourists have quite a high level of preference for Thailand as a tourism destination in Asia;
U.S. and Spanish wine are leaders in the Philippines because of the very strong links arising from colonial links to food culture and demand, and to well established importing businesses that have a high level loyalty to products from the USA or Spain; Wine is generally a part of U.S. food and drink promotions across the ASEAN region, so its activities are not solely limited to the Philippines;
Muslim Malays are predominantly Muslims who, for religious reasons are not permitted to consume any alcoholic drinks. Australian wine is the most popular wine in Malaysia.

Leading Supply Countries % Share (Based on Tonnes)

Australia (38%)
USA (35%)
France (40%)
Italy (25%)
France (38%)
Singapore re-exports (17%)
Spain (16%)
Australia (27%)
Australia (22%)
Chile (21%)
France (12%)
Australia (10%)
Chile (8%)
France (20%)
Australia (8%)
Chile (8%)
Chile (8%)
USA (6%)
Chile (12%)
USA (6%)
Spain (7%)
France (8%)
Italy (5%)
USA (7%)
South Africa (4%)

Source: ASEAN governments' official trade statistics.
Indonesia and Malaysia are predominantly Muslims who for religious reasons are not permitted to consume any alcoholic drinks. This limits the size of the market for wine to just over one third of the total population, however the Chinese population forms the wealthiest group of consumers and offers a solid target base for imported wines.
Singaporean wine consumers are mainly in the middle to upper income bracket and tend to be mostly Chinese, aged between 25 to 50 years old, predominantly man. The Singapore wine market is made up of 10 percent sparkling wine, approximately 65 percent red and 25 percent white.
One and off-trade sales
Consumption of red and white wines is at a ratio of approximately 65:35 across ASEAN countries, according to various surveys. Wine is usually not consumed at home. It is a social drink usually consumed on special occasions. On-Trade sales (i.e. restaurants and bars) represent 65 % of total sales, with off-Trade sales (i.e. retail outlets) represent the remaining 35 %. Acceptance of wine as an everyday drink is increasing and fine dining with wine is growing in popularity. Fuelled by the demand for imported wines, wine boutiques and retail outlets are popping up in main urban and tourist areas and we also seen the birth of hybrid off and on trade sales; retail outlet of wines serving lunch and dinner.
Demand for wine is seasonal, this is particularly true for Champagne but also other grape based wines. For instance in Vietnam, the highest demand occurs normally during festive season such as in Vietnam during the Tet festival (Lunar New Year) around February every year and of course Christmas holiday, and New Year celebration. Some retailers state that between 60 and 70 percent of the wine sales occur during this period. Demand is significantly lower during other periods of the year.


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