""

Required Report - public distribution

**Date:** 10/24/2003

**GAIN Report Number:** TW3037

TW0000

**Taiwan**

**Exporter Guide**

**Annual**

**2003**

**Approved by:**

![](media/image1.wmf)Hoa Van Huynh, Director, Agricultural Trade Office

American Institute in Taiwan

**Prepared by:**

Asian Pacific Research, Ltd.

**Report Highlights:**

Renewed economic growth through 2003/2004 will provide new growth
opportunities for U.S. exports of food and beverages. WTO trade
liberalization and consumer demand for novelty and variety have,
however, created a highly competitive environment for U.S. exporters.
This puts a strong emphasis on innovative product development, superior
marketing skills and a trend towards high value niche product markets.

Continued development of large-scale retail outlets and up-market food
service, typified by the new Taipei 101 complex nearing completion, will
favor high added value and specialty products.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Taipei \[TW1\]

\[TW\]

**Market Overview**

Renewed export-led growth in 2003 and 2004 is expected to deliver
substantial relief to the Taiwan food and beverages industry, which has
suffered in recent years due to a combination of weak demand and
low-cost Asian imports. Although industry members remain concerned with
improving efficiency and cutting costs, retailers and food service
outlets are exploring innovative approaches to food product development,
packaging and presentation and new experiences in dining out.

1\. [Economic situation]{.underline}

Taiwan's economy is undergoing a fundamental restructuring in response
to the challenges posed by the emergence of China as a global
manufacturer and consumer. Much of Taiwan's own manufacturing capacity
has relocated to China, while in Taiwan companies have focused on high
tech production and the development of technical and industrial
management skills.

Although offering sound prospects for the long term, this restructuring
has restricted overall economic growth and led to difficult conditions
in the domestic economy.

Source: Directorate General of Budget, Accounting and Statistics.

The return to economic growth of 3.5% in 2002 probably marks a turning
point in the economy, with forecast economic growth of 3.0% in 2003,
rising to 4.0% and possibly higher in 2004, as the U.S. economic
recovery gathers momentum. Although this is largely driven by the export
of high technology products, it will undoubtedly have a stimulating
effect on all parts of the economy.

Although Taiwan has the means to maintain its competitive position in
the global IT industry, it is likely to be a long haul process and
vulnerable to cyclical changes in the IT industry and possible political
disruptions arising from the 2004 presidential elections.

Growth in expenditures on food and beverages has similarly been limited
by domestic economic conditions, with a marked decline in beverages
expenditures of almost 12% in 2002. This has also been due in part to
the import of low cost beverages from China and Southeast Asia.

2\. [Impact on sales of U.S. consumer-oriented agricultural
exports]{.underline}

The sluggish growth in consumer expenditures resulting from a consumer
trend toward reduced dining out and retail purchase expenditures
dampened over the past two years demand for traditional U.S. food
exports to Taiwan (high quality beef and fresh fruit were particularly
hard hit). We are now seeing signs of recovery as economic growth
gathers momentum, although price competition from other sources is
likely to remain strong as a result of trade liberalization. U.S.
exporters will therefore be under pressure to maintain market share
through superior product development and marketing skills.

New opportunities within these and other sectors will tend to be in
innovative products and marketing presentation that capture the
Taiwanese consumers' taste for product novelty, fashion and new dining
experiences. The emphasis for U.S. exporters will increasingly be on
identifying and rapidly exploiting new niche markets where uniqueness,
high quality and fashionable appeal are critical success factors.

At the same time, in many traditional snack food and processed food
categories, food and beverages manufacturers, including major U.S.
manufacturers, now process many items in Taiwan and other parts of
Southeast Asia for distribution within the region. 'Oreo' and 'Ritz'
snacks, for example, are imported into Taiwan from the Nabisco
manufacturing plant in Indonesia. This trend has been encouraged by the
accession of Taiwan and China to the World Trade Organization at the
beginning of 2002 and the progressive lifting of Taiwan's ban on direct
imports of many processed foods from China.

We are therefore likely to see a degree of restructuring in U.S.-origin
food and beverages exports to Taiwan with much of the new growth in
innovative products, specialty items and niche markets rather than the
mass market of standardized snack and processed foods. This development
will put increasing emphasis on market knowledge and awareness.

Taiwan's total imports of consumer food and beverages has remained
fairly static at about US\$4.7 billion over the period 2000-2002, while
exports of U.S. consumer-oriented agricultural products to Taiwan have
fallen by 22% from US\$569.9 million in 2000 to US\$444.2 in 2002.
Exports of U.S. edible fish and seafood products to Taiwan have fallen
even more sharply, from US\$44.0 million in 2000 to US\$30.6 million in
2002.

3\. [Demographics]{.underline}

The demographics of Taiwan have changed very little in recent years. The
population is stable at 22.5 million and concentrated in the urban,
industrial areas along the west coast, from Taipei and Taoyuan in the
north through to Hsinchu, Taichung, Tainan and Kaohsiung in the south.
Although there is economic pressure in favor of economies of scale, the
development of large-scale retail outlets and distribution requires long
lead times to overcome the issues of over-crowding.

Taiwan can be described in broad terms as a fairly homogenous population
of ethnic Chinese consumers with similar tastes, expectations, and
consumption drivers. Taiwan has no significant immigrant groups and
limited inbound tourism.

  -------------------------------------- ----------- ----------- --------
  Consumer Demographics                                          

                                         1997        2001        2002

  Female Labor Force Participation %     45.6        46.1        46.6

  Birth Rate per 1000                    1.5         1.2         1.1

  Index of Aging                         35.7        42.3        44.2

  Average Space\                         1,404       1,476       N/A
  per household, square feet                                     

  Average Disposable Income\             29,629      25,240      N/A
  per household\                                                 
  (Adjusted for inflation) US\$                                  

  Consumption Expenditure\               22,138      19,464      N/A
  per household                                                  

  Household Consumption of\              25.7        24.3        N/A
  Food, Beverage, and Tobacco\                                   
  as % of total consumption                                      
  -------------------------------------- ----------- ----------- --------

Source: Directorate General of Budget, Accounting and Statistics.

There exist, however, two long-term trends that will impact future food
and beverages demand.

-   The birth rate is falling and people are living longer. This means
    less demand for infant formula and baby foods and more demand for
    healthy foods and nutrients. These are probably long term structural
    developments arising from more women in the workforce, more divorces
    and smaller families, improved diet and better health care.

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-   The great majority of people live in apartments and new high-rise
    apartments with elevators are getting a little bigger in
    floor-space. This means more room for food storage, cooking and home
    entertainment, although we do not expect this to have a major impact
    on Taiwanese consumer habits to eat out and shop frequently and in
    small quantities.

These trends will favor Taiwan's attraction to U.S. lifestyle, with its
emphasis on space, leisure and personal enjoyment. This trend began with
McDonald's, a U.S. experience in low cost fast food for youngsters, and
has been continued with Starbucks, a U.S. experience in sipping rare
coffees in elegant surroundings for the young and affluent. A U.S.
format for fine dining as the economy develops, undoubtedly presents a
future opportunity.

+----------------------------------+-----------------------------------+
| ##### Advantages & Challenges    |                                   |
+----------------------------------+-----------------------------------+
| **Advantages**                   | **Challenges**                    |
+----------------------------------+-----------------------------------+
| U.S. high quality beef and fresh | Price competition from Asia and   |
| fruit                            | Australia                         |
+----------------------------------+-----------------------------------+
|                                  |                                   |
+----------------------------------+-----------------------------------+
| Advanced U.S. technology in      | Low cost food processing in S.E.  |
| frozen food                      | Asia                              |
+----------------------------------+-----------------------------------+
|                                  |                                   |
+----------------------------------+-----------------------------------+
| Strong attraction to novelty and | Emphasis on variety and price     |
| fashion in                       |                                   |
+----------------------------------+-----------------------------------+
| food product and food service.   |                                   |
+----------------------------------+-----------------------------------+
|                                  |                                   |
+----------------------------------+-----------------------------------+
| U.S. specialty products and      | Diseconomies in distribution.     |
| innovative                       |                                   |
+----------------------------------+-----------------------------------+
| product development and          |                                   |
| marketing.                       |                                   |
+----------------------------------+-----------------------------------+
|                                  |                                   |
+----------------------------------+-----------------------------------+
| Admiration of U.S. lifestyle in  | Strong Japanese, Korean and other |
| foodservice                      | Asian                             |
+----------------------------------+-----------------------------------+
| and retail.                      | cultural influences               |
+----------------------------------+-----------------------------------+
|                                  |                                   |
+----------------------------------+-----------------------------------+
| Strong ties with the U.S. IT     |                                   |
| industry has                     |                                   |
+----------------------------------+-----------------------------------+
| some carry over into food and    |                                   |
| beverages                        |                                   |
+----------------------------------+-----------------------------------+

###### Exporter Business Tips

1\. [Appointment of Import Agents]{.underline}

Except for major exporters with their own offices in Taiwan, the
appointment of an effective import agent is a critical decision.
Background research with assistance from the Agricultural Trade Office,
the U.S. Trade Co-operators and others willing to share experience
cannot be over-emphasized.

Although factors will vary from case to case, key issues to be
considered include:

-   The extent of the agent's network of distributors, owned or leased
    storage capacity and owned or leased transport arrangements. In
    particular, does the agent have strong contacts with the responsible
    purchasing officers in the target sales channels?

-   Does the agent have a high proportion of direct-to-market channels
    or is he heavily dependent on multiple distribution levels.

-   Is the agent developing added-value communications and promotions or
    is he dependent on price discounts as the major sales tool.

-   Does the agent have complementary product lines? Although cases
    vary, exclusivity can provide a better incentive to the agent and
    can help the exporter to maintain improved supervision over price
    and product integrity.

2\. [Sales and marketing]{.underline}

Although sales and marketing techniques in Taiwan are in a process of
evolution and development, there remains a high reliance on price
discounts in promotion strategies. To minimize reliance on discounting
strategies, U.S. food and beverage suppliers, particularly those higher
added value categories, may benefit from a focus on market education and
sales training to develop brand recognition (demand-pull) and consumer
preference.

Consumer concern for their personal health as well as the health of
immediate family members (children and parents), mean that foods and
beverages believed to provide specific health or nutritional benefits
can and often do earn a retail premium above what the market might
normally bear. Taiwanese consumers tend to be less concerned about cost
when shopping for products they believe provide such benefits and may
alter purchasing habits and behavior in order to include such foods or
beverages in their diet. Fresh fruit, dried berries, fruit juices,
yogurt, fresh baked breads, and a wide range of nutritional supplements
are just a few examples of product categories for which marketing
strategies founded in nutritional and health messages have proven highly
successful.

U.S. companies are, however, advised to keep in mind the strict product
labeling requirements enforced in Taiwan, which require that any health
or nutritional claim be first assessed and approved by the Taiwan
Department of Health (DOH) prior to inclusion on product packaging. For
more information regarding DOH labeling requirements, please refer to
the USDA FAIRS Report on Registration of Health Foods and Health Claims
(2003) at website:
<http://www.fas.usda.gov/gainfiles/200301/145785192.pdf>

3\. [Taiwan Business Customs]{.underline}

Taiwanese businessmen are often refreshingly direct and informal in
their business approach and do not have the business rituals associated
with, for example, Japan. Nonetheless, there are some local customs that
are well worth observing, for example, greetings and gifts to mark the
major festivals such as the Mid-Autumn Moon Festival and the Chinese New
Year.

Although agents and purchasing managers are always searching for new
products, they are also very thorough in their evaluation. They like to
see product samples whenever possible and will often place small initial
shipments to test the market response.

4\. [Bureaucratic Burden]{.underline}

Although food standards and regulations and general import and
inspection procedures are duly written up, implementation and compliance
can occasionally be a source of frustration. The documentation
requirements are split between various ministries and the officials
dealing with food and beverages regulations are not always familiar with
international standards and practices. There have been improvements
since Taiwan's accession to the World Trade Organization in January
2002. Please refer to Post's Food and Agricultural Import Regulations
and Standards (FAIRS) report, TW3027, available on the FAS website
www.fas.usda.gov.

Although agents can take care of many of these issues, they occasionally
require patience and understanding on the part of the exporter. The
problems are usually ones of misunderstanding or inconsistent
application of procedures and can be readily resolved.

5\. [Due Diligence]{.underline}

Although Taiwan purchasers have a high reputation for contract
performance, consolidation and financial pressures within the industry
make it important to maintain normal due diligence on contracts and
payment procedures. As always, foreign exchange fluctuations need to be
guarded against.

**Market Sector Structure and Trends**

1\. [Market Size]{.underline}

In 2002, total expenditures at current prices were US\$37.2 billion on
food and US\$4.8 billion on beverages, making a total market size of
US\$42 billion.

This closely correlates with food and beverages industry revenue figures
for 2001, the latest year available.

\* *The wholesale figure does not includes US\$4.9 billion of
'Agricultural, Husbandry and Aquatic Products', most of which went to
manufacturing.*

Source: Directorate General of Budget, Accounting and Statistics

After reaching real growth rates in N.T. (New Taiwan) dollar terms of 5%
to 6% in the late 1990s, growth in food expenditures fell by 4.3% in
2000, 2.3% in 2001 and 2.9% in 2002. Our industry sources are optimistic
that recovery in the overall economy will see renewed growth in the food
industry, although they do not anticipate a return to the high growth
rates of the 1990s. In the medium term, our industry sources indicate
overall growth in food expenditures will probably be about 3% a year
over the next three years.

Growth in the beverages industry has been less robust in the economic
downturn. After a period of sustained high growth through most of the
1990s, growth fell to 1.3% in 1999, followed by 2.8% in 2000, 0% in 2001
and --11.9% in 2002. The sharp decline in 2002 is partly due to the
increase in imports of alcoholic and non-alcoholic beverages from low
cost S.E. Asian producers and the outbreak of price wars within the
industry.

2\. [Manufacturing]{.underline}

In terms of production, two major players are significantly larger than
the rest. The Uni-President Group, with total 2002 revenues of about
US\$1.0 billion, owns significant production and retail channel assets
both in Taiwan and in the Southeast Asia and China regions.
Uni-President is involved in the production and sale of a wide range of
food and beverage products. The state-financed Taiwan Tobacco and Liquor
Corporation (TTLC), with total 2002 revenues of US\$1.9 billion, is the
former Taiwan alcohol and tobacco monopoly. It remains largely focused
on the importation, production, and sale of alcoholic beverages and
tobacco products.

Uni-President is not only the dominant player in food and non-alcoholic
beverages processing but is also the local partner for the 7/11
convenience store franchise, the Carrefour hypermarkets and Starbucks
coffee shops as well as an investor in shopping mall development. TTLC,
on the other hand, continues to have an effective monopoly of liquor,
wine, beer and tobacco products production in Taiwan and through that
that a very strong position in distribution. However, the legal monopoly
on beer, liquor, wine and tobacco production ended with WTO accession
and competitors are starting to emerge.

Aside from the two majors and a dozen or so mid-sized manufacturers,
including Chia Hsin and Wei-chuan (each with 2002 revenues of around
US\$280 million) and Hey Song (the largest domestic soft drinks producer
with 2002 revenues of US\$108 million), food and beverage manufacturers
in Taiwan are predominantly small-scale enterprises. Although there has
been a degree of vertical integration in the mid-sized manufacturers,
the smaller enterprises remain dependent on agents for both purchases of
raw materials and sales of product.

  ----------------------------- ------------- ----------- ----------- ----------
  Food & Beverages                                                    
  Manufacturing Industry 2001                                         

                                No. of\       Ave. No. of Revenues\   Gross
                                Enterprises   Employees   US\$        Profit\
                                                          millions    %

  Total Manufacturing           6,079         20.4        13,933.8    3.0

  Dairy Produce                 100           130.2       2,081.2     5.1

  Canned, Frozen, Dehydrated,\  877           27.1        2,251.1     -2.7
  Preserved Food                                                      

  Sugar Confectionery &         695           20.7        1,166.2     4.6
  Bakeries                                                            

  Seasoning                     382           16.5        695.3       5.0

  Beverages                     223           39.8        1,440.2     12.8

  Slaughtering                  38            55.6        231.7       1.7

  Edible Oil, Flour, Milling &\ 1,325         12.1        1,660.7     0.8
  Grain Husking                                                       

  Sugar Manufacturing           69            115.8       1,283.2     -3.4

  Other Food                    2,370         13.3        3,124.2     3.9
  ----------------------------- ------------- ----------- ----------- ----------

Source: Directorate General of Budget, Accounting and Statistics

The relatively high profitability for the beverages industry in 2001
reflects the monopoly profits of the state-owned TTLC, which had about
70% of the domestic beer market. Since then, however, TTLC has come
under pressure from beers imported from China, following the lifting of
Taiwan's direct import ban at the beginning of 2002. These include beers
from U.S. and other international brewers in China, as well as Tsingtao
and other domestic China brewers.

Although this trend toward declining prices and declining profits has
undercut some of the incentive for U.S. brewers to enter the Taiwan beer
market when the government ends its support of the TTLC over the next
two years (as it is committed to under World Trade Organization (WTO)
obligations), there remains opportunities for micro-breweries in Taiwan
that target premium, niche markets with a high-quality, domestically
brewed product.

Although the food manufacturing industry has started to recover in 2002,
profit margins have remained slim. Wei-chuan Foods, one of mid-tier food
manufacturers, has reported gross profit of 0.6%, Standard Foods
reported 4.9% and Lien Hwa Foods 2.4%. One of the best performers was
I-Lan Foods, with reported 2002 gross profit of 9.5%. Beverages
producers have generally done better, with Hey Song reporting gross
profit of 9.2%.

Although it is a situation that may offer prospects for merger and
acquisition, there are still many barriers in Taiwan to such industry
consolidation. For some of these companies, the reaction has been to
diversify into new businesses and/or to seek opportunities in China,
Vietnam and other parts of Southeast Asia. For U.S. exporters,
therefore, some of the larger Taiwan food manufacturers, whose
management remains in Taiwan, offer broader opportunities throughout the
region.

The choice between the two domestic giants, Uni-President and TTLC, the
mid-sized companies and the large number of small manufacturing
enterprises thus offers a wide range of prospects for U.S. exporters
looking for a manufacturing partner both inside and outside of Taiwan
itself.

3\. [Distribution and Retail]{.underline}

The wholesale and retail trades continue to be dominated by very small
enterprises, the so-called 'Mom and Pop' distributors and retailers.
Even in the case of the retail franchises, such as 7/11, the store
operator is often an individual family.

  ----------------------- ------------- ----------- ------------ ------------
  Distribution Industry                                          
  Structure 2001                                                 

                          No. of\       Ave. No. of Revenues\    Gross
                          Enterprises   Employees   US\$         Profit\
                                                    millions     %

  Wholesale Food\         9,890         6.4         10,590.3     4.8
  & Groceries                                                    

  Retail Food\            58,845        1.9         5,878.2      9.1
  & Groceries                                                    

  Retail Agriculture,\    39,537        1.7         2,957.5      10.4
  Husbandry & Aquatic                                            
  ----------------------- ------------- ----------- ------------ ------------

Source: Directorate General of Budget, Accounting and Statistics.

There is a great deal of pressure on the wholesale distributors from
manufacturers and importers who are looking for more direct supply
chains to the retail outlets. For many in the industry, eliminating
layers of wholesale distributors is one of the main ways to find
cost-cutting efficiencies.

Although there has certainly been a trend in the retail sector towards
large-scale outlets, the pace of this 'channel revolution' has been
constrained by a combination of the economic slowdown, demographics,
topography and detailed property zoning and building use restrictions.
The population in Taiwan is 78% urban and with a high population
density. Most people live in small apartments located on narrow urban
streets and residential and commercial properties tend to be mixed
together. This makes it difficult to develop locations for large-scale
outlets and much of the hypermarket and supermarket activity has,
indeed, been by Japanese and European store operators, who are more used
to this lack of space than their U.S. counterparts.

Nonetheless, developers have persevered and a number of shopping malls
have been developed in Taipei and other major cities, sometimes
expanding existing department stores. To these will shortly be added
'Taipei 101', a new retail complex in central Taipei, which includes a
101-storey tower and is designed to bring international retail standards
to Taiwan.

Within the shopping malls, the main impetus in food and beverages is
towards high value, specialty items, including delicatessens,
confectionery, specialty cakes, food and beverages gift items and
liquor. Supermarkets are also being tried in the shopping malls,
although it is more difficult to achieve sufficient revenues and
economies of scale to justify the high property rentals.

Hypermarkets, including Carrefour, Costco, Tesco, and RT Mart, have
continued to expand, despite the economic downturn and are a very
significant outlet for major food and beverages items which are bulky
and/or high added value, including frozen foods, processed foods and
beverages.

The introduction of shopping malls and hypermarkets has had a strong
influence on both purchasing behavior and consumer habits. Most
Taiwanese shopping is done after 4 p.m. and the shopping malls provide
an opportunity for both shopping and evening leisure activity in a
fashionable atmosphere. Hypermarkets, on the other hand, have encouraged
the trend towards a weekly shop for major food and beverages items,
often combined with clothing, consumer durables and consumer
electronics.

Although different in detailed design from their U.S. counterparts,
these large-scale retail outlets provide more of a U.S. style shopping
experience which, together with their savings in scale and supply chain
logistics, are ultimately favorable to high quality and high added-value
food products.

  -------------- -------------------- ----------- ----------- ---------- -------- ----
  Distribution                                                                    
  channel                                                                         

                                      2002        2003        Growth     Growth   

                                                                         Rate     

  Large Scale                         7606        8115        509        6.69%    
  Retail                                                                          

                 Shopping Mall        10          12          2          20.00%   

                 Department Store     156         154         -2         -1.28%   

                 Hypermarket          103         113         10         9.71%    

                 Supermarket          764         861         97         12.70%   

                 CVS                  6573        6975        420        6.39%    

                                                                                  

  Retail special                                                                  
  for Food                                                                        

                                      2002        2003        Growth     Growth   

                                                                         Rate     

  Other Retail                        14417       14464       47         0.33%    

                 Food Retail          2891        2904        13         0.45%    
  -------------- -------------------- ----------- ----------- ---------- -------- ----

Source: Directorate General of Budget, Accounting and Statistics.

Although supermarkets have to some extent been squeezed between shopping
malls and hypermarkets on one side and convenience stores on the other,
they remain a major food and beverages outlet, offering a full range of
products. The major supermarket chain is Wellcome, with about 110
outlets.

Although convenience chain stores remain a strong outlet for beverages,
instant food and snacks, aimed mainly at the younger population, they
have begun to look increasingly for non-food convenience items,
including courier services. There is also a trend to larger package
sizes to increase the product value on the shelf. For non-chain
neighborhood stores, the formula has changed very little with the
emphasis on low priced items, packed to the ceiling.

Neighborhood specialty shops, especially bakeries and confectionery
shops, have become increasingly popular by improving the quality and
range of product, with a stronger emphasis on novelty items.

Although retail stores provide the major sales channels, about one third
of food retail is through the traditional wet markets, offering fresh
produce and fish. The wet markets are holding up much better than
expected because of their low overheads and ready availability in most
neighborhoods of Taiwan's major cities. For U.S. exporters of beef,
fresh fruit and vegetables and edible fisheries, these remain an
important retail outlet.

4\. [Food Service]{.underline}

Dining out is probably the major national pastime in Taiwan. The high
propensity to dine out is driven by a combination of factors:

-   Small size of apartments.

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-   High female participation in the labor force.

-   A high level of disposable income

-   Restaurant availability.

Although there are almost 60,000 registered eating-places, there is
probably another 20% or more of street vendors, street food stalls and
night market food stalls that are not officially recorded. Few people
have to step far outside their apartment to find a selection of places
to eat. In the food service industry as a whole, it is again
characterized by a great many small enterprises.

  ------------------- ------------- --------------- ----------- ------------
  Food Service                                                  
  Industry 2001                                                 

                      No. of\       Ave. No. of     Revenues\   Gross Profit
                      Enterprises   Employees       US\$        
                                                    billions    

  Total               58,494        3.3             7.9         7.6%

  Restaurants         47,440        3.5             6.8         7.3%

  Coffee/Tea Shops\   9,285         2.5             0.9         9.6%
  & Bars                                                        

  Others              1,769         3.3             0.2         9.4%
  ------------------- ------------- --------------- ----------- ------------

Restaurants can be broadly divided into three tiers.

[Tier I: Low Price Eateries.]{.underline}

At the low end of the market, are a large number of street vendors,
night market stalls and unenclosed eating places that frequently spill
out onto the sidewalk, offering cheap on-site and take-away breakfasts,
lunch, including lunch boxes, dinner and after-midnight snacks.

Although these different eateries tend to specialize in particular foods
and beverages, overall they offer a 7/24 fast food service of variety
and low cost to meet the daily dining out needs of office workers,
shoppers and students. Many use disposable packaging and the standards
of hygiene are remarkably high, despite the unpromising surroundings.
Any beverages offered are usually tea and traditional soft drinks.
Dining out for breakfast, lunch boxes and after-midnight snacks are
particular Taiwanese characteristics and the cuisine for these is almost
always Chinese.

[Tier II: Mid-range Restaurants.]{.underline}

The middle range of restaurants are enclosed, but still offering a basic
standard of food service in which the emphasis is on the variety of
dishes and fast delivery of food. Although these are mainly Chinese,
western-style restaurants have made a significant penetration at this
level.

-   Traditional western style fast food restaurants, including
    McDonald's, Kentucky Fried Chicken, Burger King and Pizza Hut.

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-   New fashionable western 'coffee shop' style restaurants that offer a
    basic set meal of soup/salad, main course of steak, chicken, pork or
    fish and a cake/ice cream desert have become popular lunch and
    dinner venues with younger office workers.

Beverages may include a help-yourself selection of beer, fruit juices
and traditional soft drinks.

Tier III: [Fine dining]{.underline}.

There is a very wide range of high-end restaurants. These include
traditional Chinese restaurants with menus containing more expensive
dishes delivered either by course or by combination 'banquet' style,
with table and restaurant décor and reception and table service. Beer,
spirits, including cognac, whisky and sake and local rice wine, and soft
drinks are usually available and possibly a small selection of wine. In
these restaurants, it is not unusual for business and family groups to
make reservation in tables of ten and twelve and to order spirits by the
bottle.

Western-style fine dining restaurants are found in most of the
international hotels and there is a small number of western-style fine
dining restaurants near the main business areas. Although the economic
slowdown and the reduction in business travel, because of international
terrorist activity and the recent outbreak of Severe Acute Respiratory
Syndrome (SARS), have restrained growth in western-style fine dining,
renewed economic growth and the advent of improved central urban
facilities such as Taipei 101 will undoubtedly lead to new opportunities
in the fine dining category. This is likely to include U.S. style steak
houses and lobster specialty restaurants

U.S. chain restaurants have already achieved considerable success as a
life-style choice for targeted groups. McDonald's has achieved large
success through the novelty of serving beef in a bun delivered in a
store format that offered a U.S. lifestyle experience to youngsters.
Similarly, Starbucks has become very popular in Taiwan with young office
workers wanting a change of scene and a fashion statement as well as a
novelty cup of coffee. At the higher end, fine dining steak houses have
not yet been as successful with the older age groups, where the U.S.
lifestyle attraction is probably not as strong, but industry sources
believe will be successful with younger, affluent age groups.

Although we should emphasize that over 75% of the restaurants in Taiwan
are independent family owners and predominantly Chinese, we have focused
attention on the 25% of food service outlets that are chain stores or
franchises and probably of most interest to U.S. exporters.

  ----------- --------------- ----------- ----------- ----------- -----------
  **Chain &                                                       
  Franchise                                                       
  Instant                                                         
  Food**                                                          

  ** **                       2002        2003        Growth      Growth

  ** **                                                           Rate

  Total                       8534        10926       2392        27.48%

              Western Instant 684         759         75          10.96%
              Food (burger,                                       
              Fried Chicken)                                      

              Western Instant 403         153         -250        -62.03%
              Food (Pizza)                                        

              Japanese        108         169         61          56.48%
              Instant Food                                        

              Chinese Instant 587         375         -212        -36.12%
              Food                                                

              Breakfast       6752        9423        2671        39.56%
              restaurant                                          
  ----------- --------------- ----------- ----------- ----------- -----------

Source: Taiwan Chain Stores and Franchise Association (TCFA).

In the chain fast food service segment, Japanese fast food, which serve
mainly Japanese-style lunch boxes, and 'Breakfast restaurants', which
serve both on-site and take-away Chinese pancakes, dumplings and
western-style sandwiches to people on their way to work, have shown the
most rapid growth.

Western-style fast food chains remain very popular, although there has
been a sharp decline in pizza chains. Chinese fast food chains, which
primarily serve chicken pieces, have also declined.

Among the restaurant chains, fashionable Chinese Tea Restaurants,
offering a selection of small dishes in the Chinese dim sum style,
Japanese, Korean and Thai restaurants have shown strong growth.

  --------------- --------------- ----------- ----------- ----------- -----------
  **Chain and                                                         
  Franchise                                                           
  Restaurants**                                                       

                                  2002        2003        Growth      Growth

                                                                      Rate

  Total                           524         569         45          8.59%

                  Chinese Tea     25          46          21          84.00%
                  Restaurant                                          

                  Western         86          90          4           4.65%
                  Restaurant                                          

                  Steak house     251         280         29          11.55%

                  Thai Restaurant 14          21          7           50.00%

                  Japanese/ Korea 32          56          24          75.00%
                  Restaurant                                          

                  Chinese         43          47          4           9.30%
                  Restaurant                                          

                  Hot-pot         73          29          -44         -60.27%
                  Restaurant                                          
  --------------- --------------- ----------- ----------- ----------- -----------

Source: TCFA

Steakhouses remain very popular and include a number of western-style
steakhouses, including Sizzler in the mid-tier and Ruth Chris in fine
dining as well as Chinese-style steak houses.

Among the other chain and franchise outlets, the Starbucks-led fashion
for coffee shops appears to be nearing its peak. This has been one of
the most recent major successes for U.S. foodservice franchises, aimed
at young affluent office workers, looking for a different 'lifestyle'
choice and willing to pay premium prices for the experience.

  ------------ --------------- ----------- ----------- ----------- -----------
  **Chain and                                                      
  Franchise                                                        
  Other                                                            
  Outlets.**                                                       

                               2002        2003        Growth      Growth

                                                                   Rate

               Street vendor   1812        2252        440         24.28%

               Coffee shop     619         682         63          10.18%

               Beverages shop  3558        2504        -1054       -29.62%

               Others          0           454         454         NA
  ------------ --------------- ----------- ----------- ----------- -----------

Source: TCFA.

On-site beverage outlets in Taiwan cover a wide array of pubs, clubs and
karaoke bars which are a major alcoholic beverage outlet. There is a
high premium on novelty. Corona beer drunk from the bottle over a slice
of lemon and Smirnoff Ice have both attracted a following.

A new chain of soft drinks, offering a range of fruit juices and novelty
drinks such as 'pearl milk tea', has also become very popular.

5\. [Impact on U.S. Exports of Consumer-oriented Foods and
Beverages]{.underline}

The United States continues to retain a high share of the Taiwan import
market for fresh meat and offal and fresh fruit and a significant market
share for fish and seafood and fats and oils.

  --------------------------------- ---------- ------- ------- -------- -------
  Taiwan Consumer-Oriented Food &                                       
  Beverage Total Imports                                                

                                    US\$                                
                                    millions                            

                                    2000       2001    2002    2002\    \%
                                                               from US  

  Fresh Meat & Offal                313.3      241.3   304.0   95.8     31.5%

  Fish & Seafood                    347.4      263.7   269.6   30.4     11.3%

  Dairy Produce                     213.0      219.9   188.0   8.4      4.5%

  Fresh Fruit & Nuts                306.4      266.2   291.9   141.3    48.4%

  Fats & Oils                       166.4      132.7   161.5   25.8     16.0%

  Prepared Meat & Fish              50.7       41.4    38.2    2.1      5.5%

  Sugar & sugar confectionery       140.4      156.6   144.9   5.2      3.6%

  Bakeries                          243.8      253.9   269.6   13.7     5.1%

  Beverage                          368.5      281.2   319.9   23.7     7.4%
  --------------------------------- ---------- ------- ------- -------- -------

Source: Department of Statistics, Ministry of Finance.

A more detailed breakdown of U.S. consumer-oriented foods and beverages
exports to Taiwan is shown in the U.S. BICO reports.

+----------------------+--------+--------+--------+--------+--------+
| U.S. Export of       |        |        |        |        |        |
| Consumer-Oriented    |        |        |        |        |        |
| Agricultural         |        |        |        |        |        |
| Products to Taiwan   |        |        |        |        |        |
+----------------------+--------+--------+--------+--------+--------+
|                      | US\$   |        |        |        |        |
|                      | '000s  |        |        |        |        |
+----------------------+--------+--------+--------+--------+--------+
|                      | 1998   | 1999   | 2000   | 2001   | 2002   |
+----------------------+--------+--------+--------+--------+--------+
| Total:               | 5      | 5      | 5      | 4      | 4      |
|                      | 14,433 | 43,046 | 69,905 | 82,311 | 44,216 |
+----------------------+--------+--------+--------+--------+--------+
| Snacks (ex. nuts)    | 28,477 | 36,959 | 31,915 | 25,949 | 24,425 |
+----------------------+--------+--------+--------+--------+--------+
| Red meats            | 53,723 | 91,344 | 99,145 | 62,021 | 79,596 |
|                      |        |        |        |        |        |
| (FR/CH/FR)           |        |        |        |        |        |
+----------------------+--------+--------+--------+--------+--------+
| Poultry meat         | 7,832  | 19,691 | 20,663 | 15,082 | 24,406 |
+----------------------+--------+--------+--------+--------+--------+
| Dairy products       | 59,653 | 43,602 | 42,685 | 37,549 | 22,842 |
+----------------------+--------+--------+--------+--------+--------+
| Fresh fruit          | 1      | 1      | 1      | 1      | 1      |
|                      | 55,859 | 64,712 | 75,749 | 58,220 | 14,268 |
+----------------------+--------+--------+--------+--------+--------+
| Fresh Vegetables     | 16,092 | 16,970 | 21,759 | 26,962 | 19,581 |
+----------------------+--------+--------+--------+--------+--------+
| Processed Fruit &    | 70,893 | 59,532 | 59,990 | 52,660 | 56,698 |
|                      |        |        |        |        |        |
| Vegetables           |        |        |        |        |        |
+----------------------+--------+--------+--------+--------+--------+
| Wine & Beer          | 37,703 | 25,095 | 22,976 | 20,071 | 19,162 |
+----------------------+--------+--------+--------+--------+--------+
| Others               | 84,201 | 85,141 | 95,023 | 83,797 | 83,238 |
+----------------------+--------+--------+--------+--------+--------+

Source: http://www.fas.usda.gov

Although there has been a significant decline in total consumer-oriented
agricultural products since the recent millennium peak, the main issues
are to what extent this represents cyclical economic issues and to what
extent it reflects structural changes in the pattern of Taiwan's
imported food and beverages.

The two major categories of U.S. consumer-oriented agricultural products
are fresh fruit and fresh, chilled and frozen beef, which together
account for over 40% of the total.

U.S. exports to Taiwan of fresh fruit are probably facing the strongest
challenge from other sources. Although Taiwan is, for example, the
world's largest importer of apples, at about 6 million boxes (250
million pounds), the U.S. market share has stayed relatively static
during the last three years at about 50%, largely because the market has
been opened up to other countries, notably Korea and Japan. Although
there are differing views on timing, there is also some concern among
U.S. apple exporters that their market in Taiwan will eventually be
vulnerable to the opening up of apples imports from China.

Thus, while the decline in U.S. fresh fruits exports is partly due to
cyclical economic difficulties in Taiwan, and can be expected to recover
with the overall economy, they are increasingly subject to strong
competition from both other temperate supplies and Asian sources, as a
result of the trade liberalization that received its most recent impetus
from Taiwan's accession to the World Trade Organization.

In order to meet this competitive threat and to maintain their market
share, U.S. exporters will need to develop new product and promotion
strategies that leverage the high quality of U.S. fresh fruit and
justify a premium price.

U.S. exporters are also responding with the introduction of
new-to-market categories of fruits, including cherries, grapes,
strawberries and blueberries and other niche fruits, which are also
popular gift items.

Similarly, we can expect to see a cyclical recovery in the demand for
beef and increased opportunities for high quality beef in fine dining
and hotel restaurants, although there will continue to be a strong
competitive threat from Australia and other producers, following the
opening up of the beef market. Again there will be strong competitive
pressure on U.S. beef exporters to continue to differentiate the U.S.
product with new variety meats and innovative ways of product marketing.

Although poultry meat, especially dark meat and offal, is a smaller
export category, it has enjoyed consistent growth. The progressive
lifting of Tariff Rate Quotas (TRQ) has been facilitated by advanced
U.S. technology in frozen food preparation and has been largely driven
by the demand for offal and chicken and turkey pieces in a large range
of food service outlets, including take-out stores for snack and home
consumption and the many instant food outlets for quick snacks and
lunches as well as in food processing.

Exports of U.S. fresh vegetables have also succeeded in keeping market
niches. Exports of fresh potatoes have received a boost from the lifting
of WTO restrictions and are proving a popular item in Taiwan. On the
other hand, the popularity of more expensive U.S. asparagus is on the
decline with low cost competition from Thailand. These are niche market
opportunities driven by changing fashions and the occasional natural
disasters in Taiwan of floods and typhoons.

In addition to the main product ranges, there are large number of
emerging new-to-market products that take advantage of U.S. technology
as well as quality. These include:

-   Dried and frozen fruit with new flavors such as blueberry, raspberry
    and cranberry which are popular both as snack foods and gift items
    as well as applications as ingredients in food processing.

-   Food ingredients as a whole cover a wide range of products,
    including dairy products such as whey and cheese, as well as other
    new-to-market products like dehydrated potatoes.

-   New western-style health foods, including nutrients and vitamin
    foods have become increasingly popular with the spread of U.S. style
    fitness centers such as Hollywood and associated fit-and-healthy
    life styles.

-   The U.S. has established market leadership in pet foods for tropical
    fish, birds and fashionable dogs.

Although these new niche products are unlikely to achieve large-scale
volume, they nonetheless offer good profitable market opportunities.

In other traditional categories of snack foods, dairy foods, processed
fruits and vegetables, wine and beer, there have been significant
declines in market share because of more competitive processors both in
Europe and Australia and New Zealand and, increasingly Asia itself. In
these categories, export opportunities will be very much in niche areas
and specialty products that are uniquely American, such as Jack Daniels
whiskey and Californian wines, or have the advantage of novelty or high
technology.

Among U.S. exports of edible fish and seafood products, there has also
been an overall decline in imports as Taiwan and other Asian countries
have developed their own seafood production and the emphasis for U.S.
exporters is again moving towards high quality, specialty items such as
crabs, lobster and abalone.

Overall, renewed economic growth in Taiwan will see some recovery in
U.S. exports of consumer-oriented food and beverages in both the major
categories of fresh and frozen foods and the specialty, niche markets.
Some of the more standardized processed foods will increasingly be
manufactured either in Taiwan or in low cost Asian countries. U.S.
exporters in all categories will face strong competitive challenges from
other sources, both temperate and Asian as a result of trade
liberalization. The U.S. exporter, and their Taiwan importer, will
probably have to work harder for their retail dollar.

Although strictly outside of the scope of this report, we believe there
will be opportunities for investment in Taiwan in microbreweries to
offset the flood of packaged beers and in higher-end fine dining
restaurants.

####### Best High Value Product Prospects

+-----------+-----+------+------+-----+---------+-------------------+
| Product   | 2   | 2002 | Im   | Imp | Key     | Market            |
| Category  | 002 | Imp  | port | ort | Cons    | Attractiveness    |
|           | Mar | orts | Gr   | Tar | traints | For USA           |
|           | ket |      | owth | iff | Over    |                   |
|           | S   |      |      | R   | Market  |                   |
|           | ize |      | P    | ate | Deve    |                   |
|           |     |      | oten |     | lopment |                   |
|           |     |      | tial |     |         |                   |
+-----------+-----+------+------+-----+---------+-------------------+
| Beef      | 76, | 71   | Me   | NT\ | Comp    | Renewed economic  |
|           | 500 | ,271 | dium | $15 | etition | growth. Canadian  |
| (tons)    |     |      |      | -24 | from    | beef restricted   |
|           |     |      |      | per | Au      | by BSE            |
|           |     |      |      | kg. | stralia |                   |
|           |     |      |      | V   |         |                   |
|           |     |      |      | ary |         |                   |
|           |     |      |      | by  |         |                   |
|           |     |      |      | i   |         |                   |
|           |     |      |      | tem |         |                   |
+-----------+-----+------+------+-----+---------+-------------------+
| Poultry   | 7   | 27   | High | TRQ | C       | High price for    |
|           | 39, | ,000 |      | un  | onsumer | dark meat &       |
| (tons)    | 000 |      |      | til | taste   | offal.            |
|           |     |      |      | 2   | co      |                   |
|           |     |      |      | 005 | ncerns. |                   |
+-----------+-----+------+------+-----+---------+-------------------+
| Total     | 1.9 | 2    | Me   | Var | Comp    | Quality market.   |
| Fresh     | b   | 42.1 | dium | ies | etition | Sole supplier     |
| Fruit     | ill | mil  |      |     | from    | some categories.  |
|           | ion | lion |      |     | Asia    |                   |
| (US\$)    |     |      |      |     |         |                   |
+-----------+-----+------+------+-----+---------+-------------------+
| Cherries  | 15, | 8    | Me   | 7   | Ex      | Premium price,    |
|           | 000 | ,486 | dium | .5% | pensive | gift items        |
| (tons)    |     |      |      |     |         |                   |
+-----------+-----+------+------+-----+---------+-------------------+
| Grapes    | 50, | 20   | High | 20% |         | Premium price,    |
|           | 000 | ,346 |      |     |         | gift items.       |
| (tons)    |     |      |      |     |         |                   |
+-----------+-----+------+------+-----+---------+-------------------+
| Bl        | N/A | 24   | High | 7   |         | Novelty, few      |
| ueberries |     |      |      | .5% |         | competitors       |
|           |     |      |      |     |         |                   |
| (tons)    |     |      |      |     |         |                   |
+-----------+-----+------+------+-----+---------+-------------------+
| Dried &   | 1   | 10.0 | High |     |         | New snack and     |
| Frozen    | 1.6 | mil  |      |     |         | ingredient        |
| Fruit     | m   | lion |      |     |         | flavors.          |
|           | ill |      |      |     |         |                   |
| (US\$)    | ion |      |      |     |         |                   |
+-----------+-----+------+------+-----+---------+-------------------+
| Potatoes  | N/A | 534  | Me   | 20% | Strong  | WTO limits        |
|           |     |      | dium |     | compe   | lifted. Taiwan    |
| (tons)    |     |      |      |     | tition. | drought.          |
+-----------+-----+------+------+-----+---------+-------------------+
| Health    | N/A | 4.o  | Me   | 30% |         | Reduction of      |
| Foods     |     | mil  | dium |     |         | tariff rate (from |
|           |     | lion |      |     |         | 50%-30%).         |
| (US\$)    |     |      |      |     |         | Awareness of      |
|           |     |      |      |     |         | health food.      |
+-----------+-----+------+------+-----+---------+-------------------+
| Food      |     |      | Me   |     | R       | Market wants new  |
| Ing       |     |      | dium |     | equires | flavors. Mainly   |
| redients. |     |      |      |     | product | processing e.g.,  |
|           |     |      |      |     | kno     | whey, dehydrated  |
|           |     |      |      |     | wledge. | potatoes, but     |
|           |     |      |      |     |         | also food service |
|           |     |      |      |     |         | e.g., cheese.     |
+-----------+-----+------+------+-----+---------+-------------------+
| Edible    | 1.9 | 3    | Me   |     | Strong  | Premium prices    |
| seafood   | b   | 08.0 | dium |     | comp    | for high quality  |
|           | ill | mil  |      |     | etition | specialties e.g.  |
| (US\$)    | ion | lion |      |     |         | lobster, crab,    |
|           |     |      |      |     |         | fish roe.         |
+-----------+-----+------+------+-----+---------+-------------------+
| Pet Foods | 4   | 36.0 | Me   |     | Some    | U.S. market       |
|           | 9.0 | mil  | dium |     | health  | leader.           |
| (US\$)    | m   | lion |      |     | bans.   |                   |
|           | ill |      |      |     |         |                   |
|           | ion |      |      |     |         |                   |
+-----------+-----+------+------+-----+---------+-------------------+
| Micr      | N/A | N/A  | N/A  | N/A | Strong  | Liberalization of |
| o-Brewery |     |      |      |     | d       | brewing, high     |
|           |     |      |      |     | omestic | quality, niche    |
|           |     |      |      |     | comp    | beers             |
|           |     |      |      |     | etition |                   |
+-----------+-----+------+------+-----+---------+-------------------+
| Fine      | N/A | N/A  | N/A  | N/A | De      | Demand for fine   |
| dining    |     |      |      |     | pendent | dining U.S. style |
| chain     |     |      |      |     | on      |                   |
| r         |     |      |      |     | e       |                   |
| estaurant |     |      |      |     | conomic |                   |
| e.g.,     |     |      |      |     | growth  |                   |
| steaks &  |     |      |      |     |         |                   |
| lobster   |     |      |      |     |         |                   |
+-----------+-----+------+------+-----+---------+-------------------+

####### Key Contact and Further Information

# 

# American Institute in Taiwan.

Organization Name Agricultural Trade Office

Address Room 704, 7F, 136 Renai Road, Section 3, Taipei, Taiwan

Telephone (886-2) 2705-6536; Fax: (886-2) 2706-4885

E-mail ato@mail.ait.org.tw

Internet Homepage http://ait.org.tw/ait/AGRI/ato_portal.htm

Organization Name United States Department of Agriculture

Department Foreign Agricultural Services

Address U.S. Department of Agriculture, Washington, D.C. 20250

Telephone

E-mail info@fas.usda.gov

Internet Homepage www.fas.usda.gov

# Taiwan Central Authority Agencies

Organization Name Bureau of Standards, Metrology & Inspection (MSMI)

Address No. 4 Chinan Road, Section 1, Taipei, Taiwan

Telephone (886-2) 2321-2790; Fax: (886-2) 2356-0998

Contact Person Neng-jong Lin, Director General

E-mail nengjong@mail.ait.org.tw

Internet Homepage http://www.bsmi.gov.tw

Organization Name Council of Agriculture, Executive Yuan

Address No. 37, Nanhai Road, Taipei, Taiwan

Telephone (886-2) 2381-2991; Fax: (886-2) 2331-0341

E-mail coa@mail.coa.gov.tw

Internet Homepage http://www.coa.gov.tw

Organization Name Bureau of Animal & Plant Health Inspection &
Quarantine

> (BAPHIQ)

Address 9 Fl., No. 51, Chungching S. Rd, Sec. 2., Taipei, Taiwan

Telephone (886-2) 2343-1401; Fax: (886-2) 2343-1400

E-mail baphiq@mail.baphiq.org.tw

Internet Homepage http://www.baphiq.gov.tw

Organization Name Department of Health (DOH)

Department Bureau of Food Sanitation

Address No. 100 Aikuo E. Road., Taipei, Taiwan

Telephone (886-2) 2393-8209; Fax: (886-2) 2392-9723

Contact Person Dr. Lu-hung Chen, Director General

E-mail fslhcn@doh.gov.tw

Internet Homepage http://www.doh.gov.tw

Organization Name Directorate General of Customs, Ministry of Finance
(MOF)

Address No. 13, Ta Cheng Street, Taipei, Taiwan

Telephone (886-2) 2550-5500; Fax: (886-2) 2550-8111

E-mail customs@mail.dgoc.gov.tw

Internet Homepage http://www.dgoc.gov.tw

Organization Name Food Industry Research and Development Institute

Address 331 Shih-Pin Road, Hsinchu, Taiwan

Telephone (886-3) 5223191; Fax: (886-3) 5214016

E-mail wwwadm@firdi.org.tw

Internet Homepage http://www.firdi.gov.tw

Organization Name Bureau of Foreign Trade (BOFT), Ministry of Economic
Affairs

Address No. 1, Hukou Street, Taipei, Taiwan

Telephone (886-2) 2351-0271; Fax: (886-2) 2351-3603

E-mail boft@trade.gov.tw

Internet Homepage http://www.trade.gov.tw

# Major Taiwan Trade Associations

Organization Name Taiwan Chain Stores and Franchise Association (TCFA)

Address 7F, 197 Nanking E. Road, Section 4, Taipei, Taiwan

Telephone (886-2) 2712-1250; Fax: (886-2) 2717-7997

E-mail tcfa@@tcfa.org.tw

Internet Homepage http://www.tafa.org.tw

Organization Name China External Trade Development Council (CETRA)

Address 333 Keelung Road, Sec. 1, Taipei Taiwan

Telephone (886-4) 2725-5200; Fax: (886-2) 2757-6443

E-mail <cetra@cetra.org.tw>

Internet Homepage www.taiwantrade.com.tw

Organization Name Importers and Exporters Association of Taipei (IEAT)

Address No. 350, Sungkiang Road, Taipei, Taiwan

Telephone (886-2) 2581-3521; Fax: (886-2) 2542-3704

E-mail ieatpe@ieatpe.org.tw

Internet Homepage http://www.ieatpe.org.tw

######## Statistics

  ------------------------------------------------------------- -----------
  Table A. Key Trade & Demographic Information                  

  Agricultural Imports From All Countries (US\$Mil) / US Market 7,079/34%
  Share (%)                                                     

  Consumer Food Imports From All Countries (US\$Mil) / US        
  Market Share (%)                                              

  Edible Fishery Imports From All Countries (US\$Mil) / US       
  Market Share (%)                                              

  Total Population (Millions) / Annual Growth Rate (%)          22.5/0.5

  Urban Population (Millions) / Annual Growth Rate (%)          17.6/0.6

  Number of Major Metropolitan Areas                            7

  Size of the Middle Class (Millions) / Growth Rate (%)         13.5/0.6

  Per Capita GDP (U.S Dollars)                                  12,900

  Unemployment Rate (%)                                         5.17

  Per Capital Food Expenditures (U.S. Dollars)                  1,867

  Percent of Female Population Employed                         46.6%

  Exchange Rate (US\$1=X.X local currency)                      34.58
  ------------------------------------------------------------- -----------

<table>
<colgroup>
<col style="width: 35%" />
<col style="width: 9%" />
<col style="width: 8%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 8%" />
<col style="width: 6%" />
<col style="width: 6%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><h1
id="table-b.-consumer-food-edible-fishery-product-imports">Table B.
Consumer Food &amp; Edible Fishery Product Imports</h1></td>
</tr>
<tr class="even">
<td>Taiwan Imports<br />
(US$Million)</td>
<td colspan="3">Imports from the World</td>
<td colspan="3">Imports from the U.S.</td>
<td colspan="3">U.S. Market Share</td>
</tr>
<tr class="odd">
<td></td>
<td>2000</td>
<td>2001</td>
<td>2002</td>
<td>2000</td>
<td>2001</td>
<td>2002</td>
<td>2000</td>
<td>2001</td>
<td>2002</td>
</tr>
<tr class="even">
<td>CONSUMER-ORIENTED<br />
AGRICULTURAL TOTAL</td>
<td>1,8 46</td>
<td>1,015</td>
<td>678</td>
<td>577</td>
<td>530</td>
<td>465</td>
<td>31%</td>
<td>52%</td>
<td>68%</td>
</tr>
<tr class="odd">
<td>Snack Foods (Excl. Nuts)</td>
<td>88</td>
<td>49</td>
<td>27</td>
<td>12</td>
<td>14</td>
<td>11</td>
<td>14%</td>
<td>29%</td>
<td>42%</td>
</tr>
<tr class="even">
<td>Breakfast Cereals &amp; Pancake Mix</td>
<td>11</td>
<td>5</td>
<td>2</td>
<td>2</td>
<td>2</td>
<td>0.8</td>
<td>20%</td>
<td>47%</td>
<td>34%</td>
</tr>
<tr class="odd">
<td>Red Meats, Fresh/Chilled/Frozen</td>
<td>267</td>
<td>163</td>
<td>105</td>
<td>98</td>
<td>61</td>
<td>77</td>
<td>37%</td>
<td>60%</td>
<td>74%</td>
</tr>
<tr class="even">
<td>Red Meats, Prepared/Preserved</td>
<td>7</td>
<td>4</td>
<td>9</td>
<td>5</td>
<td>4</td>
<td>9</td>
<td>62%</td>
<td>85%</td>
<td>93%</td>
</tr>
<tr class="odd">
<td>Poultry Meat</td>
<td>20</td>
<td>14</td>
<td>24</td>
<td>20</td>
<td>14</td>
<td>22</td>
<td>97%</td>
<td>99%</td>
<td>94%</td>
</tr>
<tr class="even">
<td>Dairy Products (Excl. Cheese)</td>
<td>225</td>
<td>128</td>
<td>48</td>
<td>14</td>
<td>15</td>
<td>13</td>
<td>6%</td>
<td>11%</td>
<td>27%</td>
</tr>
<tr class="odd">
<td>Cheese</td>
<td>23</td>
<td>10</td>
<td>4</td>
<td>1</td>
<td>2</td>
<td>2</td>
<td>7%</td>
<td>24%</td>
<td>54%</td>
</tr>
<tr class="even">
<td>Eggs &amp; Products</td>
<td>5</td>
<td>3</td>
<td>2</td>
<td>0.5</td>
<td>0.3</td>
<td>0.2</td>
<td>10%</td>
<td>12%</td>
<td>15%</td>
</tr>
<tr class="odd">
<td>Fresh Fruit</td>
<td>289</td>
<td>177</td>
<td>121</td>
<td>176</td>
<td>158</td>
<td>116</td>
<td>61%</td>
<td>90%</td>
<td>96%</td>
</tr>
<tr class="even">
<td>Fresh Vegetables</td>
<td>39</td>
<td>37</td>
<td>21</td>
<td>22</td>
<td>27</td>
<td>20</td>
<td>56%</td>
<td>73%</td>
<td>99%</td>
</tr>
<tr class="odd">
<td>Processed Fruit &amp; Vegetables</td>
<td>143</td>
<td>67</td>
<td>74</td>
<td>75</td>
<td>58</td>
<td>66</td>
<td>53%</td>
<td>87%</td>
<td>89%</td>
</tr>
<tr class="even">
<td>Fruit &amp; Vegetable juices</td>
<td>24</td>
<td>10</td>
<td>7</td>
<td>8</td>
<td>7</td>
<td>6</td>
<td>32%</td>
<td>69%</td>
<td>81%</td>
</tr>
<tr class="odd">
<td>Tree Nuts</td>
<td>43</td>
<td>12</td>
<td>12</td>
<td>14</td>
<td>9</td>
<td>10</td>
<td>33%</td>
<td>78%</td>
<td>83%</td>
</tr>
<tr class="even">
<td>Wine &amp; Beer</td>
<td>91</td>
<td>40</td>
<td>34</td>
<td>23</td>
<td>20</td>
<td>19</td>
<td>25%</td>
<td>50%</td>
<td>55%</td>
</tr>
<tr class="odd">
<td>Nursery Products &amp; Cut flowers</td>
<td>27</td>
<td>2</td>
<td>0.8</td>
<td>0.2</td>
<td>0.2</td>
<td>0.2</td>
<td>0.63%</td>
<td>10%</td>
<td>24%</td>
</tr>
<tr class="even">
<td>Pet Food (Dog &amp; Cat Food)</td>
<td>34</td>
<td>19</td>
<td>14</td>
<td>9</td>
<td>9</td>
<td>11</td>
<td>26%</td>
<td>47%</td>
<td>81%</td>
</tr>
<tr class="odd">
<td>Other Consumer-Oriented Products</td>
<td>509</td>
<td>276</td>
<td>173</td>
<td>98</td>
<td>129</td>
<td>79</td>
<td>19%</td>
<td>47%</td>
<td>46%</td>
</tr>
<tr class="even">
<td>　</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>FISH &amp; SEAFOOD PRODUCTS</td>
<td>651</td>
<td>211</td>
<td>128</td>
<td>44</td>
<td>28</td>
<td>32</td>
<td>7%</td>
<td>13%</td>
<td>25%</td>
</tr>
<tr class="even">
<td>Salmon</td>
<td>36</td>
<td>15</td>
<td>15</td>
<td>0.7</td>
<td>1</td>
<td>2</td>
<td>2%</td>
<td>7%</td>
<td>10%</td>
</tr>
<tr class="odd">
<td>Surimi</td>
<td>19</td>
<td>6</td>
<td>6</td>
<td>4</td>
<td>6</td>
<td>5</td>
<td>22%</td>
<td>92%</td>
<td>71%</td>
</tr>
<tr class="even">
<td>Crustaceans</td>
<td>310</td>
<td>102</td>
<td>19</td>
<td>17</td>
<td>10</td>
<td>11</td>
<td>6%</td>
<td>10%</td>
<td>56%</td>
</tr>
<tr class="odd">
<td>Groundfish &amp; Flatfish</td>
<td>101</td>
<td>31</td>
<td>40</td>
<td>3</td>
<td>1</td>
<td>2</td>
<td>3%</td>
<td>3%</td>
<td>4%</td>
</tr>
<tr class="even">
<td>Molluses</td>
<td>70</td>
<td>22</td>
<td>16</td>
<td></td>
<td></td>
<td>1</td>
<td></td>
<td></td>
<td>9%</td>
</tr>
<tr class="odd">
<td>Other Fishery Products</td>
<td>115</td>
<td>35</td>
<td>31</td>
<td>16</td>
<td>10</td>
<td>12</td>
<td>14%</td>
<td>28%</td>
<td>38%</td>
</tr>
<tr class="even">
<td>AG PRODUCTS TOTAL</td>
<td>4,177</td>
<td>2,829</td>
<td>2,350</td>
<td>2,002</td>
<td>2,015</td>
<td>1,972</td>
<td>48%</td>
<td>71%</td>
<td>84%</td>
</tr>
<tr class="odd">
<td>AG FISH &amp; FORESTRY TOTAL</td>
<td>5,702</td>
<td>3,468</td>
<td>2,643</td>
<td>2,127</td>
<td>2,110</td>
<td>2,090</td>
<td>37%</td>
<td>61%</td>
<td>79%</td>
</tr>
</tbody>
</table>

Source: FAS' Global Agricultural Trade System using data from the United
Nations Statistical Office

  ------------------------- --------------- --------------- ---------------
  Table C. Top 15 Suppliers                                 
  of Consumer Foods                                         

                                                            

  Taiwan Imports                                            
  Consumer-Oriented AG                                      
  Total (US\$1,000)                                         

                                                            

  　                        2000            2001            2002

  United States             577,290         529,549         464,505

  France                    422,444         49,752          53,826

  Canada                    N/A             N/A             39,542

  Denmark                   28,504          36,893          37,694

  Singapore                 26,940          21,853          24,504

  Italy                     16,148          20,038          17,621

  United Kingdom            13,914          15,720          10,801

  Hong Kong                 10,736          9,034           10,716

  Swltzerland               N/A             N/A             6,244

  Turkey                    N/A             N/A             2,914

  Finland                   1,945           2,088           2,593

  Austria                   220,512         217,101         1,978

  Panama                    N/A             N/A             1,368

  Macau                     N/A             N/A             1,321

  Poland                    N/A             N/A             1,082

  Other                     527,764         113,075         1,687

  TOTAL                     1,846,197       1,015,103       678,396
  ------------------------- --------------- --------------- ---------------

Source: United Nations Statistics Division

  ------------------- ---------- --------- --- --------- ---------- -------- ---------- --
  Table C. Top 15                                                                       
  Suppliers Edible                                                                      
  Fishery Products                                                                      

                                                                                        

  Taiwan Imports Fish                                                                   
  & Seafood Products                                                                    
  (US\$1,000)                                                                           

                                                                                        

  　                  2000       2001          2002                                     

  United States       44,323     28,267        31,952                                   

  Norway              33,615     16,470        21,562                                   

  Singapore           20,181     16,499        20,173                                   

  Iceland             17,250     17,105        17,058                                   

  Canada              N/A        N/A           15,069                                   

  Denmark             18,399     13,325        14,670                                   

  Panama              N/A        N/A           2,593                                    

  Mauritius           N/A        N/A           2,299                                    

  United Kingdom      688        658           1,680                                    

  Turkey              N/A        N/A           497                                      

  Hong Kong           489        166           192                                      

  Fiji                N/A        N/A           153                                      

  France              361        411           151                                      

  Maldives Islands    N/A        N/A           76                                       

  Czech Republic      N/A        N/A           31                                       

  Other               515,994    117,657       44                                       

  TOTAL               651,300    210,558       128,200                                  
  ------------------- ---------- --------- --- --------- ---------- -------- ---------- --

Source: United Nations Statistics Division