Required Report - public distribution

**Date:** 2005/11/08

**GAIN Report Number:** TW5045

TW4052

**Taiwan**

**Retail Food Sector**

**2005**

**Approved by:**

![](media/image1.wmf)Hoa Huynh, Director, ATO Taipei

American Institute in Taiwan

**Prepared by:**

Amy Chang-Chien Hsueh, Marketing Specialist

**Report Highlights:**

Globalization is a distinguishing characteristic of Taiwan's food retail
market. Foreign operators, including Carrefour, Wellcome, Auchan,
Costco, and Geant continue to dominate Taiwan's food retail market.
Fierce competition among these retail stores continues. Mergers and
strategic alliances will continue to take place over the next few years.

Liberalization of the Taiwan market resulting from Taiwan's accession to
the WTO in 2002 has provided opportunities for food product imports.
Many food retail chains are expanding direct or indirect imports of
new-to-market items. It is advisable for U.S. suppliers to contact these
retail chains directly.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Taipei ATO \[TW2\]

\[TW\]

######### 

######### 

######### Taiwan Retail Food Sector 2005

######### 

######### 

######### Table of Contents

**Section I. Market Summary**

1\. Taiwan in
Profile...............................................................................................Page
3 of 24

2.  Taiwan Retail Food Sector in
    Overview.......................................................Page
    4 of 24

> \(a\)
> Hypermarkets............................................................................................Page
> 6 of 24
>
> \(b\)
> Supermarkets............................................................................................Page
> 7 of 24
>
> \(c\) Convenience
> Stores..................................................................................Page
> 8 of 24
>
> \(d\) Department
> Stores...................................................................................Page
> 9 of 24

3\. Advantages & Challenges for U.S.
Exporters.............................................Page 10 of 24

**Section II. Road Map for Market Entry**

1\. Entry
Strategy..................................................................................................
Page 10 of 24

2\. Market
Structure...............................................................................................Page
11 of 24

3\. Company
Profiles..............................................................................................Page
14 of 24

Hypermarkets/Warehouse
Stores............................................................\...Page
14 of 24

Supermarkets..................................................................................................Page
15 of 24

Convenience
Stores........................................................................................Page
16 of 24

Mom and Pop Grocery
Stores.......................................................................Page
17 of 24

Wet
Markets.....................................................................................................Page
17 of 24

**Section III.
Competition**........................................................................................Page
17 of 24

**Section IV. Best Product
Prospects**..................................................................Page
20 of 24

**Section V. Post Contact and Further
Information**.....................................Page 22 of 24

**SECTION I. MARKET SUMMARY**

**1. Taiwan in Profile**

## Geography

![](media/image2.jpeg){width="2.9166666666666665in"
height="3.83125in"}Taiwan is located off the southeast coast of the
Asian continent, between Japan to the north and the Philippines to the
south, with a current population of nearly 23 million people. The total
area is about 14,000 square miles. About two-thirds of the island is
covered with lushly forested mountains. Taipei and Kaohsiung on the west
coast are the two major metropolises of Taiwan with population of 6.3
million and 2.8 million respectively. The elderly (age 65 and above)
currently make up 9.2 percent of the island's population, and is
increasing rapidly.

## Economic Situation

Taiwan has a dynamic, capitalist economy that continues to expand
annually. Taiwan's foreign exchange reserves are the world's second
largest, exceeded only by the PRC. In 2004, Taiwan's economy, freeing
from the hit by the outbreak of SARS in 2003, rebounded significantly
with an annual GDP growth rate of 5.7%. However, Taiwan authorities have
recently adjusted its forecast for 2005 economic growth downward to
3.7%.

## Trading Partners

The United States and Japan have long been the two major suppliers of
Taiwan's imports. Prior to 1995, these two countries consistently
provided more than half of Taiwan's total imports. However, the ASEAN
and the PRC have shifted some import share away from the US and Japan,
accounting for 12% and 10% of Taiwan's total imports respectively in
2004. The United States and Japan altogether accounted for 38% of
Taiwan's imports in 2004.

## Agricultural Trade

Taiwan is the sixth largest market for U.S. food and agricultural
product exports. In 2004, the United States, exported US \$2.6 billion
of agricultural products to Taiwan, a two (2) percent increase from the
previous year, capturing 30 percent of total Taiwan's agricultural
imports (approximately US\$9 billion)**.** The United States (30%),
Australia (7%) and Japan (7%) were top three largest suppliers of
Taiwan's agricultural imports.

Taiwan became a full member of the World Trade Organization (WTO) in
2002. The lowering of tariff and non-tariff trade barriers for food and
agricultural products has provided improved market access for a wide
range of U.S. agricultural products including fresh produce, dairy
products, meat, seafood, and processed food products. Given Taiwan's
relatively small agricultural sector, Taiwan's dependence on imports is
expected to continue to grow. Taiwan's continued modernization, and
increased adoption of American and western food tastes make the country
an extremely attractive market for U.S. exporters.

***Taiwan At a Glance 2004-2005***

**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

-   Land Area 14,000 square miles

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```
-   Population 22.6 million

-   Gross Domestic Production (GDP) \$305.4 billion

-   Gross National Production (GNP) \$316.7 billion

-   Per Capita GNP \$14,032

-   GDP Growth Rate 2004/2005 (estimated) 5.71% / 3.65%

-   Total Agri-Food Imports \$8.9 billion

-   Total Agri-Food Exports \$3.6 billion

-   Agri-Food Imports as a Share of Total Imports 5%

######## **\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

Taiwan Council of Agriculture; Directorate General of Budget,
Accounting, and Statistics

2\. Taiwan Retail Food Sector in Overview

# Market Size

The entire retail food industry sales in the year 2004 were \$20.6
billion, a 7% sales gain over 2003. The following chart outlines the
trend that convenience stores have been growing significantly and are
taking the second market-leading position, in lieu of hypermarkets,
behind department stores in Taiwan.

![](media/image3.wmf)

Retail Stores 2004

  ---------------------------- --------------------- --------------------
                               Total \# of Retailers Total \# of Outlets

  Department Stores            21                    58

  Supermarkets                 32                    963

  Chain Convenience Stores     11                    8,115

  Hypermarkets                 12                    107
  ---------------------------- --------------------- --------------------

Source: Taiwan Chain Stores & Franchise Association Yearbook 2004

Growth of Revenues by Store Format (%)

  ------------------------- ---------- ---------- ---------- ---------- ----------
                            **2000**   **2001**   **2002**   **2003**   **2004**

  Department Stores         9          4          11         -2         13

  Supermarkets              -0.02      3          -1         5          7

  Convenience Stores        9          11         11         8          6

  Hypermarkets              17         6          4          1          -2
  ------------------------- ---------- ---------- ---------- ---------- ----------

Source: Taiwan Chain Stores & Franchise Association Yearbook 2004

![](media/image4.wmf)

### 

### Globalization

Globalization is a distinguishing characteristic of Taiwan's food retail
market. Foreign operators, including Carrefour, Hong Kong-based
Wellcome, Auchan of France, Costco of the United States, and France's
Geant continue to dominate Taiwan's food retail market.

### Competition

Taiwan's food retail industry has entered a phase of maturity. Mergers
and strategic alliances will continue to take place over the next few
years. The larger chains continue to grow at a constant rate while small
chains have begun to stagnate.

-   Tesco decided to withdraw from the Taiwan market. Its six stores in
    Taiwan will be acquired by Carrefour by the end of 2005. The merger
    will boost Carrefour's market presence from 33 percent with 36
    outlets nation-wide to 40 percent with 42 outlets.

-   In 2002, Hong Kong-based Wellcome Supermarket merged with local
    Kasumi's 23 supermarket outlets. Wellcome also merged with Sun
    Mart's 7 stores, mainly located in the Taipei metropolitan area, in
    2004, and further strengthens its position as the largest
    supermarket chain in Taiwan.

-   Makro shut down its remaining six stores in Taiwan in 2003, citing
    high operating costs and keen competition. Makro was the first
    foreign retailer to open a store in Taiwan in late 1989.

# Store Trends

-   [Private Label:]{.underline} To offer differentiation and to
    increase markups, many of Taiwan's retail chains, including
    7-Eleven, Auchan RT Mart, Carrefour, Wellcome, Aimai Geant, and
    Costco, are aggressively expanding and promoting private label
    products (both imported and domestically produced). As the average
    selling price of private label products is 15-40% lower than branded
    items, they are increasing in popularity in the market. Industry
    sources estimate that currently private label products account for
    an average of 5 percent of the revenue of a retail food chain in
    Taiwan, adding that 10 percent is their common short-term target.

-   [Customer Service]{.underline}: Each food retail chain will continue
    to increase the number of new products carried and services offered
    to attract more customers. Retail stores will continue to extend
    their service items, such as on-line shopping/home delivery
    packages, international express mail, and public utility fee
    collection.

-   [Health, Nutrition and Safety]{.underline}: Taiwan people are
    becoming more health conscious and environmentally sensitive.
    Therefore, demand for healthy/organic foods is expected to continue
    to grow. Also, Taiwan's population is aging. The elderly (age 65 and
    above) make up 9.2 percent of the island's population and are
    increasing rapidly. Currently, products with low sugar, low salt,
    natural, and high calcium are most popular among Taiwan's elderly
    people.

-   [Convenience:]{.underline} With many women working, the eating-out
    population and single-person households are becoming more common. As
    a result, small packaged products, ready-to-cook dishes, and
    ready-to-eat refrigerated meals are becoming more popular. The
    percentage of this type of convenience foods will continue to
    increase in retail stores.

**Hypermarkets**

![](media/image5.wmf)In Taiwan, growth by hypermarkets and wholesale
stores has been rapid since the first store, Makro Taiwan, opened in
late 1989. The rapid expansion of the hypermarkets has now slowed since
2001 due to an overall economic slowdown of the past few years and
intensifying competition. Makro withdraw from Taiwan in 2003. Tesco
decided to pull out of the country at end of 2005.

In 2004, Taiwan hypermarkets generated a total of US\$4.2 billion in
sales, a nearly nine percent decrease from the previous year. Growth in
the hypermarket sector will remain flat with an additional four new
stores being opened in 2005. There are now 105 hypermarkets in Taiwan,
some foreign owned and some locally owned and operated. Foreign
operators, including Carrefour, Auchan, Geant, and Costco, continue to
dominate the Taiwan market, holding a nearly 75% market share, in terms
of sales generated.

![](media/image6.wmf)

Most of Taiwan's hypermarkets and warehouse stores are located in
suburban areas. However, the current tendency is to compete with each
other for positioning new stores in the urban metropolitan areas, as
land prices have decreased. Recently opened hypermarkets have tended to
be smaller in area. To lower operating costs, as well as to
differentiate themselves from their competitors, many hypermarkets have
increased their volumes of imported and private label items.

According to an ACNeilsen market research, each hypermarket serves an
average of 229,000 people in Taiwan. In the European Union, there is a
hypermarket store for every 30,000-50,000 people. Based on this,
Taiwan's Food Industry Research & Development Institute (FIRDI)
predicted that there is still much room for growth in hypermarkets in
Taiwan. However, adding that operating a hypermarket is harder in
Taiwan. Tough competition comes not only from modern food retail stores
but also from the numerous street stalls and traditional wet markets
which provide not only convenience but also cater to local tastes.

###### Supermarkets

![](media/image7.wmf)Supermarkets have generated more than \$2.5 billion
in sales in 2004, a 7 percent increase compared with the previous year.
The supermarket industry has reached a plateau after approximately 20
years of rapid expansion. Continued fierce competition from hypermarkets
and convenience stores, have made it difficult for small supermarkets to
survive. Mergers among supermarkets are expected to continue over the
next few years, forming an aspect of concentration on one or two large
chains.

To meet stronger competition, supermarkets have been aggressively
developing other effective strategies. These include launching the
"Jasons Market Place" at the Taipei 101 Tower in 2003 by the Wellcome
Supermarket Chain. The new supermarket mainly carries higher end and
imported foods, which account for 50% of the products carried, to cater
to the needs of city dwellers. Soon afterwards, Wellcome launched its
second Jasons Market Place at the Takashimaya Department in Taipei. In
addition, there are now two newly-established "Matsusei" and one
"City'Super" stores in Taipei that are under this new supermarket format
category. This new supermarket format may become fashionable for a time
in Taiwan.

![](media/image8.wmf)

The idea of "freshness" for supermarkets serves as a tool to attract
customers, and to generate profits. Fresh items carried in supermarkets
have seen an increase in recent years, reaching about 50 percent of the
total items carried. Fresh fruit and vegetables, meat, and seafood are
also used by supermarkets to differentiate themselves from hypermarkets
and conveniences stores as well as to guarantee the profitability of a
store and attract more customers.

## Convenience Stores

![](media/image9.wmf)According to Cabinet-level Taiwan Fair Trade
Commission's research, the growth of Taiwan's convenience stores, in
terms of store expansion, have been slow from 25.38% in 1999 to 9.06% in
2003, and is not expected to grow significantly during the next few
years. The revenues generated have also been slower, from 11.27% of
annual growth rate in 1999 to 6.48% in 2004. This segment generated
nearly US\$5 billion in sales in 2004. Total sales turnover of this
sector continued to drop below its annual double-digit percentage growth
since 2002. This was mainly due to several factors including unstable
weather, price battle from hypermarkets and drug stores, as well as
failure of developing popular products by these CVS stores.

According to a 2005 ACNeilsen market research, Taiwan has the highest
store density, with 8,000 stores throughout the country or one store per
2,800 people.

As of September 2005, there were over 8,582 chain convenience stores in
Taiwan. 7-Eleven, with 4,000 outlets island-wide, accounts for 47
percent of the market, followed by Family Mart (21%, 1,784 stores),
Hi-Life (13%, 1,124 stores), Circle K (10%, 850 stores), and Niko Mart
(4%, 365 stores). The leading five chains altogether account for 94% of
the total market. The tendency of the market is that the large chains
become larger, and the small chains are getting difficult to survive in
such fierce competition.

![](media/image10.wmf)

Currently, the most popular products sold in Taiwan's convenience stores
were home meal replacement (HMR) and fresh ready-to-eat food items, such
as lunch boxes, Japanese style rice rolls (sushi), hot dogs, sandwiches,
buns, pizzas, fried rice/noodles, and hamburgers. These HMR items
currently account for approximately 10-15% of the total revenues of
these stores. However, this category remained flat with some items even
had negative growth in 2004, due to few food safety-related happenings
that impacted the sales of HMR items. Convenience stores are expected to
continue to make efforts in developing and marketing new convenience
foods, especially lunch boxes, breakfasts, and dinners. And, at the same
time they continue to extend service items, such as on-line
shopping/home delivery packages, public utility fee collection, and
international express mail. The income from collecting public utility
fee has become one of the most important revenue earners for these
stores. Reportedly, the leading five convenience store chains in Taiwan
altogether collected over US\$8 billion of public utility fee in 2004.

####### Department Stores

Most department stores in Taiwan have supermarkets in their basements.
The main effect of these supermarkets is to draw customers to the store
by carrying a wide range of gourmet products. In the past, these
supermarkets were not profit centers for the store. However, recently
they have become more popular and better revenue earners. With Taiwan's
economy turning around reaching a nearly 6% growth in 2004, the
department store sector, reflecting this significant growth, generated
total revenues of nearly US\$6 billion in 2004, a 13 percent increase
from the previous year. Market consolidation took place with the Far
Eastern Department Store acquiring 85% of the Pacific Sogo Department.
The department store industry is expected to continue to expand over the
next few years.

![](media/image11.wmf)

Currently, the Taiwan-Japan joint ventures Shin Kong Mitsukoshi (12
stores), Pacific Sogo (6), Guang-San Sogo (2), and local Far Eastern
Department Store (8), together dominate the Taiwan market, with a total
of nearly 50 percent market share. Japanese operators, including Sogo,
Mitsukoshi, Takashimaya, Isedan, and Hanshin have become the mainstream
of Taiwan's department store industry.

3\. Advantages and Challenges for U.S. Exporters

  ----------------------------------- -----------------------------------
  **Advantages**                      **Disadvantages**

  U.S. products are perceived by      Lack of knowledge of U.S. brands by
  Taiwan consumers to be of high      importers and retailers.
  quality.                            

  The majority of Taiwan consumers    Lack of brand awareness by
  can afford imported food products.  consumers

  Taiwan's WTO accession in early     Competition among major world
  2002 resulting in further market    agricultural and food exporters for
  liberalization and import tariff    a share of Taiwan's growing food
  reduction has provided U.S.         import market is further
  exporters with more market          intensifying due to Taiwan's WTO
  opportunities                       accession.

  The growing modern retail industry  Lack of importer and retailer
  is looking for new imported food    knowledge and training in
  products.                           purchasing, handling, and
                                      merchandising U.S. products.
  ----------------------------------- -----------------------------------

**SECTION II. ROAD MAP FOR MARKET ENTRY**

**1. Entry Strategy**

-   ***Direct*** Taiwan's supermarket, hypermarket, convenience store,
    and warehouse store chains purchase from local importers,
    wholesalers, and manufacturers. However, the current tendency is to
    increase the volume of direct imports to avoid the higher cost of
    products purchase from importers and local manufacturers. U.S.
    suppliers can sell directly to these stores by contacting their
    purchasing managers. The best method to reach Taiwan's retail buyers
    is to initially contact them directly via e-mails or faxes. Product
    catalogues and price lists are essential. Sample products are very
    helpful. U.S. suppliers can obtain a list of major Taiwan retail
    stores from the ATO Taipei.

-   **Indirect** U.S. companies may wish to concentrate on establishing
    their business relationships with a reliable and efficient importer
    and distributor, who in turn will sell the imports to retail stores.
    The ATO Taipei maintains listings of potential
    importers/distributors for U.S. suppliers.

-   **On Line Procurement** Some retail chains, especially those with
    foreign joint venture partners such as Carrefour and RT Mart,
    currently purchase on line a very limited number of product items.

Industry sources estimate that currently up to 95% of imported processed
foods are imported through importers. The direct imports by retail
stores are anticipated to increase.

Taiwanese buyers in retail stores tend to buy and import directly those
products that are already well known in the market. The reason according
to purchasing managers is that they do not want to risk trying out a new
product. Instead, stores prefer to buy new-to-market imported products
from local suppliers. A trend for supermarkets/hypermarkets is to begin
importing directly from a consolidator who can arrange one consolidated
shipment for a variety of new and/or already in-the-market products.
However, purchasing managers of these Taiwan retail stores state that
they welcome offers with market potential from any reliable and
dependable suppliers.

A visit to Taiwan is an excellent way to start establishing a meaningful
relationship with potential Taiwan buyers. U.S. suppliers are advised to
bring product samples to Taiwan to provide to potential buyers as many
importers and retailers rely heavily upon subjective factors when
deciding on new products to represent.

2\. Market Structure

**Supermarkets/Hypermarkets/Warehouse Outlets**

-   **Fresh Fruit** Industry sources estimate that approximately 15
    percent of imported fresh fruit is now imported directly by
    supermarkets, hypermarkets, and warehouse stores. The remaining 85
    percent is imported by importers/distributors. Direct import of
    fresh fruit by retail stores is expected to continue to increase
    over the next few years.

-   **Fresh and Frozen Meat** On average, the ratio of direct and
    indirect beef imports by Taiwan's hypermarkets is 40:60.
    Supermarkets currently import a limited amount of beef directly.
    About 90 percent of pork is purchased by supermarkets and
    hypermarkets from local pork processors/wholesalers, and the
    remaining 10 percent is imported by importers/distributors.

-   **Fresh and Frozen Seafood** It is estimated that approximately 3%
    of seafood is imported directly by retail stores. The remaining is
    sold to retail stores through importers, wholesalers, and
    distributors.

######  Convenience Stores

Major Taiwan convenience store chains import directly. They also rely on
importers, agents, and distributors for products. Major Taiwan
convenience store chains have their own distribution centers to
distribute products, both dry and chilled/frozen goods, to each outlet.
The other convenience stores have ties with other distribution centers.

**Traditional Markets**

-   The same importers, distributors, and wholesalers that provide for
    the supermarkets, hypermarkets, and convenience stores provide for
    traditional markets, including wet markets and mom & pop grocery
    stores. Unlike supermarkets, hypermarkets, and convenience stores,
    the wholesalers and regional wholesale markets play the most
    important role in distribution of products for traditional markets.
    Modern warehouse stores, such as Costco Wholesale, also provide
    products for traditional markets.

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-   Grocery products are usually supplied by local wholesalers, although
    agricultural products are often purchased at regional wholesale
    markets.

-   Sales of imported goods in traditional markets should not be
    overlooked. Industry sources estimate that around 55 percent of
    imported fruit from the United States is sold in wet markets island
    wide.

**3. Company Profiles**

###### 

###### [Major Hypermarket/Warehouse Store Profile]{.underline}

+-------------+----------+----------+-------+---------+--------------+
| **Retailer  | **[      | **[200   | **    | **[Loc  | *            |
| and Outlet  | Ownershi | 4]{.unde | [2004 | ations] | *[Purchasing |
| Type**      | p]{.unde | rline}** | ]{.un | {.under | Agent        |
|             | rline}** |          | derli | line}** | Type]{.      |
|             |          | **[Sales | ne}** |         | underline}** |
|             |          | US       |       |         |              |
|             |          | \$Millio | **[   |         |              |
|             |          | n]{.unde | No.of |         |              |
|             |          | rline}** | Ou    |         |              |
|             |          |          | tlets |         |              |
|             |          |          | ]{.un |         |              |
|             |          |          | derli |         |              |
|             |          |          | ne}** |         |              |
+-------------+----------+----------+-------+---------+--------------+
| Carrefour   | Frenc    | 1,555    | 34    | Nat     | Direct,      |
|             | h/Taiwan |          | (36)  | ionwide | importer,    |
| Hypermarket |          |          |       |         | wholesaler,  |
|             |          |          |       |         | agent        |
+-------------+----------+----------+-------+---------+--------------+
| RT Mart     | Frenc    | 689      | 23    | Nat     | Direct,      |
|             | h/Taiwan |          | (23)  | ionwide | importer,    |
| Hypermarket |          |          |       |         | wholesaler,  |
|             |          |          |       |         | agent        |
+-------------+----------+----------+-------+---------+--------------+
| Aimai Geant | Frenc    | 444      | 13    | Nat     | Direct,      |
|             | h/Taiwan |          | (13)  | ionwide | importer,    |
| Hypermarket |          |          |       |         | wholesaler,  |
|             |          |          |       |         | agent        |
+-------------+----------+----------+-------+---------+--------------+
| Costco      | U.S      | 239      | 4 (4) | Nat     | Direct,      |
|             | ./Taiwan |          |       | ionwide | importer,    |
| Warehouse   |          |          |       |         | wholesaler,  |
|             |          |          |       |         | agent        |
+-------------+----------+----------+-------+---------+--------------+
| Tesco       | UK       | 209      | 5 (6) | Nat     | Direct,      |
|             |          |          |       | ionwide | importer,    |
| Hypermarket |          |          |       |         | wholesaler,  |
|             |          |          |       |         | agent        |
+-------------+----------+----------+-------+---------+--------------+
| Taiwan      | Taiwan   | \-       | 4 (4) | S       | Importer,    |
| Sugar       |          |          |       | outhern | wholesaler,  |
|             |          |          |       | Taiwan  | agent        |
+-------------+----------+----------+-------+---------+--------------+
| Dollars     | Taiwan   | \-       | 3 (3) | S       | Direct,      |
|             |          |          |       | outhern | importer,    |
| Hypermarket |          |          |       | Taiwan  | wholesaler,  |
|             |          |          |       |         | agent        |
+-------------+----------+----------+-------+---------+--------------+

Source: Taiwan Chain Stores and Franchise Association Yearbook 2004;
China Credit

Information Service, Ltd.; *Distribution News*

\* Figures inside the parentheses represent number of outlets as of
September 2005

-   Taiwan's highly competitive hypermarket sector is facing a major
    reshuffle. Carrefour will formally take over rival Tesco's Taiwan
    operations of six stores at the end of 2005, which could have a
    ripple effect and cause problems for rivals. The UK retailer entered
    Taiwan in 2000 with a relatively slow pace of store expansion
    compared with its stronger rivals, including Carrefour.

-   The France-based Carrefour SA and the Uni-President Group, Taiwan's
    largest food company, in 1987 established Carrefour Taiwan jointly.
    Currently, Carrefour and the Uni-President each hold a sixty percent
    (60%) and forty percent (40%) stake respectively. Carrefour
    indicated in a press interview that localization, product
    differentiation, private labels, and flexible new store openings are
    the main factors of its success in Taiwan. Carrefour is further
    strengthening its market-lead position in Taiwan with 40 percent
    market share and 42 outlets island wide after acquiring Tesco's
    stores at the end of 2005. Reportedly, Carrefour planed to expand to
    50 outlets in Taiwan by 2008.

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-   Costco Wholesale is the only wholesale store that issues membership
    cards with an annual fee of NT\$1,200 (approx. US\$35) in Taiwan.
    Its characteristics that differentiate them from other chains are:
    American style management, high percentage of imported goods, and
    large packaging. Costco inaugurated its fourth store in Taiwan in
    2004.

-   RT Mart, currently the second largest and one of the most aggressive
    hypermarket chains in Taiwan, signed a contract with French
    hypermarket operator Auchan SA to sell a 67% stake of its shares to
    Auchan in 2001. RT, which was established in 1996, currently has 23
    outlets in Taiwan and nearly 50 outlets in the PRC.

###### 

###### 

###### [Major Supermarket Store Profile]{.underline}

+------------+----------+---------+----------+----------+-------------+
| Retailer   | **Own    | **2004  | **2004** | **Loc    | *           |
| and Outlet | ership** | Sales   |          | ations** | *Purchasing |
| Type       |          | US\$Mi  | **No. of |          | Agent       |
|            |          | llion** | O        |          | Type**      |
|            |          |         | utlets** |          |             |
+------------+----------+---------+----------+----------+-------------+
| Wellcome   | # H      | \-      | 169      | Na       | Direct,     |
|            | ong Kong |         | (166)    | tionwide | importer,   |
|            |          |         |          |          | wholesaler, |
|            |          |         |          |          | agent       |
+------------+----------+---------+----------+----------+-------------+
| Sung       | Taiwan   | 156     | 77 (75)  | Centr    | Direct,     |
| Ching/     |          |         |          | al/North | importer,   |
|            |          |         |          | Taiwan   | wholesaler, |
| Marukyu    |          |         |          |          | agent       |
+------------+----------+---------+----------+----------+-------------+
| Sinon      | Taiwan   | 97      | 32 (33)  | Central  | Direct,     |
|            |          |         |          |          | importer,   |
|            |          |         |          | Taiwan   | wholesaler, |
|            |          |         |          |          | agent       |
+------------+----------+---------+----------+----------+-------------+
| Commissary | Taiwan   | \-      | 213      | Na       | Importer,   |
| stores     |          |         | (261)    | tionwide | agent,      |
|            |          |         |          |          | wholesaler  |
+------------+----------+---------+----------+----------+-------------+
| Taipei     | Taiwan   | 67      | 16 (16)  | Taipei   | Importer,   |
| Agr.       |          |         |          |          | agent,      |
|            |          |         |          |          | wholesaler  |
+------------+----------+---------+----------+----------+-------------+
| Jasons     | # H      | \-      | 2 (2)    | Taipei   | Direct,     |
| Market     | ong Kong |         |          |          | importer,   |
| Place      |          |         |          |          | wholesaler, |
|            |          |         |          |          | agent       |
+------------+----------+---------+----------+----------+-------------+
| City'Super | Hong     | \-      | 1 (1)    | Taipei   | Importer,   |
|            | kong     |         |          |          | agent,      |
|            |          |         |          |          | wholesaler  |
+------------+----------+---------+----------+----------+-------------+

Source: Taiwan Chain Stores and Franchise Association Yearbook 2004;
China Credit

Information Service, Ltd.; *Distribution News*

\* Figures inside the parentheses represent number of outlets as of
September 2005

-   With the acquisition of twenty-two stores from Kasumi in 2003 and
    seven stores from Sun Mart in 2004, Wellcome further strengthens its
    position as the largest supermarket chain in Taiwan. Wellcome
    currently operates 166 outlets island-wide, which more than doubles
    Wei-chuan Foods Group's Sung Chin/Marukyu, in second position, in
    terms of number of stores. Wellcome currently accounts for 26
    percent of the market.

-   Wellcome Supermarket launched its first "Jasons Market Place," a new
    store format which mainly carries higher-end and imported foods, in
    November 2003. Jasons' organic/healthy food corners - its
    distinguishing characteristics - carry an estimated 1,200 items of
    HMR and other food products with low fat, low salt, high fiber, and
    non-dairy. In addition, Wellcome has located in the Taipei
    Metropolitan area two superstores. The Wellcome superstores are a
    format combining concept of a modern supermarket with a traditional
    wet market. Jasons Market Place carries over 45 percent of imported
    goods and a high percentage of fresh items, such as fresh produce,
    meat, poultry meat, and seafood.

-   Local Far Eastern Group launched its first "City's Super"
    Supermarket at the Far Eastern Plaza Shopping Mall in Taipei at the
    end of 2003. Imported items account for 50% of its food section.
    Price is 10-15% higher than regular supermarkets. City Super
    reportedly planed to expand to 5 stores within 5 years.

-   Sinon Supermarket is the largest supermarket chain with currently 33
    outlets in Central Taiwan. Sinon owns a distribution center
    supplying all Sinon supermarket stores with dry and fresh/frozen
    goods. Sinon is a leading diversified company in central Taiwan.
    Their businesses include food and non-food manufacturing and
    trading. The well-known "Sinon Bulls" professional baseball team
    recently won the annual Taiwan Series Championship.

**[Major Convenience Store Profile]{.underline}**

+-----------+------------+--------+-----------+---------+-----------+
| *         | **O        | **2004 | **2004**  | **Loca  | **P       |
| *Retailer | wnership** | Sales  |           | tions** | urchasing |
| and       |            | US\    | **No.of   |         | Agent     |
| Outlet    |            | $Mil** | Outlets** |         | Type**    |
| Type**    |            |        |           |         |           |
+-----------+------------+--------+-----------+---------+-----------+
| 7-Eleven  | Ja         | 2,421  | 3,680     | Nat     | Direct,   |
|           | pan/Taiwan |        | (4,000)   | ionwide | importer, |
|           |            |        |           |         | wh        |
|           |            |        |           |         | olesaler, |
|           |            |        |           |         | agent     |
+-----------+------------+--------+-----------+---------+-----------+
| Family    | Ja         | 819    | 1,700     | Nat     | Direct,   |
| Mart      | pan/Taiwan |        | (1,784)   | ionwide | importer, |
|           |            |        |           |         | wh        |
|           |            |        |           |         | olesaler, |
|           |            |        |           |         | agent     |
+-----------+------------+--------+-----------+---------+-----------+
| Hi-Life   | Taiwan     | 458    | 1,064     | Nat     | Direct,   |
|           |            |        | (1,124)   | ionwide | importer, |
|           |            |        |           |         | wh        |
|           |            |        |           |         | olesaler, |
|           |            |        |           |         | agent     |
+-----------+------------+--------+-----------+---------+-----------+
| Circle K  | U          | 324    | 810 (850) | Nat     | Direct,   |
|           | .S./Taiwan |        |           | ionwide | importer, |
|           |            |        |           |         | wh        |
|           |            |        |           |         | olesaler, |
|           |            |        |           |         | agent     |
+-----------+------------+--------+-----------+---------+-----------+
| Niko Mart | Taiwan     | 146    | 356 (365) | Nat     | Direct,   |
|           |            |        |           | ionwide | importer, |
|           |            |        |           |         | wh        |
|           |            |        |           |         | olesaler, |
|           |            |        |           |         | agent     |
+-----------+------------+--------+-----------+---------+-----------+

Source: Taiwan Chain Stores and Franchise Association Yearbook 2004;
China Credit

Information Service, Ltd.; *Distribution News*

\* Figures inside the parentheses represent number of outlets as of
September 2005

-   Family Mart, Hi-Life, Circle K, and Niko-Mart jointly formed a
    company, CVS.COM Co., Ltd., in October 2000. Part of the objective
    of this company is to jointly seek new products to be sold in the
    four convenience store chains. In the face of growing competition,
    they recently decided to use joint marketing strategies to compete,
    through CVS.COM, with their common rival, 7-Eleven. As of September
    2005, there were 4,000 7-Eleven stores nation-wide. Family Mart,
    Hi-Life, Circle K, and Niko-Mart altogether owned 4,123 stores in
    Taiwan.

-   As a part of this joint marketing strategy, Family Mart began to
    supply ready-to-eat fresh food items, breads, and desserts to the
    other three leading chains, i.e. High-Life, Circle, and Niko Mart.

-   Laborer shortage is currently a common problem of Taiwan's
    convenience stores. Each chain is shifting their focus on housewives
    in the neighborhood from part-time students. They offer better pay
    and working conditions to attract these housewives to the work.

-   Currently, the top three convenience store chains, i.e. 7-Eleven,
    Family Mart, and High-Life, have their own distribution centers to
    supply their own stores. Circle K reportedly will terminate its
    contract with an independent DC and will inaugurate its own Lai Lai
    Distribution Center by the end of 2005.

**[Mom and Pop Grocery Stores]{.underline}**

Mom and Pop grocery stores are still common in smaller towns on the
island. Grocery products are usually supplied by local wholesalers.
Although these 'mom and pop' grocery stores tend to be well located in
the heart of residential areas, they are limited by the lack of shelf
space and offer fewer varieties of products. Local consumers are
increasingly turning to the greater product variety offered by
supermarkets, hypermarkets, and convenience stores.

**[Wet Markets]{.underline}**

According to statistics released by Taiwan's Ministry of Economic
Affairs, there are 631 public/private wet markets and 639 street stall
gathering places in Taiwan. These businesses generate approximately
US\$13 billion in annual sales. The major items sold in these
traditional markets\--meat, seafood, and fresh produce\--account for
over 50% of total wet market sales. Beginning in July 1999, Taiwan
authorities have implemented a five-year program to upgrade and remodel
traditional wet markets.

**SECTION III. COMPETITION**

![](media/image12.wmf)

In 2004, Taiwan imported US\$8.9 billion in food and agricultural
products, of which US\$2.6 billion was imported from the United States.
The United States (30%) was the number one agricultural supplier to
Taiwan, followed by Australia (7%), Japan (7%), China (6%), Malaysia
(6%), Thailand (5%), Brazil (5%), and New Zealand (4%). Australia
dominates the beef and mutton markets. Japan dominates the swine skin
and biscuit markets and is very competitive in other consumer ready food
products. New Zealand ranks as the top supplier of dairy products.

While maintaining its position as a substantial supplier of bulk
commodities, such as soybeans and products (55%), corn (95%), and wheat
(87%), the Untied States supplies 96% of turkey meat, 56% of fresh &
frozen pork and products; 40% of vegetable & products; and 17% of fruits
and products. The United States is the top supplier of most varieties of
imported fresh fruits: apples (51% or US\$46 million), table grapes (56%
or US\$13 million), grapefruits (81% and US\$3 million), oranges (66%,
or US\$4 million), cherries (73%, or US\$32 million), peaches (81%, or
US\$34 million), and plums (64%, or US\$5 million). \*\* Figures inside
parentheses represent total US exports and US market share.

+-------------------+-----------+------+------------------------------+
| **Product         | **Total   | *    | **Major Supply Sources and   |
| Category**        | Import    | *U.S | Market Share**               |
|                   | Value     | Ma   |                              |
|                   | 2004 (US  | rket |                              |
|                   | 1,000)**  | Sha  |                              |
|                   |           | re** |                              |
+-------------------+-----------+------+------------------------------+
| Total Food-Agr    | 8,862,033 | 30%  | Australia (7%), Japan (7%),  |
| Imports           |           |      | China (6%), Malaysia (6%),   |
|                   |           |      | Thailand (5%), Brazil (5%),  |
|                   |           |      | New Zealand (4%), Indonesia  |
|                   |           |      | (4%), Canada (3%)            |
+-------------------+-----------+------+------------------------------+
| ####              |           |      |                              |
| # Animal Products |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Beef \*\*         | 221,858   | 1.4% | New Zealand (52%), Australia |
| Fresh             |           |      | (45%)                        |
| /Frozen/Processed |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Pork,             | 53,208    | 56%  | Canada (38%)                 |
| Fresh             |           |      |                              |
| /Frozen/Processed |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Turkey Meat       | 18,398    | 96%  | Nil                          |
+-------------------+-----------+------+------------------------------+
| **Fish &          |           |      |                              |
| Seafood**         |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Salmon            | 28,458    | 1.4% | Norway (40%), Canada (27%),  |
|                   |           |      | Chile (17%), Japan (8%)      |
+-------------------+-----------+------+------------------------------+
| Lobster           | 40,602    | 30%  | Australia (46%)              |
+-------------------+-----------+------+------------------------------+
| Fish Roe\*        | 1,436     | 42%  | Japan (43%), Canada (7%)     |
+-------------------+-----------+------+------------------------------+
| Surimi\*          | 22,210    | 22%  | India (40%), Thailand (31%)  |
+-------------------+-----------+------+------------------------------+
| ###               | 366,373   | 3%   | New Zealand (37%), Australia |
| ## Dairy Products |           |      | (28%), Netherlands (8%),     |
|                   |           |      | Denmark (6%), France (7%),   |
|                   |           |      | Ireland (3%)                 |
+-------------------+-----------+------+------------------------------+
| ##### Cheese      | 49,032    | 10%  | Australia (37%), New Zealand |
|                   |           |      | (36%)                        |
+-------------------+-----------+------+------------------------------+
| ##### Powder Milk | 253,751   | 0.3% | New Zealand (37%), Australia |
|                   |           |      | (30%), Netherlands (10%),    |
|                   |           |      | Denmark (8%)                 |
+-------------------+-----------+------+------------------------------+
| #                 |           |      |                              |
| #### Horticulture |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Fruits & Products | 101,872   | 17%  | China (24%),Thailand (11%),  |
|                   |           |      | Iran (7%), Vietnam (7%), S.  |
|                   |           |      | Africa (2%), Japan (2%)      |
+-------------------+-----------+------+------------------------------+
| Apples, Fresh     | 90,119    | 51%  | Japan (17%), Chile (16%)     |
+-------------------+-----------+------+------------------------------+
| Table Grape,      | 23,144    | 56%  | Chile (31%)                  |
| Fresh             |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Cherries, Fresh   | 44,035    | 73%  | Chili (10%), New Zealand     |
|                   |           |      | (8%), Canada (7%)            |
+-------------------+-----------+------+------------------------------+
| Grapefruits,      | 3,964     | 81%  | South Africa (16%)           |
| Fresh             |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Plum, Fresh       | 7,592     | 64%  | Chile (27%)                  |
+-------------------+-----------+------+------------------------------+
| Peaches, Fresh    | 41,480    | 81%  | Chile (11%), Australia (5%)  |
+-------------------+-----------+------+------------------------------+
| Oranges, Fresh    | 5,792     | 66%  | South Africa (19%)           |
+-------------------+-----------+------+------------------------------+
| **Vegetable &     | 184,107   | 40%  | Thailand (12%), China (12%). |
| Products**        |           |      | Vietnam (6%)                 |
+-------------------+-----------+------+------------------------------+
| Potatoes, Fresh,  | 58,373    | 57%  | Canada (11%), Netherlands    |
| Frozen, Processed |           |      | (9%)                         |
+-------------------+-----------+------+------------------------------+
| Celery            | 2,130     | 100% | \-                           |
+-------------------+-----------+------+------------------------------+
| Onions, fresh     | 6,620     | 81%  | New Zealand (12)             |
+-------------------+-----------+------+------------------------------+
| Broccoli,         | 7,908     | 83%  | China (12%), Australia (4%)  |
| fresh/frozen      |           |      |                              |
+-------------------+-----------+------+------------------------------+
| **Tree Nuts**     |           |      |                              |
+-------------------+-----------+------+------------------------------+
| ##### Almond \*   | 11,341    | 95%  | China (5%)                   |
+-------------------+-----------+------+------------------------------+
| ##### Walnut \*   | 4,419     | 68%  | China (16%), India (16%)     |
+-------------------+-----------+------+------------------------------+
| # Beverage        |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Apple Juice       | 2,248     | 8%   | China (72%)                  |
+-------------------+-----------+------+------------------------------+
| Grapefruit Juice  | 1,280     | 14%  | Israel (44%), Japan (39%)    |
+-------------------+-----------+------+------------------------------+
| Grape Juice       | 4,839     | 31%  | Spain (32%), Italy (22%)     |
+-------------------+-----------+------+------------------------------+
| ####              |           |      |                              |
| # Processed Foods |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Sunflower Oil     | 16,366    | 3%   | Argentina (89%)              |
+-------------------+-----------+------+------------------------------+
| Pre Mix & Dough\* | 4,665     | 61%  | Japan (21%), Australia (4%), |
|                   |           |      | Germany (3%)                 |
+-------------------+-----------+------+------------------------------+
| Soups & Broths\*  | 5,482     | 18%  | China (51%), Japan (16%),    |
|                   |           |      | New Zealand (10%)            |
| Powder/Solid      |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Canned Corn \*    | 22,537    | 79%  | Thailand (19%), New Zealand  |
|                   |           |      | (2%)                         |
+-------------------+-----------+------+------------------------------+

Source: Council of Agriculture

> \* 2003 data
>
> \*\* Taiwan tentatively banned U.S. beef imports due to concerns about
> BSE.

![](media/image13.wmf) **SECTION IV. BEST PRODUCT PROSPECTS**

+------+------+------+-----+--------+--------------+-----------------+
|      | **20 | **20 | *   | **     | **Key        | **Market        |
|      | 03** | 04** | *5- | Import | Constraints  | Attractiveness  |
|      |      |      | Yr. | Tariff | Over Market  | for USA**       |
|      | *    | **I  | Avg | Rate** | D            |                 |
|      | *Imp | mpor | .** |        | evelopment** |                 |
|      | orts | ts** |     |        |              |                 |
|      | (US  |      | **  |        |              |                 |
|      | \$Mi | *    | Ann |        |              |                 |
|      | l)** | *(US | ual |        |              |                 |
|      |      | \$Mi | Imp |        |              |                 |
|      |      | l)** | ort |        |              |                 |
|      |      |      | Gr  |        |              |                 |
|      |      |      | owt |        |              |                 |
|      |      |      | h** |        |              |                 |
+------+------+------+-----+--------+--------------+-----------------+
| *    | \$   | \$56 | 1   | 10%    | French wine  | Currently, the  |
| *Red | 37.2 |      | 00% | plus a | still        | United States   |
| Wi   |      |      |     | NT\$7  | dominates    | is Taiwan's     |
| ne** |      |      |     | per    | the red wine | second largest  |
|      |      |      |     | one    | market.      | wine supplier.  |
|      |      |      |     | p      | Knowledge    | Despite the     |
|      |      |      |     | ercent | about wines  | front-runner    |
|      |      |      |     | a      | is generally | position of     |
|      |      |      |     | lcohol | low          | French wines,   |
|      |      |      |     | for    | throughout   | US wines        |
|      |      |      |     | grape  | wine         | continue to     |
|      |      |      |     | wines. | distribution | gain consumer   |
|      |      |      |     |        | channels.    | recognition and |
|      |      |      |     |        |              | acceptance. The |
|      |      |      |     |        |              | growth was      |
|      |      |      |     |        |              | fueled by the   |
|      |      |      |     |        |              | perception that |
|      |      |      |     |        |              | wine is good    |
|      |      |      |     |        |              | for health      |
+------+------+------+-----+--------+--------------+-----------------+
| **   | \$34 | \$49 | 20% | 5%     | Although the | The US share is |
| Chee |      |      |     |        | import       | growing faster  |
| se** |      |      |     |        | volume is    | than the larger |
|      |      |      |     |        | large, it is | competitors,    |
|      |      |      |     |        | dominated by | meaning that    |
|      |      |      |     |        | New Zealand  | those US cheese |
|      |      |      |     |        | (37%) and    | currently       |
|      |      |      |     |        | Australia    | coming into the |
|      |      |      |     |        | (26%).       | market are      |
|      |      |      |     |        |              | finding faster  |
|      |      |      |     |        |              | acceptance than |
|      |      |      |     |        |              | those of        |
|      |      |      |     |        |              | competitors     |
+------+------+------+-----+--------+--------------+-----------------+
| **Wh | \$10 | \$11 | 4%  | 5%     | Intense      | The U.S. is the |
| ey** |      |      |     |        | competition  | major supplier  |
|      |      |      |     |        | from major   | of whey due to  |
|      |      |      |     |        | exporting    | competitive     |
|      |      |      |     |        | nations such | pricing and     |
|      |      |      |     |        | as New       | successful      |
|      |      |      |     |        | Zealand and  | promotion       |
|      |      |      |     |        | Australia.   | efforts into    |
|      |      |      |     |        |              | hotel/restauran |
|      |      |      |     |        |              | t/institutional |
|      |      |      |     |        |              | and processed   |
|      |      |      |     |        |              | food channels   |
|      |      |      |     |        |              | by U.S.         |
|      |      |      |     |        |              | exporters and   |
|      |      |      |     |        |              | the U.S. Dairy  |
|      |      |      |     |        |              | Export Council. |
+------+------+------+-----+--------+--------------+-----------------+
| **S  | \$91 | \$93 | 6%  | 20%    | Taiwan's WTO | Effective       |
| tone |      |      |     |        | accession    | marketing       |
| Fru  |      |      |     | plum   | (2002)       | programs        |
| it** |      |      |     | /peach | opened the   | targeting       |
|      |      |      |     | /nec   | island's     | reliable        |
|      |      |      |     | tarine | fruit        | quality,        |
|      |      |      |     |        | market.      | competitive     |
|      |      |      |     |        | C            | pricing, and    |
|      |      |      |     |        | onsequently, | brands of US    |
|      |      |      |     |        | competition, | stone fruits    |
|      |      |      |     |        | in terms of  | has been        |
|      |      |      |     |        | new          | undergone by    |
|      |      |      |     |        | suppliers    | the California  |
|      |      |      |     |        | and new      | Tree Fruit      |
|      |      |      |     |        | varieties    | Agreement that  |
|      |      |      |     |        | from both    | could help      |
|      |      |      |     |        | abroad and   | retain and      |
|      |      |      |     |        | domestic     | improve the     |
|      |      |      |     |        | producers,   | market for US   |
|      |      |      |     |        | is           | stone fruit in  |
|      |      |      |     |        | intensifying | Taiwan.         |
|      |      |      |     |        | now.         |                 |
+------+------+------+-----+--------+--------------+-----------------+
| **B  | \    | \$2  | 79% | Blueb  | Co           | Consumers in    |
| erri | $1.1 |      |     | erries | nsumer/trade | Taiwan are      |
| es** |      |      |     | 7.5%   | lack of      | becoming more   |
|      |      |      |     |        | product      | health          |
|      |      |      |     | Strawb | knowledge.   | conscious.      |
|      |      |      |     | erries | Educational  | Berries         |
|      |      |      |     |        | programs by  | continue to     |
|      |      |      |     | 20%    | US exporters | enjoy a         |
|      |      |      |     |        | are          | steadily        |
|      |      |      |     |        | necessary.   | increasing      |
|      |      |      |     |        |              | share of both   |
|      |      |      |     |        |              | consumer/retail |
|      |      |      |     |        |              | and food        |
|      |      |      |     |        |              | service         |
|      |      |      |     |        |              | channels. There |
|      |      |      |     |        |              | are strong      |
|      |      |      |     |        |              | growth          |
|      |      |      |     |        |              | prospects for   |
|      |      |      |     |        |              | berry,          |
|      |      |      |     |        |              | strawberries    |
|      |      |      |     |        |              | and blueberries |
|      |      |      |     |        |              | in particular,  |
|      |      |      |     |        |              | category.       |
+------+------+------+-----+--------+--------------+-----------------+
| *    | \$22 | \$40 | 56% | 20%    | The TRQ      | Imports are     |
| *Chi |      |      |     |        | controls on  | rising          |
| cken |      |      |     |        | chicken meat | significantly   |
| Meat |      |      |     |        | was          | in the wake of  |
| &    |      |      |     |        | eliminated   | Taiwan's        |
| Off  |      |      |     |        | in January   | elimination of  |
| al** |      |      |     |        | 2005 and     | all tariff rate |
|      |      |      |     |        | replaced by  | quota           |
|      |      |      |     |        | ordinary     | restrictions in |
|      |      |      |     |        | tariffs.     | January 2005.   |
|      |      |      |     |        | However, an  | The United      |
|      |      |      |     |        | SSG          | States is       |
|      |      |      |     |        | assessment   | currently in a  |
|      |      |      |     |        | would add an | strong supply   |
|      |      |      |     |        | estimated    | position, being |
|      |      |      |     |        | 633% to      | one of only six |
|      |      |      |     |        | normal       | countries       |
|      |      |      |     |        | tariffs,     | certified for   |
|      |      |      |     |        | resulting in | poultry exports |
|      |      |      |     |        | an effective | to Taiwan and   |
|      |      |      |     |        | tariff of    | the only one of |
|      |      |      |     |        | about 26.33% | these with      |
|      |      |      |     |        | for chicken  | sufficient      |
|      |      |      |     |        | meat.        | volumes and     |
|      |      |      |     |        |              | competitive     |
|      |      |      |     |        |              | pricing points. |
+------+------+------+-----+--------+--------------+-----------------+
| **   | \$29 | \$36 | 6%  | Sweet  | Currently,   | Nuts (mainly    |
| Tree |      |      |     | al     | the US       | almonds, and    |
| Nu   |      |      |     | monds: | dominates    | walnuts) are    |
| ts** |      |      |     | in     | the          | very popular as |
|      |      |      |     | shell  | following    | ingredients     |
|      |      |      |     | 5%;    | nut market:  | used in baking. |
|      |      |      |     | s      | almonds, and | The US          |
|      |      |      |     | helled | walnuts.     | currently       |
|      |      |      |     | 2.5%   | Cashes from  | dominates these |
|      |      |      |     |        | China and SE | categories.     |
|      |      |      |     | Bitter | Asia has     | Constant        |
|      |      |      |     | al     | shifted some | communication   |
|      |      |      |     | monds: | market share | with the baking |
|      |      |      |     | 10%    | away from    | industry        |
|      |      |      |     |        | U.S.         | technical       |
|      |      |      |     | Hazel  | suppliers.   | seminars and    |
|      |      |      |     | nuts:  | The greatest | trade shows is  |
|      |      |      |     | s      | competition  | essential to    |
|      |      |      |     | helled | to US        | grow in this    |
|      |      |      |     | 7%     | pistachio    | category.       |
|      |      |      |     |        | exporters is |                 |
|      |      |      |     | In     | from Middle  |                 |
|      |      |      |     | -shell | East and     |                 |
|      |      |      |     | 7.5%   | Australia.   |                 |
|      |      |      |     |        |              |                 |
|      |      |      |     | W      |              |                 |
|      |      |      |     | alnuts |              |                 |
|      |      |      |     | 5%     |              |                 |
|      |      |      |     |        |              |                 |
|      |      |      |     | Pist   |              |                 |
|      |      |      |     | achios |              |                 |
|      |      |      |     |        |              |                 |
|      |      |      |     | 3%     |              |                 |
|      |      |      |     |        |              |                 |
|      |      |      |     | Pecan  |              |                 |
|      |      |      |     | 7.5%   |              |                 |
+------+------+------+-----+--------+--------------+-----------------+
| *    | \    | \    | 11% | Be     | Beef-The     | U.S. beef is    |
| *Red | $395 | $432 |     | ef-10% | primary      | perceived to be |
| Meat |      |      |     | per kg | competitor   | high quality.   |
| &    |      |      |     |        | is           |                 |
| Off  |      |      |     | Beef   | Australia,   | There are       |
| al** |      |      |     | offal  | whose        | growth          |
|      |      |      |     | --15%  | advantage is | opportunities   |
|      |      |      |     |        | custom       | for U.S. pork   |
|      |      |      |     | Pork   | er-perceived | that meets      |
|      |      |      |     | -12.5% | comparabl    | local food      |
|      |      |      |     |        | e/acceptable | processors'     |
|      |      |      |     | V      | quality at a | needs.          |
|      |      |      |     | ariety | low price.   |                 |
|      |      |      |     | me     |              |                 |
|      |      |      |     | at-15% | Pork-is a    |                 |
|      |      |      |     |        | market where |                 |
|      |      |      |     |        | the domestic |                 |
|      |      |      |     |        | producers    |                 |
|      |      |      |     |        | have many    |                 |
|      |      |      |     |        | competitive  |                 |
|      |      |      |     |        | advantages.  |                 |
+------+------+------+-----+--------+--------------+-----------------+
| **S  | \    | \    | -5% | 9%-38% | With a bias  | The food        |
| eafo | $307 | $314 |     |        | towards      | service/HRI     |
| od** |      |      |     |        | fresh fish   | venues with a   |
|      |      |      |     |        | and SE       | strong Western  |
|      |      |      |     |        | Asia-variety | orientation and |
|      |      |      |     |        | crustaceans, | up-market       |
|      |      |      |     |        | the seafood  | positioning     |
|      |      |      |     |        | segment      | offer the       |
|      |      |      |     |        | currently    | current best    |
|      |      |      |     |        | ahs          | opportunities   |
|      |      |      |     |        | development  | for U.S.        |
|      |      |      |     |        | problems     | exporters       |
+------+------+------+-----+--------+--------------+-----------------+

Source: Taiwan Council of Agriculture

####### V. Key Contacts 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@ait.org.tw

Internet Homepage http://www.ait.org.tw/en/agriculture/ato/

Organization Name United States Department of Agriculture

Department Foreign Agricultural Services

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

E-mail info@fas.usda.gov

Internet Homepage www.fas.usda.gov

# Taiwan Central Authority Agencies

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

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

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

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

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

Internet Homepage http://www.firdi.org.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 (TCSFA)

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

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

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

Organization Name Taiwan External Trade Development Council (TAITRA)

Address 333 Keelung Road, Sec. 1, Taipei Taiwan

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

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](http://www.ieatpe.org.tw/)

Organization Name Kaohsiung Importers & Exporters Association (IEAK)

Address 4F, 472 Chung Shan 2^nd^ Road, Kaohsiung, Taiwan

Telephone (886-7) 241-1191; Fax: (886-7) 201-6193

E-mail <kieanet@ms15.hinet.net>

Other ATO Taipei market and commodity reports, including Taiwan Exporter
Guide, Taiwan Food Processing Ingredients Sector Report, and HRI Food
Service Sector Report are available at the United States Department of
Agriculture's website [www.fas.usda.gov.](http://www.fas.usda.gove/)

#########