The Rum Market in China
With consumption hitting 62 billion liters annually, China is a hotspot for selling imported alcohol. Many companies are eager to expand their reach in this booming market as the demand for premium spirits continues to surge, especially among China’s growing middle-class population.
Compared to whisky and brandy, rum is still considered a relatively new category in China, but it holds much potential. Imports in 2017 increased in both volume and value, with a year-on-year growth of 58%. During the first half of the year, shipment reached 1.26 million liters, valued at US$3.6 million.
Targeting Market Niche
Sold at US$2.86 per liter, rum is considered a semi-premium liquor in China. Imports mostly come from Puerto Rico and the United Kingdom. Other top suppliers include the United States, Cuba and Guatemala. Shanghai is the largest trading area for rum in the country, accounting for 75% of the market share, followed by Beijing and Tianjin, Guangdong and Shandong.
Off-trade channels have significantly higher sales of spirits compared to on-trade ones. Liquors sold in restaurants and bars are typically more expensive. Specialty retailers are the main means of distribution for mid to high-end spirits and wine in China, offering a wider range of selections to consumers.
Meanwhile, e-commerce platforms have become important tools for imported spirits brands to sell their bottles in China. The country has over 700 million active internet users who enjoy scouring the Web for great finds and deals. Around 55% of China’s alcohol consumers have ordered their liquors online.
Import Regulations for Rum in China
Companies planning on exporting rum to China must follow the strict regulations set by Customs regarding the manufacture, procurement and sales of alcoholic beverages in the country. Major regulations include the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) regulations and the Guobiao (GB) standards.
The Food Safety Law, Measures for Administration of Imported/Exported Food Safety and of Food Production Licensing are also important requirements. Meanwhile, some mandatory national standards to note are the General Standard for the Labeling of Prepackaged Alcoholic Beverage and Fermented Alcoholic Beverages and Their Integrated Alcoholic Beverages.
The Exporting Process
Rum exporters must first sign an agreement with a local importer with valid import business license, and personal and company customs and China Inspection and Quarantine (CIQ) certificates. He will take over the handling of product registrations to the State Certification and Accreditation Administration (CAA) and the General Administration of Quality Supervision (AQSIQ).
All imported products to China must be properly labeled. Exporters must include both original and translated labels in Chinese, as well as a digital version of the Chinese label registered with the China Inspection and Quarantine (CIQ). They must also submit the required documents at Customs, including the Certificate of Health/Sanitation (for distilled spirits and malt beverages).
Import Taxes and Tariffs
Tariffs are imposed on almost all products imported to China via the General Administration of Customs. These include packing charges, freight, insurance premiums and other service charges incurred prior to the unloading of the goods at the place of destination. For spirits like rum, custom duty is at 10%, while consumption tax and value-added tax (VAT) are at 20%, and 17%, respectively.
Parting Thoughts on Exporting Rum to China
Exporting rum to one of the world’s largest and most dynamic alcohol markets may seem daunting to some, but it is actually simple and straightforward as long as companies follow the regulations and set standards. To avoid shipment delays and other setbacks, a thorough understanding of the exporting process is a must.