Taiwan's baseball star C Y Chen appears in the new ads for Taiwan Beer. The outfield player for the Brothers (one of the country's biggest teams) is shown sprinting into the bleachers to snatch a can of beer from the air and hurl it screaming past home plate onto the TV screen for a close up. "Jyoushr bi ni syan declares the ad - which literally translates as "ahead of you and plays on the message that the beer brand is the freshest around because it's the only one brewed locally.
No one can argue with Taiwan Beer's claim that it's ahead of its competition.
It is a brand with a history of benefitting from a Government monopoly.
For more than a century it has been the only beer brewed in Taiwan. It is the country's "official beer - created and managed by the Taiwan Government's Tobacco & Wine Monopoly Bureau,which changed its name in July to the Taiwan Tobacco & Liquor company.
Fifteen years ago, Taiwan opened its doors to imported beer brands, but their impact has so far been negligible. They were unable to match Taiwan Beer in either distribution or price. At every roadside noodle bar, restaurant or karaoke club, Taiwan Beer was usually the only brand on offer. So Taiwan Beer and TTL had the market sewn up. But for the first time in its history, Taiwan Beer, is getting some serious competition.
Importers of foreign beers say that Taiwan's entry into the WTO at the beginning of the year, and the pending market-liberalisation in the next few years have made Taiwan Beer vulnerable.
For now, the only import beer poised to take advantage of the changes is Tsingtao, the best selling beer in China. Tsingtao is the first of the post-WTO arrivals and its importer, Tsing Beer Corp (TBC) is making bullish forecasts about future market share. Three months after Tsingtao's debut in mid-April, TBC was claiming 30,000 retail outlets and sales equivalent to five per cent of the market. TBC expects to achieve 20 per cent within three years, and then it intends to build a local brewery. Will it achieve that goal? TBC has done everything right so far. Instead of positioning Tsingtao as a premium import, it has gone local and copied TTL's strategy down pat.
Taiwan Beer's slogan is 'fresh', and so is Tsingtao's.
Taiwan Beer launched a 30-second TVC during Tsingtao's launch in which an ensemble of drinkers are seen chanting, tsing, tsing, tsing, which among other things means - 'fresh'. TBC created the campaign inhouse, perhaps because, like TTL, it sees little value in Western-style branding.
Over the years, TTL has been a reluctant advertiser, and when forced to do so offers agencies miserly commissions. Newcomer TBC hasn't bothered to hire an agency.
Both regard price - not advertising - as the key factor in this battle.
Taiwan Beer, which pays no import duties, sells at the bottom of the market - NT$30 a can. Tsingtao, which is brewed courtesy of cheap mainland labour, debuted at NT$32. So Taiwan Beer retains its lowest price position, but the two are close. Distribution then, becomes another key issue.
Here, Taiwan Beer's owner TTL is the master. Its name, TTL, is a post-WTO renaming of its more revealing former moniker Taiwan Tobacco & Wine Monopoly Bureau. Formed in 1901, when Taiwan was a Japanese colony, the bureau has spent the past century getting to know its market inside and out. Today, its fleet of trucks delivers beer from four breweries to every beverage point-of-sale on the island. Total saturation' is an apt description.
But, in terms of distribution, TBC is no laggard either. TBC is a joint-venture of Tsingtao Beer and Taiwan's Sanyo Whisbih Group, also a local veteran of distribution, trucks its namesake Whisbih brand through an equally large network.
Tsingtao is the first import that can compete with Taiwan Beer on its turf - what marketers refer to as the 'restaurant' channel - a wide variety of night market noodle stands, seafood restaurants, KTVs (a local variant of the karaoke bar) and other venues where Taiwanese indulge in serious drinking.
Taiwan Beer has these bases covered - it's the cheapest, (with its large 600ml bottles) it can be shared, and it is everywhere. But Tsingtao can match it point for point. It's no accident that TBC designed an eerily familiar 600ml bottle for the Taiwan market.
Cracking the restaurant channel is Tsingtao's top priority, so much so that it has yet to negotiate distribution in a major convenience store chain. But TBC knows that the key to market success is getting into these bars - not the stores.
The restaurant channel is where the serious beer drinking gets done. It accounts for as much as two thirds of the total beer market.
Through the late 1990s, Taiwan Beer's 600ml bottle accounted for more than one third of all beer sold. In 2000, according to the Taiwan Tobacco & Wine Statistical Yearbook 2000, Taiwan Beer sold 169.9 million litres in 600ml format (35 per cent of total beer sales), and another 192.1 million litres in 350ml cans (39.9 per cent), which together with a light and dark brew gave it 395.7 million liters (82.2 percent). These figures show the dominance that Taiwan Beer still has in the market - and the scale of the challenge facing Tsingtao and others who aim to compete against it. The figures suggest that together, all imported beers in the market account for less than 18 per cent of sales.
The truth is most of the foreign beers have thrown in the towel. While Tsingtao's philosophy is: 'If you can't beat 'em, join 'em,' the other import beers appear to ascribe to the view, 'If you can't beat 'em, ... well, cut a deal with a minor distributor and hope the product lands on store shelves.'
Import beers have had a tough time in Taiwan, and looking back there were a number of stumbling blocks in their path: Taiwan allowed imports in 1987, more than 120 brewers sent over shiploads of beer, but only a few got distribution. Advertising was restricted to magazines and newspapers.
Most disappeared. One notable exception was Miller, which cut a distribution deal with Country House, the Sunkist distributor, and entered the restaurant channel. The import beers racked up a miniscule eight per cent market share.
Then, in 1994, beer advertising was permitted on cable TV, and the survivors tried again. Kirin scored big with a TV campaign created by Dentsu based on a classic Taiwanese folksong, 'Wandering along the Tanshui'. Fleetingly, Kirin claimed a 10 per cent market share, giving TTL the scare of its life. Eastern Advertising helped Taiwan Beer counter with an unprecedented US$2.1 million campaign featuring the island's only rock guitarist, Wu Bai. Kirin ended up in a price war with the other leading Japanese imports, Asahi and Sapporo, and that set the pattern. The import beers linger in 'sustain' mode until one rudely launches a campaign, forcing competitors to defend sales with low prices.
Prior to the launch of Tsingtao, Heineken had spent its way into the top import slot. Two years of advertising based on the brutally straightforward proposition - 'the most international premium beer' - pushed it past Miller, Kirin and Budweiser. Heineken became the beer to beat, and when Beck's staged a comeback this year, its agency, Saatchi & Saatchi created a TVC showing a man pushing a shopping cart with a six pack of Heineken. He then removes the pack and replaces it with Beck's when he encounters it a little further down the supermarket aisle.
The Heineken campaign proved that advertising works, but the launch of Tsingtao has thrown the import market into chaos. This summer, the name of the game is price and the imports are selling 350ml cans at record low levels. Kirin launched its Bar beer at NT$29, as did Miller with Milwaukee's Best. The others are priced as far under Heineken's NT$44 ceiling as economics allow.
In the past, Taiwan was a tough enough market with just one 'Taiwan Beer', but now the imports must face their old foe and a potent lookalike, Tsingtao.
The likelihood is that this monopoly is set to become a duopoly - but few other imported beers have either the appetite or the ability to enter this fight in a meaningful way.
HOW THE BEER RIVALS STACK UP AGAINST EACH OTHER
TAIWAN BEER
Available: for more than a century
Owned by: Taiwan Tobacco & Liquor company, which until July 2002 was
called Tobacco & Wine Monopoly Bureau.
Agency: creates campaigns inhouse
Distribution: enjoys total saturation of the ma rket built during the
company's days as a monopoly.
Price: pays no import duties, sells at the bottom of the market,
NT$30 a can
Positioning: sells on being fresh as it's the only locally-brewed beer
TSINGTAO
Launched in mid-April, 2002
Imported by Tsing Beer Corporation (TBC).
Hasn't hired an agency
TBC is a joint-venture between Tsingtao Beer and Taiwan's Sanyo Whisbih
Group, a local distribution veteran.
Sells at NT$32 a can as it's brewed by cheap mainland labour.
Also uses freshness as a selling point although Tsingtao is brewed in
China
