In three weeks the agreement between the EU and Japan will come into effect. For European wines this will mean no more custom taxes to enter the archipelago starting from February 1st.
So are we really going to be flooded by rivers of Bordeaux and Barolo?

Last month Sapporo Breweries has published the results of a very interesting survey: 13,000 thousands Japan residents have been asked about their expectations towards this agreement in relation to wine.
Some notable points:

  • At the time of the interview only 23% of people knew that custom taxes for wine are going to be abolished. Despite this, 72% of the interviewed have high hopes about the agreement.
  • More precisely, 59% think that expensive wine will become more accessible, while 40% hope that bottles over 1,500 yen will get cheaper prices. For 29% the variety of European wine on the market will increase. (this question, obviously, did allow multiple choices)
  • So what are these consumers going to do if the wine gets cheaper? Sparkling and rosé wines may get the most benefits: if prices are going to be lowered as the consumers hope, 46% of the surveyed people are likely to increase their consumption of sparklers (now regularly drunk by only 32% of the total). The same for rosé, with 15% of the interviewed inclined to drink more of it once it gets cheaper (as opposed to 12% of present regular consumer).
  • Wines between 800 and 2,000 yen a bottle are likely to take the most advantage from the situation: 76% is interested in trying more wine in this price band and in general 56% expect to increase its consumption of wine.
  • Pages 5 and 6 outline the profile of the interviewed and their general drinking habit. The majority drinks red wine (67%), though white wine (44%) and sparklers (32%) also have their following. The most popular price band is 800-1,400 yen. France and Italy are confirmed as the most successful European Countries (43% and 32%), while a pretty significant 28% admits never drinking wine from the Old World.

The survey depicts a pretty encouraging situation: lots of people in Japan do not drink European wine, probably for their relatively high price. On the other hand though, the average consumer here is curious and well disposed to try new things if he can get them for a lower price.
The popularity of the 800-2,000 yen band (6-something to 16-something euros) is easy to understand and it represents a low to low-medium price range.

There is a condition though: this survey just show the intention of the consumers towards European wines “if their hopes are fulfilled”, which is a very generic concept. They were not asked about the expected price fall, so much will depend on importers and distributors. If the wines do not get cheaper, nothing will change.

So, will prices really fall? And by the way how high is the custom tax now?
We will look at these issues in the next post.