Phl demand for US wines increasing

Wines coming from the US are expected to maintain their stronghold in the Philippine market with sales seen hitting $13 million for this year alone, the US Department of Agriculture (USDA) said in a report.

According to the USDA Global Agricultural Information Network, export of US wines to the Philippines this year will reach a record high of 4.3 million liters or 477,778 cases worth $13 million.

This year’s volume and value are higher by 10 percent and 12 percent, respectively, from the 3.9 million liters or 433,333 cases worth $11.6 million in 2017.

“The country’s robust economy, wine’s increasing popularity, and a young and growing population create an extraordinary profile that makes the Philippines one of the most exciting wine markets in the world,” the USDA said.

Also, the fast-growing and highly urbanized population with increasingly sophisticated tastes and growing access to supermarkets as at least 20 million Filipinos now have sufficient income to purchase wine occasionally make the Philippines a high value target for wine producers in the US.

Furthermore, USDA said importers have capitalized on the growing health-awareness among Filipinos and the shift in consumer preference from beer and spirits to wine.

“Prospects for growth are exceptionally bright despite tariffs that inflate the final price by 75 percent, distribution challenges, and intense competition due to regional free-trade agreements,” the report said.

While traders report that 80 percent of “value-priced” wines marketed in the Philippines are from the US, the agency emphasized that growth is taking place across all price ranges.

In 2017, the average CIF (cost, insurance and freight) price of US wines exported to the Philippines was $2.97 per liter.

“We estimate that a combination of higher prices and increased sales in mid-priced and premium wines will raise the average price by 20 to 30 percent in the coming years. At the same time, brisk sales of entry-level, value-priced US wines are expected to continue as more consumers become interested in wine,” the USDA said.

The US has long been the leading supplier of wines to the Philippines and, since 2009, the Philippines has been the largest US wine market in Southeast Asia in terms of volume.

“The Philippines will remain the largest market in Southeast Asia for US wines for the foreseeable future,” the report said.

There are more than 20 wine importers in the Philippines, mostly based in Metro Manila, as an estimated 70 percent of total wine sales take place in the metropolis.