How to export wine in Singapore?

Although limited by its size and population, Singapore remains the most mature market in Southeast Asia. The country is home to a large number of consumers with a resolutely westernized lifestyle and a GDP per capita well above the Asian average, equivalent to that of a developed country.
Three categories of wine consumers should be distinguished:

1. Foreign expatriates: they are in the minority but influence the wine landscape considerably. The diversity of the origins of expatriates explains the diversity of the types of wines offered on the Singaporean market. They are well-informed consumers, very sensitive to different considerations (vineyard, region, label, appellation of origin, country of origin…);

2. Young Singaporeans with medium/high incomes: they are between 25 and 40 years old and try to get informed about the different qualities of wines;

3. Middle-income people under 50: they consume wine occasionally but do not have a very high level of knowledge. Generally, their purchases follow the trend. They are very sensitive to the quality/price ratio.

Then, among Asian consumers, Singaporeans are the most knowledgeable about export wine. They would be more confident when buying and would be very keen to inform themselves (through international magazines and guides, wine courses, etc.).

Moreover, thanks to its modern infrastructure and strategic position, Singapore plays a role of logistics and distribution platform, with an estimated re-export level of more than 50% for wine and more than 75% for spirits.

Finally, wine has gone from being a trendy exotic product to a commonly consumed product. It is a young, friendly, fashionable product, but also and above all, synonymous with social status, especially in the many wine clubs that have sprung up in recent years.

While wine consumption in Singapore was estimated at 60 000 hl in 2008, it has never decreased since then, wine being the only alcoholic beverage whose domestic consumption has grown uninterruptedly in recent years. Still wines are widely popular, with 89% of the market share in 2020, compared to 10% for sparkling wines. As in most other Asian countries, the supremacy of red wine is undisputed in Singapore, and its health benefits are emphasized. Total consumption in 2020 was distributed as follows:

However, the market for rosé wine is growing as it grew by 24.2% between 2010 and 2014, and this growth shows no signs of slowing down. There is also a growing interest in organic, natural or biodynamic wines, driven by restaurants and outlets specializing in organic cuisine/products. Sparkling wines are also in the trend and champagnes are increasingly competing with other sparkling wines, notably Prosecco and Cava.

Before you even start looking for an importer in Singapore, you need to analyze the competition to find out how similar products or services are traded in the market, where the gaps in the market are and whether the market is open to new entrants. This information will help you find the best import/export business for your products and refine a unique selling proposition.

Also, the fact that your brand is well established in your home market will give you credibility and demonstrate to various importers your ability to compete abroad.

Finally, you can visit the wine-searcher website to find an importer in Singapore.

To export wine to Singapore, you must respect several conditions:

On the one hand, the conditions to enter the Singaporean market require the exporter to present a number of necessary documents:

A Certificate of Analysis as well as a Certificate of Registration with the Agri-Food and Veterinary Authority of Singapore (AVA) must be provided for the following customs nomenclatures: 2204.10 – 2204.21.11 – 2204.21.12 – 2204.21.21 – 2204.21.22 – 2204.29.11 – 2204.29.12 – 2204.29.21 – 2204.29.22 – 2204.30.10 – 2204.30.20

On the other hand, Singapore has labelling requirements. Singapore’s food regulations require that all prepackaged foods sold, including beverages, be properly labeled. Labeling laws are enforced by the Food Control Division of the Agri-Food and Veterinary Authority (AVA). The following information must be provided in English:

Wine retail accounted for nearly 70% of the volume of wine sold locally in 2020, an exception in a country that traditionally buys most of its alcoholic beverages from the on-trade sector. It is done through distribution chains (more than 75% of volumes) which are owned by three operators NTUC Fair Price, Meidi-Ya and Dairy Farm.

The on-trade sector represents 31% of the volume of wine sold in Singapore. About 80% of alcoholic beverages sold in the on-trade are sold in pubs, bars and hotels and 20% in other outlets such as coffee shops. Wine sales in the Café, Hotel, Restaurant (CHR) channel will have accounted for 60% of the wine market by value in 2019. This sector plays a leading role in wine consumption in this country. 70% of the Champagne market and more than 60% of the wine market goes through the CHR. However, this sector is currently suffering from the Covid-19 crisis with the closure of consumption places, the option to enter this sector is certainly a bad strategy for an exporter.

If it does not yet represent a major segment, direct selling is an increasingly important distribution channel in terms of volume. It is estimated that there will be 2.05 billion online shoppers in 2020, or nearly 25% of the world’s population. This figure is expected to reach 2.14 billion by 2021, representing a huge pool of potential customers for the wine industry worldwide. Ewine Asia is an example of the dynamism of the companies involved in the online wine business in this country.

The marketing of wine on the Internet has entered its mature phase. Worldwide, wine sales via the Internet are exploding and are capturing an increasing percentage of the retail market share year after year. Among the main e-commerce sites specializing in online wine sales in Singapore are: Pop Up Wine, Vinomofo, Wines Online, Alcohol Delivery.

The first obstacle for exporters is the payment of customs duties. Indeed, wine is expensive in Singapore, partly because the duty per bottle is about SG$9 (£5.35, €5.90, $6.48). However, European products are exempt from these duties. Indeed, since the EU-Singapore Free Trade Agreement (EU-Singapore FTA) came into effect on November 21, 2019, every exporter enjoys duty-free access on all products originating in the EU, including products that were previously subject to duty (such as beer and stout).

The second barrier is the Goods and Services Tax (GST). This is a tax on the supply of goods and services to Singapore and on the importation of goods into Singapore. You must register for GST if your annual taxable income exceeds S$1 million per year. This GST is 7%, and will inevitably increase the price of your wines (Singapore uses an 8-digit tariff code, composed of HS6, and 2 digits specific to the nomenclature applicable within ASEAN. This code defines the tariff and/or non-tariff barriers applicable to goods).

The third barrier is the rent. These are a real burden for exporters because for those working in retail, rent in a prime location can be as high as SG$8,000 (£4,727, $5,790) per month for a decent-sized space. Retailers therefore often have to negotiate contracts with exporters very hard to make a sufficient margin.

The final obstacle is where to store the exported wines. Singapore requires that goods subject to duties and taxes can be stored in the FTA. They can be repacked, sorted and packaged there, subject to customs authorization. However, with one exception, certain products such as alcohol are not allowed in the FTA because they are subject to strict customs control.

To better develop your wine export and succeed in the Singapore market, you can work closely with different entry points such as importers, distributors or agents.

First, participate with your local partner in several trade shows:
1. The Food Hotel Asia, a regional trade show of reference, which takes place every two years in April;
2. The Tax Free World Association, an annual trade show for spirits;
3. Pro Wine Asia (the 2022 edition will take place from May 10 to 13, 2022)

Next, you can contact local wine industry magazines directly to promote your wines. Among the most well-known:
1. The regional trade magazine The Wine Review (published quarterly) by one of the local specialists, Mr. Ch’ng Poh Tiong ;
2. General public magazines:

Finally, you can promote your wines through social networks which are relatively popular in Singapore.