Written by Jordan Laramore
Image credit: The various product offerings by Taiwan Beer as seen on its official website.
Foundation
When the Japanese Empire occupied Taiwan in 1895, following the Qing Dynasty’s defeat in the Sino-Japanese War, it began investing in the island. The island had often been an afterthought for the Qing Dynasty; however, the Japanese sought to turn it into what can best be described as a “model colony.” Much of the Japanese-funded and backed development led to the construction of railroads and ports, the expansion of agricultural goods, and, in one interesting case, the creation of a beer brewery. Established in 1919, the Takasago Brewery Company started making Takasago Beer. This was the first beer brewery on the island. The Japanese administrators supported the creation of the company as a way to increase tax revenue via a state-owned enterprise.
During the Japanese period, the beer became the most popular, and following the introduction of a government monopoly, it was cemented as the de facto beer of choice in Taiwan. Following the transfer of Taiwan to the Republic of China (ROC, 中華民國) after the end of the Second World War, the government monopoly became an important source of tax revenue for the island’s new authorities. After the ROC government retreated to Taiwan, this trend continued, and Taiwan Beer (台灣啤酒) held a monopoly until 1987.
The Products and their History
The modern Taiwan Tobacco and Liquor Corporation (TTL, 台灣菸酒公司) makes numerous products, such as traditional lager beers, more premium draft beers, fruit beers, and non-alcoholic beers. TTL’s most popular offerings are Taiwan Beer Classic (經典台灣啤酒) and Taiwan Beer Gold Medal (金牌台灣啤酒). Classic is the oldest and the closest to the original recipe that one can get, while Gold Medal is a newer product designed to refine the taste of the Classic for a younger consumer base.
What gives Taiwan beer its unique taste is the inclusion of Ponlai short-grained rice (蓬萊米) in the brewing process. Ponlai rice is a cultivar of Japonica rice developed during Japanese colonial rule to meet the preferred taste of the Japanese palate. Japanese colonisation caused a shift in Taiwan, and the cultivated Indica rice varieties brought over from China were mostly displaced, leading to Ponlai rice becoming the dominant variety on the island. Ponlai rice was added to the recipe after the relocation of the ROC government to Taiwan. This made the beer sweeter and less bitter. More importantly, the change in recipe was meant to help local farmers. Taiwan had experienced a surplus of domestically produced rice, and this brought down prices; thus, incorporating rice into Taiwan beer helped absorb part of that surplus.
This gave Taiwan Beer its unique flavour, and the Classic recipe has remained unchanged since. Classic would dominate the market for decades, owing to the government-backed monopoly. However, much like Taiwan’s political system, this would begin to change. Market liberalisation began to erode the monopoly in the 1990s, but the biggest change came in 2002 when Taiwan joined the World Trade Organisation (WTO). This opened Taiwan’s markets, including the beer market, to foreign competitors. As foreign beers entered the market in greater quantities, Taiwan Beer’s market share took a hit, and in response, TTL launched a new product.
Taiwan Beer Gold Medal was launched in 2003 to compete with foreign brands. Gold Medal refined the older Classic recipe by increasing the proportion of Ponlai rice and aromatic hops, as well as a higher maltose content. This reduced the bitterness and increased its appeal to younger beer drinkers in Taiwan. Gold Medal quickly became TTL’s top-selling product and now sells four times as much as its older sibling, Taiwan Beer Classic. Nonetheless, Taiwan Beer’s market share has dropped throughout the years, falling from nearly 85% in 2009 to 70% by volume in 2015 and just 60% in 2019, though Taiwan Beer still holds the lion’s share of the market.
Taiwan Beer and Economics
As ties with China improved following the election of Kuomintang (KMT, 國民黨) President Ma Ying-jeou (馬英九), TTL led the way and began selling Taiwan Beer in China after registering its trademark in late 2008. Upon entering the Chinese market, TTL primarily marketed Taiwan Beer in the Chinese provinces of Fujian (福建) and Guangdong (廣東) because those provinces’ food preferences are similar to Taiwan. After a slow start, Taiwan Beer managed to generate NTD 180 million (USD 5.6 million) in sales in the first five months of 2010, a small amount compared to the NTD 25.6 billion per year in sales made in Taiwan at the time, but a welcome first step into the Chinese market.
Taiwan Beer would continue to sell in China until the company hit a roadblock. In 2022, China would go on to ban the import of Taiwan Beer from the island. The official reason was said to be improper paperwork and food safety regulations; however, the ban followed the visit by then-US House Speaker Nancy Pelosi when China sought to pressure Taiwanese officials. TTL did seek to re-enter China, but Taiwan Beer has remained locked out of the Chinese market since then. Yet it found new life in one interesting way: nationalism. Taiwanese Foreign Minister Joseph Wu (吳釗燮) made a social media post promoting Taiwan Beer as ‘Freedom Beer,’ reminiscent of the ‘Freedom Pineapples,’ which faced similar bans in 2021. This move was done to promote Taiwan Beer using the language of protecting freedom from China’s economic coercion.
Since the election of President Tsai Ing-wen (蔡英文) of the Democratic Progressive Party (DPP, 民主進步黨) in 2016, China has ramped up pressure on Taiwan, and among its toolkit is the use of economic measures. This has included everything from bans on the aforementioned pineapples and beer to restrictions on Chinese tourism to Taiwan. Such economic pressures have continued into the administration of Tsai’s successor and current leader, President Lai Ching-te (賴清德), also a member of the DPP. While China banned Taiwan Beer, the island continued to import beer produced in China. However, this situation would begin to create a problem for TTL and other Taiwanese beer producers.
Chinese-produced beer entered the Taiwanese market and often sold at highly competitive prices, which helped chip away at Taiwan Beer’s market share. Most of the beer imported from China is not from Chinese brands, but Western and Japanese brands, such as Budweiser and Kirin beer, brewed in China. After an investigation, the Ministry of Economic Affairs found that Chinese beer imports hurt the domestic industry, and as a result, the Ministry of Finance imposed tariffs on Chinese beer. Anheuser-Busch received a 31.3% duty, while Kirin was assigned a 19.13% rate, and other Chinese exporters got hit with a 51.94% duty.
This move was done to protect the Taiwanese beer industry, not just TTL but also smaller Taiwanese breweries. In general, Taiwan’s beer market is dominated by local companies or foreign brands imported from overseas. However, one foreign company has found tremendous success: Heineken. The company has found so much success that in 2019 it was the second-largest beer brand after Taiwan Beer. This success led the company to invest NTD 13.5 billion (USD 414.07 million) to set up a brewery in Taiwan’s southern county of Pingtung (屏東) to serve as a production base for the Northeast Asian market.
More than an Adult Beverage
Taiwan Beer tells the story of an island that has gone from a Japanese colony to state-managed development and, finally, into a modern, free, and open market. Taiwan Beer has been influenced by Japan and its need for rice that could be sold back in the home islands and by the ROC government’s need to intervene in the market to support local farmers. It has also been affected by Taiwan’s market liberalisation, which coincided with the nation’s political liberalisation and democratisation. It has had to adapt to changing demographic preferences and market competition.
Taiwan Beer is just one product that sits at the centre of cross-strait challenges. It was once a prime product for export to China during the high point of cross-strait relations under Ma Ying-jeou (馬英九), but as relations worsened following the return of the DPP to power, Taiwan Beer became a target. This inadvertently reinforced the product as a symbol of freedom and Taiwanese identity. Taiwan Beer has been a part of Taiwanese culture for over a century and has united generations of Taiwanese in a way that cannot be easily replicated. In the future, Taiwan Beer looks set to continue to be part of Taiwan’s culture and Taiwanese identity.
So next time you have a Taiwan Beer, you can know that it is more than just a beer; it tells the story of Japanese colonialism, Cold War authoritarianism, and post-Cold War liberalism. Taiwan Beer is also an example of China’s economic coercion and Taiwan’s push to resist it. But even if that is of little concern as you open a bottle of Taiwan Beer, just remember the most important thing: always drink responsibly.
Jordan Laramore is an independent researcher based in Taiwan. He holds a Master’s in Asia-Pacific Affairs from Taiwan’s National Sun Yat-sen University (國立中山大學) and a Bachelor’s in International Studies from the University of West Florida.