China's tea market will be inundated with foreign brands, as more overseas beverage makers are expected to march into China following the country's entry into the World Trade Organization, according to sources with the drink industry.
Under agreements reached with WTO member countries, China will cut import taxes on agricultural products to an average of 14.5 to 15 percent on entering the WTO. Current tariffs on teas, including green teas, red teas and oolong teas, range from 80to 100percent.
The sharp tax cuts will increase tea imports, and especially of red teas, analysts in the drink industry noted. They said domestic red tea drink makers will therefore feel increasing pressure as their foreign rivals flood the market.
Many overseas companies have introduced their tea drinks to China in a bid to seize more market share. Unilever (China)Co Ltd unveiled the Jinghua Teas after it acquired the locally prestigious tea brand; Japan's Suntory has rolled out its oolong teas and US-based Coca-Cola has developed its Tianyudi bottled tea drinks in China.
These invading tea drink producers, taking advantage of cheap labor and land resources in China, will put heavy pressures on the local players, analysts said. The foreign companies' advantages include a broad capital base, far stretching distribution networks and standard managing systems.
(eastday.com December 29, 2001)
