THE Philippines’s wine imports this year may reach a four-year high of $60 million driven by higher demand from a growing young Filipino population due to increasing purchasing power and deemed health benefits of the alcoholic drink.
The United States Department of Agriculture-Foreign Agricultural Service in Manila (USDA-FAS Manila) made the projection, pointing out that wine consumption in the country is continuously growing thanks to the “fast growing” and “highly urbanized” young population.
The USDA-FAS Manila added that young Filipino consumers are having an “increasingly sophisticated” taste while having better access and the capacity to buy wines.
“At least 20 million people have sufficient income to purchase wines occasionally,” the USDA-FAS Manila said in its recent Global Agricultural Information Network (GAIN) report.
The USDA-FAS Manila explained that despite its relatively low consumption in the entire Philippines, the Philippines has one of the “most exciting” wine markets in the world.
The international agency estimated that wine accounts for only less than one percent of the roughly 2.7 billion liters of alcohol consumed annually in the Philippines.
“Despite tariffs and taxes that inflate the final price by 75 percent, the weak peso, and supply chain setbacks, traders forecast total wine exports to Philippines will reach $60 million in 2022, and will increase 5 percent annually over the next three years to $70 million,” the USDA-FAS Manila said.
The Philippines’s total wine imports last year rose by 67.64 percent on an annual basis to $60 million, surpassing pre-pandemic level of $55 million.
Aside from the rising purchasing power of Filipino consumers, the USDA-FAS Manila noted that the increasing awareness to the health benefits of moderate wine consumption contributed to the growing demand for the alcohol drink.
“The industry is reporting a shift in consumer preference from beer and spirits to wine. While the Philippines produces almost no wine, it is a major producer of relatively inexpensive beer and spirits,” it explained.
Citing traders, the USDA-FAS Manila said sales growth is observed across all price ranges of wine products driven by the post-pandemic recovery of the economy.
“The trade estimates 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,” it said.
“At the same time, brisk sales of entry-level, value-priced US wines are expected to continue as more consumers become interested in wine and the hospitality and foodservice sectors ease into post-pandemic recovery mode,” it added.
The USDA-FAS Manila said the US has been the Philippines’s top wine supplier for two decades, after surpassing France in 2002. In 2021, the US cornered 36 percent of the country’s wine market followed by France (20 percent), Australia (17 percent), Spain (7 percent), Italy (6 percent), and Chile (5 percent).
The USDA-FAS Manila added that wine exports from the US to the Philippines last year reached a record high of $20 million (3.8 million liters) “as consumers temporarily traded up to more expensive wines during the coronavirus lockdown.”
“In 2021, the Philippines was the largest US wine market in the region, surpassing major transshipment destinations, such as Singapore and Vietnam,” it said.
“FAS Manila forecasts US wine export sales in 2022 will level off at $17 million (4.8 million liters at an average cost of $3.50 per liter), two percent higher than export sales in 2019, before the pandemic,” it added.
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