Taiwan and Lithuania Look to the Long Term on Consumer Goods Trade

Upsurge in demand for products from the Baltic state came on the back of warming diplomatic relations. However, considerable obstacles to agri-food imports remain.

What does Lithuania mean to Taiwan? Prior to 2021, perhaps only the presence of several of the country’s basketball players in the NBA. However, following donation in July and October last year of more than 250,000 doses of the AstraZeneca vaccine, the opening of a Taiwan representative office in Vilnius in November, and a visit to Taiwan by the Lithuanian Parliamentary Group that same month, the Baltic nation was suddenly all the rage.

Orders for Rūta chocolate reportedly increased tenfold as hordes converged on the brand’s store in Taipei’s Da’an District, malty kvass – a non-alcoholic fermented malt drink – began to tickle Taiwanese palates, and Facebook groups were awash with inquiries about “that beer with the foil wrapper on top” – the Volfas Engelman range of brews that has surged in popularity among Taiwan tipplers.

When China suspended Lithuanian imports – widely perceived as a response to the use of “Taiwanese” in the name of the representative office – consignments of various perishables were rerouted to Taiwan. The state-owned Taiwan Tobacco and Liquor Corp. agreed to take 20,000 bottles of Propeller brand rum, much of which was snapped up through pre-order. Clad in cutesy aprons featuring Formosan black bear motifs, Finance Minister Su Jain-rong and National Development Council head Kung Ming-hsin appeared in a Valentine’s Day-themed promotional video, whisking up rum-infused chocolate bites.  

As Lithuania and Taiwan foster closer relations, Lithuanian goods, such as spirits and beer, are gaining popularity on the island. Photo: Peter Young

But will the love affair with Lithuanian food and beverage products last?

“I think so,” says Aušra Andriuškaitė, chair of the Lithuanian Community in Taiwan. “We felt the gratitude from the Taiwanese people after the vaccines. They wanted to help. It’s not like ‘OK, thank you and bye-bye.’” 

Taipei-based businessman Ričardas Sedinkinas agrees. “We’re not geographically near, but we feel like neighbors from afar,” says Sedinkinas, who like Andriuškaitė, served as a representative for Lithuania’s first-ever pavilion at the Food Taipei exhibition at Nangang Exhibition Center in December. “So, we’re saying ‘Hello neighbor, do you need anything? We have a rich selection of goods for you.’ And Taiwan responded.”

Despite the goodwill, barriers to consumer imports remain. Several of the producers spotlighted at Food Taipei have encountered difficulties due to strict regulations over what can be labeled “organic” in Taiwan.

As the largest vertically integrated organic food company in Europe, the AUGA Group would seem a shoo-in for market access. “Our products are European organic certified,” says Aušra Rumbutytė, sales development manager for the group’s Asia region. “But Taiwan does not accept EU organic labels, so our products cannot be imported to this market at the moment.”

The frustration is obvious. Lithuania prides itself on exemplary agricultural standards. “It’s strange from our side, because we know the quality of our organic food,” says Antanas Venckus, head of the Lithuanian Ministry of Agriculture’s International Affairs and Export Promotion Department. “It’s hard to find higher requirements than we have.”

Venckus credits these principles with securing an export ranking for Lithuania’s wheat that is incommensurate with the country’s small size. “Taking into account the parameters of nutrition, mainly because of the geography and climate, our grain is very high quality,” says Venckus. “That’s why we are number 11 in the world, even though we are a very small country compared to other major exporters such as Russia, Ukraine, or Kazakhstan.”

With import authorization for various products still pending, Venckus has appealed to Taipei to expedite the process. He acknowledges that “business is not always based on the aim to help somebody else,” and is grateful for a Taiwanese commitment to put Lithuania “first in line.” He also believes Lithuanian exporters must take the bull by the horns to “build up mutual trust and contacts, to present ourselves to Taiwanese society and consumers.”

On the Taiwan side, there is acknowledgment of the sometimes opaque and unwieldy bureaucracy involved in greenlighting import permissions. Part of the problem relates to misuses of the “organic” label by domestic producers, which continues to beset Taiwanese agriculture. To take just one recent example, last November, a Tainan farmer was charged with using a forged organic certification to sell vegetables that ended up in high school lunches.    

To combat such recurrent abuses, the regulations have acquired exceptional stringency, says Rebecca Shih, a senior project manager for the Europe Section of the Taiwan External Trade Development Council’s (TAITRA) Market Development Department. “Because we are a small country and don’t have much land, we don’t have that many truly organic farms,” she says. “So, we have our own strict definitions.”

Still, some have expressed disappointment about the amount of red tape. “I understand that they’re very cautious about these requirements,” says Venckus. “But our products are more organic than almost everywhere else.”

Another problem is an apparent lack of clarity regarding the categorization of goods under the Harmonized System (HS) of tariff codes used by the two countries. Anita Wang, who works with Shih in TAITRA’s Europe Section, says a Lithuanian cheese producer recently contacted her, unsure of whether the company’s goods would pass muster.

“They couldn’t find [their] HS code in our customs system,” she says. “It was quite different from Taiwan’s codes, so I called customs to ask whether a product with this code could be imported.”

After some investigation, the code was deemed acceptable. However, a further stumbling block arose over paperwork required by Taiwan’s Food and Drug Administration (TFDA). “The company still needed to provide documents showing their portions or how they make the product,” says Wang, noting that the details were not completely clear. The TFDA was requiring “some kind of laboratory statistics,” she says. It took further phone conversations before a conclusion could be reached.

With other products, matters are proceeding on a case-by-case basis. “This specific cheese is OK, but another might not be,” says Wang.

There is hope that the path to market entry will soon be free of such potholes. “We expect that Taiwan and Lithuania will sign a bilateral agreement in the near future, which would allow us to import organic products with EU organic certification,” says the AUGA Group’s Rumbutytė. 

Forging ahead

In the meantime, TAITRA officials are focused on making Taiwan a hub for Lithuanian expansion into Asia. Felix Chiu, executive director of the Market Development Department, considers that ahead of any formal agreement on agricultural products, this approach – along with tradeshows and promotional activities – is the best help the organization can offer.

Chiu is also keen to promote investment by Taiwanese businesses looking for a foothold in the European Union. To this end, an online B2B platform has been established to showcase investment opportunities, and a permanent Lithuania showroom at Taipei’s World Trade Center is in the works. “Eastern Europe is very important for Taiwanese companies to enter the EU market, and Lithuania can be the gateway,” Chiu says. He notes that the potential for mutual benefit is heavily skewed toward tech and B2B exchanges.    

Despite the current holdups, Venckus is also optimistic. At recent meetings with Lithuanian officials, Taiwan’s first representative to Lithuania, Eric Huang, gave assurances that Taiwanese government agencies “are doing their best to solve the issues, and in the coming months we will get those export permissions, so that a much bigger variety and volume of products can be exported,” Venckus says.

Elsewhere, importers give mixed views as to the staying power of certain Lithuanian products. Peter Young, a Taipei-based Hong Konger whose Scapa Scandia company imports a wide range of Lithuanian alcohol to Taiwan, thinks the fizz for Volfas Engelman beer will soon go flat. 

“Beer is not where it’s going to happen because Lithuania is too far away,” says Young. “It takes four or five months to get here, and because all breweries in Lithuania make beer with a short shelf life, you have maybe three months to sell it.”

Peter Young, an importer of alcohol from the Baltics, cites some major logistical hurdles to importing beer from Lithuania to Taiwan, predicting that such obstacles will keep it from really catching on in Taiwan. Photo: James Baron

Added to this are problems associated with shipping amid freezing temperatures in the winter, says Young, while the weight makes it prohibitively heavy for small importers to transport. Big supermarket chains can make it work “because they can get it into stores very quickly and discount it to make one cent on every can,” he says. “But smaller guys can’t survive. I physically experienced it in China and Hong Kong with Lithuanian beer. We were losing our shirts.”

While these hurdles have been a factor for the Forun Trading Group, the import agent for the Volfas Engelman range, CEO Sunny Wang believes they are far from insurmountable. The company, which picked up two containers – almost 2.6 million cans – from a consignment of 60 turned back at Chinese customs late last year, has been working hard to carve a permanent niche for the brand.  

In addition to tradeshows such as the Taipei International Wine and Spirits Festival in November, there are plans for branded stalls at outdoor music events – COVID restrictions notwithstanding. Having first appeared in Hi-Life convenience stores two years ago, the beers are now available in RT Mart, Jason’s Marketplace, and City’Super. At the time of publication, the brand was set to launch at Carrefour and PX Mart, while negotiations with Costco were underway. “We’re also promoting through online channels and launching bottled products at fine dining and bistro restaurants,” says Sunny Wang, noting that a “mango milkshake” flavor will be added to the current selection.

“This is a very distinctive flavor, which will match Taiwan’s mango season,” says Amber Huang, a member of Forun’s purchasing team. “We think that will attract people.” 

Citing plans for cooperation with Lithuanian exporters in areas such as beauty, health, and lifestyle, which currently comprise over 50% of Forun’s business, Wang says he is upbeat about the future. Noting that the company’s sourcing of Volfas Engelman came long before Lithuania’s vaccine donation, he is not banking on the feel-good factor.       

“We saw a short-term spike because of that,” he says. “But we didn’t import this product because of the current popularity for Lithuanian things. We concentrate on the product and the brand – not the government and country relations.”

Felix Chiu shares this pragmatism. Parallels between Taiwan and Lithuania as small, flourishing democracies in the shadow of aggressive, authoritarian superpowers are, he maintains, not particularly useful commercially. “That’s just coincidence,” says Chiu. “Most Taiwanese don’t even think about stuff like that.” Nevertheless, shared values and amity can provide the basis for economic success. “Just like making a friend,” he says, “it doesn’t really matter how you bump into each other; it’s just about how you get along.” 

Aušra Andriuškaitė gives the analogy a romantic twist. “Maybe Taiwanese tastes will be different, or things will change in other ways,” she says. “But I think in their hearts, it’s like your first love. You don’t forget.”