Taiwan’s Tempest in a Rice Wine Bottle

Most of the time, talk of this island’s pending entry into the World Trade Organization goes right over Bei Hong-jou’s head. She has no use for its jargon of tariffs, import quotas and the like.

But in one respect, Taiwan’s WTO accession hits Bei right in the gut--literally. On Jan. 1, the price of the rice wine that Bei and millions of other Taiwanese use to flavor their foods--everything from ginger duck to medicinal dishes--will soar more than 500%.

Anticipation of the price hike for a culinary essential found in virtually every Taiwanese pantry has sent housewives such as Bei hurrying to join long lines at stores and distribution centers to stock up on the commodity and, in some cases, hoard it in bulk.

The scramble is indicative of the wide-ranging consequences that WTO entry will have for Taiwan’s 23 million people, affecting more than just big-ticket items such as cars or luxury goods, which are irrelevant to many residents here.

Everybody relates to rice wine, and the new rules governing its sale and pricing have driven home--into people’s kitchens--the reality that Taiwan will soon be bound by trade regulations that emanate from halfway around the world at WTO headquarters in Geneva.

At the same time, the impending rice wine price hike points up how, to ordinary folk, the rules can seem capricious, dictated by international decisions and considerations that appear absurdly removed from common sense and everyday life.

The looming price jump follows a dispute between Taiwanese trade officials and their American and European counterparts over the terms of the island’s entry into the WTO.

After Taiwan joins the trading body, the Taiwanese government’s decades-old monopoly on alcohol and tobacco will end. This will put imported booze on a level playing field with domestic brands, in line with the vision of free global trade embraced by the WTO.

The U.S. and European Union--mindful of their countries’ large liquor industries--insisted that rice wine be treated like spirits such as whiskey and vodka and therefore be subject to the same sin tax those products are assessed.

Never mind that for most Taiwanese, rice wine is a condiment, not a beverage; a staple, not a tipple: The island’s negotiators eventually gave in to the demand, which means that the plain glass containers like those tucked away in Bei’s pantry will soon be taxed at the same rate as the snazzy blue bottles of Bombay Sapphire gin glinting on the shelves of Taipei’s trendy bars.

To many here, that is ridiculous, like lumping olive oil with crude oil in Italy. Only “poor alcoholics,” as one publication put it, resort to rice wine for a swigging good time. Fine Japanese sake it’s not, though it is quite strong--20 proof.

“Actual drinking of rice wine probably constitutes only about 1.7%” of its consumption in Taiwan, said Cheng-Hsiung Chu, director general of the Taiwan Tobacco and Wine Board.

The wine is added to sundry dishes as well as herbal tonics and special concoctions such as the sesame oil chicken that Taiwanese women eat--in great quantities--after giving birth, to encourage a speedy recovery.

Last year, island residents bought enough rice wine--270 million bottles--for every man, woman and child to go through almost a bottle a month. This year, officials expect nearly 300 million bottles to be sold. The island’s five state-owned distilleries are “all working overtime,” Chu said.

But rice wine’s status as a cooking necessity won’t prevent its price from skyrocketing after WTO accession, from 65 cents a bottle to $3.90 next year and $4.55 in 2003.

When word first spread a few years ago that the price would go up with WTO membership, it triggered a stampede at supermarkets and long, angry lines at state distribution centers--chaotic scenes that were replayed after every announcement that a deal was at hand.

Last month, the deal finally closed, pushing rice wine fever so high that the government had to impose a rationing system.

As a compassionate gesture, new mothers are entitled to more bottles, as long as they produce their babies’ birth certificates.

“Of course it’s bothersome for people to line up,” Chu said, “but it’s a way for us to make sure that everybody is able to get some.”

From Nov. 20 to Nov. 29, the government sold 8 million bottles directly to consumers.

“We have about 30 bottles at home,” said Jack Su, 53, who runs a small religious-goods store here in Tainan, a southern city. “They’ll run out in about two months. . . . Dishes like ginger duck take three bottles alone.”

Rice wine was an issue even in the Dec. 1 legislative election, with some candidates demanding a tougher crackdown on retailers caught hoarding and others reportedly offering free courses on how to distill the brew at home.

Wedged between WTO rules and an angry public, the government has searched for a way out. One solution has been to market a new kind of rice wine containing salt, which ensures that it gets used in cooking recipes and not as a recipe for getting cooked. That, in turn, will allow the price of those bottles to be kept low after Jan. 1.

Relatively few bottles of the salted variety have cleared the shelves so far. The government hopes they’ll become more popular once the new pricing system kicks in and the disparity becomes apparent.

But Taiwan’s consumers are notoriously picky when it comes to their favorite commodity. Last year, a shipment of 5 million bottles from Singapore fell flat with buyers who felt the wine didn’t taste quite right--partly because it was bottled in plastic, not glass.

“We’ll find other alternatives,” said Tainan restaurateur Su Jou-mei, 59. But, she added, “it’s not fair to increase the price [so much] in so short a time.”