IntroductionAustralian-made consumer goods are on the rise in the Indonesian market, today. Some of the products range from agricultural products, mechanical products, electronics, and chemicals. In terms of the agricultural products, some of the Australian-made consumer products exported to Indonesia include fruits, grains, beef, live animals, honey, and beverages. In this essay, focus is put on Australian-made wine exports to Indonesia. Here, its viability is analyzed in terms of legal, economic, cultural, and market factors. Market overview of the wine in IndonesiaAs Pekerti (2011, pp. 2-12) reports, wine consumption in Indonesia initially was low due to the fact that it is a Muslim-populated country (Gray 2012).
As a result, there was a small market for wine imports because majority of the population kept away from alcoholic drinks. Currently, there are reports that wine market has improved with the consumption rates increasing by 25% per year, for the last six years. This improvement is attributed to the development of the global four and five hotels, and important expansion in up-scale dining businesses. Additionally, Indonesia is a home for budding middle class consisting of young, learned and urban populations.
In 2010, the Government of Indonesia (GOI) modified the taxes and tariffs on alcoholic drinks, and increased import quotas levels and added licensed importers numbers (Woods 2008, pp. 2-28). Viability of the wine exports in IndonesiaConsumption rate Pekerti (2011, pp. 2-12) also says that in the past, wine market was relatively low in Indonesia because of its social and religious beliefs. For instance, most of the Indonesian population was dominated by Muslims who do not value alcohol consumption; hence, lowering the wine market in the country (Gray 2012).
Nevertheless, market researchers have realized that there is a growing demand for wine products in the country due to various environmental, social, political, economic, and legal changes. Gray (2012) and Corra (2007) argue that there are apparent market opportunities all over South East Asian markets like, Singapore, Thailand, and Vietnam. These markets are in the major accessible to wine, and thus, Australian wine firms ought to be looking to make exports to these areas. Nonetheless, there is an overlooked market in the region; Indonesia by Western Wine companies.
This is because of the wide view that the country predominantly occupied by Muslims; hence, holding little chances for Australian wine. Despite the challenge of developing a wine market in a Muslim-influenced culture, there is a great opportunity for an upcoming wine market in Indonesia (Gray 2012; Australian Government Austrade, 2007). Notably, Gray (2012) further maintains that there are few chances for low-cost and bulk wine sales to Indonesia. These price levels are impractical in relation to the Indonesian politics. This does not apply for finest wine sales, for the Australian wine shelf’s US$15-50 price level.
In the Indonesia, the same products are sold at an extra premium of $40-150. Individuals pay for the wine products, and those in the middle class people in the cities, such as, Jakarta, consume them. Besides, hotels and restaurants across the country seek for wine products because they want to satisfy their consumer needs. In addition, Gray (2012) says that despite the fact the Muslim culture in Indonesia, there are no restrictions for alcohol sales. Therefore, Australian-made wine export opportunity is viable in the Indonesian market and has a possibility of a long-term growth.