Imported wine accounts for more than 60 percent of all wine. Even in domestic wine, imported bulk wine and grape must are commonly used as raw materials. In terms of both volume and value, bottled wines represent roughly 65 percent of imports, which is the main part of the trade discussed in this report.

United States

In 2008, the United States held a 10.4 percent share of the Japanese bottled wine import market, which would seem like a dramatic decrease from 2007’s share of 14.6 percent if there wasn’t the following explanation. The largest Japanese importer of wine had switched from importing approximately 5.4 million hectoliters of bottled wine to importing the same amount in bulk for bottling in Japan. Thus, the actual U.S. share of bottled wine hasn't changed. The overall value of U.S. wine imports rose during the same period to $69 million, which suggests a movement towards premium California wines, supported by promotional campaigns. Several major California brands, e.g. Carlo Rossi, River Crest, Franzia, Almaden, Beringer and Papio, and are being distributed by major Japanese liquor companies. Wines from other states, especially Washington and Oregon, are growing even more rapidly from a
small base. Inquiries for New York wines have increased in the past year as well. U.S. wines have predominantly targeted the lower end of the market. Although wines costing ¥1000 or less makeup 55 percent of the Japanese wine market, they account for 80 percent of U.S. wine imports. There is a growing movement towards high-range products (¥2,000 and up) for U.S. wines as importers anticipate the impact of the Chile-Japan Free Trade Agreement. U.S. wine in this price range faces particularly tough competition from French and Italian wines.

The "California Wine by the Glass" campaign, in which over 400 restaurants serve California wines, along with other U.S. promotional efforts, continue to build awareness of more premium products and help to encourage consumers to move upscale in their wine selections. Washington wine, in particular, made significant progress for placement in Tokyo area hotel and restaurant wine lists.

France

For many Japanese wine drinkers, France is synonymous with wine. It offers a broad range of products and is strong in all price segments. Though France currently has about 40 percent of the bottled wine market, overall market share is declining as competition increases and emerging markets attract some attention away from Japan. One of the wine categories that have been steadily growing is Beaujolais Nouveau. The wine’s annual November release has grown to be a highly anticipated event. Champagne sales increased in 2007 and 2008. Yet sparkling wines from other countries are growing at much faster rates.

Italy

Exports from Italy have remained roughly the same since 2006, yet their value increased by about 10 percent, again showing the trend towards more expensive products. Italian wines have been squeezed by price competition at the lower and midrange areas of the market. Stricter enforcement of alcohol and driving laws also had a relatively stronger impact on Italian wine, which depends heavily on restaurant sales.

Chile

Chile, one of the most successful New World producers, emerged in Japan around 1998 as a maker of reasonably priced, good quality wine. Excess inventories in subsequent years led to steep price discounts and a "cheapening" of the country's brand image. However, after the March 2007 Free Trade Agreement between Chile and Japan was signed, Chilean imports have significantly increased, even though the agreement won't go into effect for 6 years.

Chile is now the 3rd largest importer in terms of volume, and the 4th largest in terms of value. They are becoming increasingly competitive with the United States, and without an FTA,competing in the lower price range will become extremely difficult.

Germany

German wine exports to Japan, which are predominantly white wines, continue to fall since the red wine boom in 1998. German wines declined only slightly in 2008 to 35,000 hectoliters compared with 36,000 hectoliters in 2007.

Australia

While globally Australian wine exports suffered, in Japan, there was very little change in both value and volume from 2007 to 2008.

 Argentina and South Africa

Both Argentina and South Africa have experienced tremendous growth in the last year, in particular Argentina grew by 59 percent in both volume and value. Yet these markets seem to have limited production capacities to export.