During Japanese colonial rule, Taiwan had implemented liquor monopoly policy since July in 1922. The official authority owned the exclusive and absolute right of sale over the production and distribution of liquor for the purpose of increasing fiscal revenue and ensuring national health care. However, the amount of self-produced liquor by the monopoly bureau was insufficient to meet the needs in Taiwan. About 30 percent of liquor relied on the import from abroad and Sake was the most, accounting for nearly 20 percent of the profit from liquor monopoly. The Sake intermediators who purchased liquor from the authority and provided it to the businessmen were operating liquor wholesale business at the same time. Those intermediators were in turn the largest collaborators and beneficiaries under liquor monopoly policy at that time. Thus, this study analyzes the business of Sake intermediators in Taiwan to profoundly understand the operation of liquor monopoly during Japanese colonial rule as well as have a comprehensive grasp of the situation that Japanese in Taiwan operated their capital.
To completely sell Taiwan-produced liquor, the monopoly bureau kept on improving the quality of liquor in the hope of the decrease in liquor purchase overseas and the export of self-produced liquor outside of Taiwan. Finally, the monopoly bureau successfully exported Taiwan-produced liquor to Japan. The purpose was to replace the liquor from China with Taiwan-produced liquor so that the production and marketing of Taiwan-produced liquor could be combined with the imperial forces developed by Japan, especially Southern China and Southeast Asian that were the main expansion areas with the implementation of South Forward Policy. Nevertheless, the connection among the areas was severed followed by the defeat of Japan.
After World War II, Taiwan provincial administrative executive office continued monopoly policy from Japanese colonial rule on the excuse of prohibitive taxation on liquor business and the development of revenue; in this way, the production and marketing of Taiwan liquor was under more comprehensive control by the office. With the personnel scandal and reconnaissance failure by the monopoly bureau, however, Taiwan provincial administrative executive office was reorganized as Taiwan Provincial Government after the outbreak of the 228 incident. Then the monopoly bureau, which became the target of public criticism, remained the business of tobacco and liquor and was reorganized as Tobacco and Liquor Monopoly Bureau.
Since the Nationalist Government have retreated to Taiwan at the end of 1949, the trade to Mainland China was almost cut off. Liquor market in Taiwan was entirely monopolized by Tobacco and Liquor Monopoly Bureau at that time compared with the period of Japanese colonial rule and the early postwar. While the region governed by Taiwan central government and Taiwan provincial government was nearly the same, Tobacco and Liquor Monopoly Bureau only remained as a three-level provincial administration. The production and marketing of liquor was largely affected by the higher-level authority especially when there was financial demand, monopoly bureau had to raise up the price of liquor to meet the demand from the higher-level authority.
Moreover, the postwar period was shrouded in the atmosphere of martial law and anti-communism, so tobacco and liquor were regarded as luxuries and forbidden as the imported commodities by Taiwan central government so as to protect the liquor of monopoly bureau. Meanwhile, the export for commodities was deeply influenced by anti-communism and the government was to consolidate overseas Chinese in different areas in which the number of Chinese in Japan were the most, so it was hoped that the monopoly bureau could export Shaoxing wine to Japan on the request of the Japanese ambassador to Taiwan. In the light of this, it was proposed to trade Shaoxing wine with Yomeishu during Sino-Japan negotiation in 1954. But the negotiation came to a deadlock since both parties refused to make progress on the trade. It was not until 1958 that the relationship between Taiwan and Japan turned into a rapport with each other. Japan was the first to make a compromise, hence the barter trade of liquor was realized in 1958. Later, Japanese agents were assigned to sell liquor of monopoly bureau along with the end of barter trade; however, it could be seen that monopoly bureau was stuck in a dilemma with a great pressure from the higher-level authority, overseas Chinese, and political infighting during the designation of the agents.
Until 1986, liquor could be imported from the outside due to Sino-US agreement on tobacco and alcohol. Tobacco and Liquor Monopoly Bureau no longer monopolized the entire liquor market in Taiwan, and the business of both tobacco and liquor was returned to the tax system followed by the end of outdated liquor monopoly policy in 2002.