Eu Market Survey Pre Frui

Preserved fruit and vegetables

EU MARKET SURVEY 2005

1

EU MARKET SURVEY 2005

PRESERVED FRUIT & VEGETABLES

Compiled for CBI by: Ceres Company

in collaboration with

Ir. A.F. Eshuis

August 2005

DISCLAIMER CBI MARKET INFORMATION TOOLS Although the content of its market information tools has been compiled with the greatest care, the Centre for the Promotion of Imports from developing countries (CBI) is not able to guarantee that the information provided is accurate and/or exhaustive, and cannot be held liable for claims pertaining to use of the information. In the case of the market publications, neither CBI nor the authors of the publications accept responsibility for the use which might be made of the information. Furthermore, the information shall not be construed as legal advice. Original documents should, therefore, always be consulted where appropriate. The information does not release the reader from the responsibility of complying with any relevant legislation, regulations, jurisdiction or changes/updates of same. In the case of the Internet tools, CBI aims at minimising disruption caused by technical errors. However, CBI cannot guarantee that its service will not be interrupted or otherwise affected by technical problems. CBI accepts no responsibility with regard to problems incurred as a result of using this site or any linked external sites. The information provided is aimed at assisting the CBI target group, i.e. exporters and business support organisations (BSOs) in developing countries. It may, therefore, not be used for re-sale, the provision of consultancy services, redistribution or the building of databases, on a commercial basis. For utilization of the CBI market information tools by the CBI target group on a non-commercial basis, the condition applies that CBI is referred to as the source of the information. All other use is prohibited, unless explicitly approved in writing by CBI. Photo courtesy: Joost van Velsen for Ceres Company

2

TABLE OF CONTENTS

REPORT SUMMARY 4 INTRODUCTION 7 PART A: EU MARKET INFORMATION AND EU MARKET ACCESS REQUIREMENTS

1 PRODUCT CHARACTERISTICS 10 1.1 Product groups 10 1.2 Customs/Statistical product classification 12 2 INTRODUCTION TO THE EU MARKET 13 3 INDUSTRIAL DEMAND 16 3.1 Overview of EU food market 16 3.2 Market segmentation 21 3.3 Patterns and trends in industrial demand 22 4 PRODUCTION 27 5 IMPORTS 32 5.1 Total EU imports 32 5.2 Imports by product groups 43 5.3 The role of developing countries 55 6 EXPORTS 58 7 TRADE STRUCTURE 63 7.1 EU trade channels 63 7.2 Distribution channels for developing country exporters 67 8 PRICES 68 8.1 Price developments 68 8.2 Sources of price information 68 9 EU MARKET ACCESS REQUIREMENTS 69 9.1 Non-tariff trade barriers 69 9.2 Tariffs and quotas 81 PART B: EXPORT MARKETING GUIDELINES: ANALYSIS AND STRATEGY

10 EXTERNAL ANALYSIS: MARKET AUDIT 87 10.1 Market developments and opportunities 88 10.2 Competitive analysis 88 10.3 Sales channel assessment 89 10.4 Logistics 90 10.5 Value chain / price structure 91 10.6 Product profiles 93 11 INTERNAL ANALYSIS: COMPANY AUDIT 97 11.1 Product standards, quality, USP and production capacity 97 11.2 Logistics 98 11.3 Marketing and sales 98 11.4 Financing 99 11.5 Capabilities 100

3

12 DECISION MAKING 101 12.1 SWOT and situation analysis 101 12.2 Strategic options & objectives 101 13 EXPORT MARKETING 103 13.1 Matching products and the product range 103 13.2 Building up a relationship with a suitable trade partner 103 13.3 Drawing up an offer 106 13.4 Handling the contract 107 13.5 Sales promotion 108 APPENDICES 100 1 DETAILED HS CODES 100 2 DETAILED IMPORT/EXPORT STATISTICS 114 3 USEFUL ADDRESSES 121 3.1 Standards organizations 122 3.2 Sources of price information 122 3.3 Trade associations 122 3.4 Trade fair organizers 124 3.5 Trade press 125 3.6 Other useful addresses 126 4 LIST OF DEVELOPING COUNTRIES 128 5 USEFUL INTERNET SITES 129

Update of EU Market Survey Preserved Fruit and Vegetables (July 2004)

4

REPORT SUMMARY This survey profiles the EU market for selected preserved fruit and vegetables, both as an ingredient for industrial use and as consumer products. The emphasis of the survey lies on preserved fruit and vegetables for industrial use, as this segment offers the best market opportunities for suppliers in developing countries. The following EU markets are highlighted: Germany, France, United Kingdom, Belgium, The Netherlands, Italy and Spain. Further, the new EU countries Poland, Czech Republic and Hungary are highlighted. These countries are major importers of preserved fruit and vegetables. The product groups discussed in this survey are used as industrial or consumer products, or both. An indication of the main application is given for each group: Fruit juices/concentrates Industrial Canned vegetables Consumer Canned fruit Consumer Frozen vegetables Industrial Frozen fruit Industrial Dried fruit Consumer and industrial Dried vegetables Industrial Provisionally preserved fruit and vegetables Industrial Market demand It is difficult to give figures on the industrial demand for preserved fruit and vegetables. The larger part of preserved fruit and vegetables is imported as ingredients for the food processing industry. After import, these ingredients are processed to become consumer products (fruit juice) or used as an ingredient to prepare consumer products (dried vegetables). The main industrial end-users are the beverage industry (fruit juice/concentrate), jam industry (frozen fruit), ready-meals industry (dried/frozen vegetables), soup industry (dried vegetables), breakfast cereal and bakery industry and packers (dried fruit). Trends which have an impact on the demand for food products and, consequently, on the demand for preserved fruit and vegetables include: increasing preference for safe and healthy food, increased fruit and vegetable consumption (they contain vitamins and natural antioxidants), increasing interest in organic products, more convenience meals (ready meals), interest in exotic and ethnic food and ‘grazing’ (i.e. eating more snacks in between the usual meals). Another trend is that the relationship between ingredients suppliers and industrial users has changed: the industrial user buys not only additives and ingredients from the supplier, but also his expertise and experience. Another change is that ingredients stocks held by manufacturers are increasingly minimised and, as a consequence, just-in-time delivery has become an important aspect in the European food market.

5

Production EU countries are large suppliers of fruit and vegetables, which grow in temperate zones. One part is supplied as fresh products directly to consumers, while the other part is supplied as ingredient to the food processing industry. Italy (orange and apple juice concentrate), Spain (orange juice concentrate) and Germany (apple juice concentrate) are the only countries in the EU that supply considerable amounts of fruit juice concentrate. Italian and Spanish orange juice concentrate is shipped solely to the soft drink industry, as these products are not suitable (different production process) to reconstitute into fruit juice. EU production of frozen vegetables is estimated at 2 million tonnes, of which around one quarter is supplied by Belgium. The only two countries in the EU supplying notable volumes of dried fruit are Greece (currants) and France (prunes). Dried vegetables are mainly produced outside the EU. Poland and Hungary are becoming major suppliers to the EU market; especially for apple juice (Poland and Hungary), frozen sweet corn, frozen fruit and vegetables (Poland). In 2003, Poland was the eight largest supplier and Hungary the fifteenth supplier of selected preserved fruit and vegetables to the EU market. Imports In 2003, 17 million tonnes of selected preserved fruit and vegetables were imported into the EU-25, representing a value of € 13.9 billion of which 25 percent came from developing countries. Germany is the major import market for preserved fruit and vegetables, accounting for 23 percent of total imports by EU member countries (in terms of value) in 2003, followed by France (14%), the United Kingdom (14%) and The Netherlands (11%). The new EU countries imported € 607 million of selected preserved fruit and vegetables during 2003 representing 713 thousand tonnes. 32 percent in value was imported from developing countries and 33 percent in volume. Poland was the largest importer of the new EU countries, in terms of value (31%), followed by Czech Republic (20%) and Hungary (13%). It is important to mention that preserved fruit and vegetables are often imported as a raw material from countries outside the EU, processed and packed in EU countries and re-exported to other EU countries. Therefore extreme care should be given in interpretation of the figures used in this survey. Fruit juices and concentrates were the leading imported product category, accounting for 32 percent of imports (in value) by EU-25 member countries. Other important categories were, in descending order, canned vegetables (26%), frozen vegetables (12%) and canned fruit (10%). Less important categories were frozen fruit (8%), dried fruit (6%), dried vegetables (3%) and provisionally preserved fruit & vegetables (2%). Between 2001 and 2003, the values of all imported products increased by 9 percent and the import volume increased by 14 percent. This implies that in most product groups, due to large supplies, import prices were under pressure. The share of developing countries in imports by EU-25 member countries of selected preserved fruit and vegetables amounted to 25 percent in 2003. Leading developing country suppliers are Brazil (fruit juice/concentrate), Turkey (canned vegetables, dried fruit and vegetables), China (frozen vegetables, dried vegetables, canned vegetables, provisionally preserved fruit & vegetables) and Thailand (fruit juice/concentrate and canned fruit).

6

Exports In 2003, the EU exported 13 million tonnes of selected preserved fruit and vegetables, representing a value of € 11.9 billion. The leading exported product group were canned vegetables, accounting for 36 percent, of total exports in terms of value in 2003, followed by fruit juice/concentrate (29%), frozen vegetables (14%), canned fruit (9%) and frozen fruit (6%). Intra-EU exports accounted for 80 percent of total exports of selected preserved fruit and vegetables. Leading export destinations were Germany (22% in value), France (14% in value) and the United Kingdom (12% in value). A large part of intra-EU exports consists of re-exports to other EU destinations. Export destinations outside the EU were USA (4% in value), Russia (2% in value) and Switzerland (1% in value). Opportunities for exporters Market opportunities in the EU for developing country exporters lie in the production of tropical and subtropical products (exotics), which are hardly or not at all grown in the EU, and in the production of organically grown products. Moreover, a general trend in the food ingredients sector is that importers and food processors in the EU require increasing documentation in order to guarantee food safety. This means that a product should be accompanied by complete product specifications according to EU and customer requirements, a tracking and tracing administration, instructions on how to store and to process, information on quality assurance (e.g. HACCP) or even ISO certification. An exporter capable of meeting these requirements will have an improved competitive position in the EU market for preserved fruit and vegetables. Another positive argument in the export business is that the raw materials, used by processors and/or exporters of preserved fruit and vegetables, are produced according to the standards on Good Agricultural Practice. For information on current CBI Programmes and training & seminars, and for downloading market information and CBI News Bulletins, please refer to http://www.cbi.nl

7

INTRODUCTION This CBI survey consists of two parts: EU Market Information and EU Market Access Requirements (Part A), and Export Marketing Guidelines (Part B).

Market Survey

Part A EU Market Information and Market Access Requirements

EU Market Information

(Chapters 1-8)

Product characteristics Introduction to the EU market Consumption and production

Imports and exports Trade structure

Prices

EU Market Access Requirements (Chapter 9)

- Non-tariff trade barriers:

Product legislation Market requirements:

Occupational health and safety Environmentally sound production Packaging, marking and labelling

- Tariffs and quotas

Part B Export Marketing Guidelines: Analysis and Strategy

External Analysis (market audit)

(Chapter 10)

Opportunities & Threats

Internal Analysis (company audit) (Chapter 11)

Strengths & Weaknesses

Decision Making (Chapter 12)

SWOT and situation analysis: Target markets and segments

Positioning and improving competitiveness Suitable trade channels and business partners

Critical conditions and success factors (others than those mentioned)

Strategic options & objectives

Export Marketing (Chapter 13)

Matching products and product range

Building up a trade relationship Drawing up an offer

Handling the contract Sales promotion

8

Chapters 1 to 8 of Part A profile the market for selected preserved fruit and vegetables. The emphasis of the survey lies on those products, which are of importance to developing country suppliers. The major national markets within the EU for those products are highlighted. Furthermore, statistical market information on industrial demand, production and trade, and information on trade structure and opportunities for exporters is provided. Chapter 9 subsequently describes the requirements, which have to be fulfilled in order to gain market access for the product sector concerned. It is furthermore of vital importance that exporters comply with the requirements of the EU market in terms of product quality, packaging, labelling and social, health & safety and environmental standards. After having read Part A, it is important for an exporter to analyse target markets, sales channels and potential customers in order to formulate export marketing and product strategies. Part B therefore aims to assist (potential) exporters in developing countries in their export-decision making process. After having assessed the external (Chapter 10) and internal environment (Chapter 11), the (potential) exporter should be able to determine whether there are interesting export markets for his company. In fact, by matching external opportunities and internal capabilities, the exporter should be able to identify suitable target countries, market segments and target product(s) within these countries, as well as possible trade channels to export the selected products (Chapter 12). Chapter 13 subsequently describes marketing tools, which can be of assistance in successfully achieving the identified export objectives. The survey is interesting for both starting exporters as well as exporters already engaged in exporting (to the EU market). Part B is especially interesting for more experienced exporters starting to export to the EU and exporters looking for new EU markets, sales channels or customers. Starting exporters are advised to read this publication together with the CBI’s Export Planner, a guide that shows systematically how to set up export activities and the interactive tool on the CBI website ‘Export marketing plan’.

9

PART A

EU MARKET INFORMATION AND EU MARKET ACCESS REQUIREMENTS

10

1 PRODUCT CHARACTERISTICS 1.1 Product groups This market survey deals with selected preserved fruit and vegetables for both industrial use and for the consumer and food service market. Preserved fruit and vegetables consist of a range of product groups, which can be subdivided in an extensive range of individual products. In this survey, a selection has been made of product groups and individual products that are important for EU markets and that offer opportunities for exporters in developing countries, further to be referred to as ‘selected preserved fruit and vegetables’. The best opportunities for exporters in developing countries lie in supplying preserved fruit and vegetable products in the form of ingredients to the food processing industry in EU countries, or in acting as subcontractors by supplying consumer and food service products, like canned fruit and vegetables, to food processing companies or multiple retail chains under their label. The Eurostat statistics used in this survey do not make a distinction according to application. This means that the figures include preserved fruit and vegetables as ingredients for the food processing industry as well as for consumer and food service packing. The market survey distinguishes the following product groups: Fruit juices and concentrates In the country of origin, water is evaporated from fruit juice, in order to maintain quality, to prolong shelf life, and diminish the transport and storage costs. The residue is fruit juice concentrate. In the country of destination, the juice is restored to its original properties by adding water up to the original juice strength. According to EU Directive 2001/112/EC, fruit juice consists of juice without the addition of water. The fruit juice industry in particular uses (frozen) fruit juice concentrate. The directive also states that fruit nectar consists partly of fruit juice and partly of added water and sugar. The minimum share of fruit juice in the nectar depends on the kind of fruit and varies between 25 percent and 50 percent. The directive has been incorporated in the legislation of all European countries. The best-known and most-consumed fruit juice is orange juice. Apple, pineapple and grapefruit are other fruit species, which form the basis for popular fruit juices.

Besides the beverage industry (juices and soft drinks), the dairy industry also accounts for considerable volumes of fruit juices and concentrates.

According to European fruit juice legislation, drinks made from fruit juice can be divided into three segments: • Pure juice: 100 percent fruit with the same strength and consistency as fresh squeezed

juice and no preservatives added • Nectars: Base of concentrated juice or a pasteurised purée of fruit pulp to with sugar

and water are added. Citrus fruit nectars usually have more than 50 percent fruit juice content

11

• Juice drinks: Fruit juice ranging from 6 to approx 50 percent with sugar and water added and often with added flavour and/or artificial sweeteners. Fruit

juice drinks with low or no sugar content, sweetened with artificial sweeteners, form a growing sector in this market (lower costs, lower calorie content)

Although the majority of imports by EU member countries consist of fruit juice concentrates, trade figures cannot be split up between fruit juice and fruit juice concentrate. Therefore, in the remaining part of the survey, this product group will be referred to as fruit juice/concentrate. Canned fruit and vegetables To ensure sufficient storage life for fruit and vegetable preserves, micro-organisms (yeast, moulds and bacteria) have to be inactivated. In fruit products, due to their natural acidity, only yeast and moulds will develop. Simple pasteurisation (heating to approx. 90º C) is sufficient for preservation of fruit products. In vegetables, where there is a lack of natural acidity, bacteria (including dangerous pathogenic bacteria) can also develop. To inactivate bacteria, sterilisation (heating to at least 121º C) is required. Please note that in trade statistics for canned vegetables (vegetables preserves sterilised in a closed recipient) vegetables preserved in glass jars are also usually included. Vegetable products can also be preserved as 'pickles', through acidification, creating non-favourable conditions for the growth of bacteria by means of the addition of vinegar or acetic acid. The most popular pickles are based on gherkins, cocktail onions, carrots, sweet peppers and celery. Canned vegetables mainly consist of tomatoes and of different kinds of beans, peas, carrots, etc. The main canned fruit varieties are pineapples, peaches, apricots and fruit mixes. Other interesting canned fruit species are lychees, mandarins and other citrus fruits Dried fruit and vegetables Fruit and vegetables, consisting of more than 80 percent of water, are dried in order to stop the multiplication of micro-organisms. These organisms obtain the water and nutrients they need for growth from the fruit or vegetable in which they grow. By drying or dehydrating fruit or vegetables, the water is removed from the food and from the bacterial cell, thus ending the multiplication. The dried fruit and vegetables described in this survey are whole, cut, sliced, broken or powdered, but not further prepared. Dried fruit can be divided into vine fruit and tree fruit. The best-known vine fruit species are raisins, sultanas and currants, whereas apples, apricots, bananas, dates, figs, papayas, peaches, pears and prunes are the most important tree fruits. Dried fruit is mainly used as a snack or a constituent for breakfast cereals, muesli, bakery products, dairy products and desserts. Although some vegetables are sun-dried or field-dried, most vegetables are dehydrated industrially. The main dehydrated vegetables are onions, tomatoes, garlic, carrots and olives. The Netherlands Horticulture Commodity Board’s definition of dried vegetables is used in this survey, resulting in the exclusion of dried leguminous vegetables (for example, dried peas and beans). The sauce, soup and ready meal industries are the main users of dried vegetables.

12

Frozen fruit and vegetables Freezing and deep-freezing is based on the same idea: turning water into ice so that bacteria cannot live and reproduce on the raw food product. The two processes are different. Freezing achieves low temperatures slowly, resulting in relatively large ice crystals, which damage the food cells. When defrosted, a part of the proteins, sugars and vitamins is removed by leaching. In the case of deep-freezing, low temperatures are quickly achieved, resulting in smaller ice crystals and consequently causing less damage to the food cells. Fruit and vegetables can be blanched before freezing (to inactivate enzymes that might remain active even at very low temperatures, and affect the structure and colour of the product). The freezing of fruit and vegetables is increasing in popularity. Generally, the quality of the frozen product is nearly the same as the original fruit. Of course higher transport and storage costs have to be taken into account. Frozen vegetables are mainly processed for ready meals, vegetable preserves and salads. Frozen fruit is processed into jam, bakery products and dairy products. Provisionally preserved fruit and vegetables In the case of fruit, this method of preservation (packing in wooden casks or plastic drums, in a sulphite solution as a preserving agent) is outdated and has for a large part been replaced by freezing. Fruit preserved in this manner generally contains substantial amounts of sulphite. As EU regulations are strict with respect to sulphite content, imports by EU member countries of provisionally preserved fruit are small. Provisional preservation of fruit still takes place in some East European countries (mainly Bulgaria). The quality of this type of fruit is low, but so is the price. Provisionally preserved fruit is mainly used as an ingredient in the jam industry.

Vegetables such as gherkins and mushrooms can be temporarily preserved in the country of origin, but in this state they are unsuitable for immediate consumption. Temporarily preserved vegetables are packed in drums (200 litres). The products are then washed, cleaned and repacked in smaller volumes in the country of destination. 1.2 Customs/statistical product specification On January 1, 1988 a unified coding system was introduced to harmonise the trading classification systems used worldwide and to allow for improved international comparability of foreign trade statistics. This system, the Harmonised System (HS), is based on a ten-digit product classification. The World Customs Organisation (WCO) is introducing alterations to the HS and these were included in the combined nomenclature (CN) as of January 1, 2002. Section II, Chapters 7 and 8 and Section IV, Chapter 20 of the Harmonised System, cover preserved fruit and vegetables products discussed in this survey. Not all product groups covered by these chapters deal with preserved fruit and vegetables. Product groups covering fresh fruit and vegetables are not included in this survey. Appendix 1 provides a detailed list of HS codes (and corresponding product names) of the product groups covered by this survey. HS codes/product groups printed in bold are specifically discussed in this survey.

13

2 INTRODUCTION TO THE EU MARKET The European Union (EU) is the current name for the former European Community. Since 1 January 1995, the EU has consisted of 15 member states. Ten new countries joined the European Union in May 2004. They are Poland, Hungary, Czech Republic, Slovakia, Lithuania, Latvia, Estonia, Slovenia, Malta and Cyprus. Negotiations are in progress with a number of other candidate member states. In this survey, the EU will be referred to as the EU-25, unless otherwise stated. Table 2.1: Population and GDP of selected and new EU countries, 2003 Countries Population

million Age 15 – 64

% GDP (€)

estimation 2003 Selected EU Countries Germany France UK Belgium The Netherlands Italy Spain New EU countries Poland Estonia Czech Republic Hungary Slovakia Lithuania Latvia Slovenia Cyprus Malta

82.4 60.4 60.3 12.0 16.3 58.1 40.3

38.6 1.3 10.2 10.0 5.4 3.6 2.3 2.0 0.8 0.4

67.0 65.1 66.3 66.0 67.8 66.9 68.0

70.0 67.5 70.9 69.0 70.8 68.4 69.2 70.6 67.4 68.5

24,407 24,318 24,495 25,000 25,291 23,699 19,455

9,727 10,877 13,884 12,292 11,761 9,904 8,931

16,183 14,149 6,263

Currencies Exchange (2003)

€, UK ₤, DKr, SKr € 1 = US$ 1.13

Source: The World Factbook 2003 Within Western Europe – covering 15 EU member countries, Iceland, Liechtenstein, Norway and Switzerland – more than 20 million enterprises are active. Small and medium-sized enterprises (SMEs) accounted for the lion’s share. In 2000, the average turnover per enterprise of SMEs and large enterprises amounted to € 600,000 and € 255 million respectively.

14

EU Harmonisation The most important aspect of the process of unification (of former EC countries), which affects trade, is the harmonisation of rules in the EU countries. As the unification allows free movement of capital, goods, services and people, the internal borders have been removed. Goods produced or imported into one member state can generally be moved around between the other member states without restrictions. A precondition for this free movement is uniformity in the rules and regulations concerning locally produced or imported products. Although the European Union is already a fact, not all the regulations have yet been harmonised. Work is in process in the fields of environmental pollution, health, safety, quality and education. For more information about harmonisation of the regulations visit AccessGuide, CBI’s database on European non-tariff trade barriers at http://www.cbi.nl/accessguide Monetary unit: Euro On 1 January 1999, the euro (€) became the legal currency within twelve EU member states: Austria, Belgium, Finland, France, Germany, Greece, Italy, Ireland, Luxembourg, The Netherlands, Spain and Portugal. In 2002 circulation of euro coins and banknotes replaced national currency in these countries. Denmark, United Kingdom and Sweden have decided not to participate in the Euro. The most recent Eurostat trade statistics quoted in this survey are from the year 2003. In this market survey, the € is the basic currency unit used to indicate value. Trade figures quoted in this survey must be interpreted and used with extreme caution. The collection of data regarding trade flows has become more difficult since the establishment of the single market on 1 January 1993. Until that date, trade was registered by means of compulsory customs procedures at border crossings, but since the removal of the intra-EU borders, this is no longer the case. Statistical bodies like Eurostat cannot depend on the automatic generation of trade figures. In the case of intra-EU trade, statistical reporting is only compulsory for exporting and importing firms whose trade exceeds a certain annual value. The threshold varies considerably from country to country, but it is typically about € 100,000. As a consequence, although figures for trade between the EU and the rest of the world are accurately represented, trade within the EU is generally underestimated. Furthermore, the information used in this market survey is obtained from a variety of different sources. Therefore, extreme care must be taken in the qualitative use and interpretation of quantitative data, both in the summary and throughout the text, as also in comparison between different EU countries with regard to market approach, distribution structure, etc. For more information on the EU market, please refer to the CBI’s manual ‘Exporting to the European Union’.

15

Table 2.2 Exchange rates of EU currencies in US$, 2002-2005 Country Currency 2002 2003 2004 April 2005 EU Denmark Sweden UK Poland Estonia Czech Republic Hungary Slovakia Lithuania Latvia Slovenia Cyprus Malta

€

Dkr Skr GB₤ PLN EEK CZK HUF SKK LTL LVL SIT CYP MTL

0.946 0.13 0.10 1.50 0.245 0.06 0.031 0.004 0.022 0.732 1.639 0.004 1.639 2.326

1.125 0.15 0.12 1.63 0.257 0.072 0.036 0.004 0.027 0.328 1.754 0.005 1.923 2.632

1.24 0.167 0.136 1.833 0.275 0.079 0.039 0.005 0.031 0.360 1.887 0.005 2.128 2.941

1.32 0.178 0.145 1.907 0.329 0.084 0.044 0.005 0.035 0.382 1.896 0.006 2.263 3.058

Source: OECD Selected Countries This survey covers Germany, France, the United Kingdom, Italy, Belgium, Spain and The Netherlands. These countries are the largest importers of selected preserved fruit and vegetables. The first four countries are also the largest consumer markets in the EU, while Belgium and The Netherlands are important processing and transit trade countries for preserved fruit and vegetables. Besides the seven selected countries, attention is paid to the new EU countries Poland, Czech Republic and Hungary. These countries have a sizeable food processing industry and are thus important for exporters in developing countries.

16

3 INDUSTRIAL DEMAND Most of the product groups mentioned in this survey are used as ingredients for food processing. This segment is the most important for exporters in developing countries, as preserved fruit and vegetables for the consumer market require extensive investments in marketing and distribution. Data on industrial demand for preserved fruit and vegetables, however, are rather scarce. As information on consumer products is more readily available, it is the information given in this chapter. Trends in consumer products influence demand in the ingredients sector. 3.1 Overview of the EU food market Canned fruit and vegetables, fruit juice and frozen vegetables in consumer packing are sold as branded products. Next to producers’ brands like Del Monte and Dole (canned fruit), Bonduelle (canned vegetables), Tropicana and Minute Maid (juices), Iglo and Birds Eye Wall’s (frozen vegetables), multiple retail chains like Carrefour, Ahold, Tesco, Sainsbury and Rewe sell these products under their own (private) label. Private label products are usually less expensive than producer’s brands and have established strong market positions, especially in the United Kingdom and France. Dried and frozen fruit, dried vegetables, fruit juice concentrates and provisionally preserved fruit and vegetables are mainly used as ingredients for the food processing industry. The total EU food and drink market is estimated at € 666 billion in 2003, forecast to grow to € 690 billion in 2006. The growth in value is estimated to be only 4 percent, indicating that the food market in the EU-15 countries is stabilizing. There are, however, differences because the food market in Germany is estimated to decline by 4% during this period, while the food markets in France and Italy are estimated to grow by 3% and 7% respectively. The remaining markets show a stabilizing trend. It is further estimated that the food markets in the ten new EU countries will grow, due to increasing spending power. For example, markets like Czech Republic and Slovakia are estimated to grow by 20% and 10% respectively per annum. Table 3.1 Consumer expenditure on food and non-alcoholic beverages in the

EU, € million, 2003 and estimated % change 2003/2006 Country Value % change Germany 139,550 - 4.0 France 124,760 3.1 Italy 110,300 7.4 United Kingdom 96,920 2.7 Spain 64,840 6.3 The Netherlands 24,270 0.2 Greece 17,950 11.5 Belgium 17,420 12.2 Austria 15,940 6.4 Sweden 14,640 7.2 Portugal 14,470 - 2.9 Denmark 10,800 11.0 Finland 8,460 8.4 Ireland 5,600 11.7

17

Poland 26,100 2.3 Hungary 12,280 4.3 Czech Republic 7,330 20.2

Source: Euromonitor, 2003 In the following table, the main food sectors relevant to preserved fruit and vegetables are outlined as follows: Table 3.2 Food sectors relevant to preserved fruit & vegetables in the EU-15

countries, € billion, thousand tonnes, 2003 and estimate 2006 Food sector Value in

2003 Volume in 2003

Estimated value in 2006

% change Estimated volume in 2006

% change

Frozen food - frozen vegetables

20.0 2.0

4,571 566

21.1 2.1

+ 5.5 + 5.0

4,864 597

+ 6.4 + 5.5

Canned food - canned vegetables - canned fruit

14.8 3.0

1.2

6,002 1,770

534

15.3 3.1

1.2

+ 3.4 + 3.3

0

6,149 1,821

530

+ 2.4 + 2.9

- 0.1

Dried food 7.9 3,839 8.2 + 3.8 3,954 + 3.0 Source: Euromonitor 2003 Fruit juice/concentrate After a strong growth during the last decade, overall consumption in the EU-15 tends to stabilize as the following table shows: Table 3.3 Per capita consumption of fruit juices and fruit nectars in the

EU-15, 2001-2003, litres Country 2001 2002 2003 Germany 40.5 40.2 42.0 Austria 35.6 32.0 31.0 Finland 35.0 32.0 31.7 Denmark 22.7 25.3 25.1 The Netherlands 25.5 24.4 24.8 Sweden 23.0 23.7 23.8 Spain 21.0 22.0 24.4 France 21.8 21.7 22.5 United Kingdom 20.5 21.0 22.8 Belgium/Luxembourg 19.9 19.7 20.2 Ireland 15.6 17.1 16.5 Greece 16.3 16.1 15.0 Italy 11.7 11.9 12.9 Portugal 10.8 11.1 11.1 Source: AIJN Price fluctuations, competition from other non-alcoholic drinks and warm/cold weather affect the juice and nectar consumption. Nevertheless, the fruit juice and nectar consumption is characterised by a high per capita consumption in northern European

18

countries (in particular Germany) and a low, but rising, consumption growth in southern European countries. The production of fruit juices is concentrated mainly in Germany, which is not surprising since Germany has the highest per capita consumption of fruit juice and nectar in Europe, accounting for 37 percent of the overall volume. France and the United Kingdom are the only other two countries where fruit juices have a share of over 10 percent of total EU fruit juice sales, followed by Spain in fourth place. Several fruit juice producers are also located in the United Kingdom and these supply substantial amounts of fruit juices. Canned fruit and vegetables The total canned food market in the EU-15 countries was estimated at € 14,8 billion and 6 million tonnes in 2003. The canned vegetable market was estimated at € 2,9 billion and the canned fruit market was € 1,1 billion, accounting for 20 percent and 7 percent respectively of the total canned food market in value in 2003. Canned vegetables There are large differences in consumption and market prospects between the EU countries as the following table shows: Table 3.4 Descending size of per capita consumption of canned vegetables in major EU countries , kilograms, 2002 and estimated consumption

2007 Country 2002 2007 France 10.9 11.4 Belgium 6.0 6.5 Germany 5.8 5.9 Sweden 5.5 5.8 The Netherlands 5.4 5.5 Spain 3.3 4.2 United Kingdom 3.2 2.8 Czech Republic 6.1 7.4 Hungary 4.9 5.8 Poland 1.2 1.4 Source: Euromonitor, 2003 Per capita consumption is the lowest in Ireland with only 0.6 kilograms. The remaining countries have per capita consumptions ranging between 0.7 – 2.2 kilograms. Although the image of canned food is sometimes considered old-fashioned, canned vegetables are more popular among younger consumers. Nevertheless, the packaging in glass jars instead of metal cans is still gaining popularity in the EU, partly because fruit and vegetables in glass are totally visible and stand for a quality product. The canned vegetable sector is very fragmented. Nevertheless, canned green beans, peas with carrots and peas are very popular in almost every single EU member country. HAK and Bonduelle are the leading A brands in The Netherlands, Belgium and in Germany. Bonduelle is a French brand, and is, as such, mainly imported from France. Canned fruit As is the case with canned vegetables, consumption and market prospects for canned fruit show large differences between the EU countries

19

Table 3.5 Descending size of per capita consumption of canned fruit in major EU countries, kilograms, 2002 and estimated consumption 2007

Country 2002 2007 Denmark 4.3 4.2 Sweden 3.3 3.1 Belgium 2.9 3.0 The Netherlands 2.4 2.5 Germany 2.0 1.9 United Kingdom 1.9 1.9 Finland 1.5 1.7 Slovakia 0.7 0.8 Czech Republic 0.5 0.6 Poland 0.4 0.4 Source: Euromonitor, 2003 The EU market for canned fruit is largely dominated by private label brands, followed by producers’ brands, which are led by Del Monte and Dole. Considering the imports of canned fruit, canned pineapples, peaches and mixtures are popular varieties of canned fruit in the EU. The volume in the EU-15 is estimated at 530,000 tonnes. The canned fruit market in the EU-15 is stable to declining, both in value and volume. Table 3.6 Market developments canned fruit in major EU markets, 2004 Country Market value in €

million Private label share Developments

Germany 707 50% Consumption under pressure United Kingdom

317 70% Declining market

France 233 60% Mature market Italy 113 50% Mature market Spain 90 20% Stabilizing market Source: Leatherhead Dried fruit and vegetables The dried food consumer market in the EU-15 countries has a value of € 7.9 billion and a volume of 3.8 million tonnes in 2003. Unfortunately, there are no data about the consumer markets for dried fruit and vegetables as these products are mainly used as ingredients for food processing. Dried fruit Dried fruit is used in consumer or food service packing, mainly consumed as a snack and as an ingredient for breakfast cereals, healthy ready-to-eat snacks and desserts. Bakeries and breakfast cereal mixes are one of the largest end users of dried fruit. The market for bakery products in the EU-15 had a value of € 70.3 billion and a volume of 26.8 million tonnes in 2003. Considering the imports of dried fruit, sultanas are the most popular (mainly for industrial use) dried fruit in the EU, accounting for more than a quarter of the total imports by EU member countries of dried fruit. Sultanas, other raisins, dates, prunes, apricots and figs are the major imported dried fruit species.

20

Table 3.7 Descending size of per capita consumption of dried food in major EU countries, kilograms, 2002 and estimated consumption 2007

Country 2002 2007 Italy 24.7 24.8 Portugal 14.6 15.3 Hungary 13.6 14.4 Czech Republic 13.6 16.3 Sweden 11.4 12.6 Slovakia 11.1 11.7 Denmark 10.8 11.7 Source: Euromonitor, 2003 The lowest consumption is measured in United Kingdom with 4.5 kilograms per capita. Dried vegetables Dried vegetables are mainly used as ingredients by the dried soup industry. It uses most types of dried vegetables, especially potatoes, onions, tomatoes, leek, carrots and peas. A few large multinational companies dominate the soup industry in the EU. These are Unilever (Knorr, Unox), and Nestlé (Maggi). In most markets, the ratio is moving towards higher relative usage by the industrial sector, reflecting the growing popularity of ready-to-eat healthy snacks, muesli, and processed foods using more healthy ingredients like dried fruit. Frozen fruit and vegetables The consumer market for frozen food in the EU-15 countries had a value of € 20 billion and a volume of 4.6 million tons in 2003. Frozen vegetables The consumer market for frozen processed vegetables had a value of € 1.9 billion and a volume of 566 thousand tonnes in 2003, accounting for 9.5 percent and 12 percent respectively of the total consumer market for frozen food. Table 3.8 Descending size of per capita consumption of frozen processed

vegetables in major EU countries, kilograms, 2002 and estimated consumption 2007

Country 2002 2007 Denmark 15.2 15.5 Austria 3.6 3.7 Finland 3.0 3.4 United Kingdom 2.9 2.7 Sweden 2.6 2.9 Germany 1.5 1.9 Belgium 1.5 1.7 Source: Euromonitor, 2003 However, since the main buyer of frozen vegetables is the industry for ready meals and the overall consumption of ready meals has increased, the market for frozen vegetables is expected to grow. Frozen vegetables in consumer packing also grew at the expense of vegetables in canned and glass packing. Market leaders in ready meals in the EU are Nestlé and Unilever. Private labels take an important share of the market for frozen food. The market for frozen ready meals is boosted largely through the increasing sales of ethnic ready meals and through a strong growth in frozen pizzas.

21

However, frozen vegetables are the most frequently used type of frozen product. The market is stable in the leading countries (the United Kingdom and Germany), but in Spain, the frozen food market is among the more dynamic sectors. Frozen fruit Frozen fruit is mainly used by the jam industry for further processing into jam. In 2003, the consumption of jam and preserves in the EU amounted to 505 thousand tonnes, which represented an average per capita consumption of 1.3 kg per year (Euromonitor, 2003). 3.2 Market segmentation The market for preserved fruit and vegetables can be divided into three segments 3.2.1 Ingredients segment The food processing industry is the largest segment for preserved fruit and vegetables. As the trade in these products takes place on a business-to-business basis, there is very little information available on market sizes and trends. In this sector, preserved fruit and vegetables (primarily frozen and dried fruits and vegetables and concentrated juice) are used as ingredients in a wide range of food products. Food processors use these ingredients to produce end products in consumer packing for the retail sector and in catering packing for the food service sector. The major food processors, using preserved fruit and vegetables, operate in the following sectors: • beverage industry. The beverage industry is the largest end-user of fruit juice

concentrate. Fruit juice concentrate is reprocessed, by blenders and mixers, into fruit juice or nectar. The most important fruit juices in the EU are orange juice and apple juice, followed by pineapple juice and grapefruit juice.

• ready-meals industry. The ready-meals industry is a significant end-user of frozen vegetables, preserved mushrooms and dried vegetables (mainly for pizzas and pasta dishes).

• soup industry. The soup industry is the largest end-user of dried vegetables. Preserved mushrooms are also used by this industry. The main products are packet soups (dried) including soup bases, instant soups (dried), canned soups and, to some extent, frozen soups.

• breakfast cereal industry. The breakfast cereal industry uses substantial amounts of dried fruit in its production of cereals, muesli and cereals bars.

• jam industry. The jam industry uses considerable amounts of frozen fruit to produce jam products and marmalade. This industry hardly uses fresh fruit anymore.

• other food sectors, like pet food (dried vegetables), confectionery, baby and infant food. 3.2.2 Consumer segment Preserved fruit and vegetables like canned fruit and vegetables, frozen vegetables, fruit juice and jam are processed and packed in consumer units and sold through retail outlets to consumers. The consumer sector of preserved fruit and vegetables consists mainly of branded products and private labels. Supermarkets in the EU dominate retail sales at the expense of specialised shops, such as greengrocers, bakeries, butcheries and deli shops. The share of private label is increasing, mainly at the expense of B and C brands. 3.2.3 Food service sector The food service sector has been growing during recent years. Out-of-home consumption increased as consumers saw their incomes rising, especially two-person households where both partners are working. Fast food outlets showed an increasing expansion in most EU countries. The food service sector also includes company canteens and institutional outlets like hospitals, prisons, convalescent homes, schools and universities. Meals-on-wheels is a growing segment in food service, catering for an increasing greying population in EU–15 countries.

22

The market for preserved fruit and vegetables for industrial use can also be segmented according to whether the products are grown by organic farming or by conventional farming. This is particularly important since the demand for organic food is growing in several EU member countries and can offer interesting market opportunities for developing countries’ exporters. Organic products still account for a small share of the total food consumption in most of the EU markets, although the differences are quite large. In Denmark and Austria, organic products account for about 10 percent of the total food market, while in countries like Spain and France the share is between 0.5 and 1 percent. Although growth of organic foods reached double digit figures in 2000 and 2001, since 2002 the markets have tended to grow much more slowly (3-4 percent). In some sectors like organic coffee, there is an oversupply, causing prices to drop. Because of its nature, organic production is highly suitable for small and medium-sized farmers working in areas, which may not be suitable for large-scale food production. Dried fruits like apricots, bananas and pineapple are important organic products within the segment preserved fruit and vegetables for industrial use. For more information on organic products, please check CBI’s Market Survey ‘Organic Food Products’. 3.3 Patterns and trends in consumer demand The population in the EU is still growing and will continue to grow until about 20 years from now. It is estimated that, thereafter, the EU will start to show a declining population size. However, already now the composition of the population is changing. It shows a rapidly growing number of elderly people combined with a decreasing number of young people. We also see a family ‘dilution’; family households are getting smaller because people are having fewer children. Moreover, the number of single households in Western Europe is substantial and still increasing, making these people a highly significant consumer group for food suppliers. Prosperity in the EU has increased over recent years, and eating behaviour is related to income and life style. Despite this increase in prosperity, the food market in the EU is highly competitive, since consumers are not going to eat more, but will only, at the very most, switch to other products. The main trends for packaged food in the seven identified countries are the following: 3.3.1 Germany One of the key trends in Germany is towards ready, easy to prepare meals. As the demography of Germany changes increasingly towards single households, the market for single-portion products is increasing. Snacks are a growing segment in Germany, as consumers use this increasingly as a replacement for breakfast and lunch. Due to the recession in Germany and low consumer confidence, discounter retailers are growing to the detriment of more traditional and expensive outlets. 3.3.2 France The French packaged food market grew by only 2% in 2004, mainly due to disappointing results of bakery products and confectionery. Dried ready meals are also expected to decline, being challenged by the success of other types of ready meal. Due to changing eating habits, the French increasingly prefer a cereals breakfast rather than a continental type breakfast. This leads towards an increase in sales for breakfast cereals and sweet biscuits. Concerns about health, in particular obesity, increase the popularity of healthy products like reduced fat products, probiotic yoghurts and alternatives for sugar.

23

3.3.3 United Kingdom Convenience appears to be at the forefront of everybody’s mind, as the United Kingdom continues to go down the road of the 24-hours society. Consumers have less time to spend in the kitchen. Sales of convenience foods, especially chilled ready meals and prepared salads, have continued to grow. Pressure of time has also impacted on snack and confectionery sales, which have continued to grow. Public health has become a major issue, especially obesity. Low calorie products boomed in the wake of a predominant diet culture. 3.3.4 Spain Snack bars, meal replacement products, chilled processed food, ready meals and confectionery saw strong growth in 2004. However, overall growth in packaged food was held back by poorer performances by bakery products and baby food. Awareness of obesity leads to a growth for low calorie and fat-free products. As in many EU countries, the reduction of spare time leads to changing shopping habits. Most shopping is now done at weekends. It is expected that less developed sectors, like snack bars and ready meals, will be the most dynamic product groups for the coming years. 3.3.5 Italy Although convenience is becoming more important to Italian consumers, due to lack of time or energy to dedicate to food preparation, ready meals are still perceived as a makeshift solution. An exception to this, however, is chilled ready meals. This product group is seen as being more authentic than frozen or dried products. Another key factor in the increase in sales of these products is a growing demand for fresh preservative-free products. Sales of frozen pizza are expected to continue to fall, due to the doubts about the quality of the products available. The Italian packaged food market is extremely fragmented. Private label products were the best performers in 2003. 3.3.6 The Netherlands The packaged food market registered a growth of 4 percent during 2004. Consumers became more price sensitive, looking for cheaper distribution channels. The trends and developments that impacted demand for packaged food during this period were: - increased price-consciousness - shift towards out-of-home channels with adopted packaging formats - search for variation - development of well-being concepts in most sectors. The Dutch packaged food market is expected to continue registering healthy growth. The number of products and varieties will continue to grow, focussed on values looked for by consumers such as quality, health and taste variation. Sectors such as frozen foods and ready meals are expected to show the highest growth. 3.3.7 Belgium Belgian consumers traded up to products with more added value during the period under review. This lead to impressive growth in value terms of chilled processed food. Within the famous success triangle of health benefits, taste and convenience, the first-mentioned is emerging as the most influential. Nonetheless, the ongoing success of pizzas and ready meals reflects the continuing importance of convenience and taste. Belgian consumers appreciate frozen food, in line with their increasingly hectic lifestyles. Private labels continue to gain ground over mid-priced brands and even some prestigious A brands.

24

Recent research into consumer behaviour shows that today’s consumer has the following preferences concerning food and nutrition: Safe food Food products should be safe and eating them should not result in any danger or risk to health. A CIAA European Food Safety Survey conducted in 2002 showed that consumers find food safety the 4th largest health concern. For example, producers are encouraged to adopt an approved HACCP (Hazard Analysis and Critical Control Points) system, to show their commitment to the quality and safety requirements of the EU food industry. Please also refer to Chapter 9 of this survey for more information on HACCP. Health food Health food refers to food products, which are low in fat and have limited sugar and salt content; this includes functional foods, which have specific health promoting properties and food products with added vitamins and minerals or bacteria, which support the intestinal function. Organic food Since European consumers have recently experienced several food scares, many people are concerned about the safety of food and the effects of intensive farming on the countryside as well as on the environment in general. These factors, combined with the increasing awareness of the importance of diet and nutrition, have intensified interest in organic foods, which are grown according to principles laid down in Regulation (EC) 2092/91, in short: without artificial fertilizers and pesticide. For more information on organic food, please refer to the separate CBI EU Market Survey “Organic Food Products.” Fruit and vegetables There is a growing interest in the consumption of fruit and vegetables in the EU food market. This is caused by the fact that fruit and vegetables contain vitamins and natural antioxidants, which are supposed to have properties, which help to prevent heart diseases and cancer. According to health authorities and scientists the consumption of fruit and vegetables is still too low in most EU countries. Environment-consciousness Food production, especially primary growing, should be environment-friendly (organic, see above). Waste, including packaging waste, should be avoided or at least reduced. In the scope of the increasing environment-consciousness in the EU, a group of leading European food retailers launched the EurepGap Protocol in 1999. The objective of EurepGap (Euro-Retailer Produce Working Group for Good Agricultural Practice) is to raise standards for the production of fresh fruit and vegetables by promoting food safety, sustainable use of natural resources and more environment-friendly production. For more information on the Eurep Group and EurepGap Protocol, please refer to http://www.eurep.org Convenience European people (including women) are working more and more in jobs outside their home and have busy social lives. Moreover, the number of single households increases. As a result, less time is left for the preparation of a full meal. Therefore, West European consumers have a growing need for convenience meals, spurring the demand for peeled potatoes, canned soup, preserved vegetables, prefried fries, fish sticks, pizza, frozen pastry, ready meals (frozen, chilled or shelf-stable). The catering sector now also uses semi-processed fruit and vegetables.

25

Market developments are closely linked to innovation and many new products have entered the market in recent years. Sales of meals packed in bags, the contents of which can be split up into individual portions, have increased considerably as a result of Individually Quick Frozen technology (IQF). This technology prevents the product from freezing into one large block, so it is easier to separate. Advertising for frozen food is increasing in most of the selected European markets. 'Grazing' The modern consumer does not confine himself to the traditional three meals a day (breakfast, lunch and dinner), but is eating smaller bites at more frequent intervals: ready-to-eat products or products requiring very little ultimate preparation: take-out foods, hamburgers, mini-pizzas, instant soups, filled croissants, candy bars, muesli bars, cheese sticks and fruit yoghurts. Tracking and tracing As a result of several food scares (BSE, dioxine) consumers increasingly pose questions on the production process and demand open, honest, and informative labelling. This has resulted in a discussion in the fruit and vegetable processing industry about “tracking and tracing”, which is now required by the EU General Food Law (Directive (EC) 178/2002). For more information on this Directive, please see chapter 9.1 of this survey. With the help of good chain management and control within the chain, end-product processors are able to supervise all kinds of aspects of fresh fruit and vegetables and products derived from them, such as plant material, growth, harvest, storage, distribution and processing. The fruit and vegetable processing industry is increasingly paying attention to chain management and labelling systems, through which products can be traced back to the producer. Tracking and tracing is becoming even more important in production (i.e. growing and processing) of organic products, where fully documented tractability is required from the raw material to the final product, to ensure the organic character of the product. Internationalisation As the world is increasingly turning into a global village, culinary traditions from other continents tend to be more widely accepted by European consumers, increasing the demand for ethnic and exotic ingredients. This development is also stimulated by the steady population growth of ethnic minority groups, which have significantly increased their purchasing power over recent years. Many products containing exotic fruits (like fruit juice drinks, jams, ice cream) are manufactured by European food industries from ingredients that are imported as semi-manufactured products (fruit juice concentrate). The food processing industry responds to the demands of consumers for safe, healthy and tasteful food by tightening their requirements and by placing increasing responsibility for the quality of the food in the hands of their suppliers (importers/exporters). Unilever announced recently that it is going to require that suppliers of agricultural raw materials grow their products according to the principles of sustainable agriculture. Moreover, for exporters of preserved fruit and vegetables, one trend in the food industry is very important. Over the years, the relationship between the ingredients supplier and the food manufacturer has been changing. In the past, the food manufacturer simply ordered ingredients and additives from his suppliers, carrying out his own programmes of evaluation and formulation to manufacture his end products. This scene has changed in so far that the

26

food manufacturer is increasingly calling on and depending on the ingredients suppliers to carry out this development on his behalf. The food manufacturer not only buys additives and ingredients, but also expertise and experience. The influence of those ingredients suppliers who can offer experience will increase. For starting exporters, it is recommendable to contact traders and the food ingredients industry in Europe (already maintaining their relation to the food industry) rather than going directly to the food manufacturers. A further change has been the minimisation of ingredient stocks held by manufacturers, thus requiring short-term call-off from their suppliers. Just-in-time delivery is becoming increasingly important in the European food market. Opportunities for exporters from developing countries Due to the characteristics of the preserved fruit and vegetable sector, the opportunities for exporters in developing countries lie in the following positions in the supply chain:

• Suppliers of preserved fruit and vegetables ingredients to the food processing industry in the EU countries

• Suppliers of preserved fruit and vegetables in bulk to packers in the EU, who pack in consumer and food service units

• Subcontractors for the food processing industry and retail organisations. These subcontractors process fruit and vegetables and pack them in consumer and food service units according to strict specifications and under their customers’ labels in the EU. For example, beans and peas are harvested in African countries, sorted and washed immediately after harvest, processed and packed in consumer packing under the label of a UK retailer, then shipped to the distribution centre of the retailer in the United Kingdom and from there directly to the retail outlets.

Based on the trends as mentioned under 3.3, increasing demand for convenience products spurs demand for ingredients used in ready-to-eat meals. Internationalisation of taste increases demand for exotic ingredients. Coupled to the need for safe and traceable food ingredients, this provides exporters in developing countries with opportunities to catch on to these trends.

27

4 PRODUCTION Preserved fruit and vegetables are part of the EU food and drink industry. In 2003 the total production value of the food and drink industry was over € 600 billion. 26,000 companies are active in this sector employing 2.6 million employees. The top EU food processors, ranked on turnover in 2003 and relevant to the preserved fruit and vegetable sector, were: Company Country Turnover

in € billion

Product groups

Websites

Nestlé Switzerland (no EU)

87.9 CHF Cereals, dairy, beverages, confectionery

http://www.nestle.com

Unilever

The Netherlands/ UK

42.7 Dairy, beverages, dressings, frozen food, cooking products

http://www.unilever.com

Danone France 13.5 Dairy, beverages, biscuits, cereals

http://www.danonegroup.com

Cadbury Schweppes

United Kingdom

9.1 Beverages, confectionery

http://www.cadburyschweppes.com

Ferrero Italy 4.1 Confectionery, spreads

http://www.ferrero.com

Barilla Italy Unknown Fruit and vegetables, Italian products

http://www.barilla.com

Numico The Netherlands

1.6 Dietetic food, baby and infant food

http://www.numico.com

France, Germany and the United Kingdom were the largest food processors in the EU, accounting for 60 percent of total food and drinks production. Apart from the above-mentioned multinational companies with strong pan-European brands, most of the foods processing companies in the EU are small to medium sized (SMEs). The processed fruit and vegetable sector in the EU had a production turnover of € 36.8 billion in 2003. This was an increase of 1.2 percent compared to 2002 and accounted for 5.8 percent of total production value of the food and drinks industry. This share is relatively low, because of the fact that the preserved fruit and vegetable sector is a mature industry with a low added value. The sector employs 168,000 people, representing 6 percent of total employees in the food and drinks industry (Source: CIAA).

28

Due to the high wage levels in the EU, coupled to a high degree of concentration in the retail sector and fierce competition, processing facilities are highly automated and efficient. Economies-of-scale, resulting in lower production costs and an efficient logistical system are necessary to be able to operate profitably. The major developments in the processed fruit and vegetable industry in the EU can be described as follows: - a maturing industry - private label is still gaining momentum - consolidation at the processing side - specialisation: concentration on limited set of activities and outsourcing - alliances: partnerships in the value chain and co-packing for private label suppliers Fruit juice/concentrate In the EU, only Spain and Italy produce notable amounts of orange juice concentrate. Compared to Brazil and the USA, which together account for 90 percent of global production, the production in Europe is small. Moreover, the fruit juice concentrate from Spain and Italy has a different kind of quality, which makes it more suitable for the soft beverages industry and less for the processing of fruit juice and nectar. Germany and Italy are the major EU producers of apple juice concentrate, producing some 70 thousand and 50 thousand tonnes respectively. The production of apple juice concentrate depends to a large extent on the apple harvest, which fluctuates considerably. Table 4.1 Production of unconcentrated orange juice (excl.frozen) in selected EU countries, 2002 – 2003, 1000 tonnes Country 2002 2003 Germany 962,212 Not available United Kingdom 563,050 554,210 France 418,321 396,466 Spain 302,922 371,273 Poland 153,442 Not available Belgium 79,609 96,043 Source: Eurostat 2003 Canned vegetables France is by far the largest producer of canned vegetables, accounting for more than 50 percent of total EU production. The Netherlands, Italy and Spain are other important producers of canned vegetables. The French company Bonduelle is a leading EU supplier of canned vegetables and has established a strong branded position on major EU markets. Please note that the figure 4.2 not only refers to canned vegetables, but also to other forms of preservation, like frozen vegetables. Figure 4.1 Production of preserved vegetables (excluding preserved

mushrooms and tomatoes) in selected EU countries, 2001-2003, million litres

29

0

200

400

600

800

1000

1200

Fran

ce

The Net

herla

nds

Italy

Spain

Belgium

Unite

d King

dom

2001

2002

2003

Source:OEITFL/VIGEF Figure 4.2 Production of canned and bottled vegetables (excluding baked beans) in major EU countries, 2001-2003, million litres

0

200

400

600

800

1000

1200

1400

Fran

ce

The Net

herla

nds

Spain

Belgium

Italy

Unite

d King

dom

Poland

German

y

2001

2002

2003

Source:OEITFL/VIGEF Frozen vegetables Frozen vegetables have become a fierce competitor of canned vegetables. Production of finished products in the EU has been growing steadily from 2001 – 2003, but declined in 2003 according to following figures provide by OEITFL: Figure 4.3 Production of frozen vegetables (excluding mixtures and corn) in

selected EU countries, 2001-2003, 1000 tonnes

30

0

100

200

300

400

500

600

700

800

900

Belgium

Fran

ce

Spain

Unite

d King

dom

Italy

German

y

The Net

herla

nds

2001

2002

2003

Source:OEITFL/VIGEF Production technology and quality are constantly improving within the frozen food industry. Research by Unilever has shown that nowadays frozen vegetables are qualitatively comparable to fresh vegetables. The improvements and research development and strong marketing efforts contribute to a positive consumer attitude towards frozen food consumption. Canned fruit Southern European countries are the leading producers of canned fruit in the EU. In descending order, Greece, Spain, France and Italy were the leading producers in 2003. Please note figure 4.4 details the production of preserved fruit. Canned fruit is a segment of preserved fruit production. Figure 4.4 Production of preserved fruit in selected EU countries,

2001-2003, million litres

0

50

100

150

200

250

300

Spain

Fran

ceIta

ly

German

y

The Net

herla

nds

Belgium

Unite

d King

dom

2001

2002

2003

Source: OEITFL/VIGEF

31

Dried fruit There are only a few countries in the EU supplying significant amounts of dried fruit. Greece is a major producer of currants and raisins. France is the second largest producer of dried prunes in the world, after the United States. French prune production is estimated at about 41,000 tonnes. Spain is the only date producing EU member country, with an annual production fluctuating around 7,000 tonnes (FAO 2003). Dried vegetables It is not possible to give an overall view of EU production of dried vegetables, as only a few countries publish production figures on this product group. This is because the quantities are fairly small compared to those of other processed vegetables. However, a large share of dried vegetables originates outside the EU, accounting for about half of the imports by EU member countries (in terms of volume) of dried vegetables in 2003. Production of dried vegetables and mixtures of dried vegetables, other than potatoes, onions and mushrooms, in selected EU countries in 2002, 1000 tonnes: Spain 53,781 Germany 12,782 France 9,585 Hungary 2,818 New EU countries Hungary and Poland are the most important of the new EU countries in the trade of preserved fruit and vegetables. Therefore these countries are highlighted. Hungary The processing industry is a major outlet for fruit and vegetables grown in Hungary. The juice industry produces more than 500 million litres/annum and, with 40 companies, has a relatively high degree of concentration. Domestic raw material, particularly apples, peaches, grapes, apricots and tomatoes, are used to a large extent. The deep-freezing industry exports the majority of the products to EU markets. Total production is about 200,000 tonnes of finished products, including 25 percent sweet corn. The canning industry suffered heavily from the collapse of the Soviet Union; production decreased from 1 million tonnes to 600,000 tonnes. Although the share of Western Europe has increased, exports to the eastern direction are still more important. It should be noted that about two thirds of the companies are in foreign hands, which also means that much investment took place after privatisation and efficiency was improved. Poland Poland is a large producer of apples and soft fruit for processing into preserved fruit. The processing plants are often outdated and there is insufficient cold storage capacity. Moreover, supply is still fragmented and quality is fluctuating. However, it is expected that substantial investments will be made in the processing industry, leading to improved quality and infrastructure. In view of this, the prospects for the fruit processing industry are positive. Opportunities for exporters in developing countries Products which grow in tropical or subtropical countries and cannot be grown in the EU offer good opportunities for exporters in developing countries, e.g. lychees, mangos, mangosteen, pineapples and star fruit. Further, counter seasonal products are of interest to EU trade partners, as year round supply is increasingly demanded, e.g. apples, oranges, pears and melons.

32

5 IMPORTS As was already mentioned in Section 1.2, Chapters 7, 8 and 20 of the Harmonised System, cover preserved fruit and vegetables product groups discussed in this survey. The following HS codes are covered in the Eurostat tables and figures of this chapter and in appendix 2: Product group HS code Fruit juice/concentrate 2009 Canned vegetables 2001, 2002 and 2005 Canned fruit 2008 Frozen vegetables 0710 Dried fruit 0803, 0804, 0806 and 0813 Frozen fruit 0811 Dried vegetables 0712 Provisionally preserved fruit and vegetables 0812 and 0711 The tables and figures give the total value and volume of the product groups as mentioned above. Selected products within the product groups are highlighted in this chapter under 5.2 The seven EU countries dealt with in this chapter and the three new EU countries are leading importing countries for preserved fruit and vegetables. As already mentioned in the summary, the opportunities to export consumer products to the EU are limited for exporters in developing countries, as this requires substantial investments in marketing and distribution and detailed knowledge of EU food legislation (labelling requirements). Preserved fruit and vegetables as ingredients for the processing industry in the EU offer better opportunities for exporters in non-EU countries. Where applicable, Poland, Czech Republic and Hungary, being the new EU countries most important trading partners for preserved fruit and vegetables, will be mentioned separately. 5.1 Total imports of selected preserved fruit and vegetables In 2003, imports by EU member countries of selected preserved fruit and vegetables amounted to € 14 billion or 17 million tonnes, representing an increase by 2.2 percent in value and 10 percent in volume, compared to the preceding year. Developing countries supplied 25 percent of the total import value in 2003. This was 2 percent less compared to 2002 in value; volume increased by almost 11 percent in 2003 compared to 2002 (see appendix 2). Germany was the leading EU importer, accounting for 23 percent of total imports by EU member countries (in terms of value) in 2003, followed by France (14%) and the United Kingdom (14%) and The Netherlands (11%). Together, these countries imported 62 percent of the total imported value in 2003. The Netherlands was by far the major supplier of preserved fruit and vegetables to the EU, accounting for 12 percent of the total supplied value in 2003, followed by Germany and Belgium (9%) and Italy (8%). Of the total imported value by EU member countries, 37 percent was supplied extra-EU.

33

Figure 5.1 Leading suppliers of selected preserved fruit and vegetables to the EU, 2001-2003, € 1,000

0200400600800

100012001400160018002000

The Net

herla

nds

German

y

Belgium

Italy

Spain

Fran

ce

Braz

il

Poland

Turk

ey

China

2001

2002

2003

Source: Eurostat, 2003 It should be noted that above mentioned EU countries partly import preserved fruit and vegetables from outside the EU, process these and supply the end product to other EU countries. Table 5.1 Leading new EU suppliers of selected preserved fruit and vegetables to

the EU, 2001-2003, € 1,000 / tonnes 2001 2002 2003 value € volume value € volume value € volume Poland 511,002 693,680 532,209 672,601 613,146 742,938 Hungary 223,633 315,515 239,882 318,139 239,158 297,521 Source: Eurostat 2003 5.1.1 Germany Germany was the leading EU importer of preserved fruit and vegetables, with imports amounting to € 3.2 billion or 3.8 million tonnes in 2003. Compared to 2002, this represented a decrease by 0.2 percent in value, while imports in terms of volume decreased by 0.1 percent. The major imported product groups in 2003 were: Product group Import value in € 1,000 Import share in % Fruit juice/concentrate 934 29 Canned vegetables 792 25 Canned fruit 411 13 Frozen vegetables 368 11 The above-mentioned product groups accounted for 78 percent of the total import value of selected preserved fruit and vegetables in 2003.

34

Figure 5.2 Leading suppliers of selected preserved fruit and vegetables to Germany, 2001-2003, € 1,000

0

100

200

300

400

500

600

700

The Net

herla

nds

Poland

Italy

Belgium

Fran

ce

Turk

ey

China

Spain

Greec

e

Hunga

ry

2001

2002

2003

Source: Eurostat, 2003 The Netherlands supplied a relatively large share of German imports (18%), mainly by transit trade through the port of Rotterdam. Poland increased its importance as a trading partner of Germany and accounted for 12 percent of import value in 2003. Developing countries supplied 20 percent of the imports of selected preserved fruit and vegetables in 2003, which remained the same as in 2002. Germany continues to suffer from a bad depressed economy, high unemployment (11.5% in 2004) and a low consumer confidence. Due to this situation, consumers do not spend their money leading to enormous price pressure and competition in the retail trade. Poland and China continue their increase as suppliers of preserved fruit and vegetables to the German market, as these countries can supply at lower costs than traditional supplying countries like The Netherlands, Italy and Belgium. 5.1.2 France France was the second leading EU importer of preserved fruit and vegetables, accounting for € 2 billion or 2.3 million tonnes in 2003. French imports increased in 2003 by almost 6 percent in terms of value and by 10 percent in terms of volume. The major imported product groups in 2003 were: Product group Import value in € 1,000 Import share in % Fruit juice/concentrate 623 31 Canned vegetables 513 26 Frozen vegetables 283 14 Canned fruit 237 12 These product groups accounted for 83 percent of total import value of selected preserved fruit and vegetables in 2003.

35

Figure 5.3 Leading suppliers of selected preserved fruit and vegetables to France, 2001-2003, € 1,000

0

50

100

150

200

250

300

350

400

450

Belgium

Spain

The Net

herla

nds

German

yIta

ly

Moroc

co

Turk

ey

China

Serb

ia M

ontene

gro

Isra

el

2001

2002

2003

Source: Eurostat, 2003 Belgium, Spain and The Netherlands were the leading suppliers of selected preserved fruit and vegetables to France accounting for respectively 20, 19 and 14 percent of total value imports. Developing countries supplied 19 percent of the total imports to France in 2003. Increasingly busy lifestyles are the reasons that French consumers spend less time in the kitchen to prepare food. Packaged food sales are therefore expected to grow, as the French adopt a more Anglo-Saxon way of eating. As selected preserved fruit and vegetables are mainly used as ingredients for a wide variety of packaged food, it is not surprising that the imports showed a healthy growth. 5.1.3 United Kingdom The United Kingdom was the third leading EU importer of selected preserved fruit and vegetables, accounting for € 1.9 billion or 3.4 million tonnes in 2003. Between 2002 and 2003, the imported value increased by 3.1 percent in value, while the imported volume increased by a hefty 28 percent. The major imported product groups in 2003 were: Product groups Import value in € 1,000 Import share in % Canned vegetables 599 31 Fruit juice/concentrate 519 27 Frozen vegetables 250 13 Dried fruit 221 11 These product groups accounted for 82 percent of the total import value of selected preserved fruit and vegetables in 2003.

36

Figure 5.4 Leading suppliers of selected preserved fruit and vegetables to the United Kingdom, 2001-2003, € 1,000

0

50

100

150

200

250

300

350

Italy

The Net

herla

nds

Belgium

German

y

Fran

ce

Spain

Turk

ey

Greec

eUS

A

Ireland

2001

2002

2003

Source: Eurostat, 2003 The leading supplier to the United Kingdom in 2003 was Italy, followed by The Netherlands and Belgium. In 2003, developing countries supplied the United Kingdom with 18 percent of the total imported value of selected preserved fruit and vegetables. Sales of convenience foods, especially chilled ready meals and prepared salads, have continued to grow, as many consumers do not have the time to cook in a traditional sense. Grazing has become a growing trend, spurring growth in the snack and confectionery sectors. Many products in these sectors use preserved fruit and vegetables, which accounts for the good performance in terms of imports. 5.1.4 The Netherlands The Netherlands was the fourth largest importer of selected preserved fruit and vegetables, accounting for € 1.6 billion or 1.8 million tonnes in 2003. Between 2002 and 2003, imports decreased by 0.9 percent in value and increased by 6.9 percent in volume. The major imported product groups in 2003 were: Product group Import value in € 1,000 Import share in % Fruit juice/concentrate 852 54 Canned vegetables 284 18 Canned fruit 99 6 These product groups accounted for 78 percent of the total import value of selected preserved fruit and vegetables in 2003. The Netherlands is an important transit country, as the port of Rotterdam plays a major role in the import of preserved fruit and vegetables into the EU. Especially the bulk imports of fruit concentrates play an important role.

37

Figure 5.5 Leading suppliers of selected preserved fruit and vegetables to The Netherlands, 2001-2003, € 1,000

0

50

100

150

200

250

300

350

400

450

Braz

il

German

y

Belgium

USA

Turk

ey

Thailand

China

Spain

Italy

Fran

ce

2001

2002

2003

Source: Eurostat, 2003 Brazil was by far the leading supplier of selected preserved fruit and vegetables to The Netherlands, where it had a far more dominant position than in the other major EU markets. This was mainly caused by the high fruit juice/concentrate imports (orange juice concentrate in bulk vessels to tank farms in the Amsterdam and Rotterdam ports), a large share of which is further re-exported to the other EU member countries. Thailand and China were among The Netherlands’ leading suppliers in developing countries and took a relatively more important position in Netherlands imports than in EU overall imports. Developing countries supplied 50 percent of the total imported value during 2003. The increase in volume was most likely caused by positive developments in the fruit juice/concentrates sector. The Netherlands is a major importer of this product group and re-exports consumer products after processing and packing. Prices were negatively influenced by exports to Germany, which increasingly sources selected preserved fruit and vegetables in low cost countries like Poland and China. 5.1.5 Belgium In 2003, imports of selected preserved fruit and vegetables into Belgium amounted to € 1.1 billion or 1.4 million tonnes. Compared to 2002, this represented a decrease by 2.2 percent in value and a decrease of 1.3 percent in volume. The major imported product groups in 2003 were: Product group Import value in € 1,000 Import share in % Fruit juice/concentrate 456 41 Frozen vegetables 197 18 Canned vegetables 242 22

38

These product groups accounted for 81 percent of the total import value of selected preserved fruit and vegetables in 2003. Belgium has a large bulk terminal for citrus concentrates in the port of Gent, hence the large share of fruit concentrate. Much of the citrus concentrates are re-exported to other EU countries. Figure 5.6 Leading suppliers of selected preserved fruit and vegetables to

Belgium, 2001-2003, € 1,000

0

50

100

150

200

250

300

Braz

il

Fran

ce

The Net

herla

nds

German

y

Spain

Italy

Turk

eyUS

A

Poland

Greec

e

2001

2002

2003

Source: Eurostat, 2003 In 2003, Brazil was the leading supplier to Belgium of selected preserved fruit and vegetables (terminal for concentrates in the port of Gent), followed by France. The import share of Brazil in 2002 (value) was 23 percent, but dropped during 2003 to 21 percent. The gloomy economic outlook until 2004 had a negative impact on the confidence of Belgian households and therefore on the consumption of packaged food. The imports of juices/concentrated from Brazil decreased, probably due to sourcing in other exporting countries. Imports from France increase, especially in canned vegetables, as Belgian consumers continue to place great value on taste and convenience. 5.1.6 Italy In 2003, imports of selected preserved fruit and vegetables into Italy amounted to € 1 billion or 1million tonnes. Compared to 2002, this represented an increase of 5.7 percent in value and an increase by 11 percent in volume. The major imported product groups in 2003 were: Product group Import value in € 1,000 Import share in % Canned vegetables 324 32 Fruit juice/concentrate 184 18 Frozen vegetables 149 15 Dried fruit 76 8 Canned fruit 71 7 These product groups accounted for 80 percent of the total import value of selected preserved fruit and vegetables in 2003.

39

Figure 5.7 Leading suppliers of selected preserved fruit and vegetables to

Italy, 2001-2003, € 1,000

0

20

40

60

80

100

120

140

160

Spain

Fran

ce

China

German

y

The Net

herla

nds

Greec

e

Turk

ey

Austria

Belgium

USA

2001

2002

2003

Source: Eurostat, 2003 Spain overtook France as the leading supplier of selected preserved fruit and vegetables to Italy during 2003, followed by France and China. Developing countries supplied 28 percent of total value imports to Italy during 2003. In terms of convenience, packaged food products perceived as being convenient as well as healthy spurred the growth in imports of canned and frozen vegetables. The increase in imports was further stimulated by lower than expected Italian harvest of tomatoes, affecting the production of tomato paste. 5.1.7 Spain In 2003, imports of selected preserved fruit and vegetables into Spain amounted to € 628 million or 669 million tonnes. Compared to 2002, this represented a decrease of 1.2 percent in value but an increase of 3.9 percent in volume. The major imported product groups in 2003 were: Product group Import value in € 1,000 Import share in % Canned vegetables 217 35 Fruit juice/concentrate 150 24 Frozen vegetables 103 16 These product groups accounted for 75 percent of the total import value of selected preserved fruit and vegetables in 2003.

40

Figure 5.8 Leading suppliers of selected preserved fruit and vegetables to Spain, 2001-2003, € 1,000

0

20

40

60

80

100

120

140

Fran

ce

The Net

herla

nds

Peru

German

y

Belgium

Portu

gal

China

Thailand

Italy

Moroc

co

2001

2002

2003

Source: Eurostat, 2003 The leading supplier to Spain in 2003 was France, followed by The Netherlands and Peru. In 2003, developing countries supplied Spain with 37 percent of the total imported value of selected preserved fruit and vegetables. Sales of meal replacement products, chilled processed food, ready meals and confectionery saw a strong growth in 2003. These product groups are important for preserved fruit and vegetables. Due to hectic lifestyles of many Spanish consumers, takeaway and fast food outlets continue to prosper. Although the majority of these outlets are pizzerias, outlets that offer healthy food are opening up in increasing numbers. New EU countries 5.1.8 Poland In 2003, imports of selected preserved fruit and vegetables into Poland amounted to € 188 million or 209 million tonnes. Compared to 2002, this represented a decrease of 3.4 percent in value, but an increase of 2.4 percent in volume. The major imported product groups in 2003 were: Product group Import value in € 1,000 Import share in % Fruit juice/concentrate 56 30 Canned vegetables 38 20 Canned fruit 30 16 Dried fruit 21 11 These product groups accounted for 77 percent of the total import value of selected preserved fruit and vegetables in 2003.

41

Figure 5.9 Leading suppliers of selected preserved fruit and vegetables to Poland, 2001-2003, € 1,000

0

5

10

15

20

25

30

35

Braz

il

Hunga

ry

Greec

e

China

Spain

Isra

el

Thailand

German

yIta

lyIra

n

2001

2002

2003

Source: Eurostat, 2003 The leading supplier to Poland in 2003 was Brazil, followed by Hungary and Greece. In 2003, developing countries supplied Poland with 40 percent of the total imported value of selected preserved fruit and vegetables. 5.1.9 Czech Republic In 2003, imports of selected preserved fruit and vegetables into the Czech Republic amounted to € 122 million or 171 million tonnes. Compared to 2002, this represented an increase in both value and volume by 3 and 15 percent respectively. The major imported product groups in 2003 were: Product group Import value in € 1,000 Import share in % Fruit juice/concentrate 32 26 Canned vegetables 28 23 Canned fruit 24 20 Frozen vegetables 14 12 These product groups accounted for 81 percent of the total import value of selected preserved fruit and vegetables in 2003.

42

Figure 5.10 Leading suppliers of selected preserved fruit and vegetables to The Czech Republic, 2001-2003, € 1,000

0

2

4

6

8

10

12

14

16

18

20

Poland

China

Austria

German

yIta

ly

Slov

akia

Spain

Braz

il

Hunga

ry

Thailand

2001

2002

2003

Source: Eurostat, 2003 The leading supplier to the Czech Republic in 2003 was Poland, followed by China and Austria. In 2003, developing countries supplied the Czech Republic with 31 percent of the total imported value of selected preserved fruit and vegetables. Due to a strong economy, the Czech Republic increases its imports of selected fruit and vegetables. As disposable income rises, consumers spend more on food items. Poland strengthens its position as leading supplier; proximity to the market coupled to low costs are the main reasons. 5.1.10 Hungary In 2003, imports of selected preserved fruit and vegetables into Hungary amounted to € 79 million or 87 million tonnes. Import in terms of value and volume increased substantially, compared to 2002, by 30 and 31 percent respectively. The major imported product groups in 2003 were: Product group Import value in € 1,000 Import share in % Fruit juice/concentrate 29 37 Canned fruit 19 24 Canned vegetables 13 16 These product groups accounted for 77 percent of the total import value of selected preserved fruit and vegetables in 2003.

43

Figure 5.11 Leading suppliers of selected preserved fruit and vegetables to Hungary, 2001-2003, € 1,000

0

2

4

6

8

10

12

Braz

ilIta

ly

Poland

Greec

e

German

y

the Ne

ther

land

sUS

A

Roman

ia

Thailand

Spain

2001

2002

2003

Source: Eurostat, 2003 The leading supplier to Hungary in 2003 was Brazil, followed by Italy and Poland. In 2003, developing countries supplied Hungary with 33 percent of the total imported value of selected preserved fruit and vegetables. Hungary continues to strengthen its position as an important supplying country to the EU. Apart from growing a wide variety of fruit and vegetables, Hungary imports increasing quantities of preserved fruit and vegetables to cater for growing consumer demands. 5.2 Imports by product group Fruit juice and concentrate was, by far, the leading imported product group, accounting for 32 percent of the imports by EU member countries. Other leading product groups were canned vegetables (26%), frozen vegetables (12%), canned fruit (10%), frozen fruit (8%) and dried fruit (6%). Less important groups were dried vegetables (3%) and provisionally preserved fruit & vegetables (2%). 5.2.1 Fruit juice/concentrate Fruit juice/concentrate was the largest product group (of selected preserved fruit and vegetables) imported by EU countries, both in value (32%) and in volume (36%) in 2003. Imports in volume increased constantly during 2001 – 2003 till 6 million tonnes in 2003. The import share of fruit juice/concentrate from developing countries shows the following picture: 2001 2002 2003 Import share in value 27% 27% 25% Import share in volume 27% 25% 23% The leading suppliers of fruit juice/concentrate to the EU from developing countries (share of total 2003 imports in terms of value) → Brazil (16%), Thailand (1%), China (1%).

44

Figure 5.12 Imports of fruit juice/concentrate into the main importing EU countries, 2001 –2003, € 1,000

Source: Eurostat 2003 In 2003, Germany was the leading importer of this product group, accounting for 21 percent of value imports by EU member countries. The Dutch port of Rotterdam is an important turnover point for fruit juice concentrate, explaining the country’s high share in total imports by EU member states. Table 5.3 Imports of fruit juice/concentrate into the EU by leading suppliers,

2001-2003, € 1,000 / tonnes

2001 2002 2003 value € volume value € volume value € volume

Total 4,027,933 5,091,922 4,360,979 5,336,407 4,507,695 6,109,349 Extra-EU 1,603,448 2,157,654 1,716,493 2,142,625 1,682,403 2,380,368 Developing countries

1,088,601 1,368,349 1,178,542 1,346,642 1,104,785 1,432,027

Leading suppliers The Netherlands 747,974 701,902 837,782 726,254 785,806 732,112 Brazil 688,065 906,120 760,674 863,900 699,781 932,908 Germany 485,854 808,578 558,285 926,925 673,341 1,140,727 Belgium 283,527 304,140 280,545 264,945 340,556 357,866 Spain 206,498 316,185 250,000 372,874 317,235 500,438 Italy 238,110 302,967 233,368 305,606 246,132 328,871 Poland 169,047 224,584 181,321 226,823 216,102 265,135

Source: Eurostat 2003 Frozen orange juice was the largest product within this product group in 2003, accounting for 35 percent of total (value) imports, followed by juice of any other single fruit or vegetable (29%), mixtures of juices (20%) and pineapple juice (16%).

0

100

200

300

400

500

600

700

800

900

1000

German

y

The Net

herla

nds

Fran

ce

Unite

d King

dom

Belgium

Italy

Austria

Spain

Denmar

k

2001

2002

2003

45

The leading suppliers (share of total year 2003 imports in terms of value) of: frozen orange juice

→

The Netherlands (43%), Belgium (20%), Germany (12%), Brazil (5%)

juice of any other single fruit or vegetable

→

The Netherlands (17%), Germany (17%), Italy (11%), Poland (9%)

mixtures of juices

→

France (21%), The Netherlands (17%), United Kingdom (10%), Belgium (10%), Italy (9%)

pineapple juice →

The Netherlands (39%), Italy (13%), Germany (11%), Spain (10%), France (9%), United kingdom (6%)

Although The Netherlands and Belgium are leading suppliers of frozen orange juice, this product originates mainly in Brazil from where it is shipped to The Netherlands and Belgium and often re-exported to other EU destinations. 5.2.2 Canned vegetables Canned vegetables were the second largest product imported into the EU, both in value (26%) and in volume (24%) in 2003. Total imports increased by 1.5 percent in value and by 2 percent in volume in 2003 compared to 2002. The import share of canned vegetables from developing countries shows the following picture: 2001 2002 2003 Import share in value 18% 19% 18% Import share in volume 15% 18% 19% The leading suppliers of canned vegetables to the EU from developing countries (share of total 2003 imports in terms of value) → China (6%), Turkey (4%), Peru (3%), Morocco (2%), Thailand (1%), India (1%) Figure 5.9 Imports of canned vegetables into the main importing EU countries,

2001 –2003, € 1,000

0

100

200

300

400

500

600

700

800

900

German

y

Unite

d King

dom

Fran

ceIta

ly

The Net

herla

nds

Belgium

Spain

Swed

en

Denmar

k

2001

2002

2003

46

Source: Eurostat 2003 In 2003, Germany was the leading importer of canned vegetables, accounting for 22 percent of the imported value by EU member countries, followed the United Kingdom (17%), France (14%), Italy (9%) and the Netherlands (8%). These countries accounted for 70 percent of imports into the EU during 2003. Table 5.4 Imports of canned vegetables into the EU by leading suppliers, 2001-

2003, € 1,000 / tonnes 2001 2002 2003 value € volume value € volume value € volume Total 3,187,266 3,877,455 3,503,167 4,070,031 3,555,873 4,151,636 Extra-EU 764,766 812,955 877,690 946,416 862,768 1,056,369 Developing countries 568,424 596,912 672,408 717,138 647,870 776,526 Leading suppliers Italy 603,064 1,140,009 629,440 1,069,140 686,124 1,057,814 The Netherlands 406,479 499,280 469,294 554,753 413,487 481,726 France 348,628 375,234 350,977 381,405 365,008 383,891 Spain 284,520 272,234 324,236 337,292 351,400 368,906 Germany 214,247 190,238 230,558 180,537 257,595 204,373 Belgium 198,217 228,666 221,384 227,556 239,564 253,944 China 181,030 236,592 225,019 286,222 202,388 295,496 Source: Eurostat, 2003 Tomatoes Within canned vegetables, canned tomatoes is the largest product group Tomatoes, prepared or preserved otherwise than by vinegar or acetic acid (HS code 2002) accounted for 27 percent of selected canned vegetables in 2003 by value, as the following table shows: Table 5.5 Imports of tomatoes, prepared or preserved otherwise than by

vinegar or acetic acid into the EU by leading suppliers, 2001-2003, € 1,000 / tonnes

2001 2002 2003 value € volume value € volume value € volume Total 794,835 1,412,212 875,827 1,512,039 961,226 1.590.879 Extra-EU 91,516 166,534 126,938 205,135 157,624 280,116 Developing countries 69,180 137,458 104,955 180,038 124,003 227,588 Leading suppliers Italy 457,778 874,662 469,958 873,557 519,542 875,844 Spain 70,958 102,058 93,116 151,874 103,433 166,197 China 51,666 111,519 79,247 140,601 80,979 153,577 Portugal 59,460 96,721 64,863 93,568 55,445 84,178 Greece 52,206 84,037 57,184 99,177 50,734 83,959 Source: Eurostat 2003 The leading suppliers (share of total year 2003 imports in terms of value) of: tomatoes → Italy (54%), Spain (11%), China (8%) olives (HS2005)

→

Spain (45%), Greece (22%), Morocco (15%), Turkey (8%)

asparagus →

China (38%), Peru (34%), The Netherlands (13%), Germany (7%), Spain (5%)

47

sweet corn → France (48%), Hungary (19%), Thailand (13%) tropical fruits & nuts

→

India (23%), Germany (18%), Pakistan (18%), UK (11%), South Africa (5%), Vietnam (5%)

cucumbers & gherkins

→

Turkey (23%), The Netherlands (20%), Germany (20%), Belgium (9%), Hungary (8%)

Poland supplied 1 percent of total value imports in 2003 and is the only sizeable supplier of the new EU countries to the EU for canned vegetables. 5.2.3 Frozen vegetables Frozen vegetables was the third largest product imported into the EU, accounting for 12 percent in value and 19 percent in volume. The imports in terms of value decreased by 3 percent while imports in volume increased by 16 percent. The import share of frozen vegetables from developing countries showed the following figures: 2001 2002 2003 Import share in value 11% 11% 10% Import share in volume 6% 6% 5% The leading suppliers of frozen vegetables to the EU from developing countries (share of total 2003 imports in terms of value) → China (4%), Turkey (2%), Ecuador (1%). Figure 5.10 Imports of frozen vegetables into the main EU countries,

2001 –2003, € 1,000

Source: Eurostat 2003

0

50

100

150

200

250

300

350

400

450

500

German

y

Fran

ce

Unite

d King

dom

Belgium

Italy

Spain

The Net

herla

nds

Swed

en

Ireland

2001

2002

2003

48

The leading importer of frozen vegetables in 2003 was Germany, accounting for 21 percent of imports by EU member countries, followed by France (16%), the United Kingdom (14%), Belgium (11%) and Italy (9%). Together, these countries accounted for 71 percent of total value imports into the EU in 2003. 5.2.4 Canned fruit Canned fruit was the fourth largest product imported into the EU in 2003, both in value (10%) and in volume (9%). During 2003, both imports in value and volume increased with 5 percent compared to 2002. The import share of canned fruit from developing countries showed the following figures: 2001 2002 2003 Import share in value 32% 32% 33% Import share in volume 36% 38% 42% The leading suppliers of canned fruit to the EU from developing countries (share of total 2003 imports in terms of value) → Thailand (8%), South Africa (5%), China (5%), Kenya (3%), Indonesia (3%), Turkey (2%), Philippines (1%) Figure 5.10 Imports of canned fruit into the main EU countries, 2001 –2003, € 1,000 Source: Eurostat 2003

Germany was the largest importer of canned fruit in 2003, accounting for 28 percent of the total imports in value. France was the second country with 16 percent of import value, followed by the United Kingdom (13%), The Netherlands (7%) and Belgium (6%).

0

50

100

150

200

250

300

350

400

450

German

y

Fran

ce

Unite

d King

dom

The Net

herla

nds

Belgium

Spain

Italy

Austria

Poland

2001

2002

2003

49

Together these countries accounted for 70 percent of the total import in value of canned fruit into the EU in 2004. Table 5.6 Imports of canned fruit into the EU by leading suppliers, 2001-2003, €

1,000 / tonnes 2001 2002 2003 value € volume value € volume value € volume Total 1,334,465 1,523,925 1,379,043 1,502,414 1,448,744 1,578,396 Extra-EU 501,771 616,808 522,740 648,008 572,950 753,781 Developing countries

427,893 546,742 447,477 572,207 475,732 664,570

Leading suppliers

Germany 153,749 112,148 159,832 112,883 171,387 119,328 Spain 143,597 167,690 144,192 159,789 167,269 182,599 Italy 148,743 185,766 152,140 172,442 154,424 168,954 Greece 148,264 244,145 149,362 207,717 123,437 149,558 Thailand 116,388 187,840 107,837 166,133 120,336 205,617 The Netherlands

78,325 77,377 83,444 76,850 86,901 82,785

South Africa 54,847 67,776 62,790 78,194 73,385 86,395 China 30,432 40,706 43,383 69,124 65,487 112,278 Source: Eurostat 2003 Canned pineapple accounted for 21 percent of total value imports in 2003, followed by peaches (18%), fruit mixtures (17%), citrus fruit (9%) and apricots (9%). The leading suppliers (share of total year 2003 imports in terms of value) of: pineapples →

Thailand (36%), Kenya (13%), Indonesia (12%), The Netherlands (9%), Germany (7%)

peaches →

Greece (32%), Spain (22%), Germany (8%), Italy (8%), South Africa (7%), USA (4%)

fruit mixtures

→ Italy (25%), Germany (22%), Austria (9%), the Netherlands (7%), South Africa (7%)

citrus fruit →

China (27%), Spain (23%), Turkey (11%), The Netherlands (9%), Germany (7%)

apricots →

Spain (21%), Greece (15%), South Africa (14%). Morocco (12%), Italy (9%)

The new EU countries are not sizeable suppliers of canned fruit to the EU. 5.2.4 Frozen fruit Frozen fruit was the fifth largest product imported into the EU, accounting for 8 percent in value and 5 percent in volume in 2003. Value imports increased by 15.7 percent in 2003, while volume imports increased by 7.7 percent compared to 2002. The import share of frozen fruit from developing countries showed the following picture: 2001 2002 2003 Import share in value 26% 27% 28% Import share in volume 26% 27% 32%

50

The leading suppliers of frozen fruit to the EU from developing countries (share of total 2003 imports in terms of value) → Serbia Montenegro (11%), China (4%), Morocco (4%), Chile (3%), Turkey (3%) Figure 5.11 Imports of frozen fruit into the main EU countries, 2001 –2003, € 1,000

Source: Eurostat 2003 Germany remained by far the largest importer of frozen fruit into the EU with 37 percent of total value imports, followed by France (15%), The Netherlands (9%), United Kingdom (7%) and Italy (6%). Together these countries accounted for 74 percent of total value imports into the EU Table 5.7 Imports of frozen fruit into the EU by leading suppliers, 2001-2003,

€ 1,000 / tonnes 2001 2002 2003 value € volume value € volume value € volume Total 833,125 766,123 931,300 832,540 1,077,940 896,857 Extra-EU 533,985 517,438 582,804 547,907 681,431 597,183 Developing countries 217,915 196,268 251,649 225,281 306,114 284,268 Leading suppliers Poland 193,973 219,987 202,923 207,395 233,465 192,836 Serbia Montenegro 96,423 87,497 117,890 102,526 119,381 100,894 Germany 40,450 36,202 53,064 43,371 76,906 58,050 The Netherlands 60,686 49,734 72,493 58,069 72,470 54,798

0

50

100

150

200

250

300

350

400

450

German

y

Fran

ce

The Net

herla

nds

Unite

d King

dom

Italy

Belgium

Austria

Denmar

k

Swed

en

2001

2002

2003

51

Belgium 39,593 29,995 43,289 32,272 50,300 36,599 China 9,233 11,375 12,880 16,211 42,769 55,680 Spain 24,234 32,293 29,456 36,086 39,682 43,655 Morocco 18,224 22,781 24,510 29,054 38,603 38,773 Chile 32,777 22,546 31,619 23,506 34,345 26,465 Source: Eurostat 2003 5.2.5 Dried fruit Dried fruit was the sixth largest product imported into the EU in 2003, both in value (6%) and in volume (4%). The value of imports decreased by 1 percent while the volume increased by 1 percent in 2003 compared to 2002. The import share of dried fruit from developing countries showed the following figures: 2001 2002 2003 Import share in value 50% 53% 54% Import share in volume 62% 64% 65% The leading suppliers of dried fruit to the EU from developing countries (share of total 2003 imports in terms of value) → Turkey (31%), Tunisia (6%), Iran (4%), Chile (4%), South Africa (3%) Figure 5.12 Imports of dried fruit into the main EU countries, 2001 –2003 € 1,000

Source: Eurostat 2003

0

50

100

150

200

250

Unite

d King

dom

German

y

Fran

ceIta

ly

The Net

herla

nds

Belgium

Spain

Poland

Denmar

k

2001

2002

2003

52

Table 5.8 Imports of dried fruit into the EU by leading suppliers, 2001-2003, € 1,000 / tonnes

2001 2002 2003 value € volume value € volume value € volume

Total 840,709 587,823 889,555 605,307 879,632 611,293 Extra-EU 614,774 464,203 646,207 478,550 646,271 494,323 Developing countries 423,028 366,284 470,266 387,706 474,680 395,068 Leading suppliers Turkey 259,371 244,720 281,865 239,815 270,784 229,722 USA 160,952 86,398 138,988 77,890 129,391 82,382 France 58,752 23,831 60,792 22,166 61,733 23,013 Tunisia 49,250 28,598 53,598 30,122 53,787 30,155 Greece 51,977 36,437 55,612 40,370 42,358 29,374 Germany 30,755 12,325 35,490 13,605 40,616 17,279 Iran 30,608 40,277 32,644 43,869 36,919 49,355 Chile 25,787 14,462 30,652 18,071 36,531 26,211 The Netherlands 26,125 17,840 33,067 18,949 30,852 16,090 Source: Eurostat 2003 Dried grapes accounted for 39 percent of total value imports in 2003, followed by dates and dried figs (23%), dates (15%), and bananas (1%) Together these products accounted for nearly 80 percent of total value imports in 2003. The leading suppliers (share of total year 2003 imports in terms of value) of: dried grapes →

Turkey (42%), USA (17%), Greece (10%), Iran (8%), South Africa (6%)

dates and dried figs

→

Turkey (27%), Tunisia (26%), Israel (12%), France (7%), Algeria (6%)

dried bananas →

France (23%), Ecuador (22%), Philippines (11%), Germany (8%), Costa Rica (6%)

dried cashew, lychees, etc.

→ Germany (61%), The Netherlands (14%), Vietnam (12%)

dried papayas → Thailand (73%), The Netherlands (7%), Brazil (4%) dried tamarind fruit

→ Thailand (45%), India (29%), Germany (13%), Philippines (3%)

5.2.6 Dried vegetables Dried vegetables were the seventh largest product imported into the EU in 2003. They accounted for 3 percent of total import value and 1 percent of total import volume into the EU. Both import value and volume decreased in 2003, compared to 2002, by 8.2 and 4.5 percent respectively. The import share of dried vegetables from developing countries showed the following figures: 2001 2002 2003 Import share in value 33% 34% 32% Import share in volume 28% 31% 34% The leading suppliers of dried vegetables to the EU from developing countries (share of total 2003 imports in terms of value) → China (14%), Turkey (4%), Egypt (3%), India (3%), Serbia Montenegro(2%)

53

Figure 5.13 Imports of dried vegetables into the main EU countries, 2001 –2003, € 1,000

Source: Eurostat 2003 Germany was the leading importer of dried vegetables, accounting for 24 percent of value imports by EU member countries in 2003. Other leading EU importers were The Netherlands (15%), the United Kingdom (12%) France (12%) and Italy (11%). Table 5.9 Imports of dried vegetables into the EU by leading suppliers, 2001 –

2003, € 1,000 / tonnes

2001 2002 2003 value € volume value € volume value € volume Total 475,955 200,277 507,708 219,993 466,061 209,921 Extra-EU 253,940 85,276 267,648 97,834 229,494 98,358 Developing countries

154,724 55,631 170,965 68,121 147,204 71,031

Leading suppliers

China 69,905 28,765 78,900 36,047 64,732 36,209 France 56,815 20,880 61,679 20,328 57,143 19,278 Germany 49,269 14,503 51,279 17,558 48,991 16,290 USA 44,832 14,314 43,086 13,364 34,409 12,045 The Netherlands

32,704 28,230 36,116 24,631 32,384 17,326

Spain 17,352 7,387 22,213 8,829 23,538 10,283 Italy 19,442 5,568 23,325 8,334 23,032 7,915 Source: Eurostat 2003 Dried onions accounted for 21 percent of the total value imports of dried vegetables into the EU, followed by dried mushrooms (19%).

0

20

40

60

80

100

120

140

160

German

y

The Net

herla

nds

Unite

d King

dom

Fran

ceIta

ly

Poland

Belgium

Austria

Spain

2001

2002

2003

54

The leading suppliers of dried vegetables (share of total year 2003 imports in terms of value): dried onions → France (22%), USA (16%), Egypt (13%), India (10%), Germany

(8%) dried mushrooms

→ China (34%), Serbia Montenegro (11%), Germany (8%), Romania (8%)

5.2.7 Provisionally preserved fruit and vegetables Provisionally preserved fruit and vegetables was the seventh largest product imported into the EU in 2003, accounting for 2 percent of value imports and 1 percent in volume imports. Value imports decreased with 6.2 percent over 2003 while the import in terms of volume did not change. The import share of provisionally preserved fruit and vegetables from developing countries showed the following figures: 2001 2002 2003 Import share in value 43% 42% 42% Import share in volume 39% 41% 45% The leading suppliers of provisionally preserved fruit and vegetables to the EU from developing countries (share of total 2003 imports in terms of value) → China (12%), India (9%), Morocco (7%), Turkey (6%), Serbia Montenegro (2%). Figure 5.14 Imports of provisionally preserved fruit and vegetables into the main EU countries, 2001 –2003, € 1,000

Source: Eurostat 2003

0

10

20

30

40

50

60

70

80

Italy

German

y

Unite

d King

dom

Fran

ce

Spain

The Net

herla

nds

Belgium

Portu

gal

Greec

e

2001

2002

2003

55

The leading EU importer of provisionally preserved fruit and vegetables in 2003 was Italy, accounting for 26 percent of imports by EU member countries, followed by Germany (14%), United Kingdom (11%) and France (11%). Table 5.10 Imports of provisionally preserved fruit and vegetables into the EU

by leading suppliers, 2001-2003, € 1,000 / tonnes

2001 2002 2003 value € volume value € volume value € volume

Total 270,784 232,924 247,324 217,324 231,814 218,197 Extra-EU 156,444 124,479 142,130 119,591 140,395 132,246 Developing countries

115,606 91,670 103,837 88,941 97,983 98,584

Leading suppliers

China 37,688 26,540 30,597 24,610 27,876 25,027 Spain 36,962 34,742 29,307 27,225 25,571 25,314 The Netherlands

27,595 30,205 26,424 29,650 21,230 26,245

India 23,397 32,965 19,710 31,397 20,328 33,078 Morocco 18,179 7,640 19,388 8,350 15,359 9,269 Turkey 13,359 10,665 11,003 8,576 14,837 13,885 Poland 11,498 9,134 10,380 8,947 12,361 11,722 Italy 9,940 9,018 8,417 5,871 11,095 7,016 Source: Eurostat 2003

In 2003, the leading supplier of provisionally preserved fruit and vegetables was China, accounting for 12 percent of imports by EU member countries, followed by Spain (11%), (9%), India (9%) and Morocco (6%). 5.3 The role of the developing countries Between 2002 and 2003, imports of selected preserved fruit and vegetables from developing countries decreased on a value basis from € 3.5 billion in 2002 to € 3.4 billion in 2003. Volume, however, increased from 3.6 million tonnes in 2002 to 3.9 million tonnes in 2003. The import share of developing countries in total EU imports remained rather stable as the following picture shows: 2001 2002 2003 Import share in value 25% 26% 25% Import share in volume 23% 23% 23%

56

Figure 5.15 Share of developing countries in selected preserved fruit and vegetables imported into main EU countries as a percentage of total value imports, 2001-2003

Source: Eurostat 2003 The Netherlands remained the leading importer of selected preserved fruit and vegetables from developing countries during 2003 with an import value share of 50 percent, followed by Spain (37%), Belgium (31%), Italy (28%), Germany (20%), France (19%) and the United Kingdom (18%). Together these seven EU countries accounted for 94 percent of value imports from developing countries in 2003. Product groups Main developing country suppliers (share in

% of import value supplied by developing countries, 2003)

Share DCs of total import value, 2003

Fruit juice/concentrate

→ Brazil (16%), Thailand (1%), China (1%)

24%

Canned vegetables → China (7%), Turkey (4%), Peru (3%), Morocco

(2%), Thailand (2%) 18%

Canned fruit → Thailand (8%), South Africa (5%), China (4%),

Kenya (3%), Indonesia (3%), Turkey (2%), Philippines (1%), Ecuador (1%)

33%

Frozen vegetables → China (4%), Turkey (2%), Ecuador (1%). 10% Dried fruit → Turkey (31%), Tunisia (6%), Iran (4%), Chile

(4%), South Africa (3%), Argentina (1%). 54%

Frozen fruit → Serbia Montenegro (11%), China (4%), Morocco 28%

0%

10%

20%

30%

40%

50%

60%

The Net

herla

nds

Spain

Belgium

Italy

German

y

Fran

ce

Unite

d King

dom

2001

2002

2003

57

(4%), Chile (3%), Turkey (3%) Dried vegetables → China (14%), Turkey (4%), Egypt (3%),India

(3%), Serbia Montenegro (2%). 32%

Provisionally preserved fruit and vegetables

→ China (12%), India (9%), Morocco (6%), Turkey (6%), Serbia Montenegro (2%).

42%

Source: Eurostat, 2003 DCs = Developing countries Developing countries are already major exporters of tropical and subtropical products to the new EU countries as can be seen from the figures in this chapter. Apart from direct dealings with the new EU countries, exports can also be realized through trading partners based in the EU-15 countries. The latter are effectively penetrating the new markets, especially when many trade barriers are no longer there.

58

6 EXPORTS In 2003, value exports by EU member countries of selected preserved fruit and vegetables amounted to € 12 billion, an increase of 1 percent compared to 2002. The volume in 2003 was 13 billion tonnes and remained the same as in 2002. Belgium, Italy and Spain were the leading EU exporters, accounting for 15 percent each of total value exports, followed by The Netherlands (13%), Germany (11%) and France (8%). These countries together accounted for 77 percent of total EU exports. As mentioned in chapter 5, The Netherlands and Belgium are major transit countries for preserved fruit and vegetables. The values exported by EU countries increased steadily between 2001 and 2003. Table 6.1 Exports of preserved fruit and vegetables by the major EU exporting

countries, 2001-2003, € 1,000 / tonnes 2001 2002 2003 value € volume value € volume value € volume Total 11,124,208 13,105,812 11,861,192 13,337,834 11,971,430 13,469,427 Extra-EU 2,508,881 2,574,498 2,717,547 2,712,477 2,548,330 2,558,243 Belgium 1,637,694 1,999,700 1,765,850 2,062,997 1,804,471 2,171,673 Italy 1,678,620 2,454,654 1,835,886 2,565,462 1,766,992 2,336,046 Spain 1,471,729 1,578,452 1,626,408 1,761,251 1,761,231 1,906,218 The Netherlands

1,400,965 1,505,986 1,559,235 1,509,016 1,540,147 1,572,015

Germany 1,272,797 1,550,538 1,320,241 1,526,711 1,294,595 1,482,673 France 990,319 885,053 962,863 894,777 1,012,969 975,315 Source: Eurostat, 2003 In 2003, the leading destinations for preserved fruit and vegetables were Germany, France, the United Kingdom and The Netherlands, receiving 54 percent of total exports by EU member countries. 78 percent of the export value was intra-EU oriented. Leading extra-EU destinations were the USA (4%), Russia (2%), Switzerland and Japan. Canned vegetables were the leading exported product group (36% in value), followed by fruit juice/concentrate (26% in value), frozen vegetables (15%) and canned fruit (9%) in value in 2003. These four product groups accounted for 82 percent of the total export value. The trade in these products, however, mainly consisted of re-exports to the other EU member states. The EU member countries exported relatively small amounts of dried fruit and vegetables.

59

Figure 6.1 Exports of preserved fruit and vegetables by EU member countries per product group, 2001 - 2003, % of total export value

Source: Eurostat, 2003 6.1.1 Belgium The large imports and processing of fruit juice/concentrates are responsible for the leading position of Belgium as exporter of selected preserved fruit and vegetables. Exports amounted to € 1.8 billion or 2.2 million tonnes in 2003. Both export value and volume increased compared to 2002 by 2 and 5 percent respectively. This was due to the increasing fruit juice consumption in most EU countries. 96 percent of value exports was intra-EU, showing that processed fruit juices/concentrates are mainly re-exported to other EU countries. France was the largest export market, accounting for 28 percent of value exports, followed by Germany (24%), United Kingdom (15%) and The Netherlands (11%). 6.1.2 Italy Italy is one of the leading producers of fruit and vegetables in the EU. A substantial part of this is processed and exported to other EU countries, especially tomato processing, as about 420 thousands tonnes was exported in 2003. As the second largest exporter of selected preserved fruit and vegetables, Italy’s exports amounted to € 1.8 billion in 2003. The volume exported was 2.3 million tonnes. Compared to other leading EU exporters of selected preserved fruit and vegetables, intra-EU exports are relatively small at 68 percent.

0%

5%

10%

15%

20%

25%

30%

35%

40%

Canned vegetables

Fruit juice/concentrates

Frozen vegetables

Canned fruit

Frozen fruit

Dried fruit

Dried vegetables

2001

2002

2003

60

Germany was the largest export market, accounting for 23 percent of total value exports. United Kingdom was the second largest export market with 16 percent in value exports, followed by France (12%) and USA (4%). Processed tomatoes account for 24 percent of total exports. Tomato paste and tomato sauce form the largest product groups. 6.1.3 Spain Spain shares the second position with Italy as the largest exporter of selected preserved fruit and vegetables. Exports amounted to € 1.8 billion in 2003, an increase of 8 percent compared to 2002. Volume was 1.9 million tonnes in 2003. 67 percent of Spain’s exports are intra-EU. The USA is the largest non-EU export market, accounting for 16 percent of total exports. France is the largest export market in the EU, followed by Germany and Italy with 22, 14 and 8 percent respectively. 6.1.4 The Netherlands The Netherlands was the fourth EU exporter of selected preserved fruit and vegetables, with exports amounting to € 1.5 billion or 1.6 million tonnes in 2003. Compared to 2002, this represented a decrease of 1 percent in value, while exports in terms of volume increased by 4 percent. 91 percent in value was intra-EU exports. Germany was the largest export market, accounting for 38 percent in value of total exports from The Netherlands. France accounted for 14 percent of export value, followed by United Kingdom (13%) and Belgium (8%). As the home market of The Netherlands is small, fresh and preserved fruit and vegetables are imported as raw material, (further) processed in The Netherlands and re-exported as ingredient or consumer products to other EU countries. Germany is traditionally the largest trading partner of The Netherlands. 6.1.5 Germany Germany was the fifth EU exporter of selected preserved fruit and vegetables, with exports amounting to € 1.3 billion or 1.5 million tonnes in 2003. Compared to 2002, this represented a decrease of 2 percent in value, while exports in terms of volume decreased by 3 percent. 87 percent in value of Germany’s export was intra-EU. France was the largest export market, accounting for 21 percent of export value, followed by The Netherlands (18%), United Kingdom (11%) and Belgium (9%). These countries accounted for 60 percent of total value exports. 6.1.6 France France was the sixth largest exporter with exports amounting to € 1 billion or 975 thousand tonnes in 2003. This represented an increase in value of 5 percent and 9 percent in volume compared to 2002. 86 percent was intra-EU exports with Germany as the largest export market (20% in value), followed by Belgium (19%), United Kingdom (16%) and Italy (10%). These countries accounted for 65 percent of France’s total exports of selected preserved fruit and vegetables.

61

6.1.7 United Kingdom The United Kingdom is a small exporter of selected preserved fruit and vegetables. Exports amounted to € 0,2 billion in 2003 or a volume of 236 thousands tonnes. 78 percent of exports was intra-EU. Ireland was the largest export market, accounting for 42 percent of total value exports in 2003. Product groups

Fruit juice/concentrate In 2003, total exports of fruit juice/concentrate amounted to € 3.5 billion or 4.4 million tonnes. This was an increase in value by 1.3 percent and 4 percent in volume compared to 2002. The Netherlands was the largest exporter of fruit juice/concentrate with a value share of 20 percent, followed by Belgium (17%) and Germany (16%). The leading export destinations in 2003 were Germany (25% in value), France (19% in value) and the United Kingdom (12% in value). 87 percent of exports were intra-EU oriented. USA, Japan and Russia were the leading destinations outside the EU. Canned vegetables In 2003, total exports of canned vegetables amounted to € 4.3 billion or 4.9 million tonnes. The value remained stable compared to 2002, while the volume decreased with 1.2 percent compared to 2002. Italy was the largest exporter of canned vegetables with a value share of 27 percent, followed by Spain (19%), France (10%) and The Netherlands (9%). The leading export destinations in 2003 were Germany (17 % in value), United Kingdom (12% in value) and France (10% in value). 66 percent of exports were intra-EU oriented. USA, Russia, Switzerland and Australia were the leading destination outside the EU. Canned fruit Total exports of canned fruit in 2003 amounted to € 1 billion or 1 million tonnes. The value exports decreased with 6 percent in 2003 compared to 2002, while volume exports declined by 13 percent compared to 2002. Spain was the largest exporter of canned fruit with a value share of 22 percent in 2003, followed by Germany (17%) and Greece (15%). The leading export destinations in 2003 were Germany (25% in value), France (16% in value) and the United Kingdom (12% in value). 83 percent of exports were intra-EU oriented. USA, Poland, Russia and Japan were the leading export destinations outside the EU. Frozen vegetables Total exports of frozen vegetables in 2003 amounted to € 1.6 billion or 2.2 million tonnes. Compared to 2002, this represented an increase of 3 percent in value and 33 percent in volume. Belgium was the largest exporter in 2003 with a value share of 41 percent, followed by The Netherlands (11%) and Spain (11%). The leading export destinations in 2003 were Germany (23% in value), France (17 % in value) and the United Kingdom (11% in value). Intra-EU exports represented 88 percent of total exports. Leading destinations outside the EU were USA, Russia and Canada. Frozen fruit Total exports of frozen fruit amounted to € 730 million or 570 thousand tonnes in 2003. Compared to 2002, value increased by 11 percent, while volume decreased with 3 percent.

62

Poland was the leading exporter with a value share of 35 percent in 2003, followed by Belgium (11%) and The Netherlands (11%). Intra-EU exports accounted for 86 percent of total exports. Leading destinations in the EU were Germany (23% in value), France (15% in value) and The Netherlands (8%). Japan, Norway, China and Russia were the leading destinations outside the EU. New EU countries Poland and Hungary were the largest exporters of preserved fruit and vegetables in 2003, exporting a value of € 750 million and € 382 million respectively. 54 percent of Poland’s export was apple juice of which 80 percent was exported to Germany. Hungary was a large exporter of sweet corn (33 % of total value exports), of which 50 percent was exported to the Russian Federation and 22 percent to Germany. Apple juice was the second largest product exported by Hungary (18 percent) of which 63 percent was exported to Germany.

63

7 TRADE STRUCTURE 7.1 EU trade channels A large part of the preserved fruit and vegetables used in the EU food industry is imported, often as ingredient from other EU countries and from outside the EU. These products are then repacked or processed for re-export. The trade of preserved fruit and vegetables is pan-European and the trade channels in the different EU countries do not differ greatly. Preserved fruit and vegetables can reach their final destination by passing through different trade channels. The selection of the trade channel and the trade partner depends on the requirements of the final customer, usually the food processing industry. By selecting one specific channel and trade partner, other trade partners are often automatically included. It is important that the exporter is aware of the different channels in the market. Most exporters will sell by means of independent traders (importers) or sales agents based in EU countries. The following major business partners can be distinguished for exporters of most preserved fruit and vegetables. Agents Agents are intermediaries executing the buying and selling orders of a customer against a commission (between 2 and 5 percent of the purchasing price). The agents never actually take possession of a shipment. Moreover, the products do not pass physically through the agents’ hands and often not even through their countries of operation. Two types of agents can be distinguished: buying agents and selling agents. The former represents the buyers, such as the food processing industry, compound houses or re-exporters. The latter represents the sellers, mainly exporters. Agents are usually well informed about the current market trends, prices and users. Importers Importers buy and sell preserved fruit and vegetables on their own account, mainly to the food processing industry and for re-export. Importers take ‘long’ or ‘short’ positions in the market depending on their expectations of future price trends. If an importer sells ‘short’, he is contracting to sell products, which he does not yet possess, while taking a ‘long’ position means that he has unsold products in his trading account. Processing industry (processing importer) Processing manufacturers/processing importers buy raw materials and semi-finished products to process them further, with the goal of selling these to the end-product manufacturers. For example, in the case of dried vegetables the processing importers clean, grade, reduce the humidity content and bacteria count before selling to the food industry. The processing manufacturers purchase preserved fruit and vegetables either directly or from importers or through the services of an agent. Specialised fruit processing industries supply semi-manufactured products to the bakery, dairy and ice-cream industry. Cargill and the compound houses (see below) are examples of leading processing importers in The Netherlands. The compound houses supply their compounds in the first place to the beverage industry, the dairy industry and the ice cream industry. End-product manufacturers Some end-product manufacturers who need large quantities (on a regular basis) of ingredients purchase their ingredients directly from producers abroad, such as the beverage industry in the case of fruit juice and fruit juice concentrate. Another example is the jam industry, which buys substantial amounts of fruit pulp and frozen fruit directly from producers abroad.

64

Leading importing manufacturers in EU countries are Unilever, Cadbury Schweppes and Danone. Many end-product manufacturers use processing importers or agents, as these offer a reference point situated within their own country. Retail and food service organisations Retailers carry out the final stage of selling preserved fruit and vegetables to consumers, accounting for a very large share of the total sales. The retail sectors hardly ever import directly, but buy from wholesalers or importers. In the case of jam and canned vegetables, retailers have a strong negotiating position due to the many sourcing possibilities between products and suppliers, as well as the practice of private labelling. In the EU, large supermarket buying groups are Ahold (The Netherlands), Carrefour (France), Metro (Germany), Tesco (United Kingdom) and Aldi (Germany). Because of their much smaller size, the food service sectors do not usually import directly from source. Packers These organisations pack goods in standard packs for the European market. The (re) packers keep the goods on stock in their warehouse, at their own risk, and sometimes under their own brand or the private label of a customer. These packers sometimes function as importers as well. More or less the same trade structure applies to all the products discussed in this survey. Many importers, agents, or repackers are specialised in more than one product group. For example, Catz Int. is specialised in dried fruit and frozen fruit and vegetables. Some importers also act as an agent. Moreover, most importers trade in preserved fruit and vegetables in consumer packs and catering packs, but also in preserved fruit and vegetables for industrial use. Potential exporters in developing countries should contact importers, agents and packers in the EU. These intermediaries have long established links with their customers and are in a better position (than foreign processors) to know the requirements of the local market and of individual end users. They supply the food processing industry and supermarkets chains and are financially able to support exclusive contracts and advertising campaigns, as well as to service special requirements. There are few agents for juice, although they are involved in the juice trade throughout Europe (Amsterdam and Rotterdam serve as the gateways to Europe for Brazilian orange juice concentrate). Before a large share of the imports is re-exported, the concentrate is often processed by compound houses, which mix, pack and/or standardize the product into the basis for the manufacturing of a wide range of products. The four biggest compound houses or importers (Döhler-Eurocitrus, SVZ, Cargill and Hiwa) and the beverage industry are mostly supplied directly from the source or from tank farms. The activities of agents/importers are generally limited to responding to spot purchases from stock and searching for products of a different nature or of a special quality. New EU countries The food processing industry imports through the following channels: - direct from foreign suppliers; especially foreign owned and large companies - through importers in the present 15 EU countries - through local agents.

65

Figure 7.1 Distribution channels for fruit juice concentrate More or less the same trade structure applies to the other product groups discussed in this survey. The type of food industry and the importance of the different channels, however, can differ. Many importers, agents, or repackers trade in more than one product group. Some importers also act as an agent. The soup industry (dried vegetables), the sauce industry (sterilised vegetables), the pickles industry (semi-worked pickles), the frozen food industry and other large food manufacturers mostly import directly from source. Some, mostly smaller food manufacturers, are served by intermediaries, who may or may not repack or reprocess (cleaning, grading, and reducing the humidity content and bacteria count for dried products) the products. Often they pack the fruit and vegetables under their manufacturer’s brand or a private label. Mostly, they function as importer, wholesaler and exporter at the same time.

producer/exporter

compound house

re-exports

other food industries beverage industry

agent/broker

wholesalers food service

consumers

retailers

66

Figure 7.2 Distribution channels for other preserved fruit and vegetables Selected intermediaries of preserved fruit and vegetables in major EU countries 7.1.1 Germany Company Type Products Website Bayernwald GmbH Importer/producer juices/ concentrates http://www.bayernwald.com Dohler group Importer/producer juices/concentrates http://www.doehler.com Henry Lamotte Importer` canned fruit/veg. http://www.lamotte.de tomato products frozen fruit/veg. Schroeder KG. Trader preserved fruit/veg. http://www.iska.de Ernst Rickertsen Importer dried fruit http://www.erik.de Rudolf Wild GmbH Importer/producer preserved fruit/veg. http://www.wild.de

juice concentrates 7.1.2 France Bureau Couecou Agent/broker juices/concentrates http://www.couecou.fr La Pulpe Importer canned fruit http://www.lapulpe.fr Comp.Alimentaire Importer/packer dried fruit

http://www.compagnie-alimentaire.com Eurobroker SA Trader dried fruit http://www,eurobroker.fr 7.1.3 United Kingdom Gerber Foods importer/producer juices/concentrates http://www.gerber.co.uk H.J. Uren & Sons Importer/producer juices/concentrates http://www.uren.com

frozen fruit/veg. European Food Importer/producer dried fruit/veg. http://www.efiltd.com Ingredients Netra Agro UK Importer preserved fruit/veg. http://www.netra-agro.com 7.1.4 Spain Export Trading S.A. Agent/broker/ canned fruit/veg. http://www.arrakis.es

Importer tomato products frozen fruit/veg.

producer/exporter

importer/agent repacker/processor

wholesaler

retail and food service sector

consumers

67

7.1.5 Italy Italconserve SpA Producer canned fruit/veg. http://www.italconserve.com Moellhausen SpA Broker/producer juices/concentrates http://www.moellhausen.com 7.1.6 The Netherlands Catz International Importer dried fruit/veg. http://www.catz.nl Riedel Drinks Importer/producer juices/concentrates http://www.riedel.nl Alanheri Trader dried fruit/veg. http://www.alanheri.com Dohler-Euro Citrus Importer/producer juices/concentrates http://www.dohler.com

preserved fruit Van Eeghen Intern. Trader dried fruit/veg. http://www.vaneeghen.com SVZ International Importer/producer juices/concentrates http://www.svz.com

preserved fruit/veg. 7.2 Distribution channels for developing country exporters Importers represent an interesting distribution channel for developing country exporters of preserved fruit and vegetables. Importers not only have experience and knowledge of the international market, they also have strong relationships with suppliers and buyers all over the world. Some of the importers have an Internet site, where interested parties can find more information on the field in which these importers are active. Trade fairs are also important meeting points for developing countries’ exporters and EU importers. A trade fair is a good opportunity for making personal contact between business partners. Please refer to Appendix 3.5 for contact details of trade fairs. Trade partners in the different product groups can be described as follows: Fruit juices/concentrates - large, international operating importers - specialised - require large volumes Frozen fruit and vegetables - large importers Dried fruit and vegetables - smaller importers - repackers Canned fruit and vegetables - large, multinational companies (Delmonte, Dole) - importing retailers - specialised importers for the food service segment.

68

8 PRICES 8.1 Price developments Price developments are strongly dependent on a number of factors: - harvest output in the supplying countries in relationship to demand; - negotiations between the different chain partners - the quality of fresh fruit and vegetables aimed at the consumer markets. When quality is not up to standard the products will be diverted to the industry for processing, thus putting pressure on prices. 8.2 Sources of price information Importers and agents in EU countries are the best sources for price information. They are in constant touch with their customers and suppliers and have up-to-date information regarding the current process and pricing trends. Contrary to fresh fruit and vegetables, prices for preserved fruit and vegetables are scarcely available in trade magazines and on the Internet. ITC and FAO publish prices for some products, while Agra Europe publishes prices in the Public Ledger and Fruit and Vegetable Markets. Contact details and publication titles can be found in appendix 3.2

69

9 EU MARKET ACCESS REQUIREMENTS 9.1 Non-tariff trade barriers

Exporters in developing countries wishing to penetrate the European Union markets will have to comply with several access requirements. Apart from import tariffs and quotas these so-called non-tariff trade barriers play an important role, as there are food legislation requirements as well as requirements set by the market itself. CBI’s database on European non-tariff trade barriers is called AccessGuide. Exporters in developing countries can check relevant non-tariff barriers for preserved fruit and vegetables by going to http://www.cbi.nl/accessguide First you can register, then go to ‘quick search’ and select what you need under ‘product group’: prepared foodstuffs, beverages, spirits, tobacco…… You will find information on EU requirements for product safety, consumer health, etc. as well as requirements dealing with environmental issues and social standards. 9.1.1 Food legislation Step-by-step food legislation in the EU is being fully harmonised: the same legislation will apply to all EU member states. EU legislation also applies to the new countries which became members of the EU as per May 2004. Two forms of EU food legislation can be distinguished: Directives Directives have to be implemented by the member states into their national legislation within a certain period of time. Regulations Regulations come into force as law directly. Originally, EU food legislation was primarily product-related. At present, following new EU policy, it is primarily horizontal legislation, applying to all categories of food products In recent years, legislation on food products has become more complex and stringent. In 2002, the regulation (EC) 178/2002 was adopted. The main topics covered for EU processors and importers are:

• General principles and requirements of food legislation • The establishment of the European Food Safety Authority • Procedures in matters of food safety

The regulation is commonly known as the General Food Law. It has, so to say, an umbrella function over all existing EU food legislation. It applies to all stages of the production, processing and distribution of food, also of feed products, fed to food-producing animals. EU food legislation will not impose direct conditions on the manufacturing processes of exporters in developing countries, but importers will because they want to be sure that they (including their products) meet all relevant legislation. The main purpose of the General Food Law is to guarantee a high level of protection of human life and health and, where appropriate, the protection of animal health and welfare, plant health and the environment. The following articles of the General Food Law are important for exporters in developing countries:

70

Article 11 It states that: food and feed imported into the EU for marketing shall comply with the relevant requirements of food law or conditions recognised by the Community. If specific agreements exist between the EU and your country, all food should comply with those requirements. Article 14 This article relates to safety requirements for food. It states that, although a product complies with all specific requirements of food legislation, it is not allowed on the market if a new hazard is found for which no requirements yet exist. Article 18 This article relates to the traceability of food: a producer or importer putting a product on the market in any EU country should be able to inform a food inspector within a few hours, as to the origin of all ingredients (including batch of production) and the chain of supply. Strictly spoken, the requirements apply to food business located in the EU (including importers). Although the requirements do not apply to countries outside the EU, European importers will most likely require from suppliers in third countries that they have an accurate tracing system in place. Explicit rules for food hygiene have already been laid down in the Directive 93/43/EEC. Hygiene is defined as all measures to ensure safety and wholesomeness of foodstuffs. The new regulation states explicitly that foodstuffs cannot be placed on the EU market if they are unsafe. This was, at least implicitly, already regulated through national food laws, but now there is an EU-wide explicit regulation. The core aspects of the General Food Law came into force in January 2005. Product regulations differ per species of preserved fruit & vegetables. For detailed information, consult AccessGuide in the first place. The following sources can also be contacted: • Your trading partner in the EU • The relevant food inspection authority in the EU country concerned • The embassy of the EU member country in your country. The following EU product legislation is relevant for preserved fruit & vegetables: Fruit juice/concentrate EU Directive 2001/112/EC specifies a definition of fruit juice and nectar. Fruit juice is comprised of 100 percent juice i.e. no additions of water or other ingredients. Fruit nectar consists partly of fruit juice and partly of water and sugar. The proportion of fruit juice depends on the kind of fruit and varies between 25 percent and 50 percent. These definitions apply in all European countries. Fruit juice drinks (soft drinks based on fruit juice) are not covered in the EU fruit juice directives, and legislation may vary from country to country. Usually they are required to contain a minimum of approx. 10 percent of comminuted/crushed/squeezed fruit and they may contain sweeteners, flavourings, colouring and sometimes added vitamins. Due to the high content of water (90%) in fruit juice drinks, it is not an option for producers in developing countries to export this product to EU countries. Addition of vitamins to fruit juices and fruit nectars, with connected health claims, has become common practice in many EU countries. However, the addition of vitamins is still not harmonised within the EU. The differences are apparent in regulations about: • Which vitamins are allowed or not

71

• In which products they are allowed or not • In which quantity • Under what conditions the addition of vitamins should be labelled In general, in The Netherlands, the UK and Belgium vitaminisation is allowed under certain conditions. In Germany, however, the addition of vitamins is regulated more strictly while in France it is not allowed. It is therefore always wise to consult experts about the precise conditions, before starting to export to these countries. Canned food Apart from hygiene and food safety requirements there is no EU legislation concerning canned foods. When canning food, it is important to completely control the elimination of bacteria, which can cause diseases or produce poisonous toxins or deteriorate the product. The most virulent species is the botulinum bacteria. Even a taste of food containing this toxin can be fatal to the consumer. Whether food should be processed in a pressure canner or autoclave (i.e. sterilisation > 1230 C) or boiling water canner (i.e. pasteurisation at approximately 950 C) depends on the acidity of the food. Acidity can be natural, as in most fruit, or added. Low-acid (pH>4.6) canned food contains too little acidity to prevent the growth of the botulinum bacteria, while acid food (pH<4.6) contains enough acid to block their growth or destroy them more rapidly when heated. Food additives and flavourings Food additives are non-nutritive substances, which are allowed to be added to some or to all food products, to produce a certain effect. Food additives and flavourings are subject to EU legislation. The legislation on application of food additives is harmonised in the EU and approved additives bear identification numbers, all preceded by the letter E. This is laid down in EU Directive 95/2/EC on food additives other than colours and sweeteners (separate directives exist for colours and sweeteners): which additive may be used in which food product, and up to which concentration. However, in certain groups of prepared fruit and vegetables, only specific additives with a maximum concentration may be applied. These additives are specified in Table 9.1. Regarding the product groups not quoted in the list below, the more general list of additives applies, but it is too extensive to list here. Refer to the information in AccessGuide on EU legislation on additives and flavourings in food, which includes a direct link to the consolidated version of the Directives, containing the complete list of additives (Annex II). The EU is currently working also to harmonise the composition of substances that may be used in flavourings, by compiling a list of flavourings used in member states. This harmonisation is expected to be completed in the near future. Table 9.1 Permitted additives and the maximum concentration thereof Preserved fruit and vegetables

Additives Maximum concentration

Fruit juice and nectar Fruit juice and nectar E300 ascorbic acid quantum satis1 Fruit juice E330 citric acid 3 g/l Pineapple juice E296 malic acid 3 g/l Grape juice E170 calcium carbonate quantum satis1

72

E336 potassium tartrate quantum satis1 Fruit nectar E270 lactic acid 5 g/l E330 citric acid 5 g/l Frozen or deep-frozen raw E300 ascorbic acid fruit and vegetables E301 sodium ascorbate E302 calcium ascorbate E330 citric acid quantum satis1 E331 sodium citrate E332 potassium citrate E333 calcium citrate Dried fruit Apricots, peaches, grapes, plums, figs

Sulphur dioxide 2000 mg/kg

Bananas Sulphur dioxide 1000 mg/kg Others Sulphur dioxide 500 mg/kg White dried vegetables Sulphur dioxide 400 mg/kg Canned fruit and E260 acetic acid vegetables E261 potassium acetate E262 sodium acetate E263 calcium acetate E270 lactic acid E296 malic acid E300 ascorbic acid E301 sodium ascorbate E302 calcium ascorbate E325 sodium lactate E326 potassium lactate quantum satis1 E327 calcium lactate E330 citric acid E331 sodium citrate E332 potassium citrates E333 calcium citrates E334 tartaric acid E335 sodium tartrate E336 potassium tartrate E337 sodium potassium

tartrate

E509 calcium chloride E575 glucono-delta-

lactone

1) The quantity of an additive, added to food and drink wares consistent with good production methods, which is not larger than necessary for the goal aimed at, under the condition that the consumer is not deceived.

Source: EU Directive 95/2/EC on food additives The food additives should be mentioned in the list of ingredients on the label of food products in consumer packs either by their full name or by their E-number. There are E-numbers for different kinds of food additives, such as bleaching agents, preservatives, colouring agents, brighteners, anti-oxidants, jellifying agents, etc.

73

Even when food additives are allowed, they can be unhealthy for people who suffer from certain diseases or allergies, and therefore can be used only in limited concentrations. This especially concerns preservatives and some colouring agents. Bear in mind that legislation concerning food is continuously changing. You are, therefore, advised to check the up-to-date situation by consulting importers or the relevant national Food Inspection Authority, but first of all: refer to AccessGuide. Another EU legislation that will become important to producers and processors of flavourings is REACH, a regulation on chemical substances. REACH is an EU Commission proposal (SEC(2003)1172) for a regulation aiming to improve knowledge and information regarding chemical substances, including natural substances that are classified as dangerous, particularly with regard to protecting human health and the environment. The basis of REACH is registration, to be carried out by EU manufacturers or EU importers, in a costly procedure based on thorough and complete dossiers, according to the volumes of the chemicals that are manufactured or imported. The burden rests with the importer, but he may however request extensive information and tests from the producer. At minimum, a three years’ period will be required for registration of new substances! Naturally occurring substances that are not classified as dangerous are exempted from registration. The only category within preserved fruit and vegetables that might be considered for registration is essential oils. This point is still under discussion and no final decision has yet been taken. The proposal is expected to come for the EU parliament no earlier than the end of 2005. Contaminants Regulation (EC) No. 466/2001 and its amendments lay down threshold limits for contaminants in specific food products. Examples of contaminants currently addressed are nitrates, mycotoxins, heavy metals (lead, cadmium and mercury), 3-MCPD, dioxins and dioxin-like PCBs and inorganic tin. Please note that requirements and types of contaminants occurring may change by time. Organic preserved fruit and vegetables The main principles for organic production at farm level and the rules that must be followed for the processing, sale and import of organic products were established by the passing of Council Regulation EEC 2092/91 and its supplement EC 1804/99. Please refer to AccessGuide for the complete text of the regulation and pictures of labels and logos used by various certifying bodies. The regulation is rather complicated and difficult, which makes it necessary for an exporter to the EU to consult experts on this matter. Use of the term ‘organic’ is limited in the European Union to products farmed according to the principles of production and the rules of processing defined in the regulation. Under EU Community rules, organic farming is defined as: a system of managing agricultural holdings that uses a variety of more environmentally friendly crop farming practices and involves major restrictions on the use of fertilisers and pesticides. It is important, however, for exporters to be aware that agricultural units, processors as well as their products, also the exporting company itself, must be certified by EU recognised control bodies to confirm that they meet the required EU or specific national standards, before their products can be offered for sale in EU markets. For more information on certification, please contact Control Union Certification (formerly known as SKAL), Ecocert, Soil Association or other EU inspection organisations. For further details, please refer to CBI’s Market Survey ‘Organic Food Products’. NovelfFoods and genetically modified food products

74

Regulation (EC)258/97 on Novel foods and novel food ingredients has set out rules for authorisation and labelling of genetically modified food products, and other categories of novel foods (foods that have not been legally on the market in any EU country before). This regulation indicates that new food products are not allowed to be introduced on the EU market before going through an (expensive and) time-consuming procedure, in which it should be demonstrated that they are safe. Subsequently, in regulation (EC)641/2004, the genetically modified food products were separated from the novel food regulation and arranged in separate legislation on traceability and labelling of genetically modified foods. The most important aspect is that when more than 0.9% of a GMO ingredient is present in food, labelling to mention this is compulsory. Processors applying GMO in Europe are still limited to only a few products. The most important products in this category are soya and maize. In fact, the market for soya consists almost fully of soya that is no longer GMO-free, with the exception of certified organic soya. Hygiene and food safety One of the most important issues in food legislation concerns food processing, hygiene and food safety. The EU Directive on Hygiene for Foodstuffs (93/43/EC), which became effective in January 1996, stipulates that: “foodstuff companies shall identify each aspect of their activities which has a bearing on the safety of foodstuffs and ensure that suitable safety procedures are established, applied, maintained and revised on the basis of the HACCP system”. All food processors in the EU member countries are legally bound to have an HACCP system or they must be working on implementing an HACCP system. The HACCP system is applicable to companies which process, treat, pack, transport, distribute or trade foodstuffs. These companies are forced to understand (and act against) the possible hazards associated with food production at all stages, from growing, processing, manufacture and distribution, until the point of consumption. This includes macro-biological (vermin), microbiological (viruses, bacteria, moulds), toxicological (chemical contamination by pesticides or environmental contaminants like heavy metals or dioxin), or physical (wood, metal, glass, plastic or fabric) risk. HACCP (Hazard Analysis Critical Control Points) The HACCP regulation is also of importance for exporters in developing countries, because responsibility is passed along the processing and supply chain. Importers of food products in the EU will be legally held responsible for the imported products. Although exporters to the EU are not obliged yet to have an HACCP system and their system will not be subject to control by the food inspection service in the importing country, having an approved HACCP system, or operating following a similar principle of quality control, will be a very positive argument in export business. Importers sometimes even require exporters to have HACCP implemented. In fact, food legislation with regard to HACCP (EU Directive 93/43/EEC), like other EU legislation, applies only within the external EU boundaries. All companies involved in food industry and trade in all EU member states are obliged to have an approved HACCP system. EU legislative authorities cannot impose requirements on producers in foreign countries, and EU food inspectors will not come to your country to inspect your HACCP system. However, importers in the EU all are obliged to have their HACCP system approved by authorities, and will require proof from their ingredients suppliers to guarantee food safety for their raw materials. Not EU food inspectors but probably your buyer will ask for confirmation of your HACCP system. For more information on HACCP, please refer to CBI’s AccessGuide.

75

It is expected that, as from 2006, EU will require from exporting countries that they develop their own HACCP legislation, in order to regulate HACCP, at least for exporting companies. Legislation on food labelling will be discussed in chapter 9.1.5 ‘ Packaging, marking and labelling’. Remark: Despite harmonisation efforts, food legislation in the EU is still not completely uniform: member states are free in the implementation of EU directives and, for some categories of food products, there is no EU legislation at all. Member states may have their own legislation. Exporters should realize that differences will still exist. Exporters’ products should therefore continue to comply with the legislation of the separate EU member states. 9.1.2 Market requirements Besides requirements, which are initiated by EU or national authorities, the end-users may have their own specifications, which should be met by the suppliers. These specifications may vary from demands concerning colour, correct and constant quality, to labelling, packaging, etc. Compliance with the quality standards demanded by the importer is essential, and failure to do so results in goods being refused or only accepted at considerably lower prices for further processing. Social market requirements Increasing consumer awareness, pressure from NGOs and media coverage make social issues increasingly important when doing business in the EU. Social issues focus mainly on:

• General labour conditions Important elements are minimum wages, maximum working hours, minimum age of workers, non-discrimination, freedom of labour organisation and basic labour rights. For more information, please check the website of the International Labour Organisation (ILO): www.ilo.org

• Occupational health and safety Occupational health and safety (OHS) is related to the risks for employees during their work. Occupational and work-related injuries and diseases cause large economic costs through absences from work, sickness, disability and survivor benefits. OHS goes together with cleaner production options.

There are management systems to ensure a certain level of attention for social issues. The most accepted management system is SA8000 on social accountability and OHSAS 18000 on occupational health and safety. Both systems are structured along the same approach as ISO. For more information, see the AccessGuide database. Environmental market requirements Environmental aspects of products have become a major issue in Europe in recent periods. Depending on the product in question, environmental aspects may play a vital role in preparing for exports to the EU market. Besides governmental actions (legislation), a strong consumer movement is noticeable in many EU member countries. On the level of the EU, as well as its member states, product legislation has been developed in order to reduce the negative environmental impact of products. This results in standards on the presence of pollutants, such as hazardous substances in products. As environmental legislation is mainly product-based, environmental market requirements can go further; product labels such as ecolables can be product- and process-related. Environmental management systems are process-related. Issues can be both product- (product legislation and labels) and process-related (process labels and management systems).

76

Environmental labels and management systems The hallmarks for environmentally sound products are normally referred to as Ecolabels. This hallmark indicates that the product (including its full manufacturing process) has a reduced impact on the environment when compared to similar products. Ecolabels have been developed at various levels, applicable throughout Europe, and national labels such as the Netherlands Milieukeur, the German Blue Angel and the Scandinavian White Swan. Participation in such an Ecolabel scheme is on a voluntary basis. In the case of preserved fruit and vegetables, organic labelling indicates that the product has been certified as being organic. If a manufacturer wants to indicate to external parties that he is manufacturing in an environmentally sound way, he can comply voluntarily with the following standard: • ISO 14001 This is based on the ISO 9000 series of standards for quality management. The relevance of the ISO 14001 standard for the future can be clearly seen by following the development and adoption of the ISO 9001 and ISO 9002 quality standard, which will be discussed below. Although voluntary, customer pressure is resulting in the ISO 9001 and IS0 9002 quality standard becoming increasingly necessary for doing business around the world. Similarly, the ISO 14001 environmental management standard may become a de facto requirement for being able to compete in many regions of the global marketplace. Organic growing and processing, including organic labelling, can be an important aspect in environmentally aware production. Organic labelling In order to make agricultural products from organic sources easily recognisable to consumers, EU "organic" labels have been introduced. The EKO quality label is the label in The Netherlands that guarantees the organic origin and quality of agricultural products. The organisation SKAL (now part of Control Union Certification) is the holder of the officially registered EKO quality symbol. Internationally, SKAL is a member of IFOAM (International Federation of Organic Agriculture Movements). It provides services in the field of inspection and certification, both nationally and internationally, acting as an independent third party. Other important EU certifying organisations operating internationally include BCS and Naturland (Germany), Ecocert (Germany, France, Belgium, and Italy) and the Soil Association (United Kingdom) and KRAV (Sweden). For more information, please refer to CBI’s Market Survey ‘Organic Food products’. Quality related market requirements Quality is not only product-related, it relates also to:

• Constant and on-time delivery of products • Traceability of products • Compliance with EU, member states and customer standards • Adequate labelling and packaging • Use of materials and production methods • Consumer health and safety

HACCP The need for good quality management takes on increasing importance. One of the main quality aspects is the food safety of the product. The HACCP (Hazard Analysis and Critical Control Points) procedure typically applies to the food-processing industry. It has been discussed in 9.1.1. ISO 9000 The ISO 9000 standards for quality management (most recent version ISO 9001:2000) provide a framework for standardizing procedures and working methods, not only with regard to quality control but to the entire organization: from purchasing to processing,

77

quality control, sales and administration. This means that quality, health, safety and environmental management programmes becomes strongly interwoven with the overall ISO management plan. ISO 9000 requires that you exactly describe your processes, and then follow these procedures exactly. It does not essentially address product safety and quality, but it is a guarantee that you always do things the same way. Your ISO 9000 system has to be certified and regularly audited by an authorized certifying body (like Lloyd's, Veritas, SGS; present in many countries). Also, one has to bear in mind that being certified is not a one-time exercise. A certificate is only valid for three years. In order to maintain the certificate, regular audits, both internal (1-2 per year) and external (2 times per year), are needed. Consequently, the company should have a quality manager in-house who is responsible for the quality management policy, procedures, implementation, monitoring and documentation thereof, and quality management consultants need to be hired for external audits. Therefore, a decision to become ISO 9000 certified means a firm commitment, which will draw on the company’s human and financial resources and will add procedures and paper work. Nevertheless, manufacturers who have obtained an ISO 9000 series certificate possess an important asset. The certification may be a vital factor in the selection process applied by trade partners in Europe. Benefits of ISO 9000 certification

Improves image Inspires confidence Increases credibility Generates recognition Enhances acceptability Reduces liability disputes Creates transparency and awareness Enables identification of weaknesses Systematises efforts to increase quality Enables identification of opportunities to increase efficiency Provides an important source for reference and monitoring Enables identification of opportunities to increase customer satisfaction

For further information, please check AccessGuide and the website of ISO: http://www.iso.ch Management systems like BRC and several others are gaining increasing interest and growing importance in the food sector, see CBI AccessGuide. 9.1.3 Occupational health and safety Occupational health and safety (OHS) is related to the risks for employees in specific processes. Attention paid to health and safety prevents costs for work-related injuries and diseases, absence from work, sickness treatment and disability benefits. OHS is more a matter of good housekeeping than high-tech solutions. Please check CBI’s AccessGuide for more information on OHS matters 9.1.4 Environmentally sound production Environmentally sound production for food products is important and starts with the growing of crops, the use of pesticides and fertilisers during the cultivation of crops, during storage and transport and during methods of processing food. Several measures can be taken to reduce the environmental impact of food processing. Contrary to product legislation environmental measures in the production process focusing on environmentally sound production (ESP) are not legally compulsory for exporters to the EU. However, you might be confronted with requirements on food processing that are demanded by European buyers.

78

On both EU and national levels product legislation has been developed in order to reduce the negative environmental impact of products. This results in standards on the use of pollutants, such as hazardous substances in products. Besides product legislation, standards are being developed for process legislation. National governments in Europe are setting legislation in order to protect the local environment. Please note that, regarding process legislation, only the national legislation in the country of production is legally binding. In AccessGuide you find an analysis of EU environmental product legislation, including legislation in The Netherlands, Germany and the United Kingdom. 9.1.5 Packaging, marking and labelling The general trend in Europe is towards facilitating re-use and recycling of packaging through incentives and disincentives, such as levies and taxes, and through mandatory or voluntary restraints. In order to harmonise the different forms of legislation, the EU has issued a directive for packaging and packaging materials (Directive 94/62/EC) in which minimum requirements are regulated. Among other measures, the directive sets maximum levels of concentration of heavy metals in packaging and describes requirements specific to manufacturing and composition of packaging. The maximum concentration of lead, cadmium, mercury and chromium (VI) in packaging is 100 ppm. This directive has been transposed into the national legislation of the member states. However, the implementation may take differing forms. Various programmes are in operation in the different member states. Most requirements for packaging and packaging materials can be found in the legislation of individual member states, or in additional buyers requirements. The EU has a regulation (EU)1935/2004 for materials and articles coming into contact with food products, but this is still far from complete. Many EU countries (but not all) now have legislation requiring that packaging for consumer products (such as cans, glass jars, cartons and plastic bottles) is taken back and collected by retailers and producers. If that is not possible (i.e. for one-way packaging) a contribution has to be paid, for each package, to a central co-ordinating organisation that has taken over the responsibility of collecting and re-processing. Exporters in developing countries targeting the European market have to be aware of these legislative requirements and take appropriate measures, in order to become or remain well-matched trading partners for European businesses. Most of the time, packaging policy does not affect ‘foreign’ manufacturers because importers will be held responsible for the packaging. However, sensible marketing requires taking the obligations of the importer into consideration. That means that packaging (transport packaging, surrounding packaging and sales packaging) materials should be limited and re-usable or recyclable. Otherwise, the importer will be confronted with additional costs, thus reducing the competitiveness of the exporter. The EU has set new phytosanitary measures for all wooden packaging material that is used for the import of goods into the EU from third countries. The background for this legislation is to protect the EU from the introduction of organisms harmful to plants and plant products via wood packaging material. The Directives require heat treatment or fumigation and marking of wooden packaging materials (including for example packing cases, boxes, crates, drums and similar packing, pallets, box pallets and other loader boards, pallet collars). The European legislation which is laid down by means of amendments to Directive 2000/29/EC, namely amending Directive 2004/102/EC and 2005/15/EC, entered into force as of March 1, 2005. The requirements refer to the international standard ISPM 15. See AccessGuide

79

There are more demands concerning packaging depending on the product group: see below. Fruit juice/concentrate Orange juice concentrate, which is by far the leading import product, is almost exclusively imported from Brazil, shipped in bulk vessels at –200 C under nitrogen (to exclude it from oxygen so as to avoid oxidation). Other concentrates are mainly packed in double polyethylene bags in 200 litre (or 266 kg) drums. Some of the larger firms, which used to accept simple capping of drums, nowadays require approved security seals. Aseptic drums of 200 litres are also used for fruit juice concentrate. Other forms of aseptic pack are used for certain tropical products, such as banana purée and mango pulp. Aseptically packed products are sterile items, packed and sealed into sterile packaging under sterile conditions, so that no subsequent heat treatment or refrigeration is needed to preserve them until the pack is opened. Tropical fruit pulp and purée is still in many cases hot-packed in metal cans of 3-5 kg, but most buyers prefer aseptic bulk packaging. New bulk-packaging technologies are being developed for liquid foodstuffs that are appropriate for the distribution of these product groups. The objective of the new technologies is to achieve economic handling, while maintaining product sterility. Examples are pallet-size, bag-in-box systems and flexi tanks. Products can also be packed deep-frozen in cartons of 20-25 kg or in drums of up to 200 litres. Canned fruit and vegetables Canned fruit and vegetables for catering use are often hot-packed in metal cans of 3-5 kg. In the catering sector, two thirds of the sterilized vegetables purchased consist of cans, while one third is packed in glass. Importers generally expect the following features of cans: • well-coated inside (especially the seam); • electronically controlled capping and seaming; • the can structure and seaming should enable a two-year shelf life, without causing

positive pressure due to hydrogen production. Canned fruit and vegetables for the retail market are mainly sold in cans of 225 g, 425 g and 825 g net weight (product weight, including brine). The packaging in glass jars instead of metal cans is still gaining popularity in the EU, partly because fruit and vegetables in glass stand for a quality product. The share of glass as a packaging material is particularly high in The Netherlands (60 percent in 1999), although in Germany and Belgium the use of glass jars is gaining popularity. The can and glass jar industries have reduced the weight of the packaging (both glass and metal) considerably. Still, the metal cans are lighter and stronger than glass jars. Dried fruit and vegetables Bulk-packaged, dried tropical fruit is usually packaged in export carton boxes lined with polyethylene, containing two or four 5 kg boxes. Dried vegetables are nowadays mostly packed in polyethylene. It is generally used in the form of a closed bag inside paperboard cartons, fibreboard corrugated boxes (bag-in-box system) or multi-wall sacks. Polyethylene liners may be heat-sealed to give an airtight closure, although some air permeates gradually through the polyethylene itself. Vacuum packaging is also used, but on a small scale.

80

Packages suitable for palletisation are gaining in popularity, since they reduce handling costs and damage to the product. Rectangular boxes are more suitable for palletisation than paper sacks or drums. Packages normally vary between 5 kg and 25 kg. Frozen fruit and vegetables Frozen fruit and vegetables are mostly packed in paperboard-corrugated cartons of 10, 15, 20 and 25 kg, although packaging in polyethylene also takes place. In the case of frozen vegetables, packaging in octobins, which are large paperboard corrugated cartons, is gaining popularity. However, not all manufacturers possess the equipment to handle this kind of packaging. The Netherlands Food and Drug Act contains special regulations concerning the labelling of food products, which are in line with the EU Directive 2000/13/EC which harmonized labeling requirements throughout the Community. The labelling requirements listed below generally apply to all preserved fruit and vegetables specified in this survey. Nevertheless, there are some exceptions, depending on the kind of product or type of fruit or vegetable. For specified information, contact The Netherlands Horticulture Commodity Board or relevant trade associations. The labels on food products for industrial use in the EU should include the following information (in English or in the language of the importing country): • Product name • Batch code/lot identification • Name address of manufacturer/exporter • Net weight • Recommended storage conditions. The labels on food products in consumer and food service packing in the EU should be in the language(s) of the country where the product is put on the market and should include the following information: • Product name, variety and type; • ‘Best before’ date and storage conditions where necessary; • A list of ingredients, including food additives; quantitative labelling (in %) is required for

those ingredients mentioned in the name of the product or pictured on the label; • Net weight (and leak weight when applicable); • Usage instructions, in the case the products cannot be consumed or prepared properly

without these instructions; • Name, address of the packer/exporter/importer located in the EU; • An indication of the batch of production, which may be specified in code; • Country of origin • Substances that can cause food allergy, and might by consequence be dangerous to

health, listed in a specific annex III in the food labelling directive mentioned above, have to be mentioned explicitly on the label (see information below).

Substances that may cause food allergy and have to be labelled explicitly a. cereals containing gluten (wheat, rye, barley, oat, spelt, kamut) and products made thereof b. crustaceans and products made thereof c. eggs and products made thereof d. fish and products made thereof e. peanuts and products made thereof f. soya and products made thereof g. milk and products made thereof, incl. lactose h. nuts (almonds, hazelnuts, walnuts, cashew nuts, pecan nuts, Brazil nuts, pistachio nuts, macadamia nuts) and products made thereof i. celery, root or leaf, and products made thereof

81

j. mustard and products made thereof k. sesame seed and products made thereof l. sulphur dioxide and sulphite Moreover, the EU has legislation, which forbids health claims that cannot be upheld scientifically. Medical claims are forbidden altogether. Manufacturers should take into account that consumer protection is a vital issue in this field and that illegal claims will be heavily penalised. Under a proposed plan propagated mainly in the UK, The Netherlands and Belgium, companies have to ensure that products conform to acceptable safety standards, with assessment being executed by qualified experts. Because consumers need to make informed choices about which products to buy, a list of permitted health claims (backed by scientific evidence) should be drawn up. The information would then be collected and managed centrally so that it could be accessed easily (for example, in case of product recall). A similar system is already in operation in The Netherlands and Belgium. Regarding the exports of preserved fruit and vegetables in consumer and catering packs, all details of labelling should be agreed and specified in consultation with the importer or end-product supplier (supermarket, wholesaler, etc.), who has the correct information regarding the legal requirements. Furthermore, the accompanying documentation must provide details of any treatment the product has undergone and any further information specified in the contract with the importer. Information For detailed information about environmental aspects relevant to trade, please refer to CBI’s AccessGuide. Useful Internet sites

Max Havelaar Foundation http://www.maxhavelaar.nl Fairtrade Labelling Organisation http://www.fairtrade.net CBI http://www.cbi.nl AccessGuide http://www.cbi.nl/accessguide

9.2 Tariffs and quotas In general, all goods entering the EU are subject to import duties. The level of tariffs depends on: • country of origin; • product. The trading environment for preserved fruit and vegetables for some products is liberal, but the more highly processed the product, the higher the tariff. Imports of preserved fruit and vegetables from a number of developing countries (see Annex 4 of Regulation 2820/98/EC) are subject to reductions on import duties under the GSP scheme. In order to benefit from GSP treatment, exporters have to provide a ‘Form A’ certificate, which is issued by the appropriate authorities in the respective country. In June 2001, the European Commission adopted a proposal for revision of the Generalised Scheme of Tariff Preferences (GSP) for the period till the 31st December 2004. The regulation is designed to simplify the GSP regime for sensitive products (products grown and processed within the EU). It also intends to improve the effectiveness of special incentives to promote labour and environmental standards. The new Regulation complements and fully incorporates the recent "Everything But Arms" (EBA) initiative in favour of the Least Developed Countries. Under the EBA initiative, quota and import tariffs have been abolished for all product groups, except arms and ammunition,

82

for the Least Developed Countries. Restrictions still apply to sugar, rice and bananas; however these will be lifted during the period leading up to 2007. Exporters in Least Developed Countries wishing to benefit from the ‘EBA’ agreement should take the following 5 steps:

1) Establish product classification (CN) 2) Establish product eligibility 3) Check the origin criteria applicable to the product. These criteria are product-

dependent (Form A or EUR 1). 4) Check the transport conditions, from the exporters’ country to the port in the EU, as

direct shipment is a prerequisite for qualification. 5) Prepare documentary evidence for proof of origin.

In order to establish the import tariffs for a particular product, please check with your trade partner in the EU, the EU representative office in your country or your embassy in the EU country concerned. The EU commission established a special helpdesk for exporters from developing countries: http://export-help.cec.eu.int/ This website gives the most up-to-date information regarding import tariffs based on the CN product code. The import tariffs change frequently and depend on trade agreements between the EU and developing countries and the sensitivity of the product for EU producers. Value Added Tax (VAT) Although fiscal borders between EU countries were, in theory, eliminated as from 1 January 1993 onwards, in practice, harmonisation of VAT (tax levied at consumer sales’ level) rates has not yet been achieved. Table 9.3 summarises the VAT rates applied in the different EU-15 member states for foodstuffs in general. Table 9.4 summarizes the VAT rates in the new EU countries. In most countries the reduced rate applies to food products. Table 9.3 VAT rates (in %) applied to foodstuffs and fruit juices in the EU-15,

October 2004 Reduced Rate Standard Rate Austria 10 20 Belgium 6 21 Denmark - 25 Finland 8/17 22 France 5.5 19.6 Germany 7 16 Greece 8 18 Ireland 13.5 21 Italy 10 20 Luxembourg 6 15 Portugal 5/12 19 Spain 7 16 Sweden 6/12 25 The Netherlands 6 19 United Kingdom 5 17.5

Commission Source: DGXXI, European (2004)

83

Table 9.4 VAT rates (in %) applied to foodstuffs in the new EU countries, October 2004

Reduced Rate Standard Rate Czech Republic 5 19 Estonia 5 18 Cyprus 5 15 Latvia 5 18 Lithuania 5/9 18 Hungary 5/15 25 Malta 5 18 Poland 7 22 Slovenia 8.5 20 Slovak Republic - 19 Source: DGXXI, European Commission (2004)

Useful Internet sites

Current information on VAT rates in EU countries

http://europe.eu.int/comm/taxation_customs/taxation/vat/how_vat_works/rates/index_en.htm

EU rules of origin for the GSP

http://europe.eu.int/comm/taxation_customs/customs/customs_duties/rules_origin/index_en.htm

Market access database

http://mkaccdb.eu.int/

Opportunities for exporters in developing countries are the following: Extensive product documentation A general trend in the food ingredients sector is that importers and food processors in the EU require extensive product documentation in order to guarantee food safety. This means that a product should be accompanied by complete product specifications, including, for less known products, clear suggestions for application, instructions on how to store and to process, documentation on tracking and tracing, information on quality assurance (e.g. HACCP), or even ISO certification. An exporter capable of meeting these requirements will have an improved competitive position in the EU market for preserved fruit and vegetables. Organic products Healthy, natural and organic products are occupying an increasingly stronger position in the EU. Organic production is particularly attractive for growers in developing countries, since much of their food production is already organic or can easily be changed to organic (see Part B). HACCP HACCP (Hazard Analysis and Critical Control Points) certification is expected to become a requirement for processed products from non-EU countries under the General Food Law.

84

Exporters whose processing is certified have a better competitive position to export to EU customers. This concludes Part A of the survey. All information given in this part and additional information you can get from the different Internet sites mentioned form the basis to work on Part B. In Part B you are able to use all information gathered to prepare your strategy to enter the EU market and to draw up an Export Marketing Plan to make your strategy work.

85

PART B EXPORT MARKETING GUIDELINES: ANALYSIS AND STRATEGY

86

The Export Marketing Guidelines form a roadmap to conduct market research, to formulate your Market Entry Strategy (MES) and finally to prepare an operational Export Marketing Plan (EMP) for the introduction of your products on EU markets. The MES spells out your strategy for a period of 3 – 5 years on how you intend to build up a successful export position on EU markets. The EMP shows how this strategy will be executed and the actions you should take. In Part B, you will be guided through the different steps to prepare your Market Entry Strategy and the Export Marketing Plan. Schematically, the following steps should be taken:

EXTERNAL ANALYSIS (Chapter 10) - analyses factors outside the control of the company - focusses on potential export markets in the EU

INTERNAL ANALYSIS (Chapter 11) - analyses factors within control of the company - focuses on internal capabilities to export to EU markets

SWOT analysis (Chapter 12) - Strengths - Weaknesses - Opportunities

FORMULATION OF OBJECTIVES (Chapter 12) - EU markets and segments - trade channels - turnover and volumes - profitability - time schedule

MARKET ENTRY STRATEGY (Chapter 12) - strategy to realise objectives

EXPORT MARKETING PLAN (Chapter 13) - operational plan to execute strategy

OPPORTUNITIES AND THREATS (Chapter 12

STRENGTHS AND WEAKNESSES (Chapter 12)

87

10 EXTERNAL ANALYSIS: MARKET AUDIT Market research In order to prepare an external analysis, extensive market research is necessary. Please check CBI’s ‘Your guide to market research’ for information on this subject. For non-tariff trade barriers (an important part of the external analysis), please check CBI’s AccessGuide. To obtain relevant information about preserved fruit and vegetables in EU markets, the following fields should be explored:

• Country information General data about EU countries like population, gross national product (GNP), main Economic activities, distribution facilities, etc. This information is abundantly and freely available. Please check with embassies and consulates of EU countries in your country.

• Information on the market for preserved fruit and vegetables Market studies are available; however, these studies often refer to preserved fruit and vegetables in general and less to product groups, like fruit purées, and individual products, like pineapple purée.

• Tariff and non-tariff barriers at EU and national level This information is widely available in a large variety of public documents. Further, much information can be found on the website of the EU and on CBI’s AccessGuide http://www.cbi.nl/accessguide

• Trading conditions General information on trading with EU countries is widely available. However, it is much harder to obtain sector-specific information, as trade partners in the EU do not usually publicise information about their conditions. In some cases, websites of importers of preserved fruit and vegetables give information about product specifications, packing and processing.

Market research consists of two parts: Desk research Desk research is the gathering of secondary information; others have already assembled and compiled the information. The following sources are available to conduct desk research for preserved fruit and vegetables:

• Internet By far the most important source of information. Much information is freely obtainable; for more detailed and specific information fees must often be paid.

• Market studies Organisations like CBI and ITC have market studies for preserved fruit and vegetables available, both for organic and traditional products.

• Trade magazines Trade magazines are valuable sources of current information, trends and developments in the preserved fruit and vegetable sector. Please check appendix 3.6 for contact details of trade magazines.

• Trade fair catalogues Trade fair catalogues of for example Biofach, Food Ingredients Europe and Anuga provide a wealth of information about competitors, importers and products. Moreover, websites are mentioned, so you can easily check the sites of exhibitors.

Field research Field research is the gathering of primary information; you can look for information specifically tailored to your requirements. Field research is more expensive than desk research, as travelling to EU countries is involved.

88

Desk research can be complemented by field research. During field research, the following tools are available to the potential exporter:

• Trade fairs • Seminars • Visits to importers and agents • Visits to branch organizations • Visits to commercial sections of embassies

10.1 Market development and opportunities The market developments described in chapters 3, 4, 5 and 6, together with the opportunities as described in chapter 8, form the main source in this survey for obtaining a clear picture of the market for preserved fruit and vegetables in six EU countries. Together with information assembled from sources as mentioned in market research, you should be able to get a picture of how the market develops and which opportunities might be available. The EU Market Access Requirements, as described in Part A of this survey, indicates the product and packaging requirements with which you should comply in order to enter EU markets successfully. For example, your products might have certain properties relevant to health aspects in food or you might be a supplier of year-round products. Healthy food is on the rise in the EU, while retailers look increasingly for year-round instead of seasonal products. In both examples, your products might be well positioned to capture these trends. 10.2 Competitive analysis The food ingredients sector is increasingly becoming a global business. Not only is food retailing characterised by concentration and consolidation, this trend also applies to the food processors. In the EU, companies like Unilever, Nestlé, Danone have strong positions and brands in the EU markets, complemented by national brands. Please refer to Chapter 4 on ‘production’. Their buying power is huge, enabling them to choose from a wide variety of ingredient suppliers worldwide. Analysing the import statistics, as given in chapter 5 and in appendix 1, gives a good indication of the major supplying countries for a product group or individual products. It is important for the potential exporter to evaluate why these countries are major suppliers to the EU and, more important, whether or not you, as a potential exporter, can match or even surpass product quality, logistics and service. Factors enabling countries to be successful exporters to the EU can be a high productivity, a favourable exchange rate, the right growing conditions, proximity to EU markets, frequent shipping departures to EU ports, opposite seasons or combinations of these factors. In terms of quality, it would be a challenge to surpass the requirements customers in the EU require as minimum standards. Although price will always remain a major competitive tool, it is certainly not the only instrument for outranking competitors. The following instruments, as mentioned by leading importers of preserved fruit and vegetables in The Netherlands, are equally important:

• Consistent and high product quality according to specifications of importers and food processors

• Steady supply of products • HACCP certified • Reliability in supply and honouring agreements with EU trade partners • Complete product specifications • Good packaging • Open communication • Certification in the case of organic preserved fruit and vegetables

89

The major problems faced by importers in The Netherlands in importing preserved fruit and vegetables from developing countries are the following:

• Quality of shipment is not in line with samples sent • Delayed delivery • Exporters want to change agreed payment and delivery terms • Pesticide residues exceed permissible limits • Paperwork and bad communication

Exporters who are able to offer their products at a competitive price and who can successfully apply competitive tools as described above are in a good position to outrank competitors. This should be coupled to a good understanding of the above-mentioned problems with which importers are confronted. By providing solutions to these problems, exporters have another tool to outrank competitors. 10.3 Sales channel assessment Based on the trade structure for preserved fruit and vegetables as described in chapter 7, the exporter should evaluate the different trade channels for his products and his company. Based on the characteristics of different types of trading partners, as mentioned below, and the capabilities of your company the best option should be considered. The first step is to determine your mode of market entry into the EU:

• Direct exports to the EU This way the exporter chooses to export directly to an EU trade partner or partners. The advantages of this approach are:

Direct contact with EU trade partners, resulting in better information about market requirements and trends, price levels, supply and demand situations, etc.

Shortening of the supply chain and better able to be part of an integrated chain

Better control over the products to final destinations The disadvantage is that the company has to invest in an export organization and reserve budgets for traveling to trade partners in the EU and to promote its products. This option is suitable for larger size companies which can supply full container loads (FCL) and which have the resources to set up an export department.

• Indirect exports to the EU In this way, the company sells its products to a locally based export house or trading company, which takes care of all the export documentation and formalities. The advantages, especially for small companies, are:

No need to invest in an export organization Possibilities to supply less container loads (LCL) to local export intermediaries,

who usually consolidate smaller shipments from several exporters in order to fill a full container load (FCL). This way, shipment costs can be reduced.

The disadvantage is that the company has no direct contact with trade partners in the EU and is therefore less informed about market developments. This option is suitable for small companies which cannot fill a full container load and which do not have the financial resources to set up an export department and to invest in EU market visits, participation in trade fairs, samples and brochures.

When a company has decided that direct exports are the best option, it then should decide on the type of trade partner in the EU. In evaluating the different options, the following should be considered: • Directly to food processing companies

Although exporting directly to food processing companies in the EU might seem a

90

cost effective option, because middlemen are bypassed, the following pitfalls should be taken into account:

Food processors often require DDP (Delivered, Duty Paid) delivery terms (Please refer to 10.4, delivery terms). For exporters in developing countries this is almost impossible to organise, as they have no EU distribution structure to handle imports, pay clearing and transportation charges and pay VAT duties.

Quality complaints are difficult to deal with, as the exporter usually does not have the means to check the shipment on the spot and to evaluate the complaints. The hiring of an independent quality surveyor is necessary to evaluate the damage.

Food processors increasingly focus on their core task to produce and market food products. This means they do not concern themselves with import procedures, but require from suppliers that they deliver the goods anywhere in the EU at their warehouses.

In case of payment problems, a partner in the EU country who speaks the language and understands the business culture is necessary to communicate with the right persons within the food processing organisations, in order to settle the problem

• Through importers

As importers buy the products, usually on FOB or CIF terms, their handling stretches from unloading and clearing in the port to final delivery to their customers. As food-processing companies increasingly work with Just-In-Time (JIT) deliveries, they leave the stock holding to their suppliers. The importer’s role expands from purely importing and delivery to a logistic service provider, who can cater to the requirements of food processors in EU countries. He will adjust his assortment to the requirements of his customers and provides services like cleaning, packing, stock keeping and order picking. In this respect, the importer performs a vital role in matching the requirements of food processors (a wide variety of ingredients in smaller quantities) to those of

exporters (a limited range of ingredients in larger quantities).

• Through agents The use of agents can provide a good alternative for supplying directly to the food

processing industry. The advantage of working with agents is that they know their market well, are familiar with business practices, know the buyers of food processing companies and generally have easy access to them to settle problems and promote the exporter’s products. Exporters in developing countries can still export directly to end customers, but are

represented by knowledgeable partners in EU countries. As the exporter ships and invoices directly to EU customers, he can easily follow

the performances of his products and obtains first-hand information about possible improvements. In assessing the use of trade partners in the EU, the exporter should consider his internal capabilities to handle exports to EU countries. Direct exports to food-processing companies require a rather sophisticated export department, a minimum volume to ship and a strong financial position. On the other end of the spectrum, a locally based export house will be a good option for small companies with limited finances and only one or two products to sell. 10.4 Logistics The logistical requirements depend on the following factors:

The requirements of your trade partner in the EU. The type of product. Many preserved fruit and vegetables have a limited shelf

life and should be transported either in chilled or frozen condition. For sea

91

transport this means the use of containers that can be chilled or frozen during sea transport.

The volume to supply. Full container loads (FCLs) are usually more efficient and cheaper, as less handling is involved. Often the container can be loaded at the exporter’s warehouse and unloaded at the customer in the EU.

Container shipments are becoming increasingly popular as they provide the following benefits:

- less handling, damage and pilferage - therefore lower insurance premiums when you ship on CIF terms - one transporter to deal with - lower packing costs - combined containers in case of less container loads (LCLs).

When the exporter does not have his own shipping department, the use of a freight forwarder is recommended. A freight forwarder performs the following functions:

- arranging and contracting vessel space - arranging carriage to and from the port - warehousing - arranging for licenses, inspection, insurance, Customs formalities, packing

and marking - negotiation of freight rates - arranging shipping documents.

In dealing with freight forwarders, the following tips might be useful:

- forwarders are paid (partially) by shipping companies - nominate one forwarder from door to door; working with one contract partner

is not only more efficient, but the forwarder is likely to give rebates on the freight rates

- select forwarders who belong to associations - give clear and precise shipping instructions - ask for their general conditions.

Logistics form an integral part of the delivery terms on which an exporter agrees with his trading partner in the EU. 10.5 Price structure Although price is not the only marketing tool for exporting preserved fruit and vegetables to EU markets, it is certainly a very important one. Concentration of buying power, increasing supply and global sourcing of preserved fruit and vegetables all place pressure on process and margins throughout the value chain. Due to the diversity in products and packaging in the preserved fruit and vegetables sector, it is not possible to focus on prices for individual products. Weather conditions, harvests, supply and demand and speculation determine prices on a daily basis. However, the following trends are visible in prices and margins of preserved fruit and vegetables:

• Cost prices for growers, exporters, importers and the processing industry are constantly rising. The main reasons are the increasing rules and regulations both at EU and national level. Food safety is one of the prime concerns for consumers. Retailers and governments alike respond to these concerns by demanding HACCP certification from importers, tracking and tracing systems from growers and exporters, pesticide reduction (Minimum Residue Levels) from growers and strict product specifications from exporters and importers alike.

• Oversupply situation for some product groups as the markets in the EU are stabilizing. This puts pressure on price levels.

92

Faced with increasing costs and, at best, stabilizing selling prices causes margins to decrease, exporters should:

• Have a clear insight into their cost prices for exports to EU markets in order to set a minimum selling price. At least all variable costs and part of the fixed costs should be covered by the selling price. When the market price is lower than the minimum selling price, a loss situation occurs. Although this could be acceptable for individual orders in order to prevent larger losses (stock losses), in the longer term this situation will undermine the financial stability of the company.

• Try to obtain efficiencies in operations in order to decrease cost prices, for example reduction of stocks, more efficient production runs; negotiate lower purchase prices for raw materials and packing materials, etc.

Prices are determined by market conditions; individual exporters cannot influence the price levels. Margins for the exporter depend on his price setting at one side and his cost price on the other side. Part of his costs depends on the payment and delivery conditions, which the exporter agrees with his trading partner in the EU. Sources to check for price information (dried fruit) are:

o The Public Ledger (http://www.public-ledger.com o Foodnews (http://www.foodnews.co.uk/commodity o Market News Service (http://www.intracen.org

Export calculation structure In order to prepare an export calculation for a shipment to an importer in The Netherlands, the following structure is given, based on a Cost, Insurance and Freight (CIF) delivery, according to the Incoterms 2000 (see below): Selling price CIF Rotterdam € 100.00 per kg. Less: - insurance (110%of selling price) € 1.10 - shipping costs (total costs divided by kilograms of product) € 0.06 ____________ FOB Port of loading € 98.84 Exchange FOB amount in local currency: €1 = Lc 100 Lc 9,884.00 Less: - handling and loading charges local currency 100.00 - inland transport local currency 200.00 ____________ Ex works local currency 9,584.00 Less: - variable costs local currency 7,000.00 - interest charges local currency 500.00 _____________ Gross contribution local currency 2,084.00 Less: - fixed cost allocation local currency 1,200.00 ____________ Net contribution local currency 884.00

93

Usually prices quoted to EU trade partners are in euros (€). Shipping costs are usually quoted in US$. Both currencies should be converted into local currency at the rate of exchange applicable at the time of quoting. Payment terms Payment terms form an important negotiation tool for the exporter. By granting credit terms to his trade partner in the EU and by accepting less secure forms of payment, he can try to induce trade partners to accept his offer. The different payment methods and risks attached to them are extensively described in CBI’s Export Planner. Although payment by letter of credit (L/C) could be negotiated for first-time shipments, trade partners in the EU usually pay by ‘open account’. The exporter sends his invoice to the importer, who will pay the invoice by bank transfer. Open account payments provide the following advantages for both parties:

• No documents are required; only an invoice is sufficient. This means less paperwork. • Low cost • Quick execution • Simple However, the exporter has no guarantee that his invoice will be settled. Although he can claim retention of title of the goods as long as the shipment has not been paid, in practice he has very little control over his products when they are in the warehouse of his trade partner. It is therefore strongly advised to take out credit insurance for commercial risks. The local bank of the exporter can advise the possibilities and the premiums.

Exporters who aim to supply EU markets will invariably be faced with longer payment terms. Usually, trade partners will wait with payment until they have inspected the goods upon arrival in their warehouse against the (approved) samples they received. Depending on the shipping period, the exporter can easily face a period of 6-12 weeks after production of the goods before he receives payment of the invoice. The interest he loses should be calculated into his cost price. This is especially important for countries, which charge high interest rates.

Delivery terms Delivery terms should be based on the INCOTERMS 2000 issued by the International Chamber of Commerce (ICC). For full details on the Incoterms, please check CBI’s Export Planner or visit the ICC’s website: http://www.iccwbo.org/incoterms/preambles.asp Delivery terms in preserved fruit and vegetables depend largely on the type of trade partners in the EU: food-processing companies often demand Delivered Duty paid (DDP) delivery, while importers usually require Free on Board (FOB) or Cost, Insurance, Freight (CIF) deliveries.

There is a large difference in DDP on one hand and FOB and CIF deliveries on the other. DDP deliveries are arrival contracts: the exporter is fully responsible for the goods until they arrive at the warehouse of the trade partner anywhere in the EU. FOB and CIF are departure contracts: responsibility for the goods transfers from exporter to importer at the moment the goods cross over the ship’s rail at the port of departure. 10.6 Product profiles PRODUCT PROFILE DRIED APRICOTS 1. Product name: apricot (Prunus armaniaca L.), dried, bulk pack Main varieties: Bebekou, Hamidi Other varieties: Peeka, Royal

94

2. Market requirements: Quality standards: Apricots are distinguished as being sweet/sour and whole/diced. Whole apricots are usually graded in large (or jumbo), medium, small. No EU quality standards exist, but some member states have limited national quality standards for preserved fruit. The product should be prepared from cleaned, stalked, destoned apricots of commercial varieties, dried by appropriate methods (sun drying or air drying) to the required dry solids content. Permitted food additives: Potassium sorbate (as sorbic acid) max .1000 mg/kg Sulphite (as sulphur dioxide) max. 2000 mg/kg Ascorbic acid QS Toxic substances originating from mould growth (e.g. aflatoxin) should be absent. Sensory characteristics: Colour: dark-yellow to deep-orange, without brown discoloration Flavour/taste: aromatic, characteristic apricot, no off-taste Texture: smooth, soft, easy-bite, not leathery. Chemical/physical characteristics: No food additives exceeding permitted levels; texture as mentioned above. Minimum labelling: • product name • identification (name and address) of supplier (producer, packer or vendor) • net quantity kg Packaging: Cardboard boxes, preferable with polyethylene liner, usually 10-12.5 kg (no wooden crates because of risk of splinters in product) 3. Market structure: Harvest and processing according to growing area, demand throughout the year. Average prices: US$ 1,500 tonne (FOB) Market trends: Dried apricots are mostly consumed by direct eating (often in mixtures with other dried fruits and nuts). Consumer demand is stable. 4. Main suppliers: Main supplying country for dried apricots: Turkey (80% of supply to EU). Other supply: France, Germany, Iran, The Netherlands, Italy, UK, and South Africa. Local EU production in Mediterranean area (Italy, Spain, France, Greece) exclusively for fresh consumption. Application in jam industry has turned negligible, but there is a growing demand in bakery industry. 5. How to improve the quality: Harvesting: careful picking without damaging the fruits, because damage will rapidly cause

95

enzymatic browning. Post-harvest treatment: sulphur dioxide treatment in closed room (to maintain the bright orange-yellow color and protect against insects), keeping the final sulphur dioxide content within permitted levels. Apricots that have not had sulphur dioxide treatment will turn dark. These dark colored apricots are not very popular in the EU, except in the health food sector. PRODUCT PROFILE MANGO PURĖE 1. Product name: mango (Mangifera indica L.), puree, preserved by heat Main varieties: Alphonso, Totapuri Other varieties: Haden, Benett, Tommy Atkins, Carabao 2. Market requirements: Quality standards: No EU quality standards exist. Product should be prepared from sound ripe fruits, only mechanical and physical processes are permitted during production. Product should be preserved by appropriate heat treatment. Sensory characteristics: Colour: golden-yellow to orange-yellow, even and homogeneous; no signs of enzymatic or non-enzymatic browning or oxidation Taste/flavour: pleasant, pure mango, typical for the fresh fruit (sweet, slightly spicy, slightly reminiscent of peach), no oxidation, caramellisation or other off-taste Consistency: thick-fluid at ambient temperature Appearance: homogeneous puree with small pulp particles, completely free from contamination (including so-called black specks). Chemical/physical characteristics: Total sugar content (refractometer)min. 16 Bx PH 3.7 +/- 0.3 Total acidity (as citric acid anhydrous) min. 5.5g/kg Ratio citric/iso-citric approx. 50:1 Vitamin C (ascorbic acid) min. 25 ppm Beta-carotene min. 50 ppm Ash 0.4 +/- 0.07 % Potassium 1800 +/- 200 ppm Phosphorus (as P2O5) 130 +/- 20 ppm Formol number 15 +/- 5 Cadmium max. 0.03 ppm Lead max. 0.3 ppm Mercury max. 0.01 ppm Pulp passed through 1/32" mesh sieve. Without added sugar; presence of added citric acid is only allowed when declared quantitatively on the label. No colouring and preserving agents, and no flavouring substances, neither artificial nor natural, may have been added. Any substances in quantities that could be harmful to health should be absent. Microbiological quality: General aerobic count max. 1000/g Yeast and mould count max. 100/g Coliform count max. 10/g Salmonella absent/25 g Any components and substances originating from micro-organisms in quantities that could be harmful to health must be absent. [Product must have been subject during processing to heat treatment of min. 110 0 C during 15 seconds, to eliminate heat resistant spore forming micro-organisms].

96

Minimum labeling (on smallest unit of packaging): • product name, incl. variety • date of production • identification (name and address) of supplier (producer, packer or vendor) • net quantity kg • added citric acid Packaging: Either aseptically packed in bag-in-box or bag-in-drum (bags further to be specified), hermetically sealed, or hot-pack in hermetically sealed tinplate cans. Sufficiently strong packaging, inner material of food grade quality. Transport and storage conditions: Ambient, cool and dry conditions, without exposure to excessive sun and/or high temperature. 3. Market structure: Growing and production throughout the year, depending on growing area. Demand throughout the year. Average prices: US$ 700.- to US$ 800.- per tonne (CIF NL) (fluctuating according to harvest situation). Market trends: As the EU consumer is becoming more familiar with the fresh mango, interest for mango processed in food products is also growing: primary application in dairy, ice-cream and soft-drinks industry. Application in jam industry still negligible. The main EU market is still the UK, having traditionally a substantial population of East-Asian origin. 4. Main suppliers: No local EU production. Leading supplying country is India; other suppliers are Pakistan, The Philippines, Brazil; new producing countries: Mali, Kenya. 5. How to improve the quality: Primarily important in achieving a good product quality is to follow the above-mentioned requirements. Unnecessary high and prolonged heat treatment should be avoided. Importers have strong preference for aseptic product rather than canned puree: because of its better quality (reduced heat damage) and because of trouble in opening cans involving considerable product loss and waste disposal costs.

97

11 INTERNAL ANALYSIS: COMPANY AUDIT After the external analysis, the exporter should have a clear insight into the opportunities and threats of exporting his products to selected EU markets. Based on this external analysis, the second step is to prepare an internal analysis. The internal analysis:

• Assesses the capabilities of your company in different fields (production, logistics, marketing and sales, finance and human resources) to:

Compete effectively with international competitors in supplying EU markets Take advantage of the opportunities that are identified in EU markets Deal with threats that are identified in EU markets Comply with product, packaging and shipping requirements by the EU,

national governments and trade partners • Assesses the investments you should make relevant to the above-mentioned subjects

11.1 Product standards, quality, USP and production capacity As already mentioned in the chapters 3 and 9, food safety requirements are the leading impetus behind a whole range of product and packaging requirements. Product specifications, as required by EU importers, might include following subjects:

• Process description • Legal requirements (EU and German food laws) • Chain control • Packing • Samples • Transport and storage conditions • Sensorial characteristics • Micro biological characteristics • Chemical characteristics • Residues

Based on these requirements, the exporter can determine the extent to which he has to adapt his products, packaging and processing and the amount of investments necessary to do so. Unique Selling Points (USPs’) Although one of the most difficult subjects to achieve, the exporter should endeavour to look for ways that distinguishes him from his competitors, in other words to present these USPs’ to potential trade partners in the EU. Trade partners in EU countries generally have a wide choice of suppliers from all parts of the world: they receive up to twenty offers per day from new suppliers looking for their business! In order to stand out from the crowd, the exporter should try to draw attention to his company and get noticed by the potential trade partner. USPs’ usually do not refer to one single subject, but are a mix of different subjects which set the exporter apart from his competitors. Examples of USPs’ for the preserved fruit and vegetables sector could be the following:

• Product specifications exceeding the requirements of trade partners • Consistent and high quality of products guaranteed by the exporter • Excellent service, for example

Replying within 24 hours to any question or request Open communication On-time delivery Honouring agreements to the letter, even when they have financial

implications

98

Production capacity Trade partners in the EU require a continuous flow of products, which meet their needs throughout the year. Exporters should therefore assess in advance the volumes they could sell to trade partners in the EU and the periods of requirements. Working backwards from these requirements, the exporter should adjust his production capacity to the said requirements. Supplying the volumes required during the required periods can be an important competitive tool. 11.2 Logistics Logistics deal with all matters to ensure a smooth flow of products from production to the final destination in the country of destination. Based on the requirements of EU trade partners, assessment of the following subjects should be made:

• Planning of production Trade partners usually work with tight arrival schedules in order to deliver the products to their customers on an agreed date and time. It is therefore important to plan production well in advance to ensure the products are available in time for shipment.

• Purchasing of ingredients and packing material As part of the planning of production, EU trade partners might have special requirements for ingredients and packing material. For example, a certain type of export carton might be required. It is important that the exporter ensures that this type is available from his supplier.

• Handling of export orders The handling of export orders entails the internal logistics, ranging from ordering ingredients and packing material, to production planning, inspection and obtaining of export documentation.

• Export documentation (certificates, packing lists, invoices, insurance certificates, etc.) Depending on the requirements of the EU trade partner, some export documentation like inspection and insurance certificates must be obtained from external organizations. Sufficient time should be allowed to procure the necessary documents, especially when dealing with government agencies.

• Availability of containers and shipping space During peak season, availability of containers and shipping space might be a problem. In order to meet the required shipping date, an exporter should assure himself that containers and shipping space are available on the required shipping date.

• Agreements with transport providers to the port of shipment, shipping and Customs agents

• Pre-shipment inspection (when required) Please refer to remarks under ‘export documentation’.

• Communication with trade partner in the EU It is of the utmost importance that exporters communicate immediately with their EU trade partners when certain requirements cannot be met. This will give the trade partner the opportunity to make alternative arrangements. Open and accurate information from the exporter is an important tool in order to be a reliable trade partner for his EU counterpart.

11.3 Marketing and sales Chapter 10.3 discusses the market entry modes, direct or indirect exports. When a company decides on direct exports, it will be necessary to set up a commercial department to handle export activities to EU countries. Marketing and sales form the commercial department responsible for all export activities to EU countries. Whether to employ different persons for marketing and sales depends entirely on the size of the company and the possibilities to invest in the commercial department. In order to assess marketing and sales functions as part of the internal analysis, the responsibilities of both functions are given below:

99

Marketing • Familiarity with all non-tariff and tariff barriers relevant to the export of the company’s

products to the EU • In cooperation with production and finance departments, adjust products and

packaging to comply with EU requirements • Preparation of promotion material, like brochures and product specifications • Installation of communication tools like websites and e-mail • Organisation of participating in EU trade fairs • Carry out market research • Preparation of Market Entry Strategy (MES) and Export Marketing Plan (EMP) • In cooperation with sales and finance departments, prepare annual budgets

Sales • Selection of potential trade partners in the EU • Contacts with trade partners • Familiarity with all export documentation to ship products to EU markets • Familiarity with sales contracts, payment and delivery terms • Negotiations with trade partners in the EU • Responsibility for the margins made on exports to EU destinations • Negotiations with logistic service suppliers (transporters, shipping agents, Customs

agents) • inspection bodies

Although it appears from the above-mentioned description that different employees should occupy these functions, a combination of both functions in one position is quite possible. Much depends on the complexity of the work, the capabilities of the staff members concerned, the number of export destinations and the selected trade partners in the EU. Please refer to section 10.3: sales channel assessment, where the different modes of market entry are described, together with the functions of different trade partners in the EU. 11.4 Financing One of the most important subjects to assess in the internal analysis is the company’s financial capability to commence exporting to EU countries. The company should not only have access to sufficient funds to invest in adaptation of products, packaging and possibly production equipment, but also its credit facilities should be large enough to cover extended payment terms. Moreover, the company should have sufficient financial funds to bear commercial risks (quality problems, non-payment, late delivery, etc.) that are often inherent when commencing exports to new destinations. The following financial aspects should be assessed in the internal analysis: Investments

• Product development (adjustment of products to EU standards) • Packaging

Adjustment of content Adjustment of packing material Packaging for long-distance shipments Labelling requirements (barcodes, information)

• Human resources (qualified export staff) • Production equipment • Certification (HACCP) • Promotion (participation in EU trade fairs, travel to EU countries, brochures, etc.)

100

Payment terms

• Credit terms, for example payment 60 days after receipt of goods • Local interest rates • Bank charges, for example confirmation of Letter of Credit, handling of documents • Non-payment risks, for example with ‘open account’ payment

Commercial risks

• Claims, for example because of late delivery, quality problems • Consignment shipping, for example selling price is below cost price • Insurance premiums, for example credit insurance

Miscellaneous costs

• Export documentation • Inspection certificates • Stationery for export purposes • Communication expenses

Further reference is made to section 10.4, prices and margins, where the different payment and delivery terms are discussed. 11.5 Capabilities Apart from the subjects mentioned above, the following capabilities should be assessed as part of the internal analysis: Languages Although English is widely used in EU countries as the official business language, it is far less widely spoken in France, Italy, Spain, Portugal and Greece. Exporters who target these countries are advised to communicate in the local language. Not only will this prevent miscommunication, but also show respect and commitment to local trade partners. This can be an important USP and competitive tool compared to competitors who are less conversant in local languages. Business culture Business culture can differ tremendously from one EU country to the other. You should familiarize yourself with the prevailing business culture in your targeted EU country. This culture refers to items like dress codes, making appointments, invitation to lunches or dinners, the use of business cards, addressing of your counterpart and business conversations. Please check section 13.2 of this survey for further information on this subject Human resources Knowledge of exporting preserved fruit and vegetables to EU countries is a basic requirement for a company. This knowledge does not only apply to technical matters regarding exports (documentation, export calculations, shipping possibilities, etc.) but also to knowledge about EU requirements and market developments relevant to preserved fruit and vegetables in the EU. The knowledge is necessary in order to be able to negotiate with your trade partners in the EU at the same level. Ignorance on the part of the exporter is often (mis) used by trade partners to extract more favourable trading conditions at the expense of the exporter.

101

12 DECISION MAKING 12.1 SWOT and situation analysis Based on the outcome of the external and internal analyses, the exporter can use the results to prepare a SWOT analysis. In this analysis he identifies Strengths and Weaknesses of his company compared to competitors and the Opportunities and Threats that he identifies in selected EU markets. An example of a SWOT analysis is given below: STRENGTHS WEAKNESSES

• Consistent and high product quality • Strong financial position • Export experience to EU markets • Low interest rates • Excellent infrastructure for shipping • Short distance to EU markets

• Relatively high labour costs • Inefficient production • Substandard packing material • Weak language capabilities • No government assistance in promoting

exports • Limited production capacity

OPPORTUNITIES THREATS • Growing demand in The Netherlands,

France and Sweden • Year round shipments • Increasing consumption of exotic fruit

• Ever stricter EU rules and regulations • Concentration of buying power • Increasing costs of inspection at port of

discharge Based on the SWOT analysis, the exporter should evaluate the consequences of improving on his weaknesses and decide whether or not the threats pose manageable obstacles to start exports to the EU. When his strengths and the opportunities, which he sees in the market, outweigh his weaknesses and the threats, he might consider a positive decision to continue preparations to commence exporting to EU markets. 12.2 Strategic options & objectives Formulation of objectives After a positive decision to prepare for exporting to the EU, the exporter should formulate the following objectives:

• Selected EU markets for exports It is advisable to select only one or two EU markets. In this way, the exporter can focus his efforts and concentrate his (often limited) resources. After gaining experience and establishing regular exports, a solid base will have been formed to roll out to other EU countries. Selection of too many markets leads to diffusion of resources and often leaves only half-baked efforts to establish a durable position.

• Market segments (for example fruit puree for baby and infant food) It is impossible to be everything to everybody. The market segments for preserved fruit and vegetables are very diverse: each segment requires different product standards and a different approach. To be successful, the exporter should carefully select the segment in which he can excel and outrank his competitors. In this way he can fully concentrate his resources to this particular segment: specialisation in niche markets is a far better strategy than going after bulk markets, where he will be one of the crowd of suppliers who usually compete on price.

102

• Type of trade partner to appoint

Depending on the countries selected and the market segments chosen, the exporter decides whether direct exports to food processors or working with importers and agents provide the best option.

• Annual turnover and volumes per market/per trade partner It is important to set realistic targets for volume and turnover per market and per trade partner. Although the setting of these targets is a difficult exercise when the exporter does not have experience in the selected markets, they provide a basis for export budgets and for the level of investments needed to achieve these objectives. In this way, the company can determine the viability of exports to the EU and can compare the actual results per period compared to the budgeted results. It is extremely difficult to set objectives for annual turnover. A good way to solve this problem is to work with different scenarios:

o an optimistic scenario, where you estimate turnover in the most favourable market conditions

o a pessimistic scenario, where you estimate turnover in poor market conditions

The optimistic and pessimistic scenarios give the lower and upper borders of your turnover objectives. A realistic objective will fall within this range. By working this way, it is possible to calculate your profitability in both scenarios. When in the optimistic scenario your profitability is still marginal, you should think twice before entering EU markets.

• Profitability Building up export positions in EU markets requires a long-term approach. In order to create a durable position, profitability is essential. As with volumes and turnover, actual profits realised can be compared to budgeted profits.

103

13 EXPORT MARKETING 13.1 Matching products and the product range Based on the product specifications as required by his trade partner in the EU, the exporter is able to determine the extent to which the specifications of his products match the requirements. In order to be attractive to potential trade partners in the EU, the exporter should consider not only to sell one product variety in one type of packing, but also to have a product range available matching the import requirements from EU partners. An example of a product range can be seen in the following table: Product range (width) Strawberries Mango Apricots Varieties: senga sengana gorella ostana

Varieties: alphonso totapuri

Varieties: bebekon hamidi

Product: frozen (IQF) Product: purée Product: dried Packing: paper bag with p/e liner of 10 kg carboard box with coating of 15 kg

Packing: aseptically filled bag - in box of 15 kg - in drum of 100 kg

Packing: carboard box with p/e liner 10 – 12.5 kg

A company can export a wide product range. In the above-mentioned example, this is the case when the company exports different types of fruit; each fruit in different varieties and in different packing sizes. Different production processes (dried, purée, frozen) might also be possible. When the company concentrates on one product (strawberries), but exports this product in many varieties, in different forms and in an extensive range of packaging, the product range in depth applies. 13.2 Building up a relationship with a suitable trading partner A profound knowledge of the prevailing business culture in the country of the trading partner is one of the main keys to a durable relationship. In spite of all modern communication tools, the personal relationship with a trading partner often decides a durable cooperation. The first meeting with a trading partner in the EU is the most crucial, as the initial impression a trading partners gets during this encounter is usually decisive for future cooperation. In order to assist the exporter in the preparations for his first meeting with a EU trading partner, the business culture of the six EU countries mentioned in this survey is described below:

• United Kingdom Polite, direct with an understated use of language Treats counterpart as equal but expects respect for achieved status/position.

Wait till your counterpart assigns you a seat Extremely task-oriented – ‘hello, nice to meet you’ and then straight to the

point – this may confuse exporters, who think the trading partner is relationship-building. However, questions are purely ritual and over very quickly

A British trading partner will give the exporter the opportunity to sell himself, his company and his products

104

He will be interested in the track record/achievements of your company and your products

When convinced, he will be prepared to give it a try on the basis of a trial shipment

They get slightly irritated by small talk and formalities and like to get down to business; do not talk about politics, religion and private/family matters

They expect that their counterparts have their own opinion and voice it, even when they do not agree to it

They expect counterparts to take initiative and expect assertive communication

• The Netherlands

They are rather informal and are quick to use first names They treat their counterparts as equal and are friendly in their

communication Direct in their approach and they do not like to beat around the bush Often they do not have a secretary to bring coffee; instead they ask you to

accompany them to the coffee machine somewhere in the corridor; coffee is offered throughout the day Dutch trading partners expect you to take the initiative in the conversation:

what do you have to show or tell me? They like to ask questions and take a pro-active attitude Dutch counterparts are empowered by their organisation to make decisions

there is no need to refer to their bosses; responsibilities are delegated to purchasers They are very task-oriented and do not like extensive social talk; they like

to come straight to the point; being very price conscious, Dutch importers will be quick to ask the price Showing off is frowned upon; Dutch people do not like a display of wealth

(Rolex watch, expensive car, tailor made Saville Row suits, etc.). ‘Act normal’ is their way of doing business. Therefore expensive and colourful brochures are often counterproductive: Dutch purchasers think that eventually they pay for all this Dutch purchasers like to work with strict deadlines: ‘when can you get your

proposal to me?’ and they expect you to stick to the agreed date

• France French are formal, polite and not very direct They like shaking hands, both at the beginning and the end of a meeting French companies are very hierarchical; your counterpart is probably not

empowered to make any decisions Instead they want to gather as much information as possible about your company and your products, so they can report back to their superiors French are rather chauvinistic; they prefer you to conduct the conversation in French and that you are familiar with French culture French buyers can be rather arrogant and can treat you as though they regard you as having a much lower in status than themselves Do not expect to come to business during the first meeting; the building of a relationship between you and your French counterpart is essential before any business can be done Patience is an important virtue in dealing with the French; it takes a rather long time to commence business; however, when the relationship is established they are rather loyal customers Dress correctly and conservatively; no flashy and contrasting colours French remain formal to their business partners; first names are not used

105

• Germany Germans are formal and never use first names They like to be addressed by Herr (Mr.), Frau (Mrs) or Fraulein (Ms) and their

last names; it is also important to check beforehand whether your counterpart has a title: in this case titles should be used also: Herr Doktor Schmidt or Frau Ingenieurin Albrecht

German purchasers like to come quickly to the point and are well prepared for the meeting; as they want to eliminate uncertainties as much as possible they will ask a lot of details

Particularly offer your German counterpart ‘certainties’: assurances, guarantees, references to check you and your company out; company background, expertise and track record are very important elements for Germans in his search for certainties

Dress correctly and formally; avoid flashy and contrasting colours and expensive watches, rings, bracelets, etc.

Come strictly on time; German purchasers usually have very tight schedules and many meetings on one day; they usually inform you how long the meeting will last and the points they want to cover

They require detailed planning and concrete arrangements and expect you to adhere to them; prepare yourself in detail for this meeting: mistakes or inability to reply to questions will not be tolerated and will mean the end of a possible business relationship

Try to get friendly with the secretaries; they have a lot of influence in scheduling the appointments for their bosses; here again, never address them by their first names

• Belgium

Be aware of the bi-lingual and bi-cultural situation in Belgium. In the Flemish part of Belgium, Flemish (similar to the Dutch language) is spoken. In the Walloon part, French is spoken. Brussels is bi-lingual. The Flemish are polite and easy to communicate with. They are quite

formal; first names are never used. English is widely spoken in the Flemish part of Belgium. Walloon trade partners are similar to the French in their business dealings. The use of the French language is very much appreciated and often necessary.

• Spain

Keep the ‘siesta’ in mind. Spain is the only EU country where businesses close between 14.00 – 17.00 hrs. Business lunches usually take place during this time.

Relationship building is important when doing business in Spain. It is important to speak Spanish. Although English is increasingly spoken, it

is not as widespread as in Northern EU countries Although there are large cultural differences in dealing with trade partners in different EU countries, when building up a good relationship trade partners in all the EU countries place particular value on the following aspects:

• Open and prompt communication. When asked questions or in case of enquiries, an answer within 24 hours is highly appreciated

• Timely information in case of problems. For example, if shipments are going to be delayed, please inform your trade partner in time. He will be able to take the necessary measures on his side. Even when you only expect possible problems, advise your trade partner

106

• Reliability is a key issue for building up a durable relationship. As the supply chains are becoming more integrated and chain partners are becoming more interdependent, reliability forms an important pillar under the integrated chain.

Building up a relationship with a trading partner in the new EU countries Due to the different cultural, social and economic background of the new EU countries in Central and Eastern Europe, please observe the following points when contacting trading partners:

Communication is generally less direct and subtler. The essence of a message is often hidden between the lines and can easily lead to miscommunication.

Direct criticism should be avoided as this is often taken personally. In most countries hierarchy plays an important role. It is important to

discuss matters with the boss, as his subordinates have no authority to make decisions. ‘Top-down’ communication is very common.

A formal tone of communication is advisable. Apart from the content, the form, choice of words and the way one speaks is important. Much time should be allowed for explanations.

Written communication is complicated, as many less relevant sentences are used.

English and German are the most used foreign languages. However, the level of proficiency is sometimes low. It is important to create an atmosphere in which your trade partner feels comfortable to indicate when he has not understood a subject.

Although telephone and e-mail are important communication tools, trading partners in Central and Eastern Europe are more tuned to personal contact. This forms the basis of any business relationship.

There is a difference in dealing with new, Western managed companies and multinationals and with older state companies, government departments and smaller (family) firms.

13.3 Drawing up an offer After establishing contacts with potential trade partners in the EU, the exporter might be requested to make an offer to an importer or directly to a food processor. The preparation of an offer should be carried out with caution. An offer, which has been accepted by an EU trading partner and does not contain any escape clauses for the exporter is a legally binding document requiring the exporter to deliver, even when the trading conditions are unfavourable to him. Before making an offer, the exporter should verify the following items:

• Reputation of trade partner Important to check whether the trade partner requesting an offer is well established and has a good reputation. Sources to check are:

Branch organisations in the EU and accession countries (see appendix 3.4) Trade registers in the country of the trade partner, for example the Chamber

of Commerce Commercial organisations, which can supply company profiles, like Dun &

Bradstreet, Cofaz and Graydon. The information provided is generally extensive, so reports from these organisations can be quite expensive.

• Rules, regulations and quality standards

107

It is important to verify whether the exporter can comply with EU and national regulations on products and packaging and the specifications requested by the trade partner.

When making an offer, the following elements should be included:

• Date of quotation and reference number. This number can at a later stage be used on contracts, payment and shipping documents as easy reference to the consignment in question.

• Full names and addresses of both parties • Product and product specifications • Packaging specifications • Quantity in kgs, litres • Price per kg/litre, currency and total amount • Delivery terms (Incoterms 2000) • Delivery period • Payment terms • Validity of the quotation. The period of validity depends very much on the volatility

of market prices. In very volatile markets, the validity of the quotation might only be 24 hours.

• Waiver. A very important element of the quotation. The waiver gives the exporter an escape clause not to honour the quotation, even when accepted by the EU trade partner. A waiver in the offer is quite customary and can be worded as follows:

This quote is subject to our confirmation This offer is without any obligations This offer is subject to confirmation by means of a sales contract

An offer made without waiver and accepted by the buyer obliges the exporter to deliver the goods according to the quotation

• Referral to the general sales conditions of the exporter. General sales conditions apply to all offers and contracts and stipulate items like:

Retention of title of the goods (in case of non-payment) Product liability Force majeur (when an exporter cannot supply due to circumstances beyond

his control like strikes, fires, political unrest, perils of the sea) Resolution of disputes Delayed payment, late/non delivery Inspection procedures Exclusion of Value Added Taxes (VAT) in price quotations

Please remember that the general sales conditions of an exporter might conflict with the general purchasing conditions of an importer.

13.4 Handling the contract Once the offer has been accepted by the buyer and reconfirmed by the exporter, a sales contract will be prepared. Reference is made to the sales contracts of the International Chamber of Commerce (ICC). The ICC sales contracts contain all the necessary elements and can be used as a sound basis. However, in practice, an offer signed by both parties automatically converts into a sales contract.

108

An example of an offer/sales contract is given below: Dried Fruit Importers B.V. Sales Contract No. 03/10799 Havenweg 211 2039 JK Amsterdam The Netherlands Buyer Tel.: Dried Fruit Wholesalers Fax: 2345 Regent Street E-mail: Cambridge, NA 3 4YU VAT no: United Kingdom Chamber of Commerce Amsterdam Bank: ING Amsterdam Swiftcode:ING BNL 45 Amsterdam, 25th July 2004 Our ref.: 03/10799 Confirmation of sale No. 03/10799 Product: Dried prunes in 10 kg boxes Quality: According to our specifications no. 1234 Origin: Italy Currency: € Quantity Total (kg) Price/kg Total price Delivery date 100 boxes 1,000 kg € 1.95 € 1,950.00 10th August 2003 Incoterms 2000: DDP Cambridge Payment: 40 days after date of invoice Documents: Invoice Certificate of analysis CMR freight note Our general sales conditions apply; a copy is attached to this contract Please return a countersigned copy of this contract to us before the 30th July 2003 We thank you for this order Yours truly, Dried fruit importers BV, Dried fruit Wholesalers Seller Buyer Reg Leenes John Curley 13.5 Sales promotion To promote the exports of his products to markets in the EU, an exporter in the preserved fruit and vegetable sector can apply the following tools:

• Participation in trade fairs in the EU This is by far the most effective promotion tool, as the exporter has the opportunity to present his products to importers, agents and food processors from all EU countries. The most important trade fairs in the EU are Food Ingredients Europe,

109

Health Ingredients Europe, and Biofach (organic food ingredients). Please check contact details in appendix 3.5 of this survey. Further reference is made to CBI’s Your image Builder.

• Company brochures and product specifications A company brochure should be factual, in order to inform potential trade partners on relevant information of the company. Lengthy stories about the founding family and historic reviews should be omitted, as these are of little interest to trade partners in the EU. Instead information should be given about production capacities, certification, tracking and tracing systems, processing equipment, organization, markets (both domestic and export), turnover and personnel. This way, a potential trade partner will be able to form an image of your company. Be careful not to exaggerate and to ‘walk your talk’ (deliver what you promise).

• Visits to potential trade partners in the EU As personal contacts always work best in any sector, the exporter should invest time and money to visit EU trade partners. It is advisable to allow additional weeks after a trade fair to follow up on contacts and to make appointments with the most promising trade partners.

• Company stationery In order to build the right image for your company, make sure that the layout, colors and texts of your letterheads, invoices, business cards and envelopes is consistent and that good quality paper is used. Company stationery is an important ambassador for your company as it is sent/given to EU trade partners.

• E-promotion This applies to the use of e-mail and website. A website forms an easy reference for any EU partner to obtain information about your company. In designing a website for your company, the same rules apply as for company brochures: factual and to-the-point information is all a trade partner wants to see. Time is at a premium for trade partners in the preserved fruit and vegetable business and they do not want to spend any of it in reading information not relevant to their business.

• Samples Samples are a very important tool for promoting your products. The first thing interested trade partners in the EU will ask for is samples of your products. Often, they will inform you about their product specifications and request you to send samples according to these specifications. In sending samples (often by airmail), attention should be given to the packaging. Rough handling, and resulting damage, during transport is common; good packing ensures that your sample reaches your contact in the EU in top condition.

110

APPENDICES 1 DETAILED HS CODES The detailed HS codes are given in sequence of the product groups as mentioned under chapter 5 of this survey. HS codes printed in bold type indicate that information is given in chapter 5 of this survey. FRUIT JUICE, CONCENTRATE HS code Description 2009

Fruit juices (incl. grape must) and vegetable juices, unfermented and not containing added spirit, whether or not containing added sugar or other sweetening matter

11 orange juice, frozen 19 unfrozen orange juice 20 grapefruit juice 30 juice of any other single citrus fruit 40 pineapple juice 50 tomato juice 60 grape juice (including grape must) 70 apple juice 80 juice of any single fruit or vegetable 90 mixtures of juices CANNED VEGETABLES HS code Description 2001 Vegetables, fruit, nuts and other edible parts of plants,

prepared or preserved by vinegar or acetic acid: 10 cucumbers and gherkins 20 00 onions 90 10 mango chutney 90 20 fruit of the genus Capsicum other than sweet peppers or pimentos 90 30 sweet corn (Zea mays var. saccharata) 90 40 yams, sweet potatoes and similar edible parts of plants containing 5%

or more by weight of starch 90 60 palm hearts 90 65 olives 90 70 sweet peppers 90 75 salad beetroot (beta vulgaris var. conditiva) 90 85 red cabbages 90 91 tropical fruits and tropical nuts 2002 Tomatoes, prepared or preserved otherwise than by vinegar or

acetic acid 10 tomatoes, whole or in pieces 90 other 2005 Other vegetables prepared or preserved otherwise than by

vinegar or acetic acid, not frozen, other than products of heading 2006

10 homogenised vegetables 20 potatoes

111

40 peas (pisum sativum) 51/59 beans (vigna spp., phaseolus spp.) 60 asparagus 70 olives 80 00 sweet corn (Zea mays var. saccharata) 90 other vegetables and mixtures of vegetables CANNED FRUIT HS code Description 2008 Fruit, nuts and other edible parts of plants, otherwise prepared

or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included

20 pineapples 30 citrus fruit 40 pears 50 apricots 60 cherries 70 peaches, including nectarines 80 strawberries 91 palm hearts 92 mixtures 99 25 passion fruit and guaves 99 26 manga’s, mangisstans, papaya.s, etc. FROZEN VEGETABLES HS code Description 0710 Vegetables (uncooked or cooked by steaming or boiling in

water), frozen 10 potatoes 21 peas (pisum sativum) 22 beans (vigna spp., phaseolus spp.) 29 other leguminous vegetables 30 spinach, New Zealand spinach and orache spinach 40 sweet corn 80 10 olives 80 51 sweet peppers 80 59 capsicum or pimenta 80 61/69 mushrooms 80 70 tomatoes 80 80 artichokes 80 85 asparagus 8095 other frozen vegetables 90 mixtures of vegetables

112

DRIED FRUIT HS code Description 0803 00 90 Bananas, including plantains, dried 0804 Dates, figs, pineapples, avocados, guavas, mangoes and

mangosteens, fresh or dried 10 00 dates (fresh and dried) 20 90 figs 30 00 pineapples 40 00 avocados 50 00 guavas, mangoes and mango steens 0806 Grapes, fresh or dried 2011/91 currants 2012/92 sultanas 2018/98 other dried grapes 0813 Fruit, dried, other than that of headings 0801 to 0806; mixtures of

nuts or dried fruits of this Chapter 10 00 apricots 20 00 prunes 30 00 apples 40 10 peaches, including nectarines 40 30 pears 40 50 papaws (papayas) 40 60 tamarinds 40 70 cashew apples, lychees, jackfruit, sapodillo plums, passion fruit,

carambola and pitahaya 50 mixtures of nuts or dried fruit of this Chapter FROZEN FRUIT HS code Description 0811 Fruit and nuts, uncooked or cooked by steaming or boiling

water, frozen, whether or not containing added sugar or other sweetening matter

10 strawberries 20 raspberries, blackberries, mulberries, loganberries, black, white or red

currants and gooseberries 90 other fruit DRIED VEGETABLES HS code Description 0712 Dried vegetables, whole, cut, sliced, broken or in powder, but

not further prepared 2000 onions 3000 mushrooms, wood ears (auricularia spp.), jelly fungi (Tremella

spp.) and truffles 90 05 potatoes 90 11/19 sweet corn 90 30 tomatoes 90 50 carrots 90 90 other vegetables and mixtures of vegetables

113

PROVISIONALLY PRESERVED FRUIT AND VEGETABLES HS code Description FRUIT 0812 Fruit and nuts, provisionally preserved (for example, by sulphur

dioxide gas, in brine, in sulphur water or in other preservative solutions), but unsuitable in that state for immediate consumption

10 cherries 20 strawberries 90 10 apricots 90 20 oranges 90 30 papaws (papayas) 90 40 fruit of the species vaccinium myrtillus 90 50 black currants 90 60 raspberries 90 70 guavas, mango’s, mangosteens, tamarinds, cashew apples,

lychees, jackfruit, sapodillo plums, passion fruit, carambola, pitahaya and tropical nuts

VEGETABLES 0711 Vegetables provisionally preserved (for example, by sulphur

dioxide gas, in brine, in sulphur water or in other preservative solutions), but unsuitable in that state for immediate consumption

10 onions 20 olives 30 capers 40 cucumbers and gherkins 90 other vegetables

114

2 DETAILED IMPORT/EXPORT STATISTICS The source of the data presented below is Eurostat COMEXT 2003. The leading suppliers mentioned in the statistics supplied at least 80 percent of total value imports in 2003. Table 1 Imports of selected preserved fruit and vegetables into the EU,

2001-2003, € 1,000 / tonnes

2001 2002 2003 value € volume value € volume value € volume Total 12,703,977 14,937,868 13,595,161 15,543,540 13,895,808 17,090,378 Extra-EU 4,830,527 5,278,988 5,130,254 5,458,042 5,177,160 6,010,515 Developing countries

3,192,428 3,393,939 3,486,435 3,584,355 3,422,489 3,893,703

Germany 3,134,615 3,787,612 3,228,062 3,781,543 3,221,428 3,777,428 France 1,739,476 1,964,196 1,901,090 2,055,418 2,010,947 2,251,162 United Kingdom 1,779,324 2,449,700 1,876,745 2,673,530 1,934,176 3,428,075 The Netherlands 1,386,065 1,590,220 1,592,642 1,696,764 1,578,522 1,814,325 Belgium 1,107,342 1,426,488 1,146,943 1,456,499 1,120,641 1,437,089 Italy 912,045 863,236 952,239 971,699 1,006,528 1,079,158 Spain 537,299 597,816 635,750 643,576 627,982 668,574 Austria 345,459 392,995 358,842 400,977 421,020 495,635 Sweden 305,967 295,867 331,637 312,458 336,397 328,434 Denmark 233,086 236,252 294,909 317,170 303,643 322,518 Ireland 209,480 170,042 231,260 202,519 229,077 199,030 Poland 200,344 239,407 194,989 204,023 188,291 208,676 Greece 122,402 169,060, 144,568 158,610 162,257 250,267 Finland 133,565 126,133 139,712 124,988 151,548 136,954 Portugal 129,427 162,040 136,233 161,117 139,199 158,991 Czech Republic 99,133 136,625 117,823 148,667 121,840 170,855 Hungary 57,952 66,001 60,855 66,450 79,174 86,912 Slovenia 41,783 41,634 46,919 44,866 47,631 45,590 Slovakia 42,504 68,808 46,453 68,028 44,147 61,479 Luxembourg 39,257 27,698 39,525 27,917 44,126 30,034 Lithuania 34,601 41,994 37,890 44,502 41,494 48,881 Latvia 26,839 34,485 29,258 35,302 29,973 37,745 Estonia 22,379 26,981 22,149 24,136 24,570 27,172 Malta 13,838 8,814 14,646 9,781 16,492 10,971 Cyprus 13,792 13,762 14,023 13,003 14,706 14,425 Source: Eurostat, 2003

115

Table 2 Imports of fruit juice/concentrate into the EU, 2001-2003, € 1,000 / tonnes

2001 2002 2003 value € volume value € volume value € volume Total 4,027,933 5,091,922 4,360,979 5,336,407 4,507,695 6,109,349 Extra-EU 2,424,485 2,934,268 2,644,486 3,193,782 2,825,292 3,728,981 Developing countries

1,603,448 2,157,654 1,716,493 2,142,625 1,682,403 2,380,368

Germany 866,583 1,125,379 893,743 1,145,219 933,836 1,230,736 The Netherlands 777,230 937,828 896,829 970,802 851,790 1,059,111 France 523,610 730,118 580,955 773,210 622,652 886,886 United Kingdom 401,015 426,008 453,624 486,611 519,167 764,756 Belgium 498,782 722,956 494,180 731,366 456,263 720,696 Italy 181,411 217,710 189,885 272,644 204,787 298,566 Austria 147,159 205,293 135,828 189,948 184,477 260,385 Spain 117,905 159,731 141,425 160,281 150,427 176,302 Denmark 67,574 64,484 97,442 113,016 93,617 115,826 Sweden 86,738 94,745 98,223 99,064 92,993 100,985 Ireland 65,833 57,031 77,719 77,735 74,680 73,698 Poland 66,933 79,872 61,900 55,208 55,940 57,377 Greece 39,363 39,674 43,470 44,945 49,070 116,047 Finland 43,516 38,956 43,867 37,331 47,511 44,866 Portugal 40,386 55,075 42,594 51,321 40,853 49,660 Czech Republic 23,572 31,500 30,354 34,508 32,264 42,779 Hungary 15,938 15,700 12,417 11,274 28,904 31,140 Luxembourg 12,916 13,615 12,631 13,252 14,553 14,692 Slovenia 8,529 6,183 11,739 7,806 11,333 7,884 Slovakia 14,553 33,734 12,730 25,559 9,594 17,037 Lithuania 6,955 12,386 8,725 14,624 9,349 16,869 Latvia 6,417 7,675 7,222 8,514 8,164 10,020 Estonia 6,628 11,852 5,282 8,651 5,474 8,420 Cyprus 4,896 4,417 4,556 3,522 5,320 4,616 Malta 3,490 0 3,639 0 4,678 0 Table 3 Imports of canned vegetables into the EU, 2001-2003,

€ 1,000/tonnes 2001 2002 2003 value € volume value € volume value € volume

Total EU-25 3,187,266 3,877,455 3,503,167 4,070,031 3,555,873 4,151,636 Extra-EU 764,766 812,955 877,690 946,416 862,768 1,056,369 Developing countries

568,424 596,912 672,408 717,138 647,870 776,526

Germany 804,671 1,069,555 848,086 1,099,342 791,850 1,019,111 United Kingdom 522,509 781,634 561,039 773,896 598,982 839,035 France 456,878 500,610 494,705 519,934 512,604 536,801 Italy 255,927 296,581 290,218 339,397 324,150 396,171 The Netherlands 209,392 232,439 275,214 285,725 283,761 288,666 Belgium 216,728 257,533 230,859 262,033 241,566 261,116 Spain 213,298 163,549 236,681 182,360 216,958 185,528 Sweden 93,359 98,482 100,680 104,510 111,851 113,578 Denmark 64,206 75,615 76,295 88,003 81,273 88,500 Ireland 61,288 42,155 72,152 49,748 69,274 47,845

116

Austria 58,354 60,437 64,885 70,327 68,128 81,915 Poland 43,011 53,614 40,552 46,387 37,673 45,913 Greece 24,584 49,215 29,834 35,285 31,280 33,401 Finland 20,306 21,403 23,630 23,582 28,109 24,589 Portugal 23,798 30,031 26,551 34,314 27,920 32,401 Czech Republic 22,592 35,466 27,539 39,183 27,895 42,247 Luxembourg 14,567 8,703 14,780 8,779 16,782 9,425 Slovenia 12,606 12,951 13,893 14,327 14,592 15,315 Latvia 13,134 18,559 13,981 18,012 14,097 19,882 Slovakia 11,473 16,732 13,215 20,804 13,161 20,396 Hungary 14,152 20,477 16,303 21,622 12,593 15,463 Lithuania 13,421 16,067 13,307 14,822 12,567 15,115 Estonia 8,809 8,470 9,518 8,813 9,707 10,369 Malta 4,840 3,250 5,640 4,689 5,475 4,624 Cyprus 3,363 3,930 3,610 4,139 3,623 4,231

Source: Eurostat, 2003 Table 4 Imports of frozen vegetables into the EU, 2001-2003, € 1,000 / tonnes 2001 2002 2003 value € volume value € volume value € volume Total EU-25 1,733,739 2,657,419 1,776,086 2,859,031 1,728,048 3,314,729 Extra-EU 401,400 500,175 374,543 477,111 361,449 497,886 Developing countries

196,237 172,083 191,290 178,320 168,121 171,630

Germany 437,129 593,157 389,638 508,211 367,605 498,145 France 236,985 317,322 260,492 339,275 282,866 382,939 United Kingdom 275,760 767,005 279,500 965,289 249,904 1,369,662 Belgium 188,196 258,177 206,373 275,208 196,959 263,311 Italy 148,639 135,319 148,365 143,248 149,014 143,567 Spain 96,590 144,248 106,051 158,368 102,611 162,285 The Netherlands 86,257 119,238 93,655 128,089 85,913 126,858 Sweden 42,797 42,955 46,781 49,226 45,871 53,425 Ireland 39,030 40,268 38,476 42,361 40,879 46,507 Austria 31,343 32,167 37,955 37,880 39,099 39,680 Denmark 28,243 35,782 39,819 51,720 38,739 52,203 Greece 26,403 45,027 31,629 38,076 32,536 51,839 Portugal 27,233 33,477 26,059 31,812 26,301 31,462 Finland 18,826 21,948 19,016 21,469 18,847 21,811 Czech Republic 12,510 22,593 15,084 25,176 14,358 27,146 Poland 9,713 14,976 9,004 12,292 8,192 12,131 Luxembourg 5,605 2,837 6,449 3,300 6,596 3,244 Slovenia 4,685 6,416 4,924 6,738 4,762 6,573 Malta 2,554 2,867 2,584 2,740 3,280 3,563 Cyprus 2,971 3,188 3,155 3,026 2,971 3,021 Hungary 3,777 7,217 2,616 4,389 2,670 5,338 Slovakia 3,040 5,197 2,855 5,151 2,664 4,904 Lithuania 2,073 1,677 1,855 1,551 2,479 1,736 Estonia 1,680 1,968 1,671 1,809 1,604 1,798 Latvia 1,702 2,392 2,082 2,627 1,330 1,582

117

Table 5 Imports of canned fruit into the EU, 2001-2003, € 1,000 / tonnes 2001 2002 2003 value € volume value € volume value € volume Total EU-25 1,334,465 1,523,925 1,379,043 1,502,414 1,448,744 1,578,396 Extra-EU 501,771 616,808 522,740 648,008 572,950 753,781 Developing countries

427,893 546,742 447,477 572,207 475,732 664,570

Germany 391,902 492,932 394,748 490,367 411,355 491,995 France 218,123 213,517 231,574 201,513 236,951 211,494 United Kingdom 195,924 205,677 189,261 184,895 187,273 195,821 The Netherlands 99,701 118,510 92,578 109,350 99,284 114,313 Belgium 81,696 84,566 86,743 86,723 93,520 90,000 Spain 55,098 55,592 62,305 59,921 73,051 70,890 Italy 63,644 72,331 72,535 75,164 71,463 73,578 Austria 33,685 37,447 35,465 40,274 41,573 46,757 Poland 30,085 51,141 30,116 47,312 29,894 45,899 Sweden 25,586 25,831 25,373 24,145 24,854 24,494 Finland 21,202 24,024 21,418 22,832 24,093 26,129 Portugal 18,283 25,031 21,425 25,859 23,947 27,440 Czech Republic 18,283 26,716 20,473 29,126 23,605 37,023 Greece 16,173 16,726 18,966 19,982 23,425 27,135 Hungary 9,820 13,955 14,989 20,896 18,955 26,431 Ireland 15,137 14,279 15,796 14,962 17,901 16,643 Denmark 14,724 17,570 16,387 18,075 16,188 17,779 Slovakia 6,084 8,035 7,994 10,177 8,571 11,594 Slovenia 6,767 8,750 6,884 8,481 7,405 8,914 Lithuania 3,365 2,784 3,930 3,370 4,467 4,014 Estonia 2,310 2,116 2,789 2,468 3,163 2,835 Luxembourg 2,758 1,472 2,916 1,699 2,654 1,447 Latvia 1,334 1,890 1,635 1,957 1,933 2,240 Malta 1,637 1,698 1,471 1,441 1,792 1,866 Cyprus 1,145 1,339 1,270 1,423 1,424 1,666 Table 6 Imports of frozen fruit into the EU, 2001-2003, € 1,000 / tonnes 2001 2002 2003 value € volume value € volume value € volume Total EU-25 833,125 766,123 931,300 832,540 1,077,940 896,857 Extra-EU 533,985 517,438 582,804 547,907 681,431 597,183 Developing countries

217,915 196,268 251,649 225,281 306,114 284,268

Germany 312,791 318,240 351,846 336,555 403,821 350,505 France 116,353 97,652 131,247 104,253 158,151 119,021 The Netherlands 69,788 67,576 78,086 78,835 95,484 93,408 United Kingdom 65,881 47,355 76,433 56,258 73,621 52,996 Italy 60,096 44,836 54,997 43,812 68,826 56,176 Belgium 55,841 50,385 60,083 52,895 65,360 54,399 Austria 40,616 37,940 49,413 44,425 50,696 45,660 Denmark 26,947 25,680 29,944 27,205 39,742 28,974 Sweden 26,086 20,149 28,253 21,316 31,054 21,448 Spain 12,444 12,063 16,368 17,342 19,641 18,111 Poland 9,850 10,487 13,042 13,376 18,795 15,834

118

Finland 13,684 11,909 15,084 11,590 17,703 11,340 Czech Republic 6,141 6,341 7,314 7,014 9,859 9,448 Lithuania 2,426 2,628 3,692 4,049 5,349 4,551 Ireland 3,386 2,165 2,806 1,815 4,329 2,033 Slovenia 3,257 4,024 3,890 4,400 3,779 3,460 Greece 2,362 2,346 2,859 2,761 3,284 3,080 Portugal 1,374 1,131 1,848 1,547 2,052 1,635 Hungary 1,678 1,650 1,075 812 1,736 1,422 Estonia 552 527 579 490 1,571 1,418 Latvia 585 522 838 760 1,159 876 Slovakia 285 260 870 762 888 674 Luxembourg 530 166 564 190 819 275 Cyprus 123 55 134 51 172 70 Malta 49 37 33 27 48 43 Table 7 Imports of dried fruit into the EU, 2001-2003, € 1,000 / tonnes 2001 2002 2003 value € volume value € volume value € volume Total EU-25 840,709 587,823 889,555 605,307 879,632 611,293 Extra-EU 614,774 464,203 646,207 478,550 646,271 494,323 Developing countries

423,028 366,284 470,266 387,706 474,680 395,068

United Kingdom 220,282 149,820 222,427 147,419 220,565 150,020 Germany 162,970 116,370 177,399 125,125 168,360 119,549 France 100,690 64,353 116,324 73,620 113,428 68,500 Italy 68,567 44,443 73,740 46,064 75,984 51,051 The Netherlands 67,747 57,856 72,573 59,200 75,686 63,458 Belgium 35,072 24,625 38,190 24,864 39,749 25,756 Spain 35,667 20,883 33,993 21,833 33,021 21,871 Poland 22,080 21,866 22,108 20,954 21,174 21,351 Denmark 20,874 12,375 21,623 12,681 20,961 13,034 Sweden 20,394 10,328 20,757 10,526 19,226 10,547 Austria 18,039 11,144 17,247 10,112 18,483 10,610 Greece 7,488 4,919 7,793 3,429 10,695 6,768 Finland 11,154 5,757 11,943 5,922 10,533 5,629 Czech Republic 9,434 9,431 9,962 8,697 8,536 8,637 Ireland 9,223 6,773 10,700 8,598 8,534 6,657 Portugal 6,442 5,436 6,608 4,890 7,253 4,844 Slovakia 4,269 3,465 5,415 3,566 5,819 4,212 Lithuania 4,251 5,047 4,497 4,786 4,798 5,349 Hungary 4,296 4,267 4,876 4,740 4,495 4,431 Slovenia 3,363 2,137 3,450 1,996 3,646 2,140 Latvia 3,283 3,132 3,098 3,049 2,900 2,854 Estonia 1,474 1,439 1,492 1,390 2,108 1,894 Luxembourg 1,669 479 1,255 456 1,715 709 Cyprus 1,117 773 1,155 770 1,071 786 Malta 864 707 933 621 893 638

119

Table 8 Imports of dried vegetables into the EU, 2001-2003, € 1,000 / tonnes 2001 2002 2003 value € volume value € volume value € volume Total EU-25 475,955 200,277 507,708 219,993 466,061 209,921 Extra-EU 253,940 85,276 267,648 97,834 229,494 98,358 Developing countries

154,724 55,631 170,965 68,121 147,204 71,031

Germany 125,853 45,696 139,078 50,786 113,259 45,013 The Netherlands 57,671 38,292 65,571 45,454 70,374 51,137 United Kingdom 60,123 29,313 60,085 24,902 58,170 24,619 France 56,144 15,144 60,199 17,809 58,087 19,939 Italy 61,668 11,496 57,338 14,208 51,564 15,636 Poland 17,001 5,723 17,022 6,994 15,265 8,586 Belgium 14,130 8,335 17,947 9,392 14,410 7,326 Austria 12,839 4,183 14,282 4,723 13,565 5,287 Spain 13,498 16,088 14,985 19,519 11,177 8,323 Hungary 8,264 2,654 8,099 1,849 9,765 2,570 Denmark 8,457 2,621 10,617 3,326 9,718 3,631 Sweden 10,054 3,020 10,198 3,091 9,277 3,312 Ireland 8,222 2,239 8,288 2,156 8,603 2,241 Czech Republic 5,321 2,243 5,828 2,127 4,700 2,092 Greece 3,513 8,571 4,498 8,564 4,631 4,892 Finland 3,903 1,309 3,741 1,256 3,779 1,434 Slovakia 2,633 850 3,033 958 3,053 1,110 Portugal 2,013 1,032 2,223 1,106 2,046 1,021 Slovenia 1,969 483 1,682 474 1,445 437 Lithuania 724 355 1,027 573 1,186 621 Estonia 774 273 711 244 774 292 Luxembourg 681 143 673 157 747 168 Latvia 224 142 299 214 265 180 Cyprus 154 49 132 66 111 26 Malta 121 27 153 45 92 28 Table 9 Imports of provisionally preserved fruit and vegetables into the EU,

2001-2003, € 1,000 / tonnes 2001 2002 2003 value € volume value € volume value € volume Total EU-25 270,784 232,924 247,324 217,818 231,814 218,197 Extra-EU 156,444 124,479 142,130 119,591 140,395 132,246 Developing countries

115,606 91,670 103,837 88,941 97,983 98,548

Italy 72,094 40,521 65,160 37,162 60,740 44,414 Germany 32,717 26,284 33,523 25,938 31,342 22,375 United Kingdom 37,831 42,888 34,375 34,261 26,493 31,166 France 30,693 25,481 25,595 25,804 26,208 25,581 Spain 28,798 25,661 23,944 23,953 21,095 25,264 The Netherlands 18,281 18,481 18,137 19,309 16,229 17,376 Belgium 16,896 19,910 12,568 14,018 12,814 14,484 Portugal 9,898 10,827 8,924 10,267 8,827 10,528 Greece 2,517 2,584 5,520 5,568 7,336 7,107 Austria 3,424 4,384 3,767 3,288 4,999 5,341

120

Ireland 7,360 5,131 5,324 5,144 4,876 3,407 Denmark 2,061 2,126 2,782 3,144 3,405 2,570 Poland 1,672 1,730 1,246 1,500 1,357 1,587 Lithuania 1,385 1,051 858 728 1,299 626 Sweden 953 358 1,372 579 1,271 646 Finland 975 827 1,014 1,006 973 1,154 Slovenia 608 690 457 645 671 866 Czech Republic 1,281 2,336 1,270 2,836 623 1,484 Slovakia 166 537 341 1,052 395 1,551 Luxembourg 531 283 258 84 260 76 Malta 283 230 193 217 234 209 Estonia 152 335 105 271 170 147 Latvia 160 175 103 170 125 113 Hungary 27 83 479 869 55 116 Cyprus 23 11 10 6 15 10 Table 10 Exports of selected preserved fruit and vegetables by EU member

countries, 2001-2003, € 1,000 / tonnes 2001 2002 2003 value € volume value € volume value € volume Total 11,124,208 13,105,812 11,861,192 13,337,834 11,971,430 13,469,427 Intra-EU 8,615,327 10,531,314 9,143,645 10,625,357 9.423,100 10,911,184 Extra-EU 2,508,881 2,574,498 2,717,547 2,712,477 2,548,330 2,558,243 Leading destinations

Belgium 1,637,694 1,999,700 1,765,850 2,062,997 1,804,471 2,171,673 Italy 1,678,620 2,545,654 1,835,886 2,565,462 1,766,992 2,336,046 Spain 1,471,729 1,578,452 1,626,408 1,761,251 1,761,231 1,906,218 The Netherlands

1,400,965 1,505,986 1,559,235 1,509,016 1,540,147 1,572,015

Germany 1,272,797 1,550,538 1,320,241 1,526,711 1,294,595 1,482,673 France 990,319 885,053 962,863 894,777 1,012,969 975,315 Poland 603,887 791,299 675,639 829,290 750,507 915,056 Greece 591,746 800,461 614,882 649,977 470,661 452,056

121

3 USEFUL ADDRESSES 3.1 Standards organisations INTERNATIONAL International Organization for Standardization (ISO) E-mail: mailto:[email protected] Internet: http://www.iso.org EUROPEAN UNION Comité Européen de Normalisation (CEN) European Committee for Standardization E-mail: mailto:[email protected] Internet: http://www.cenorm.be BELGIUM Institut Belge de Normalisation (IBN) Belgian Institute for Standardization E-mail: mailto:[email protected] Internet: http://www.ibn.be FRANCE Association Française de Normalisation (AFNOR) French Association for Standardization E-mail: mailto:[email protected] Internet: http://www.afnor.fr GERMANY Deutsches Institut für Normung eV (DIN) German Institute for Standardization E-mail: mailto:[email protected] Internet: http://www.din.de ITALY Ente Nazionale Italiano di Unificazione (UNI) Italian Institute for Standardization E-mail: mailto:[email protected] Internet: http://www.uni.com THE NETHERLANDS Nederlands Normalisatie Instituut (NEN) Netherlands Standardisation Institute E-mail: mailto:[email protected] Internet: http://www.nen.nl UNITED KINGDOM British Standards Institution (BSI) E-mail: mailto:[email protected] Internet: http://www.bsi.org.uk

122

3.2 Sources of price information INTERNATIONAL FAO (Food and Agriculture Organization) Publisher of ‘Monthly Bulletin of Statistics’, ‘Commodity and Market Review’, and ‘Food Outlook’ E-mail: mailto:[email protected] Internet: http://www.fao.org International Trade Centre (ITC) Publisher of ‘Market News Service for Fruit Juices’ E-mail: mailto:[email protected] Internet: http://www.intracen.org UNITED KINGDOM Agra Europe Ltd. Publisher of ‘The Public Ledger’ and ‘Fruit and Vegetable Markets’ E-mail: mailto:[email protected] Internet: http://www.public-ledger.com http://www.agra-net.com 3.3 Trade associations EUROPE Association of the Industry of Juices and Nectars from Fruit and Vegetables of the European Union (AIJN) E-mail: mailto:[email protected] Internet: http://www.aijn.org Organisation Européenne des Industries Transformatrices de Fruits et Légumes (OEITFL) Association of European Fruit and Vegetable Processing Industries E-mail: mailto:[email protected] Internet: http://www.oeitfl.org Fédération des Associations de Fabricants de Produits Alimentaires Surgelés de l’UE (FAFPAS) Federation of the Frozen Products’ Producers Association in the EU E-mail: mailto:[email protected] European Federation of Dried Fruit (FRUCOM) (Fédération Européenne de Commerce de Fruits Secs) Telephone: +49 (0)40 3747 190 Fax: +49 (0)40 3747 1926 E-mail: mailto:[email protected] Confederation of the Food and Drink Industries of the EU (CIAA) E-mail: mailto:[email protected] Internet: http://www.ciaa.be

123

BELGIUM Verbond van Groentenverwerkende Bedrijven en Industriegroenten Groothandelaars en Exporteurs (VEGEBE) Federation of Processing Industry for Vegetables, Wholesalers and Exporters Telephone: +32 (0)2 2380 620 Fax: +32 (0)2 2380 408 E-mail: mailto:[email protected] FRANCE Chambre Syndicale Nationale des Industries de la Conserve French Association of Preserving Industry Telephone: +33 (0)1 5391 4444 Fax: +33 (0)1 5391 4470 Fédération Nationale des Conserveries Coopératives et S.I.C.A. French Federation of Preserving Cooperations Telephone: +33 (0)1 4326 1447 Fax: +33 (0)1 4326 3520 E-mail: mailto:[email protected] Fédération Nationale des Syndicats de Confituriers et Conserveurs de Fruits French Federation of Fruit Preserving Industry Telephone: +33 (0)1 5391 4491 Fax: +33 (0)1 5391 4470 Syndicat National des Déshydrateurs des Produits Alimentaires French Association of Dried Food Products Industry Telephone: +33 (0)1 5391 4444 Fax: +33 (0)1 5391 4470 GERMANY Bundesverband der Obst-, Gemüse und Kartoffelverarbeitenden Industrie e.V. German Association of Fruit and Vegetables Processing Industry Telephone: +49 (0)228 3540 25 Fax: +49 (0)228 3618 89 E-mail: mailto:[email protected] Waren-Verein Telephone: +49 (0)40 3747 190 Fax: +49 (0)40 3747 1919 ITALY Associazione Italiana Industrie Prodotti Alimentari, AIPPA Italian Association of Food Industry E-mail: mailto:[email protected] Internet: http://www.aiipa.it THE NETHERLANDS Productschap voor de Tuinbouw Netherlands Horticulture Commodity Board E-mail: mailto:[email protected] Internet: http://www.tuinbouw.nl Vereniging van de Nederlandse Groenten en Fruitverwerkende Industrie, VIGEF Netherlands Association of Fruit and Vegetables Processing Industry

124

E-mail: mailto:[email protected] Internet: http://www.vigef.nl Nederlandse Vereniging voor de Handel in Gedroogde Zuidvruchten, Specerijen en Aanverwante Artikelen Netherlands Dried Fruit Trade Association E-mail: mailto:[email protected] Internet: http://www.zuidvruchten.nl UNITED KINGDOM British Association of Fruit and Vegetables Processing Industry (BFVCA) Telephone: +44 (0)20 7420 7110 Fax: +44 (0)20 7836 0580 National Dried Fruit Association (NDFTA) Telephone: +44 (0)207 7227 488 Fax: +44 (0)207 7222 009 Food & Drink Federation (members include the British Fruit & Vegetable Canners’ Association) E-mail: mailto:[email protected] Internet: http://www.fdf.org.uk British Frozen Food Federation Internet: http://www.bfff.co.uk POLAND Polish Association of Juice & Soft Drinks Producers Telephone: +48 22 3361329 Fax: +48 22 827 1875 E-mail: mailto:[email protected] HUNGARY Hungarian Juice Association Telephone: +36 84 501503 Fax: +36 84 501500 E-mail: mailto:[email protected] 3.4 Trade fair organisers ANUGA Together with the SIAL the leading trade fair for food and beverages in the EU Frequency: biennial (October 2005 Köln) E-mail: mailto:[email protected] Internet: http://www.anuga.de Bio Fach (Certified organic products) The largest trade fair in the EU for organic products, both end products and ingredients Nürnberg Messe GmbH Frequency: annual (February 2006 Nurnberg) E-mail: mailto:[email protected] Internet: http://www.biofach.de

125

Food Ingredients Europe Together with Health Ingredients Europe the largest trade fair for food ingredients in the EU Miller Freeman BV Frequency: biennial, alternates with Health Ingredients Europe

(November 2005 Paris) E-mail: mailto:[email protected] Internet: http://www.fi-events.com IFE A smaller trade fair for food and beverages in the United Kingdom Frequency: biennial (March 2007 London) E-mail: mailto:[email protected] Internet: http://www.ife.co.uk Natural Products Europe A smaller trade fair for natural and organic products in The Netherlands New Hope International Media Ltd. Frequency: annual (June 2006 Amsterdam) Internet: http://www.expoeurope.com SANA A smaller trade fair for food and beverages in Italy Fiere e Comunicazioni Frequency : biennial (September 2005 Bologna) E-mail: mailto:[email protected] Internet: http://www.sana.it SIAL Together with the Anuga, the leading trade fair for food and beverages in the EU Frequency: biennial (October 2006 Paris) Internet: http://www.sial.fr Above mentioned fairs are targeted at retailers, wholesalers, importers, agents and exporters of food and beverage products. 3.5 Trade press Fruit Processing Main subjects: international articles for the fruit processing and juice producing industry E-mail: mailto:[email protected] Internet: http://www.fruit-processing.com Fruit and Vegetable Markets (English language) Main subjects: fresh and processed fruit and vegetables in the European and worldwide markets E-mail: mailto:[email protected] Internet: http://www.agra-net.com Fruit World International (English, German, French language) Main subjects: fresh fruit and vegetables in worldwide markets E-mail: mailto:[email protected] Internet: http://www.agropress.com

126

International Food Ingredients Main subjects: ingredients and additives E-mail: mailto:[email protected] Internet: http://www.ifi-online.com 3.6 Other useful addresses INTERNATIONAL International Chamber of Commerce E-mail: mailto:[email protected] Internet: http://www.iccwbo.org/ IFOAM (International Federation of Organic Agriculture Movements) E-mail: mailto:[email protected] Internet: http://www.ifoam.org EUROPE TransFair International (Fair trade organisation) E-mail: mailto:[email protected] Internet: http://www.transfair.org GERMANY BCS ÖKO-GARANTIE GMBH (Contact point for organic certification) E-mail: mailto:[email protected] Internet: http://www.bcs-oeko.de Ecocert (Contact point for organic certification) E-mail: mailto:[email protected] Internet: http://www.ecocert.de Naturland Verband für naturgemäßen Landbau e.V (Germany’s Naturland association for organic agriculture) E-mail: mailto:[email protected] Internet: http://www.naturland.de UnitednatureX Europe / Green Trade Net Office (Green Trade Net is an information network on organic raw materials worldwide) Telephone: +49 (0)228 7215 776 Fax: +49 (0)228 7215 777 Internet: http://www.green-tradenet.de Deutsches Tiefkühlinstitut e.V. E-mail: mailto:[email protected] Internet: http://www.tiefkuehlinstitut.de

127

FRANCE Ecocert (Contact point for organic certification) E-mail: mailto:[email protected] Internet: http://www.ecocert.fr THE NETHERLANDS CBI/AccessGuide (CBI’s database on European non-tariff trade barriers E-mail: mailto:[email protected] Internet: http://www.cbi.nl/accessguide SKAL (Internationally operating organisation, inspecting and certifying sustainable agricultural production methods and products) E-mail: mailto:[email protected] Internet: http://www.skal.com Stichting Max Havelaar (Max Havelaar Foundation, fair trade organisation) E-mail: mailto:[email protected] Internet: http://www.maxhavelaar.nl UNITED KINGDOM Soil Association (IFOAM accredited contact point for organic certification) E-mail: mailto:[email protected] Internet: http://www.soilassociation.org

128

4 LIST OF DEVELOPING COUNTRIES Please note that the OECD list of developing countries, as applied in this market survey, may include countries that are usually not considered as developing countries. Afghanistan Georgia Pakistan Albania Ghana Palau Islands Algeria Grenada Palestinian Admin. Areas Angola Guatemala Panama Anguilla Guinea Papua New Guinea Antigua and Barbuda Guinea-Bissau Paraguay Argentina Guyana Peru Armenia Haiti Philippines Azerbaijan Honduras Rwanda Bahrain India Samoa Bangladesh Indonesia São Tomé & Principe Barbados Iran Saudi Arabia Belize Iraq Senegal Benin Jamaica Serbia and Montenegro Bhutan Jordan Seychelles Bolivia Kazakhstan Sierra Leone Bosnia & Herzegovina Kenya Solomon Islands Botswana Kiribati Somalia Brazil Korea, rep of South Africa Burkina Faso Kyrghyz Rep. Sri Lanka Burundi Laos St. Helena Cambodia Lebanon St. Kitts-Nevis Cameroon Lesotho St. Lucia Cape Verde Liberia St. Vincent and Grenadines Central African rep. Macedonia Sudan Chad Madagascar Surinam Chile Malawi Swaziland China Malaysia Syria Colombia Maldives Tajikistan Comoros Mali Tanzania Congo Dem. Rep. Marshall Islands Thailand Congo Rep. Mauritania Togo Cook Islands Mauritius Tokelau Costa Rica Mayotte Tonga Côte d'Ivoire Mexico Trinidad & Tobago Croatia Micronesia, Fed. States Tunisia Cuba Moldova Turkey Djibouti Mongolia Turkmenistan Dominica Montserrat Turks & Caicos Islands Dominican republic Morocco Tuvalu Ecuador Mozambique Uganda East Timor Myanmar Uruguay Egypt Namibia Uzbekistan El Salvador Nauru Vanuatu Equatorial Guinea Nepal Venezuela Eritrea Nicaragua Vietnam Ethiopia Niger Wallis & Futuna Fiji Nigeria Yemen Gabon Niue Zambia Gambia Oman Zimbabwe January 2003

129

5 USEFUL INTERNET SITES http://www.intracen.org Web site of ITC with link to MNS Market News Service. Depending on the product group, the MNS product specialist contacts these sources of information to obtain up-to-the-minute data concerning the prices of products, supply and demand and other economic information. The collected information is then analysed, tabulated and processed in a computer programme specially designed for each product group, then transmitted to MNS subscribers by airmail, E-mail or fax. (Language: English) http://www.minlnv.nl The web site of The Netherlands Ministry of Agriculture, Nature Management and Fishery provides information on policy and statistics on agriculture, nature management and fisheries. It also links up to other useful sites in Europe. For an overview of information by country, please refer to http://www.minlnv.nl/agribusiness/landen (Language: English and Dutch) http://www.foodnavigator.com Research and Information Centre on food ingredients and the food ingredients industry. This site offers a variety of sites, articles, surveys and other products relevant to the food sector. Each Internet review offers direct access to the chosen material and a brief explanation about the link. (Language: English) http://www.foodinfonet.com Food Info Net is an Internet site for information and services related to food technology, R&D and manufacturing. The site combines the resources of food companies, research and academic institutions, industry suppliers, government agencies, and non-profit special interest groups. (Language: English) http://www.fruchtsaft.de Web site of the Association of the German Fruit Juice Industry (VdF) containing information on fruit juices, trade and (European) fruit juice associations. Moreover, it contains links to the fruit juice industry, publications and other relevant associations. (Language: German and English). http://europe.eu.int/ Main website of the EU giving access to all kind of information on EU matters http://efsa.eu.int/index_en.html Website of the European Food Safety Authority http://mkaccdb.eu.int/ Market access database of the EU, giving trade barriers to third country suppliers