11

How To Enter The Chinese How To Enter The Chinese MarketMarket

Shanghai Import Food Enterprise Shanghai Import Food Enterprise Association (SIFEA)Association (SIFEA)

Mr. Guan RongMr. Guan Rong

22

Our Association - SIFEAOur Association - SIFEA

Provide information to members Provide information to members Government liaison and coordinationGovernment liaison and coordination Trade promotionTrade promotion Conduct activitiesConduct activities Participate in trade exhibitionsParticipate in trade exhibitions

33

OutlineOutline

1. The 1. The Imported FoodImported Food Market in ShanghaiMarket in Shanghai

2. Major Products and Exporting Countries2. Major Products and Exporting Countries

3. China’s Current Import 3. China’s Current Import RequirementRequirementss

4. Impact of the Global Economic Situation?4. Impact of the Global Economic Situation?

5. Suggestions to Your China 5. Suggestions to Your China StrategyStrategy

44

Imported FoodImported Food in Shanghai in Shanghai

Wei ght(Ki l o-Ton) 475 766 1035Amount(USD Mi l l i on) 1410 2446 3621

2006 2007 2008

55

Breakdown ofBreakdown of Products (200Products (2008)8)

((USD Million)USD Million)

Dairy, 522 , 14%

Other, 911 , 26%

Wine and Beverage, 843 ,

23%

Vegetable and Fruit, 109 ,

3%

Food Additives, 760 , 21%

Candy, 145 , 4%

Grain, 156 , 4%

Edible oil, 175 , 5%

66

　　　　　　 Products and Exporting Countries (2008)Products and Exporting Countries (2008)

Food categoryFood category Major Foods Export Countries to Shanghai Major Foods Export Countries to Shanghai

Food additivesFood additives USA, JapanUSA, Japan

WineWine France, Australian , Italy, Spain, Chile, USAFrance, Australian , Italy, Spain, Chile, USA

Liquor Liquor France, England, USAFrance, England, USA

Dairy productsDairy products Australian, New Zealand, USA, France, Italy, Japan, Australian, New Zealand, USA, France, Italy, Japan,

Olive oilOlive oil Italy, Spain, GreeceItaly, Spain, Greece

ChocolateChocolate France, Belgium, Switzerland, Japan, USA, GermanyFrance, Belgium, Switzerland, Japan, USA, Germany

Biscuit and Biscuit and CookiesCookies

USA, Japan, Denmark, England, Germany, ItalyUSA, Japan, Denmark, England, Germany, Italy

Beverage and Beverage and Mineral waterMineral water

France, Italy, England, USA, CanadaFrance, Italy, England, USA, Canada

Meat and meat Meat and meat productsproducts

USA, Canada, Denmark, France, Ireland, Australian, New Zealand, USA, Canada, Denmark, France, Ireland, Australian, New Zealand,

ConfectioneryConfectionery Japan, Switzerland, England, GermanyJapan, Switzerland, England, Germany

77

－－ USA US$ 518 Million (#1)USA US$ 518 Million (#1)

－－ Japan US$ 392 Million (#2) Japan US$ 392 Million (#2)

－－ Singapore US$ 339 Million (#3) Singapore US$ 339 Million (#3)

… … … …

－－ Canada US$ 17.7 Million (#20) Canada US$ 17.7 Million (#20)

2008 Major Exporting Countries to Shanghai2008 Major Exporting Countries to Shanghai

88

Major Rejections and ReasonsMajor Rejections and Reasons

USD7+ million of imported food products (0.2% of total import) are found USD7+ million of imported food products (0.2% of total import) are found unqualified in Shanghai port in 2008 – main reasons:unqualified in Shanghai port in 2008 – main reasons:

1. Snack food - pigment, additives and total bacteria count exceeding1. Snack food - pigment, additives and total bacteria count exceeding 2. Dairy product - Enterobacter Sakazakii and the other bacteria detected2. Dairy product - Enterobacter Sakazakii and the other bacteria detected 3. Wine and liquor - preservatives and methanol exceeding3. Wine and liquor - preservatives and methanol exceeding 4. Chinese Label - not correctly indicating the additives in the ingredient, 4. Chinese Label - not correctly indicating the additives in the ingredient,

additives do not conform to Chinese National Standard GB2760-2007.additives do not conform to Chinese National Standard GB2760-2007. 5. Other reasons: Exceeding the period of quality assurance. Can not 5. Other reasons: Exceeding the period of quality assurance. Can not

provide required certificate of imported foods. No date of production on provide required certificate of imported foods. No date of production on the package, etc. the package, etc.

99

The market shares of imported liquors in Shanghai2008

1%

26%

3%

3%

6%7% 9%

9%

12%

12%

12%

J ohnni e Wal ker

Remy Marti n

Hennessy

Chi vas

RI O

Bacardi

Martel l

Abosol ute

Royal Sal ute

Bal l anti ne

Others

`

1010

The market shares of beer in Shanghai 2008

1%1%

3%

12%

5%

25%

34%

19%

Suntory

Budwei ser

* Tsi ngdao

Hei neken

Asahi

Stei n Lager

Carl sberg

Other Chi nese Brands

1111

The market shares of milk powder in Shanghai 2008

4%

5%

7%

10%

26%

25%23%

* Bri ght

Nestl e

Nutri ci a

Anl ene

Anman

Dumex

Other Chi nese brands

1212

The market shares of infant milk powder inShanghai 2008

13%

10%

4%

4%

3%

20%

31%

15%

Dunmex

Wyeth

Abbott

Meadj ohnson

Nestl e

Mei j i

Sci ent

Chi nese Brands

1313

The market shares of cheese in Shanghai 2008

3%

3%3%

2%2%

2%2%

2%

19%

48%

14%

* Bri ght

Pi kfou

Land O' l akes

Suki

Presi dent

Kerrygol d

Kraft

Canol a

Mamazhi xuan

Beqa

Others

1414

The market shares of chocolate in Shanghai2008

6%

5%

4%

3%

2%2%

22%

45%

11%

Dove

Ferrero

Mei j i

Lotte

Cadbury

UHA

Nestl e

Banuo

Chi nese Brands

1515

Food Products Entering ChinaFood Products Entering China

- Agent & ImporterAgent & Importer- Self-importSelf-import- OEM (Private Label)OEM (Private Label)- Local ManufacturingLocal Manufacturing

1616

The Administration System in China for Import The Administration System in China for Import Food Inspection and QuarantineFood Inspection and Quarantine

AQSIQAQSIQ

General Administration of Quality Supervision, Inspection and General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China (AQSIQ) is a ministerial Quarantine of the People's Republic of China (AQSIQ) is a ministerial administrative organ directly under the State Council of the People's administrative organ directly under the State Council of the People's Republic of China in charge of national quality, metrology, entry-exit Republic of China in charge of national quality, metrology, entry-exit commodity inspection, entry-exit health quarantine, entry-exit animal commodity inspection, entry-exit health quarantine, entry-exit animal and plant quarantine, import-export food safety, certification and and plant quarantine, import-export food safety, certification and accreditation, standardization, as well as administrative law-accreditation, standardization, as well as administrative law-enforcement.enforcement.

With purpose to perform the function of entry-exit inspection and With purpose to perform the function of entry-exit inspection and quarantine, AQSIQ has set up in total 35 Entry-Exit Inspection and quarantine, AQSIQ has set up in total 35 Entry-Exit Inspection and Quarantine Bureaus (CIQ) in China's 31 provinces, near 300 branches Quarantine Bureaus (CIQ) in China's 31 provinces, near 300 branches and more than 200 local offices across the country, with employees and more than 200 local offices across the country, with employees totaled over 30,000 in goods distributing center at sea ports, land ports totaled over 30,000 in goods distributing center at sea ports, land ports and airports. AQSIQ provides direct leadership to all the CIQ. and airports. AQSIQ provides direct leadership to all the CIQ.

1717

Food Safety ManagementFood Safety Management

The recent Chinese National People’s Congress has approved the ChinThe recent Chinese National People’s Congress has approved the Chinese Food Safety Law which is to become effective June 1, 2009.ese Food Safety Law which is to become effective June 1, 2009.

AQSIQ is responsible for inspecting, supervising and administering thAQSIQ is responsible for inspecting, supervising and administering the safety, hygiene and quality of the imported and exported foods and ce safety, hygiene and quality of the imported and exported foods and cosmetics.osmetics.

1. It is AQSIQ that should inspect, quarantine, supervise and manag1. It is AQSIQ that should inspect, quarantine, supervise and manage the imported foods, food additive, food container, packaging materiae the imported foods, food additive, food container, packaging material, instrument and equipment for food production. l, instrument and equipment for food production.

2. Pre-warning System for Entry-exit Food Inspection and Quaranti2. Pre-warning System for Entry-exit Food Inspection and Quarantine Risk and Quick Response System have been established by AQSIQ ne Risk and Quick Response System have been established by AQSIQ with the view to take preventive safeguarding and treating measures awith the view to take preventive safeguarding and treating measures against the possible risk or potential harm caused by imported and expgainst the possible risk or potential harm caused by imported and exported food. orted food.

1818

China’s Current Import China’s Current Import RequirementRequirementss

Note: “√ ”means necessary “× ” means not necessary

Imported foods

Category

Products

Bilateral government agreement

AQSIQ Registration

AQSIQ Quarantine permission

Relevant Export certificate

Chinese Label

Grain, soybean √ √ √ √ Plant products Fruit, Vegetable √ √ √ √ √

Agricultural products Animal

products raw or cooked meat and poultry √ √ Raw √

Cooked × √ √ or ×

living products

Fish, Shrimp, Crab √ √ √ √ × Seafood

Frozen products

Fish, Shrimp, Crab × √ ×

√ √ or ×

Dairy products

Cheese, yoghurt, Butter, milk, Milk powder

× × × √ √

Alcoholic drink and Beverage

Wine, Spirits, Beer, Fruit drink, Mineral water, sparkling water, Coffee drink, Function drink,

× × × × √

Pre-packaged products

Snack food

Chocolate, Succade, Candy, Biscuit, Dried nut, Honey, Jam, Flavoring, Olive oil

× × × × √

1919

Chinese Label RegulationChinese Label Regulation

Chinese labels must include: Food Name, Ingredients, Net Weight,Chinese labels must include: Food Name, Ingredients, Net Weight, Country of Origin, Date of Production (Year/Month/Day), Expir Country of Origin, Date of Production (Year/Month/Day), Expiration date (Year/Month/Day), Store Condition, Distributor Name ation date (Year/Month/Day), Store Condition, Distributor Name and Address.and Address.

Chinese label must be covered over the foreign language package iChinese label must be covered over the foreign language package in the designated position of the package surface, or printed on the n the designated position of the package surface, or printed on the package surface directly, this method can help the goods to pass thpackage surface directly, this method can help the goods to pass the inspection procedure rapidly. Imported food products can not be inspection procedure rapidly. Imported food products can not be permitted into the Chinese retail market without Chinese labels.e permitted into the Chinese retail market without Chinese labels.

The local CIQ is in charge of the Chinese label inspection and keeThe local CIQ is in charge of the Chinese label inspection and keeps records according to the Chinese National Standards.ps records according to the Chinese National Standards.

2020

Impact of Global Economic Situation to Shanghai Food Impact of Global Economic Situation to Shanghai Food Industry (Survey to 90 companies)Industry (Survey to 90 companies)

Sal es of 2008

76%

4%

20%

0%10%20%30%40%50%60%70%80%

Increase Same as i n2008

Decrease

The Range of Sal es I ncrease i n2008

42%

5%

53%

0%

10%

20%

30%

40%

50%

60%

< 10% 10%-20% 20%-50%

Profi t of 2008

61%

9%

30%

0%

10%

20%

30%

40%

50%

60%

70%

Increase Same as i n2008

Decrease

The Range of Profi t I ncrease i n2008

31%

12%

57%

0%

10%

20%

30%

40%

50%

60%

< 10% 10%-20% 20%-50%

2121

2009 Shanghai Food Industry Forecast (90 companies)2009 Shanghai Food Industry Forecast (90 companies)

Sal es Forecast of 2009

89%

11%

0%

20%

40%

60%

80%

100%

Increase Same as i n 2008

The Range of Sal es I ncreaseForecast i n 2009

19%

52%

19%

10%

0%

10%

20%

30%

40%

50%

60%

< 10% 10%-20% 20%-50% > 50%

Profi t Forecast of 2009

71%

26%

3%0%

10%20%30%40%50%60%70%80%

Increase Same as i n2008

Decrease

The Range of Profi t I ncreaseForecast i n 2009

17%

58%

17%

8%

0%

10%

20%

30%

40%

50%

60%

70%

< 10% 10%-20% 20%-50% > 50%

2222

Peak Selling Period – the Chinese New YearPeak Selling Period – the Chinese New Year

2323

Suggestions to Your China StrategySuggestions to Your China Strategy

1. 1. Right products for right customersRight products for right customers

2. Be innovative and flexible2. Be innovative and flexible

3. Co-operation with your Chinese partner3. Co-operation with your Chinese partner

4. Your local presence will make a difference4. Your local presence will make a difference

5. Thinking Long term5. Thinking Long term

2424

QuestionsQuestions ？？

Thank youThank you

Mr. Guan RongMr. Guan Rong Email: guanrong@sifea.cn Email: guanrong@sifea.cn

Tel/Fax: 86-21-64398189 Tel/Fax: 86-21-64398189