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Introduction:

Capital-Canberra

Largest city-Sydney

National language-English (de facto)

Demonym-Australian, Aussie

Prime Minister- Julia Gillard

Area- 7,618,000 km

Population- (2013 estimate) 22,888,135

GDP- 1371.764 USD

Study of Cultural Environment of Australia:

Australia is a product of a unique blend of established traditions and new influences. Thecountrys original inhabitants, the Aboriginal and Torres Strait Islander peoples, are the

custodians of one of the worlds oldest continuing cultural traditions. They have been livingin Australia for at least 40 000 years and possibly up to 60 000 years.

The rest of Australias people are migrants or descendants of migrants who have arrived inAustralia from about 200 countries since Great Britain established the first Europeansettlement at Sydney Cove in 1788.

In 1945, Australias population was around 7 million people and was mainly AngloCeltic.Since then, more than 6.5 million migrants, including 675 000 refugees, have settled inAustralia, significantly broadening its social and cultural profile.

Today Australia has a population of nearly 23 million people. At 2009, about 25.6 per cent ofthe estimated resident population comprised those born overseas. Australian Bureau ofStatistics projections from the 2006 census of the numbers of Aboriginal and Torres Strait

Islander people suggest and Indigenous population of 575,552 people at 30 June 2011.

Many of the people who have come to Australia since 1945 were motivated by a commitmentto family, or a desire to escape poverty, war or persecution. The first waves of migrants andrefugees came mostly from Europe. Subsequent waves have come from the AsiaPacificregion, the Middle East and Africa.

Migrants have enriched almost every aspect of Australian life, from business to the arts, fromcooking to comedy and from science to sport. They, in turn, have adapted to Australias

tolerant, informal and broadly egalitarian society.


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Shared values:

The defining feature of todays Australia is not only the cultural diversity of its people, butthe extent to which they are united by an overriding and unifying commitment to Australia.

Within the framework of Australias laws, all Australians have the right to express theirculture and beliefs and to participate freely in Australias national life.

At the same time, everyone is expected to uphold the principles and shared values thatsupport Australias way of life.

These include:

respect for equal worth, dignity and freedom of the individual freedom of speech and association freedom of religion and a secular government support for parliamentary democracy and the rule of law equality under the law equality of men and women equality of opportunity peacefulness A spirit of egalitarianism that embraces tolerance, mutual respect, and compassion for

those in need.

Australia also holds firmly to the belief that no one should be disadvantaged on the basis of

their country of birth, cultural heritage, language, gender or religious belief.

An egalitarian society:

In most practical ways, Australia is an egalitarian society. This does not mean that everyoneis the same or that everybody has equal wealth or property.

But it does mean that there are no formal or entrenched class distinctions in Australiansociety, as there are in some other countries. It also means that with hard work andcommitment, people without high-level connections or influential patrons can realize theirambitions.

The unemployment rate is relatively low (in December 2007 it was 4.3 per cent) and thegross per capita income is around $39 000. All people are equal under the law in Australiaand all Australians have the right to be respected and treated in a fair manner.

A typical Australian:

Given the diverse nature of todays Australia, some people question whether there is atypical Australian. There is, of course, no shortage of popular stereotypes, some of which

contradict each other.

For example, some people see Australians as egalitarian, irreverent people with a deepsuspicion of authority while others regard them as mostly law-abiding and even conformist.


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Some people, particularly those living overseas, believe Australians live mainly in countryareas, the Australian outback or the bush. In fact, more than 75 per cent of Australians live acosmopolitan lifestyle in urban centers, mainly in the capital cities along the coast. Others seeAustralians as people who live in a lucky country who love their leisure, particularly sport,

both as spectators and as participants. In fact, Australians are among the hardest-working

people in the world with some of the longest working hours in the developed world.

Another common perception of Australians is that they are informal, open and direct and saywhat they mean. They are also seen as people who believe in the principle of giving people a

fair go and standing up for theirmates, the disadvantaged and the underdog.

Many of these popular images have some truth to them and most Australians conform to atleast some of them. But Australians, like people everywhere, cannot be so easily stereotyped.There are typical Australians everywhere. But they are not all the same.

Language:

All people in Australia are encouraged to learn English, which is the national language and animportant unifying element of Australian society.

However, languages other than English are also valued. In fact, more than 15 per cent ofAustralians speak languages other than English at home.

The most commonly spoken languages after English are Italian, Greek, Cantonese, Arabic,Vietnamese and Mandarin. Australians speak more than 200 languages, including IndigenousAustralian languages.

Australian English:

While English is Australias national language, there are certain words and expressions that

have become regarded as uniquely Australian through common usage. Some of them mightseem strange to non-Australians.

The use of these colloquial or slang words, often coupled with an Australian sense of humorthat is characterized by irony and irreverence, can sometimes cause confusion forinternational visitors. There are a number of books on Australian colloquialisms and slang,including theMacquarie Book of Slang.

Religious worship:

Australia is a predominantly Christian country, with around 64 per cent of all Australiansidentifying as Christians. However, most other major religious faiths are also practiced,reflecting Australias culturally diverse society.

Australias earliest religious or spiritual beliefs date back to the Aboriginal and Torres Strait

Islander peoples, who have inhabited Australia for between 40 000 and 60 000 years.Indigenous Australians have their own unique religious traditions and spiritual values.

Australia has no official state religion and people are free to practice any religion theychoose, as long as they obey the law. Australians are also free not to have a religion.


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Vibrant arts scene:

Australia has a vibrant arts scene that reflects both the nations Indigenous cultural traditions

and its rich mosaic of migrant cultures. All forms of the visual and performing arts havestrong followings, including film, art, theatre, dance and music.

According to one survey, almost 13 million or 88 per cent of adult Australians attend at leastone cultural event or performance every year. The most popular art form is film, attended byabout 70 per cent of the population each year. More than 26 per cent attend a popular musicconcert; 25 per cent go to an art gallery or museum; 19 per cent see an opera or musical; 18

per cent attend live theatre; 11 per cent attend a dance performance; and 9 per cent attend aclassical music concert.

Visual artists have played an important role in shaping and reflecting Australias image. They

range from Aboriginal and Torres Strait Islander artists to the nationalist painters of theHeidelberg School in Victoria, symbolic surrealists such as Sidney Nolan, Arthur Boyd and

Albert Tucker and modern artists reflecting issues confronting contemporary Australia. Othernotable Australian artists include John Brack, William Dobell, Russell Drysdale, MargaretOlley, John Olsen, Margaret Preston, Clifton Pugh, Jeffrey Smart, Brett Whiteley and FredWilliams.

Australia has a strong literary tradition, which started with the storytelling of IndigenousAustralians and continued with the oral stories of convicts arriving in Australia in the late18th century. Australia has one Nobel Prize for Literature to its credit, with novelist PatrickWhite receiving the award in 1973. Other recent Australian novelists whose work has a

particularly Australian flavour include Peter Carey, Bryce Courtenay, Kate Grenville,Elizabeth Jolley, Thomas Keneally, Christopher Koch, David Malouf, Colleen McCullough,Christina Stead, Morris West and Tim Winton.

A sporting culture:

Australians love their sport, both playing it and watching it.

Australia has often achieved impressive results at the elite level. In the 2004 Athens OlympicGames, Australia ranked fourth overall in the medal tally behind the United States, China andRussia. In the 2006 Football World Cup, Australia reached the final 16. Australia is alsoranked the top cricketing nation in the world.

But its not just at this top level that Australians enjoy their sport. A recent national survey

showed that more than 11 million Australians aged 15 or over participated at least once aweek in physical activity for exercise, recreation and sporta participation rate of almost 70

per cent. The 10 most popular physical activities were walking, aerobics/fitness, swimming,cycling, tennis, golf, running, bushwalking, football (often referred to as soccer in Australia)and netball. Other popular sporting activities include Australian football, rugby, hockey,

basketball, baseball, car racing, horse racing, sailing and snow skiing.

The most watched sports in Australia include Australian Rules Football, a uniquelyAustralian game with roots traceable to early forms of rugby and Gaelic football, rugby

league, rugby union and cricket. The Australian Open, held in Melbourne, is one of tenniss


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four Grand Slam events. Australia has more than 120 national sporting organizations andthousands of state and local bodies.

A national cuisine:

Australia has one of the most diverse cuisines in the world, thanks to Asian and Europeanmigrant influences, a dining public that is happy to try innovative dishes and access to a

plentiful supply of fresh and highquality produce.

Australia, one of the worlds most efficient agricultural nations, produces highqualityvegetables, fruit and grains, meat, poultry, seafood, and cheeses and other dairy products. Inaddition, many new industries have been established to accommodate the growing Australiantaste for exotic foods, including Asian greens, nashi pears, lychees, olives and herbs.Aquaculture products such as farmed Atlantic salmon and southern blue fin tuna are nowavailable as well as the great range of seafood that comes from the ocean surroundingAustralia, including Moreton Bay bugs (shellfish), banana prawns, barramundi fish and

oysters.

Australians enjoy a huge range of food in restaurants and homes, reflecting the co untryscultural diversity. Southern Europe has combined with Asia and the Pacific for new flavorsand tastes. Italian, Chinese, Indonesian, Japanese, Greek, Thai, Malay, French andVietnamese restaurants are common, particularly in the capital cities. Middle Eastern flavorsare also rapidly emerging, with Moroccan and Lebanese flavors being used with localingredients in mainstream cooking with notable success.

Traditional Australian bush tucker is also becoming more common, particularly in northernAustralian restaurants, where kangaroo, buffalo, crocodile and emu can often be found onmenus.

Historically, there has never been a cuisine typically regarded as Australian. Instead,Australian fare has evolved with the distinct layers of flavors that each new culture hasadded. Homesick expatriate Australians sometimes hanker for Australian food such aslamingtons (a sponge cake square dipped in chocolate and coconut), Pavlovas (a meringuedessert named after the Russian ballet dancer Anna Pavlova) and vegemite (a commercially

produced spread made from yeast products).

The Australian wine sector is recognized internationally as producing a full range of high-

quality wine styles and varietals to match any dish, from full-bodied reds and deep fruitywhites to sparkling, dessert and fortified wines.

Obeying the law:

Community behaviour in Australia is governed by a combination of formal laws and informalsocial customs.

All people in Australia must obey the nations laws or face the possibility of criminal

prosecution or civil action. People are also expected to generally observe Australian socialcustoms, habits and practices even though they are not normally legally binding.


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Serious criminal offences include murder, assault, sexual assault, paedophilia, violenceagainst people or property, armed robbery or theft, dangerous driving of a motor car,

possession and use of illegal drugs, fraud, and having sexual relations with young people whoare aged below the legal age of consent, which is 16 in New South Wales but varies fromstate to state.

Smoking tobacco and drinking alcohol are not illegal, but there are many restrictions on theirpublic use. It is against the law for any person to sell or supply alcohol or tobacco products toa person under the age of 18 years.

There are also laws against mistreating or neglecting animals, carrying weapons such asknives or guns, littering, polluting or disposing of wastes without permission and creatingexcessive noise. There is no death penalty in Australia.

Warm climate, informal people:

Australia is so large that it experiences most climatic conditions, from tropical monsoons tohot, dry weather and snow. Generally, however, the climate is warm and temperate,

particularly in the major coastal cities.

This relatively benign climate has resulted in a country where people spend a good deal oftime outdoors at beaches, in the countryside or on sporting fields as either spectators or

participants.

Australians tend to be gregarious and outgoing. Most are relatively informal socially and intheir relationships with acquaintances and work colleagues.

In the workplace and among friends, Australians generally call each other by their firstnames. But this informality does not extend to physical contact. When meeting someone forthe first time, it is usual to shake the persons right hand with your right hand. People who donot know each other generally do not kiss or hug when meeting.

Australians queue or line up when waiting to be served in a shop, a bank, a governmentdepartment, a cinema, or anywhere that a number of people are all seeking a service at thesame time. Australians generally wait until it is their turn to be served or attended to. Beingon time for meetings and appointments is important.

Clothing:

The types of clothing that people wear reflect the diversity in Australian society and thevariations in climate. There are no laws or rules on clothing, but Australians are expected towear certain clothing in work situationsmost workplaces have dress standards.

Outside the work situation, clothing is a personal choicepeople dress for comfort, the socialsituation or the weather. Clubs, movie theatres and other places require people to dress inneat, clean clothes and wear appropriate footwear. Australia does not have an official nationaldress.


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Celebrations and holidays:

Most workers in Australia have around 12 national and state public holidays throughout theyear, in addition to their annual holidays. These include:

New Years Day this is on 1 January every year. The most common time for people inAustralia to take their annual leave is between mid-December and the end of January.

Christmas and Easter, two of the most important dates in the Christian calendar.Christmas Day is on 25 December every year, while Easter is observed at some point

between late March and late April each year. Boxing Day, the day after Christmas Day, is also a public holiday. Australia Day, on 26 January, is the day Australians celebrate the founding of the first

European settlement in Australia in 1788. Anzac Day, on 25 April, is the day the Australian and New Zealand Army Corps

(Anzac) landed at Gallipoli in Turkey in 1915 during World War I. This day is setaside in memory of those who fought for Australia and those who lost their lives in

war. The day is a national public holiday and is commemorated with ceremonies, thelaying of wreaths and military parades.

There are also a number of other non-national holidays which are celebrated only in specificstates and territories (or celebrated in all states, but at different times of the year). Theseinclude Labour (or Eight-Hour) Day and the official birthday of Queen Elizabeth.

Melbourne Cup Day, which occurs on the first Tuesday of November each year, is a publicholiday in metropolitan Melbourne. The Melbourne Cup is a world-famous horse race which

brings Australia almost to a standstill. For a few minutes, most people, whether at work,school or home, stop to watch the race on television.

Key facts:

More than 6.5 million migrants have settled in Australia since 1945. English is thenational language but other languages are valued.

Australia is predominantly Christian but people are free to practice any religion theychoose.

Around 88 per cent of Australians go to at least one cultural event each year. Morethan 11 million Australians aged 15 or over take part in sport or other physicalactivity.

Australia has one of the most diverse cuisines in the world but has no national dish.International legal cooperation and treaties:

Australia seeks to promote international cooperation in the legal sector. The federalgovernment established the International Legal Services Advisory Council in 1990 to

promote the globalization of legal services. The council seeks to promote understanding ofdifferent countries laws, legal systems and legal institutions, particularly in the areas oftrade, business and international law. It also contributes to the development of legalinstitutions, education and training, and legal interchanges and contacts.

Combating transnational crime and terrorism is also a high priority for Australia, andextradition and mutual assistance are key tools in that fight. International cooperation ensures


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that criminals cannot evade justice simply by crossing borders. Australia has formalextradition arrangements with more than 120 countries.

Australia is a party to an extensive range of treaties, which are the formal instruments ofinternational law. Australia is currently a signatory to agreements on a wide and expanding

range of matters, including with respect to postal, shipping, social security and healtharrangements, defense and security, nuclear non-proliferation, the environment, civil aviation,maritime delimitation and technological exchanges, and agreements designed to establishuniversal standards for the treatment of civilians in times of war. Australia has been heavilyinvolved in international measures to outlaw the use of weapons of mass destruction.Australia has also been actively engaged in work on aspects of the law of the sea and theinternational trading system.

About free trade agreements:

Across the globe, there is an expanding network of free trade agreements (FTAs). High-

quality, comprehensive free trade agreements can play an important role in supporting globaltrade liberalization and are explicitly allowed for under the World Trade Organization (WTO)rules.

FTAs can cover entire regions with multiple participants or link just two economies. Underthese agreements, parties enter into legally binding commitments to liberalize access to eachothers' markets for goods and services, and investment. FTAs also typically address a rangeof other issues such as intellectual property rights, government procurement and competition

policy.

The government will not enter into any trade agreement that falls short of the benchmarks setby the WTO or the benchmarks we set ourselves of high-quality, truly liberalizing trade dealsthat support global trade liberalization.

Australia has six FTAs currently in force with New Zealand, Singapore, Thailand, US, Chileand (with New Zealand) the Association of South East Asian Nations (ASEAN). Thecountries covered by these FTAs account for 28 per cent of Australia's total trade.

Australia is currently engaged in nine FTA negotiations - five bilateral FTA negotiations:China, Japan, Korea, India and Indonesia; and four plurilateral FTA negotiations: the Trans-Pacific Partnership Agreement (TPP), the Gulf Cooperation Council (GCC), the Pacific

Trade and Economic Agreement (PACER Plus), and the Regional Comprehensive EconomicPartnership Agreement (RCEP).

The countries covered by these negotiations account for a further 45 per cent of Australia'strade.

FTAs are helping Australian exporters access new markets and expand trade in existing

markets.


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About the Australia-India Comprehensive Economic Cooperation Agreement

negotiations:

Recent years have seen remarkable growth in the trading relationship between India andAustralia, fuelled by the many complementarities between the two economies. Two-way

trade has grown in value from $3.3 billion in 2000 to over $20 billion in 2011.

India is the world's largest democracy and is a market of 1.2 billion people. Its youthfulpopulation diversified economy and growth trajectory present significant opportunity forAustralian business, especially in the agriculture, energy, manufacturing, mining and servicessectors.

On 12 May 2011 Trade Minister Craig Emerson and Indian Minister for Commerce andIndustry Anand Sharma formally launched negotiations to conclude a ComprehensiveEconomic Cooperation Agreement between Australia and India. Prime Minister Singh andPrime Minister Gillard reaffirmed the importance of achieving a high quality agreement

during Prime Minister Gillard's 15-17 October visit to India. Australia will be seeking acomprehensive and truly liberalizing agreement, consistent with the governments trade

policy. Similar to the elements covered in Australias existing bilateral Free Trade

Agreements, a Comprehensive Economic Cooperation Agreement would include coverage ofinvestment and trade in goods and services.

The Department is seeking public submissions on the Comprehensive Economic CooperationAgreement negotiations.

LEGAL REQUIREMENTS FOR EXPORT TO AUSTRALIA:

Requisites to export food to Australia:

Product is approved for import into Australia by the Australian Quarantine & Inspection

Service

Shipping documentation is completed in agreement with Australian customs

Label meets Australian labeling regulations

Quarantine Import Permit:

All food imported into Australia must comply with Australian quarantine requirements by

obtaining a quarantine import permit. A copy of the permit should accompany the products.

Goods will be released upon confirmation that conditions on the permit have been met. The

following foods are likely to require extensive risk quarantine analysis:

Fresh or frozen raw red or white meats including poultry meat

Some fresh or frozen marine products

Raw or lightly processed egg products


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Raw or lightly processed dairy products

Many fresh fruits

Many unprocessed fresh grains

Honey and some apiary products

Foods that are less likely to require extensive risk quarantine analysis:

Pasta and noodles (non-egg) products

Canned fruit and vegetables

Sauces not containing meat and eggs

Some tropical fruits

Confectionary

Jams and conserves

Processed nuts

Biscuits (cookies)

Spices

Some dried foods (not meat)

Coffee, tea and cocoa

Drinks, including juices

Processed rice

Some processed grains

Many marine products, canned and fresh

Some vegetables

Oils

All food products imported into Australia may be inspected to ensure they meet all the

requirements of the Australian Quarantine regulations and the Food Standards of Australia.

Certain at risk food products are inspected more often than other types. Where a food fails

an inspection and/or analysis, the options available to the importer are to:

Treat the food (fumigate or other)


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Re-export the food

Destroy the food, or

Downgrade the food (eg. for use as animal food or fertilizer).

In some cases, product may be re-worked (treated) to correct the problem. For example,

correcting labeling deficiencies by the application of self-adhesive labels with the required

information. In other cases, the option of re-exporting the food may be given.

However, in situations where the food is unfit for human consumption and treatment is

impractical, AQIS may insist upon destruction of the failing food.

Reasons foods do not comply with Australias standards include:

Containing prohibited plants or fungi or derivatives thereof

Containing either illegal additives or permitted additives in excess of amounts allowed

Containing residues of agricultural or veterinary chemicals for which no maximum levels

have been established in Australia or, where levels are established, the residues exceed

permitted levels

The food may be a prohibited import. Some foods and additives listed in this legislation

may be permitted entry after complying with certain requirements.

Fumigation:

If product is found to be infested with a proscribed organism, authorities may require the

container to be shipped back or fumigated. Fumigation does not entitle a shipment to a clean

bill of health. Goods are inspected after fumigation to ensure the problem was solved. The

problem with fumigation is that, in many cases, it either degrades the product or causes it to

lose its organic status. Imports of fresh produce into Australia are very tightly controlled. The

possibility of fumigation is an added cost consideration for any company wishing to export

certified organic produce to Australia because it is most likely that fumigated organic

produce would have to be sold as regular (nonorganic) produce. Depending on the outlawed

organism found, the following types of fumigation may be imposed by the Australian

Quarantine service:

Ethylene oxide:

Under initial minimum vacuum of 50 kilopascals at 1500g/m3 for 4 hours at 50C; or

1500g/m3 for 24 hours at 21C.

Methyl bromide:

32g/m for 24 hours at 21C at Normal Atmospheric Pressure (NAP).

Add 8g/m for each 5C the temperature is expected to fall below 21C, or subtract the 8g/m

for each 5C the temperature increases above 21C during the fumigation. It is the minimum


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temperature during the course of the fumigation that is to be used for the calculation of the

dose.

Methyl bromide - Giant African Snail Rate:

128g/m for 24 hours at 21C at Normal Atmospheric Pressure (NAP). Add 8g/m for each5C the temperature is expected to fall below 21C, or subtract the 8g/m for each

5C the temperature increases above 21C during the fumigation. It is the minimum


dose.

Methyl bromide - Khapra beetle rate:

80g/m for 48 hours at 21C with a minimum concentration of 32g/m for 24 hours at Normal

Atmospheric Pressure (NAP).

Add 8g/m for each 5C the temperature is expected to fall below 21C or subtract the 8g/m

for each

5C the temperature increases above 21C during the fumigation. It is the minimum


dose.

Hot air:

Hot air at not less than 85C for at least 8 hours once the core temperature has been reached.

Products may smolder or ignite with this treatment.

Hot moist air:

At not less than 85oC for not less than 48 hours (50% relative humidity) once the core

temperature has been reached. Products may smolder or ignite with this treatment.

Hot moist air:

At not less than 95oC for not less than 24 hours (50% relative humidity) once the coretemperature has been reached. Products may smolder or ignite with this treatment.

Gamma irradiation:

Gamma irradiate at 25 kGray (2.5 Mrad).

Gamma irradiation:

Gamma irradiate at 50 kGray (5 Mrad).


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Autoclave:

121C, 103 kPa (15 psi) for 15 minutes; or 134C, 103 kPa (15 psi) for 4 minutes.

Customs Clearance:

Generally, all commercial imports require a formal entry to be lodged with the Australian

Customs Service (ACS). This process can be undertaken either manually at a Customs office,

or electronically through authorized access to ACS Commercial Systems (COMPILE).

Entries may be lodged by importers or their customs agent.

Importers are responsible for obtaining a formal customs clearance for goods above set value

limits (currently $250 for goods imported by sea and air cargo, and $1,000 for goods

imported through the postal system).

Consignments valued at, or below, these amounts may be cleared through use of an approved

Informal

Clearance Document (ICD), available at Customs offices. Customs applies cost-recovery

charges for the processing of entries. These costs depend on whether the entry is submitted as

an electronic entry or as a documentary (manual) entry.

Goods entering Australia can attract Customs duty and/or GST and other taxes and charges.

Customs duty rates vary and depend on a number of factors, such as type of goods and

country of origin. For advice on charges, duty rates, as well as any other Customs matters,

contact the Customs Information Centre on tel. +61 1300 363 263.

Custom Brokers:

For a list of custom brokers, please refer to the member list of the Customs Brokers &

Forwarders Association of Australia:www.cbfca.com.au

Duty Rates:

Please consult: www.customs.gov.au for exact duty rates for each commodity. Duty rates

vary from 05% for most food products allowed entry into Australia.

The US-Australia Free Trade Agreement will reduce most duty on food products to zero on

January 1st 2005, and has provisions to reduce duty on most others to zero over the next ten

years.


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Goods and Services Tax (GST):

GST applies to most imported goods. There are few exemptions from the GST, the main ones

being certain foodstuffs, some medical aids and appliances and imports that qualify for

certain customs duty concessions. Subject to eligibility criteria, importers who are registered

for GST might be able to defer the payment on imported goods by participating in the

Deferred GST Scheme. GST is applied at 10 per cent of the value of the taxable importation

(VOTI). The value of the taxable importation is the sum of:

The customs value of the imported goods, and

Any customs duty payable, and

The amount paid or payable to transport the goods to Australia and to insure the goods for

that transport, and

Any wine tax payable.

In practically all cases, US exporters should not pay for GST as it should be deferred to the

importer or customer.

Temporary Entry:

Products entering Australia for a temporary period may be imported duty-free if they are to

be used for promotional purposes in a trade show that has been certified by the Australian

Customs Service. Even in such cases, products must meet AQIS approval.

Shipping Documentation:

All shipping documents must be presented to customs officials by the importer or their agent

upon the entry of goods into Australia. The following documents are mandatory:

Customs Entry or Informal Clearance Document (ICD)

Air waybill (AWB) or bill of lading (BLAD)

Commercial invoice

Packing list, and

Other documents relating to the importation and requested by the importer.

Customs does not require the completion of a special form of invoice. Normal commercial

invoices, bills of lading and receipts are acceptable.


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These documents should contain the following information:

Invoice terms (eg, FOB, CIF)

Monetary unit referred to on invoice (e.g. AUD, US$)

Name and address of the seller of the goods (Consignor)

Name and address of the buyer of the goods (Consignee)

Complete description of the goods

Name of the ship (or aircraft) on which the goods are to arrive in Australia

Country of origin of the goods, including a declaration from the manufacturer where

preferential rates of duty are being claimed

Numbers of packages containing the goods and the marks and numbers on each package

Quantity of the goods

Selling price of the goods to the buyer of the goods

Labor costs incurred in packing the goods into outside packages

Value of outside packages

Amount of royalties (if any) payable in respect of the goods

Particulars of freight and insurance costs associated with the transport of the goods to

Australia, and

Particulars of all arrangements or undertakings that have, or might have, the effect of

varying the selling price of the goods whether by way of discount, rebate, compensation or

any other means. Importers are legally required to retain commercial documents relating to a

transaction for five years from the date of entry. These documents might be required for

Customs audit purposes. Failure to meet this requirement may incur a financial penalty.

Import Licenses:

Australian Customs does not require companies or individuals to hold licenses to import

goods.

However, depending on the nature of the commodity, permits may be required to clear the

goods.


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Organic Certification:

Australia has been proactive on organic certification. The country has had national standards

for organic and biodynamic products since 1992. It is also one of the countries approved to

export organic food products to the European Union.

However the term organic has been used a bit freely for both domestic and imported products

that are not certified organic. This may have created some ambivalence towards the term

organic but it has strengthened the importance of the certification logo.

To export Organic Products to Australia it is recommended to be certified by a NOP

(National Organic Program) approved certifier.

The importer should be certified by an Australian Certification body accredited by AQIS. As

part of his certification, the importer will need to remain informed on any new requirements

of their certifier and AQIS regarding imported organic food products.

Australias Food Labeling Regulations:

Food Standards Australia/New Zealand (FSANZ) regulates the delivery of safe food. FSANZ

is a binational independent statutory authority that develops food standards for composition,

labeling and contaminants applying to all foods produced or imported for sale in Australia

and New Zealand. FSANZ operates under the Food Standards Australia New Zealand Act

1991.

The following is a summary of the label requirements for Australia. These should be used as

a guide.

A label consultant or the official food standard code should be consulted to ensure labels are

fully compliant: http://www.foodstandards.gov.au/foodstandardscode/

All food for retail or catering purposes must bear a label that meets the Australian Food

Standard Code.

There are labeling exceptions; these cover mostly bulk products meant to be repackaged,

fresh fruit and vegetables, livestock products, food additives and container and packaging for

food products. These all follow different labeling standards.

Labels must be legible with prominent type, distinct from the background and in English. The

type must be at least 3mm high, except on very small packages.


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Labels must include:

Name of food

Product name: the product name should be identical to the product name declared to the

licensing/inspection authority

Name and address of suppl ier

The label on a package of food must include the name and business address, in Australia or

New Zealand, of the supplier (packer, manufacturer, vendor or importer) of the food.

Country of ori gin

The review of country of origin labeling requirements for food has not been finalized. The

country of origin preceded by 'made in' or 'product of' should still be indicated on all food

products. This can be the country where the food was made or processed. If any of theingredients do not originate from that country, a statement that the food is made from

imported or local ingredients should be included.

If the address of the overseas manufacturer includes the name of the country, then no

additional country of origin labeling is required. Please refer to:

Content

Australia has fully embraced the metric system. The products content should be indicated in

the metric equivalent:

Liquids in milliliters (ml ) or Liters (L)

Solids in grams (g) / Kilograms (Kg).

Number of servings or pieces should be indicated in parentheses.

Best before date

Apart from a few exceptions, all food products must have a best before date written on the

package. It is illegal to sell food past its shelf life. This date can be preceded either as Best

Before or Use By. The date must be formatted either as day and month for products with a

shelf life of less than 3 months, or month followed by year for products with a longer shelf

life. Year can be indicated either in 2 or 4 digit format.

As an example, the following two best before dates would be acceptable:

Best Before: 25 12 1999

Use By: 25 Dec 99

Some products such as sugar may require a date of manufacture as well.


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Lot identif ication

All food products must have a unique number connecting them to the batch during which

they were produced. This lot can be the best before date, if the processor can easily identify a

batch with the latter.

Use and dir ections

The food label must include directions on its use or storage if the foods nature needs such

directions for reasons of health or safety.

Storage requi rements

Manufacturers must include storage information where specific storage conditions are

required in order for the product to remain safe until its Use-by date. Any products that

must be kept at low temperature must be clearly indicated.

I ngredient li sting

Ingredients must be listed from greatest to smallest by ingoing weight, including water.

Food labels are also required to show the percentage of key characterizing ingredients, if theyare present. For example, the percentage of strawberries in strawberry jam, or the percentage

of milk fat in ice cream.

Where moisture-loss occurs in the processing of a food, the proportion of the characterizing

ingredient or category of ingredients in the final food may be calculated taking into account

any such moisture loss, on the basis of the weight of the characterizing ingredient or category

of ingredients in the final food.

In the case of very small amounts of multi-component ingredients (less than 5%), it is

permitted to list the composite ingredient only. This exception does not apply to anyadditive or allergen which must be clearly listed however small the amount.

Australians tend to like their food to be as natural as possible. Food legislation mirrors

this position by being somewhat restrictive on new foods or foods with additives.

Food additives

All food additives must have a specific use and be approved by ANZFA for safety. Additives

must beidentified, usually by a number, and included in the food ingredients list.


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Vitamin and minerals

Consult the following document for maximum allowable addition of vitamins and minerals,

depending on the food product type

Al lowed processing aids

Many processing aids are allowed for the manufacture of food.

Irradiation

Irradiation of food and/or ingredients is prohibited unless specific permission is given.

Novel foods

Novel foods and ingredients are not allowed to be sold in Australia unless they have been

granted permission by the authorities. Specific permission may impose conditions relating to

matters such as the need for preparation or cooking instructions, warning statements or other

advice, or the need to meet specific requirements of composition or purity.

GMO

The label on a package of food containing genetically modified ingredients must include the

statement genetically modified in conjunction with the name of that food or ingredient or

processing aid.

All ergen in formation

Foods which are known to be dangerous to people with allergies must be clearly labeled,however small the amount. For example: nuts, seafood, milk, gluten, eggs, and soybeans.

This declaration usually appears on the ingredients list. In addition, there must also be an

advisory statement on the label where consumers may be exposed to a possible health risk.

For example: in the case of unpasteurized milk or egg, quinine, caffeine, etc.

Nutr ition labeli ng

All manufactured foods are required to display a nutrition information panel so thatconsumers are able to make informed choices when comparing products. However, there are


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a few exceptions such as very small packages and foods like herbs, tea, coffee, and foods sold

unpackaged (if a nutritional claim is not made).

Nutrition labeling must follow the standards as set out. A nutrition information panel must

clearly indicate that the average quantities set out in the panel are average quantities; and any

minimum and maximum quantities set out in the panel are minimum and maximum

quantities.

A nutrition claim must not be made in relation to the polyunsaturated fatty acid content or

monounsaturated fatty acid content of a food unless the total of saturated fatty acids and trans

fatty acids comprises no more than 28 per cent of the total fatty acid content of the food; and

the fatty acid, in respect of which the nutrition claim is made, comprises no less than 40 per

cent of the total fatty acid content of the food.

Health claims

Unless specifically permitted, Transitional and Temporary Standard for Health Claims in

food labels and advertisements are prohibited in Australia. Legislation on this subject is very

similar to American law. For example any product claiming to help lose weight would have

to be backed by plenty of evidence which would need to be approved by government

authorities prior to the claim being made on the product or in advertisements.

Words and expressions:

A nutrition information panel must clearly indicate that the average quantities set out in the

panel are average quantities; and any minimum and maximum quantities set out in the panel

are minimum and maximum quantities.

A nutrition claim must not be made in relation to the polyunsaturated fatty acid content or

monounsaturated fatty acid content of a food unless the total of saturated fatty acids and trans

fatty acids comprises no more than 28 per cent of the total fatty acid content of the food; and

the fatty acid, in respect of which the nutrition claim is made, comprises no less than 40 per

cent of the total fatty acid content of the food.

Pictur es and designs

Manufacturers should ensure that their pictorial representations do not give a misleading

overall impression about their products. For example, including pictures that are not foods or

ingredients, but which may imply the presence of foods or ingredients related to the pictures.


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Copyright and trademark laws

Patents, trademarks, and copyright are protected by Australian law

UPC codes

UPC codes are permitted in Australia, although EAN codes are more common. Codes should

follow the rules as set out by EAN Australia.

It is common for some importers to request an EAN verification report to ensure their bar

code (May it be a UPC or an EAN code) meets all sizing and legibility standards set forth by

EAN Australia.

Carton bar codes

Coles and Woolworths require Shipper Container Codes (SCC) on all shippers . It is

recommended for all products to feature Shipper Container Codes that meet the EAN

Australia regulations.

Other packaging and shipping considerations:

Packaging Requirements

There are no packaging or container-size regulations for food products in Australia.

Carton Weights

Most chains look for cartons with a maximum weight of 16 Kg, Woolworths requires cartons

to weigh 12 Kg or less.

Pallets

Although North American pallets are accepted by all importers, many chains and customers

who deal with local suppliers will expect products to be on Australian standard pallets.

Australian standard pallet measure: 1100 x 1100 mm

There have been ongoing discussions in the trade to adopt the Euro-pallet as the standard.


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Weight consideration for ocean containers in Australia

For containers being trucked within Australia, the maximum weight allowed is higher than

the usual maximum weight allowed in the United States. The container must be within the

weight limits of the State regulations (including the States the container needs to cross to get

to the port), and within limits set by the freight company.

For Australia, the standard maximum weights are as follows: 20 ft container: 48,000 LBS

40 ft container: 50,000 LBS

Recommended Food Shows

Fine Food Australia

This is Australias main international food show. It is the largest exhibition for the food andbeverage industry, and is open only to trade. The 2004 show had over 700 exhibitors. This is

the main show recommended by most Australian food companies surveyed.

Most Australian distributors, wholesalers, and retailers attend the show every year.

This show is held in Sydney and Melbourne (alternating every year from city to city). A

smaller version of the show is held in Brisbane every two years.

This show is held at the same time as Hotel Australia, the definitive event for the restaurant,

hotel and motel industry. The 2004 show regrouped more than 150 exhibitors.

International Catering Trade Fair (ICTF)

This is the major show catering to the Bakery trade, and is mostly an ingredient show. This is

sponsored by the Catering Trade Fair Association (CTFA). 15,000 visitors attended ICTF

2002. In 2002, 27.6% of visitors were distributors, wholesalers, manufacturers and suppliers,

while 27.5% of visitors were restaurants or caterers.

The Good Food Show

A trade and consumer show held every year in June in both Melbourne and Sydney. As this

show is not strictly for trade, it is full of consumers. Entrance fee is also quite affordable at

AUD 19.00.

This show is recommended for companies who desire to do some market research and get

feedback on their products directly from consumers, and for products which require a pull

strategy to succeed.


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BUSINESS PLAN FOR EXPORT OF SALAD GREENS LIKE RED

LEAF, MUSTARD GREENS, ENDIVE, AND CHICORY:

Executive Summary

Mixed Greens Salad Gardens (MGSG) is an exciting new company that meets an unsatiated

need for quality salad greens. The close proximity to Eugene ensures a steady flow of

customers. MGSG is a start-up grower and distributor of exotic salad greens for restaurants

and individual consumers. MGSG is located in Blue River, Oregon and serves the southern

Willamette Valley. MGSG's objectives are to develop a product-based company whose goal

is to exceed customer's expectations, increase production efficiency by 10% a year, and

lastly, and develop a sustainable farm business, able to survive off their cash flow.

Products

MGSG will sell a spring mix of salad field greens. These greens will include but are notlimited to: red leaf, mustard greens, endive, and chicory. These greens are grown for use insalad mixtures, purchased by the end consumer as well as by restaurants who then serve it totheir patrons.

The Market

MGSG has decided to target two distinct market segments, individual customers and

restaurants. The individual customers will purchase greens from MGSG at the Tuesday andSaturday Farmer's Market. This segment has 12,000 potential customers. The second segmentis local restaurants. This market is smaller at only 28 potential customers, but is moreconsistent in demand throughout the year.

Competitive Edge

MGSG has two competitive edges that will help them maintain strong growth rates,increasing their market penetration. The first edge is quality. MGSG prides themselves on thehigh quality of exotic salad greens. Greens that do not meet MGSG high standards of qualityare rejected as imperfects and go to a not-for-profit food bank. MGSG's second competitiveedge is their flexibility. The entire farm has been set up to allow them to change crops orscale existing crops to meet demand. This is highly unusual as most farms are unable tochange crops midyear.


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Objectives

The objectives for the first three years of operation include:

To create a product-based company whose goal is to exceed customers expectations. The utilization of Mixed Greens' lettuce products in at least 20% of the top restaurants

in Eugene as listed in local paper's restaurant reviews.

To increase the efficiency of our production by 10% a year. To develop a sustainable farm, surviving off its own cash flow.

Mission

Mixed Greens Salad Gardens' mission is to provide the highest-quality salad greens. We existto attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.

Company Summary

Mixed Greens Salad Gardens, soon to be located in Blue River, OR, is a grower and seller of

exotic salad field greens. MGSG grows a wide variety of field greens including red leaf,

mustard greens, endive, and chicory. MGSG sells the greens both at farmer markets as well

as direct to restaurants.

Start-up Summary

Mixed Greens Salad Gardens' start-up costs will include all the equipment needed for the

home-based office, the construction of the greenhouse and all the necessary equipment, and

other essentials for growing.

The home office equipment will be the largest chunk of the start-up expenses. This

equipment includes a computer system, fax machine, office supplies, cellular phone, and

pager. The home office will also require a few pieces of furniture such as a desk, chair, and

book shelf to transform a standard room into an office. Lastly, an additional land phone line

will be required.

The greenhouse will need the following equipment: a 25' x 100' greenhouse structure made

out of poly carbonate, a ventilation system, a heater, a mister system, supplemental lighting,

fertilizer injector, pruners, pots, trays, soil, seeds, and assorted chemicals.

Please note that of the $25,300 of long-term assets, $20,000 will be depreciated straight line

for 27.5 years (real estate) and the remaining $5,300 will be depreciated on a seven year

straight-line schedule.


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Products

MGSG will sell a spring mix of salad field greens. These greens will include but are not

limited to: red leaf, arugula, radicchio, mustard greens, endive, and chicory. These greens are

grown for use in salad mixtures, purchased by the end consumer as well as by restaurants

who then serve it to their patrons. While the greens are washed at the farm, they are not

certified washed and the patrons are told to wash them an additional time.

Product Description

Vegetables

Farmers Group's first line of production will be the green vegetable and red vegetable. During

the summer months Farmers Group will be growing carrots, romaine lettuce, leeks, red

onions, summer squash, and spinach. In the fall, production will center on pumpkins, winter

squash, globe beets and winter greens. With the growth of the popular organic food niche,and the federal government's new organic labeling policy, Farmers Group will focus its

produce on the intermediate organic label. This means that approximately 70% of the food

production process will be organic and all foods produced by Farmers Group will be eligible

for the "contains organic ingredients" label. The company's farm will have a capacity

sufficient to produce in excess of 200,000 lbs. of vegetables per year.

Technology

The company is currently seeking contact with universities in order to learn about and acquire

new hybrids of vegetables that are hardier and grow faster in our local microclimates. Theseand other available species and systems will be constantly tracked.

In addition to the above, the company is seeking contacts at Universities in Italy and

Germany that are involved in greens, and will continue the quest for the best flavored, large,

and firm fall and winter strawberries.

Currently, Farmers Group is conducting research to test certain clay-sand-manure mixture

levels to obtain better, cheaper bedding and agronomic soil mixtures that are more effective

than the standard used in the industry.

Future Products

In the meantime, the company would like to explore the possibilities of crayfish production.

Farmers Group believes this to be a high revenue venture with retail prices running in excess.

The company also believes that if crayfish production is successful then it could become the

number one endeavor of Farmers Group. Currently there is a defunct fish farming production

facility with all the necessary capital equipment approximately two miles from the current

farm. Purchase of this facility would allow Farmers Group to begin production and to

capitalize on this higher margin product. What makes this most attractive is the two ventures

have significant joint cost potential, allowing for a reduction in marginal costs for all


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products and creation of real economies of scale that would provide Farmers Group with a

competitive advantage.

Market Analysis Summary

MGSG will be focusing on two distinct users of greens, individual and restaurants. Theconsumer market is seasonal so we will have production shifts during the consumer off

season and all of the production will go toward wholesale restaurant distribution. During the

spring and the summer MGSG will be serving both the consumer markets through farmer

market stands and the restaurants through direct distribution.

Market Segmentation

Mixed Greens Salad Gardens has two distinct customers:

Individual Consumers- This group of people buys exotic salad greens because they have amore sophisticated palette. Average Americans have been raised on iceberg lettuce and this is

their green of choice (unfortunately). When people from this class get a little "crazy" they

might even try romaine lettuce. These people are typically unsophisticated or unadventurous

in terms of culinary habits. These are NOT the people MGSG serves. MGSG is going after

people that appreciate healthier, tastier alternatives to the standby of iceberg lettuce. This

group of consumers is more likely to make their own meals instead of going out, appreciates

fine dining, and generally is from a higher socio/economic class. Mixed Greens Salad

Gardens' field greens are more expensive than choices like iceberg or romaine, therefore one

can conclude that the consumer typically makes more money if they are willing to pay

significantly more for their salad greens, and second, people with more sophisticated palates

typically are more educated.

Restaurants- Not all restaurants use exotic field greens mixes, generally it is a restaurant of

fine dining that serves the finer greens. To be even more specific, it is typically an

adventurous American or nouveau cuisine restaurant as opposed to a nicer French or German

restaurant that appreciates the exotic field greens mix. For whatever reason (probably

attributable to demand of their customers), the French and German restaurants, even the finer

ones tend to serve "peasant greens." The restaurants are a year round customer which is

helpful to balance the seasonal demand of individual consumers (group 1 above). Anotheradvantage of having the restaurants as a customer is that even though they get a better price,

MGSG has a long term contract with them which helps out in terms of stability.

Target Market Segment Strategy

Mixed Greens Salad Gardens' target market segment strategy is fairly easy. Our two different

customer groups purchase from two distinct locations so it is quite easy to target them

individually.


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Individuals- These customers will be buying MGSG products from the different farmer

markets. The main one is "The Farmers Market" held downtown twice a week in the spring,

summer, and the early autumn. This market gets quite a bit of traffic because there is a nice

selection of different farmers and products and it is in a central location in the heart of

Eugene. Additionally, there are several other smaller farmer markets that exist in outliningcommunities. By setting up a booth in these markets, there is already a steady flow of

interested customers. There obviously is a fee to set up a stand, but what you get for the fee is

all of your marketing taken care of and a line of customers. In addition to individuals

frequenting the farmer markets, some restaurants will go there as well. This occurs when a

restaurant needs certain ingredients but did not have the time to order it in advance.

Restaurants- MGSG will target these customers by introducing MGSG and their products to

the restaurants through meetings with the buyers at each restaurant. There are about 25-30

different restaurants that use field greens in their salad and MGSG intends to approach these

to form long-term relationships.

Industry Analysis:

There are three different types of competitors that MGSG faces:

Supermarkets- These stores sell a salad greens mix to consumers. The advantage of the

supermarket is convenience. There are many supermarkets around the city and they are open

many hours during the day. Their disadvantage is price and quality. The quality and variety

lower than the standards set by the offerings of MGSG and other similar local farmers. The

cost is higher, usually 15% more.

Similar local farmers- These are very similar operations to MGSG, sometimes larger and

sometimes smaller. There appears to be room in the market for multiple farmers as most of

the farmers sell out their products each day at the farmer markets.

Large distributors- An example of this would be Food Service of America (FSA) which buys

a wide variety of products and quality of produce from farmers and distributes them to

restaurants. The produce is not usually local, and is a few more days older from the field

compared with the local farmers. The price is comparable and the quality can be comparable,

but not necessarily. The disadvantage of a food distributor is the lack of flexibility relative to

a local grower when serving local customers.

Buying patterns are based on the customer's desires. What is meant by this is that lower-end

restaurants (or at least restaurants that are less concerned about quality) will not bother to get

greens from local farmers, there is no need for them to. This pattern is similar for the

individuals. There are some individuals that are content with the offerings from supermarkets.

There are others that appreciate the difference in quality and are willing to schedule a trip to

the farmers market to meet their weekly needs.


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Strategy and Implementation Summary

MGSG will be aggressively courting the farmer markets to ensure the ability to have a booth

at the markets. Additionally, MGSG will be aggressive in going after the local restaurants

that have a consistent need for the greens. Through an assurance of top-shelf service and

superior customer service and reliability, MGSG will continue to grow its number of clients.

Competitive Edge:

Mixed Greens Salad Gardens' competitive edge has two main aspects: quality and flexibility.

Quality- While the quality of the other local farmers is quite good, Heidi's extensive

educational background and practical experience provides her with tools to create a superior

product. Heidi is a perfectionist and her striving for perfection will lead MGSG to developing

a product that will be a notch better than the competition.

Flexibility- With MGSG being both small and local in nature, it will be able to be flexible in

meeting customer's demands. For instance, if a local restaurant has customers that prefer

more arugula in their salad mix, MGSG can rapidly shift production to meet the needs of that

customer. Most of the farmers, and all of the distributors, typically have their production

schedules set up for maximum yield and are unable to modify crop production very much.

We are less concerned about maximizing yield; she is more concerned with pleasing the

customer. She believes, rightfully so, that talking care of the customer is the most important

thing.

A combination of quality and flexibility will create a sustainable competitive advantage that

will allow MGSG to succeed.

Sales Strategy:

MGSG's sales strategy will be based on visibility, consistency, and strategic relationships.

Visibility- MGSG will need to generate visibility that sets them apart from the other localfarmers that sell at the market. This in part will be done through the use of a colorful, distinct

booth set-up that stands out among the other farmers. This visibility will create recognition

for MGSG. This is important because the produce of the different farmers appears to be the

same. The differences are discovered upon tasting the produce in your home. If MGSG stands

out in terms of the booth appearance, the repeat customer will more easily make the

connection between the unusual booth and MGSG's product.

Consistency- In addition to product consistency, MGSG will have consistency in regards to

their presence at the farmer markets. It is much easier to build awareness and loyalty if

people can reliably expect to see MGSG every week in the same place.


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Strategic relationships- This will be the key for restaurant sales. As stated before, restaurant

sales are a consistent income that helps reduce the seasonality of MGSG's sales. Forming

mutually beneficial, strategic partnership will be of upmost importance for building a good

revenue base.

Marketing Strategy

Marketing Strategy is an organization's strategy that combines all of its marketing goals into

one comprehensive plan. A good marketing strategy should be drawn from market

research and focus on the right product mix in order to achieve the maximum profit

potential and sustain the business. The marketing strategy is the foundation of a marketing

plan.

Marketing of Agricultural Products

There are two important aspects to the marketing of agricultural products. The first has to do

with the physical process that brings products from producers to consumers; the fundamental

stages of this process are the collection, packaging, transport, processing, storage and lastly

the retail sale of agricultural products. This first aspect shall be dealt with in detail in the fact

sheet on post-harvest management. The second aspect, which is addressed here, involves the

market pricing mechanism.

Emphasis will therefore be placed on the market mechanisms that contribute to the pricing of

agricultural products and on the way that producers can obtain acceptable prices for their

crops.

Understanding the pricing mechanism according to the law of demand and supply

When - as is often the case in Africa - a multitude of small farmers are faced with a limited

number of buyers, it is hard for them to influence prices and they often just accept the price

that is offered to them. Nevertheless, the situation has greatly evolved in African countries.

In Africa, for several decades, it was the State that set the price of agricultural products,

especially cereal and export products. With the withdrawal of State funding and privatisation,

farmers have become increasingly exposed to the market and need guidance in their

marketing activities.

Agricultural prices depend upon various factors which depend upon the conditions of demand

and supply. Supply depends upon the total available amounts of a given product and can


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include -depending on the product - local production, the production of neighbouring

countries as well as world production in the case of export products. It also depends upon the

needs of producers for ready cash: the more they need cash at harvest-time, the more they

will be inclined to accept low prices. On the contrary, if they decide to stockpile instead of to

sell immediately, market prices will go up. Demand originates from the end users or

consumers and is supplied by dealers or intermediaries. End user demand is influenced by

product quality and price. Consumers will buy more if the price is low, but they may be

willing to pay a higher price (depending on their income) if product quality is good.

The dealer, who acts as intermediaries between the producer and the consumer, make their

profit from the difference between the price at which they purchase the product from

producers and that at which they sell it to consumers. To do this, they tend to seek out

production areas that are easy to access and which require lower transport costs, and those

where crops are abundant. If crops are more abundant in neighbouring countries, traders he

will go there to collect the available products at a lower cost.

Distant production area combined with poor road and railway infrastructure are factors that

drive producer prices down. If infrastructure is bad, part of the money that the dealer could

pay to the producer will be used to pay for transport; therefore, the dealer will tend to bring

down the price offered to the producer in order to make up for the high costs of transport.

Another factor that influences prices is competition among dealers. If there are many dealers

who want to buy the available products, producer prices will tend to rise. On the contrary, if

there is only one dealer and many producers or abundant production, a modest price will be

offered.

Lastly, prices vary depending on the seasons. During harvest time, prices are low, while they

rise as sowing time draws near. The ability of producers to stockpile their produce can help to

minimise these seasonal fluctuations by placing on the market only amounts of produce

sufficient to maintain a given price.

It is therefore important for producers to know when, where, and what amount of produce to

sell, bearing in mind the market price. Ideally, they should be able to get the most out of the

existing prices.

In order to do so, they must have access to information on markets and prices.

How can Market Information Services help to improve producers' income?


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If producers know what prices are quoted in his area of production beforehand, they can

better negotiate with dealers or take their products to the markets where prices are higher

rather than sell them to the local dealer. In this way, they can also decide to stockpile produce

if harvests in the neighbouring countries or in other regions of the country have not been

good and prices are likely to rise in the near term. That is why Market Information Services

are useful. Their role is to provide producers, as well as dealers and especially consumers,

with information on the availability of products and on the prices charged in production as

well as in consumption areas.

They can also tell producers where the potential buyers are, what their preferences are in

terms of processing, delivery, packing, etc. They can help producers to plan their production,

to seek out the best markets and the best prices for their crops.

To be useful, MISs must provide information on prices in the short term and on the places

and markets where it is more convenient to sell

They must also show the trends of seasonal and inter-annual price variations. This allows

producers to decide whether to stockpile or sell, and to know whether to sell all of their

products or keep some for their own use or for future sale.

MISs must also provide information on long-term prices, thus allowing producers to redirect

their production towards more profitable crops

It is important for producers to know what consumers demand and prefer. In this way, from

one year to the next, they can adapt their production and provide the products that meet

customer expectations.

Only in this way can producers improve their income in the long term.

Counter-seasonal production can mitigate the effects of the decline in prices observed at

harvest time

Off-season production can take advantage of higher prices. Producers can benefit the most if

they can manage to offset the costs expenses incurred, which are usually higher than the ones

generally incurred for production during the regular season, with higher sales prices. In

Senegal, the Manobi system allows farmers and traders to know prices in real time, which

helps producers to better negotiate with dealers or to bypass them. Thanks to the mobiletelephone system of the Manobi project, producers and other players receive market


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information in real time whenever they need it. Such information may concern the price of

tomatoes, the different prices quoted for millet in two towns Knowing market prices in

real time puts producers in a better position to negotiate with intermediaries

Break-even Analysis

The Break-even Analysis below indicates the monthly sales needed to break even.

Break-even Analysis

Monthly Revenue Break-even $8,294

Assumptions:

Average Percent Variable Cost 12%

Estimated Monthly Fixed Cost $7,299


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Projected Profit and Loss

The following table will indicate projected profit and loss. Our losses at start-up are evident,

as is the turn of the corner in July when we become profitable.

PARTICULARS YEAR 1 YEAR 2 YEAR 3

SALES 4249024 6370000 9655464

(-) TOTAL COST OF SALES 509860 764400 1158664

GROSS MARGIN /PROFIT (A) 3739112 5605600 8496800

(-) EXPENSES

PAYROLL 3330600 3536000 4134000

SALES AND MARKETING EXP 98800 98800 98800

DEPRICIATION 131664 131664 313664

UTILITIES 104000 104000 104000

INSURANCE 78000 78000 98000

RENT 312000 312000 312000

PAYROLL TAXES 499616 530400 620100

TOTAL OPERATING EXPENSES (B) 4554680 4790864 5478564

EBIT ( A - B ) -81516 814736 3018236

(-) INTEREST 19240 7280 -1040

(-) TAX - 201864 767416

NET PROFIT -834756 605592 2251860


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Cash Flow Statement:

START UP REQUIREMENTS

I. Start up expenses:

Legal 15600

Stationery 10400

Insurance 10400

Utilities upgrades 7800

Rent 13000

Expensed Computer Equipment 182000

Other 26000

TOTAL START UP EXPENSES (A) 265200

II. START UP ASSETS

Cash Requirement 1804400Start up Inventory 0

Other Current Assets 26000

Long term Assets 1315600

TOTAL ASSETS (B) 3146000

TOTAL REQUIREMENT (A+B) 3411200

III. START UP FUNDING

Start up Expenses To Fund 265200

Start up Assets To Fund 3146000

TOTAL FUNDING REQUIREMENT 3411200

IV. ASSETS

Non Cash Assets From Start up 1341600

Cash Requirement From Start up 1804400

Additional Cash Raised 0

Cash Balance On Starting Date 1804400

TOTAL ASSETS 3146000

V. LIABILITIES AND CAPITAL

LIABILITIES

Current Borrowings 260000

Long Term Liabilities 0

Accounts Payable (O/s Bills) 0

Other Current Liabilities (Interest free) 0

TOTAL LIABILITIES (A) 260000

CAPITAL

Planned InvestmentOwner's Investment 3120000


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Additional Investment Required 31200

TOTAL PLANNED INVESTMENT (B) 3151200

(-) Loss At Start up (Start up Expenses) -265200

TOTAL CAPITAL 2886000

TOTAL CAPITAL AND LIABILITIES 3146000

TOTAL FUNDING (A+B) 3411200


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Balance Sheet:

ASSETS Year 1 Year 2 Year 3

Current Asset

Cash 408148 671840 2531600

Account Receivable 653952 980408 1486056Inventory 74776 112112 169936

Other Current Assets 26000 26000 26000

Total Current Assets 116876 1790360 4219540

Long Term Asset 1315600 1315600 1315600

Accumulated Depreciation 131664 263328 394992

Total Long Term Assets 1183936 1052272 920608

Total Assets 2346812 2842632 5140148

LIABILITIES AND CAPITAL

Current LiabilitiesAccounts Payable 160368 175396 262652

Current Borrowing 135200 10400 (31200)

Other Current Liabilities - - -

Subtotal Current Liabilities 295568 185796 231452

Long Term Liabilities

Total liabilities 295568 185796 231452

Paid in Capital 3151200 3151200 3151200

Retained earnings (265200) (1099956) (494364)

Earnings 834756 605592 2251860

Total capital 2051244 2656836 4908696

Total Liabilities and Capital 2346812 2842632 5140148

Net Worth 2051244 2655836 4908696


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Australian Food Distribution Network

Australia uses a system of brokers and distributors/importers in a very similar way as North

America.

As most of the retail trade is concentrated in the hands of two major retailers (Coles andWoolworths have about 76% of food retail sales in Australia), most Australian-based food

processors tend to deal directly with these chains without the use of a broker. In most

instances, the role of the broker is purely one ofmerchandiser at retail level. This doesnt

mean that brokers no longer exist, but very few are able to make a living working purely as

brokers, so they are also importers, distributors, etc. brokering the odd product when the price

needs to be kept low. In this report, any reference to brokers is made in the North American

definition of the term (making sales calls, managing accounts, etc). Brokers hired purely to

work at store level will be referred to as merchandisers.

Due to the size of Australia and its localized population, freight is a major issue thatconfronts all companies selling in Australia (local as well as overseas). Although freight from

the US to Australia may seem expensive, inland freight between major cities can easily cost

just as much. Fuel prices are higher than in North America, and distances between main cities

can be great. For example, it takes about 10 hours to drive from Sydney to Melbourne. A US

supplier able to ship products directly to the major cities in full container loads could see

huge savings in the cost of its delivered product. A company offering a high demand product,

or a wide array of products, could find themselves with freight costs comparable to

Australian-based companies.

Over the years, Australia has often been used as dumping ground for many products. Its

insular location and expensive freight costs made it a safe-haven for many overseas producers

wanting to get rid of extra production. Strict import regulations especially regarding best

before dates have helped reduce this problem.

Because the market is very competitive, Coles, Woolworths, and other smaller chains try to

buy as direct as possible. Franklins, with its 77 stores, is stopping its relationship with

Metcash (major wholesaler) in order to increase its competitiveness by going direct and

handling its own distribution. This direct approach applies to both local products and imports.

All chains import some products directly.

Each market segment (industrial, foodservice, retail, and health foods) is easily delimited in

Australia.

Many importers and distributors will quickly lose interest in a product without exclusivity.

This was caused by decades of mostly Asian companies offering their deals to everyone in

the market. The importers/distributors who dropped their margin to close to nothing often

concluding the business. US exporters should try not to offer their products to competing

importers/ distributors, when these are going after the same customers, as this will not be

conducive to market access or long-term growth.


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Fresh Fruit & Vegetables Market

Australia, with its very varied climate, can grow most fresh fruit and vegetables. Fresh fruit

and vegetables are readily available all year round. Australians tend to eat more natural than

processed fruits and vegetables, so they will consume good quantities of fresh produce,

especially when in season.


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Conclusion:

Due to its fragile ecosystem and past troubles, Australia is very protective when it comes to

the importation of fresh products. Some fresh fruit and vegetables, such as apples, are not

allowed entry into Australia due to concerns with fire blight.

Demand for organic produce is growing faster than other organic. Growing concerns over

genetically modified crops and use of pesticides is creating much interest towards organic

produce.

The Buy Australia mentality will make it difficult to gain consistent shelf presence.

Imported produce may be in demand for some periods, but only as long as Australian

producers are unable to fill orders, or that the price for locally grown fresh produce remains

prohibitively high.

Australia has embraced fusion cuisine, and there is a large market for organic food in thefoodservice industry. There could be demand for some more select fresh fruit and vegetables

coming from both the food service and hospitality industries.

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