Food and beverage to China Trends and opportunities
发表时间:2020-11-25    

The market

China is the world’s second largest buyer of imported food and beverages after the United States with total imports exceeding A$130 billion in 2016 (UN Comtrade).

Australia is China’s 6th largest supplier of food (behind the United States, Brazil, Canada, Argentina and Thailand) with exports valued at A$5.3 billion in 2016. The value of Australian exports of processed foods increased by an average more than 40 per cent between 2015 and 2016.

Euromonitor estimates that retail sales of packaged food will total RMB1.5 trillion in 2017 – with up to 10 per cent of sales taking place online. Rising disposable incomes and associated ‘lifestyle upgrades’, overseas travel, food delivery apps and increasing product choice both online and offline continue to sustain strong annual growth.

While spending and consumption patterns vary strongly by region, age and income group, consumers across China are most attracted to products that offer:

  • food safety and high quality
  • superior taste
  • better nutrition and other functional benefits
  • high quality packaging
  • superior freshness
  • convenience

Buyers of packaged foods in major cities also demonstrate a strong preference for well-known and established brands that are readily available in Australian retail outlets and promoted by word-of-mouth.

By comparison, shoppers in smaller and regional cities are more price sensitive and less brand conscious.

Opportunities

Australia is generally well understood among Chinese consumers and Australian products have a reputation of being natural and manufactured under the highest quality standards—a feature which also appears regularly in sales and marketing campaigns of other international suppliers.

By 1 January 2019, the China-Australia Free Trade Agreement will provide most Australian processed food products, such as breakfast cereals for example, an import duty advantage of up to 25 per cent against products supplied by countries without a free trade agreement (see Tariffs).

Increased investment cold chain logistics by major e-commerce companies is addressing high consumer demand for fresh produce – with annual growth in the online sales of this category increasing by 80 per cent per year (China’s E-Commerce Research Center).

Enquires received by Austrade show interest in:

  • milk powders (including infant formula and adult milk powder), UHT and pasteurised milk, yoghurt, cheese and butter
  • seafood (particularly saltwater shell fish such as oysters, crabs, lobster and abalone)
  • fresh fruits (citrus, table grapes, cherries and mangoes)
  • oats and other breakfast cereals
  • chilled and frozen beef
  • processed foods
  • baby food
  • wine and craft beer
  • natural fruit juice

Continued strong growth in bakery chains and coffee consumption will also provide supply opportunities for dairy ingredients and soft drinks.

Austrade and Hort Market Insight Report

Opportunities also exist for exporters to supply Australian fresh fruit produce during unique cultural festivals, particularly those that feature fruits as gifts or offerings. Further insight into the specific opportunity in China can be found in the following report

Marketing your products and services

Tariffs

The China Australia Free Trade Agreement (ChAFTA) came into effect on 20 December 2015, significantly reducing the tariff barriers affecting bilateral trade in goods, including agricultural and F&B products. Under ChAFTA, the import duty on most processed food products from Australia will be zero from 1 January 2019.

The applicable tariff for Australian food and beverage sold in China can be found at https://ftaportal.dfat.gov.au.

Retail sales of food in China are subject to a value-added tax (VAT) between 13 and 17 per cent. Consumption tax also applies to wine at 10 per cent and liquor at 20 per cent.

China’s Ministry of Finance occasionally announces temporary reductions to the Most Favoured Nation (MFN) tariffs that apply to all countries. The most recent announcement on 1 December 2017 provides a temporary reduction to the applied duties on 187 products, including 33 food products. Similar temporary revisions to China’s tariff schedule were made in 2016 and 2015.

Certain types of ambient food products can to be sold directly duty free to end consumers through cross-border e-commerce. A VAT of 11.9 per cent applies. See e-commerce for more information.

Non-tariff Measures

Exporters should confirm the eligibility of their product to enter the Chinese market before engaging in commercial activities with Chinese customers or directly investing in a business opportunity.

All imported foodstuffs and beverages imported into China are subject to approval before export and/or inspection at the border by the China Entry-Exit Inspection and Quarantine Bureau (AQSIQ or CIQ).

The Department of Agriculture and Water Resources maintains a helpful database of import market requirements at https://micor.agriculture.gov.au/Pages/default.aspx

In addition, exporters are also advised to obtain professional advice from an importer or regulatory affairs agent. Austrade can provide a referral on request.

The following information is a general guide to China’s requirements at the national, business and product level.

Fresh, preserved and processed beef, lamb, seafood, dairy and honey. Fresh fruit and vegetables.Frozen fruit and vegetablesBaked foods, cereals, dried fruit and nutsHealth foods with functional claims
NationalBilateral protocol required


BusinessBusiness registration with AQSIQ.
Processing approved by CNCA.
Infant formula required to be registered by CFDA
Registration with AQSIQRegistration with AQSIQ*Registration with AQSIQ*
ProductProduct registration with AQSIQ.
Chinese label required on retail products.
Ingredients must comply with China’s GB standards
Product registration with AQSIQ.
Chinese label required on retail products.
Ingredients must comply with China’s GB standards
Product registration with AQSIQ*
Chinese label required on retail products*
Ingredients must comply with China’s GB standards
Approval by CFDA.
Products must comply with China’s GB standards*

Shaded = not required if sold through cross-border e-commerce.

Bilateral protocol

A bilateral quarantine protocol is required for trade in animal or plant products. Australia has negotiated market access with China for the following products:

Frozen and chilled beef

Cherries

Nectarines

Frozen and chilled lamb

Apples from Tasmania

Table grapes

Dairy products

Oranges and mandarins

Mangoes

Frozen and chilled seafood

Honey products including pollen, honey, propolis and royal jelly but no honeycomb

Lemon and Grapefruit

Lime and tangelo


As a general rule, a protocol is not required for preserved or processed fruit and frozen, preserved or processed vegetables, processed foods not containing meat.

Information on the requirements of each protocol, and the process of seeking market access can be found at https://micor.agriculture.gov.au/Pages/default.aspx

Business and product registration

All foreign food distributors and producers that import food products into China are required to register with the General Administration of Quality Supervision Inspection and Quarantine of the People’s Republic of China (AQSIQ).Importers must record the foods imported and distributed in China and must keep these records for at least two years.

For those ingredients or components not registered in China, it is required that the ingredients are registered as new-to-China components. Any food or food ingredient or component that has had an import history prior to the new Food Safety Law should be allowed entry even if there is no Chinese standard.

Manufacturers of dairy products, meat, seafood and horticulture are required to be approved for export by the Certification and Accreditation Administration of the People’s Republic of China (CNCA), who publishes latest lists of approved foreign manufacturers or facilities.

Since October 1, 2012, exporters and the consignees of certain food categories are required to file a Prior Notice with CIQ in order to get their shipments released at customs.

Labelling

All imported pre-packaged food must be labelled in Chinese (simplified Chinese as used in mainland China). In addition to Chinese characters, English and other foreign languages may also be used; this is useful in differentiating an imported product from local produce.

The General Standard for the Labelling of Pre-packaged Food (GB7718-2011) is available from the US Department of Agriculture website (PDF). The following is the example of minimum information to be listed:

  • standard name of foodstuffs
  • list of ingredients
  • quantitative labeling of ingredients (percentage of ingredient)
  • net weight and configuration
  • name, address and contact info of manufacturer and local agent or distributor
  • production date, use by date in YY/MM/DD format and guidance for storing
  • generic name of the food additives as used in the national standard
  • quality grade
  • food production license number
  • code of the product standard
  • special contents if there are any (e.g. irradiated food, genetically modified, nutrition list for baby food or diet food).

GB standards

China maintains national standards for food ingredients, additives, product labelling and contact materials. These are known as Guo-biao of GB standards. While most are available online in Chinese, not all the latest standards are available freely in English. A professional importer, distributor or regulatory compliance service provider can provide further advice.

Distribution

Compared to doing business in other markets, distribution channels in China can be long and complex.

Exports into China are handled through a number of intermediaries including import agents and distributors, wholesalers and sub-distributors.

ProducerConsumer

Traders (non-exclusive)


Social selling (i.e. WeChat)

e-Commerce marketplace

Traditional retail



Specialist importer

Distributor (exclusive or non-exclusive)

Specialty retail

e-Commerce marketplace

Supermarkets

Hypermarkets

Convenience stores

Hotels and restaurants



Direct import hypermarkets and supermarkets (Metro, Sam’s Club)





Direct purchase e-commerce websites (Kaola.com, JD Worldwide, VIP.com)



Cross-border warehouse

e-commerce Third Party

e-Commerce marketplace
(Tmall Global, JD Worldwide)



Cross-border direct shipping


Only licensed importers can handle import procedures and have the right to import products, with different product categories requiring different import licences / permit and distribution channels. Specific licences are required by any company importing wine, dairy products, meat, seafood and fruits.

Traditionally many food distributors or traders do not hold import licences and licensed importers usually provide import clearance services on behalf of third-party distributors.

This situation is changing, with more distributors acting as import agents or as wholesalers with a network of sub-distributors they have developed. For example, larger supermarket chains, such and Sam’s Club, Metro and Yonghui, are licenced to import directly from overseas suppliers.

In the F&B sector, distributors and retailers tend to be dominant in select areas and rarely possess national coverage. Partner selection and location is critical, with a multi-party approach preferable that is underpinned by both an on and offline strategy. Chinese partners are often keen to secure exclusive product rights; however the decision to provide exclusivity should be based on a thorough understanding of the parties’ knowledge in the sector, import capabilities and/or relationships and distribution channels.

Links and industry contacts

Food–related resources

China Agriculture Science

Government, business and trade resources for China

Australian Department of Agriculture and Water Resources - Manual of Importing Country Requirements
China Customs
China Ministry of Agriculture
China Ministry of Commerce
General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China

Media (F&B metropolitan and industry)

China Dairy Information (Chinese)
Wine China
www.beitaichufang.com (Chinese)
www.foodreport.cn/ (Chinese)
https://weibo.com/foodandwine (Chinese)
www.cnfoodnet.com/ (Chinese)
http://www.meishichina.com (Chinese)


 
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