Consumer goods to Papua New Guinea

(Last updated 20 Jul 2008)

Trends and opportunities

The market

The market in Papua New Guinea for Australian exported consumer goods is not large – the total value of exports of miscellaneous manufactured articles (excluding scientific/etc instruments) was approximately A$32.8 million through the year ending June 2007.

Current Australia exports in consumer goods to Papua New Guinea include:

• Clothing – both new and second-hand apparel
• Footwear
• Household items – cutlery, cooking utensils, plastic ware products
• Electrical household/whitegoods – lamps, fridges, stoves, fans, radios, video players
• Domestic/office furniture – blinds, chairs, cushions, tables, desks, trays
• Books – educational, fiction, non-fiction, religious
• Stationery – paper, pens, paints and painting accessories

Papua New Guinea is one of the most non-urbanised countries in the world. Approximately 85 per cent of the estimated six million total population lives in rural villages. The largest urban population centre is Port Moresby, the capital, with approximately 200,000 inhabitants. Road infrastructure throughout the country is poor; consumer goods are mainly transported within the country (and between the islands) by aircraft or boat.

Importers and wholesalers cater for outlying island provinces, and carry a restricted, lower quality and price product range.

Retail stores including supermarket variety stores – some operating wholesale divisions – specialise in certain sectors. Generally, companies service the average consumer with products, price ranges and choice aimed at the lower to middle income buyer.

The expatriate community and the Papua New Guinea elite, mostly centred in Port Moresby, represent a distinct, wealthier segment of the market.

Opportunities

The best opportunities for Australian exporters of consumer goods:

• Second-hand clothing
• Toys, games and sports goods
• Homeware, giftware and household white goods
• Horticultural products
• Domestic and office furniture – mainly in the lower price bracket

Competitive environment

Due to political history, current aid policies and geographical proximity, Australia is Papua New Guinea’s most significant trade partner. Australian exporters are facing increasing competition from cheaper goods from Asian countries and from more aggressive activity from New Zealand.

The composition of the expatriate community is changing. There has been significant growth in expatriates from Indian and Asian backgrounds whereas traditionally the expatriate community was primarily Australian and European. This has also generated competitive pressure at the top end of the market as the demographic is showing a preference for consumer goods from Asian countries, leading to a decrease in demand for Australian and European goods.

Tariffs, regulations and customs

Papua New Guinea has a single rate value added tax (VAT) of 10 per cent. The VAT is collected as part of the normal procedure at the point of entry. The customs valuation is calculated according to the cost, insurance and freight (CIF) value of the imported goods and the VAT is also charged on any customs or excise duty paid.

Papua New Guinea has undertaken a process of steady reduction in tariff rates since 1997.

As of January 2006 the tariff rate regime is:

• 0 per cent for goods if Papua New Guinea doesn’t produce that product. 
• 15 per cent goods used as inputs to businesses.
• 25 per cent for final goods competing with Papua New Guinea production. 
• 40 per cent for goods, competing with Papua New Guinea production and designated as in need special protection.

Specific duties, expressed in Kina per measure, are levied on beer, matches, and poultry meat, eggs and tobacco products.

Papua New Guinea Customs use the single column based on the Harmonised system. Most duties are applied ad valorem using the World Trade Organisation (WTO) valuation code guidelines of CIF value (as per Incoterms 1990).

Exporters should ascertain the duty rate that applies to its products, before export. Austrade can assist with this process.

Samples of no commercial value are admitted duty-free although sales tax may still be levied. Valuable samples are admitted, subject to invoice declaration, under a deposit or bond equivalent to normal duty. The deposit is refunded on re-export of the samples.

Industry standards

Industry standards in Papua New Guinea are based on Australian standards for the most part.  Exporters should therefore apply regulations applicable in Australia to products they are going to export to Papua New Guinea.

Marketing your products and services

Market entry

Exporters should establish whether its product’s level of sophistication is suited to Papua New Guinea, and especially whether it can be profitable at price points that meet the market. 

The majority of consumer goods products that are imported into Papua New Guinea are brought in through consolidators. Consolidators are frequently used as consignments are often requested as a size or quantity that can fit on to a small truck or utility vehicle. Exporters must be prepared to supply minimum volumes. Although volumes may be low, frequency of orders may be regular.

Papua New Guinea is a market that still relies heavily on personal contact for successful business relationships. Regular visits to Papua New Guinea are therefore encouraged.

In terms of promotion techniques, methods used in Australia are applicable, with the main exception being that there are no major trade fairs or trade shows. Exporters need to be prepared to actively market products and provide support with promotions and advertising.

Distribution channels

Effective sales and distribution can be achieved through local sales representatives or distribution/wholesale agents that regularly visit market centres to promote products and services and obtain orders.

The major players dominating distribution channels for imported consumer goods include:

• Steamships Ltd – hardware, groceries, variety goods, hotel supplies and kit homes
• Brian Bell – hardware, catering and homewares
• Courts Furnishers Ltd – furnishing products
• Seeto Kui – hardware, grocery and variety goods
• Andersons Foodland – operates groceries stores throughout the country
• City Pharmacies – giftware, homeware, grocery and pharmacy
• Papindo Trading – variety goods, hardware, groceries and hotel supplies
• SVS – variety goods, homeware, giftware and white goods
• TST – variety goods, homeware, giftware and white goods

All these companies import, distribute and retail using their own networks. Many smaller businesses in Port Moresby buy from trading companies, several of which have been operating in Papua New Guinea for many years.

Transport

Despite the close proximity of Australia and Papua New Guinea, freight charges tend to be relatively high due to the fact that ships returning from Papua New Guinea to Australia return virtually empty.

Transit time can vary significantly from a few days to weeks. Rapid delivery of shipping documents is essential as wharf storage dues are levied four days after the discharge of cargo. This is strictly enforced.

Physical distribution within Papua New Guinea can be complex due to:

• Geographic fragmentation
• Small market centres
• Contrasting demographic centres
• Lack of an extensive transport network

For these reasons, most goods are air or sea freighted. Air courier services are the faster means of means of delivery.

Qantas and Air Niugini service the international passenger and cargo market.

Links and industry contacts

Consumer goods-related resources

Brian Bell – www.brianbell.com.pg
PO Box 1228
Boroko NCD
Papua New Guinea
Tel: +675 325 8530
Fax: +675 325 8362

Courts Superstores
PO Box 1233
Boroko NCD
Papua New Guinea
Tel: +675 325 5900
Fax: +675 325 4149

Seeto Kui (Holdings) Pty Ltd
PO Box 456
Lae Morobe Province
Papua New Guinea
Tel: +675 472 1111
Fax: +675 472 1335 or 472 6408

BNG Trading Pty Ltd
PO Box 148
Port Moresby NCD
Papua New Guinea
Tel: +675 323 3366
Fax: +675 323 3355

Jimm Trading Pty Ltd
PO Box 126
Port Moresby NCD
Papua New Guinea
Tel: +675 325 9056
Fax: +675 325 0934

City Pharmacies
PO Box 1663
Port Moresby NCD
Papua New Guinea
Tel: +675 325 9044
Fax: +675 325 0942

Papindo Trading Company Pty Ltd
PO Box 885
Lae Morobe Province
Papua New Guinea
Tel: +675 472 3322
Fax: +675 472 6133

Government, business and trade resources for Papua New Guinea

Investment Promotion Authority – www.ipa.gov.pg
Nationwide PNG Pages – www.nationwidepngpages.com  
PNG Directory – www.pngdirectory.com 
Papua New Guinea Business Resources Directory – www.apngbc.org.au

Australia PNG Business Council – www.apngbc.org.au
PO Box 3383
Weston ACT 2611
Australia
Tel: +61 2 6231 9399
Fax: +61 2 6231 9403

Department of Trade and Industry
PO Box 375
Waigani NCD
Papua New Guinea
Tel: +675 323 1179 or 325 5816
Fax: +675 323 1109 or 325 6108

Papua New Guinea Internal Revenue Commission
PO Box 777
Port Moresby NCD
Papua New Guinea
Tel: +675 322 6600
Fax: +675 321 4249

National Institute of Standards and Industrial Technology
PO Box 3042
Boroko NCD
Papua New Guinea
Tel: +675 323 5339
Fax: +675 325 6793

Department of Labour & Employment
PO Box 5644
Boroko NCD
Tel: +675 321 7408
Fax: +675 320 1062

Service providers:

Financial

Export Finance Insurance Corporation – www.efic.gov.au

Touche Tohmatsu – www.deloitte.com.pg 
PO Box 1275
Port Moresby NCD
Papua New Guinea
Tel: +675 308 7000
Fax: +675 308 7001

Frank J de Graaf
PO Box 5999
Boroko NCD
Papua New Guinea
Tel: +675 325 6366
Fax: +675 325 0984

KPMG
PO Box 507
Port Moresby NCD
Papua New Guinea
Tel: +675 321 2022
Fax: +675 321 2780

Michael Mayberry Chartered Accountant
PO Box 1988
Port Moresby NCD
Papua New Guinea
Tel: +675 320 1988
Fax: +675 320 1989

PricewaterhouseCoopers – www.pwcglobal.com 
PO Box 484
Port Moresby NCD
Papua New Guinea
Tel: +675 321 1500
Fax: +675 321 1428

Sinton Spence
PO Box 6861
Boroko NCD
Papua New Guinea
Tel: +675 325 7611
Fax: +675 325 9389

Smiths
PO Box 487
Port Moresby NCD
Papua New Guinea
Tel: +675 321 7099
Fax: +675 321 7183

Legal

Allens Arthur Robinson Lawyers – www.aar.com.au 
PO Box 1178
Port Moresby NCD
Papua New Guinea
Tel: +675 320 2000
Fax: +675 320 0588

Blake Dawson Waldron Lawyers – www.bdw.com.au 
PO Box 850
Port Moresby NCD
Papua New Guinea
Tel: +675 309 2000
Fax: +675 309 2099

Gadens Lawyers – www.gadens.com.pg 
PO Box 1042
Port Moresby NCD
Papua New Guinea
Tel: +675 321 1033
Fax: +675 321 1885

Norton White Lawyers and Notaries
PO Box 21
Port Moresby NCD
Papua New Guinea
Tel: +675 321 1788
Fax: +675 321 2195

Pacific Legal Group
PO Box 904
Port Moresby NCD
Papua New Guinea
Tel: +675 321 7477
Fax: +675 321 3491

Warner Shand Lawyers
PO Box 1817
Port Moresby NCD
Papua New Guinea
Tel: +675 325 4422
Fax: +675 325 0682

Logistics

Qantas – www.qantas.com.au/freight/dyn/contacts/australasia
Papua New Guinea Online – www.niugini.com 
Commercial forum – www.pngtradepost.com.pg 
Air Niugini – www.airniugini.com.pg  (the national airline)

Media

Post-Courier Online – www.postcourier.com.pg
The National Online – www.thenational.com.pg
The Independent – www.niugini.com/independent 

Australian resources

Australian High Commission
Godwit Road
(Locked Bag 129)
Waigani NCD
Port Moresby
Papua New Guinea
Tel: +675 325 9333
Fax: +675 325 9183

Operating hours:
Monday to Friday, 7.45am-4.15pm

Department of Foreign Affairs
PO Box 422
Waigani, NCD
Papua New Guinea
Tel: +675 301 4121 or +675 301 4122
Fax: +675 325 4886

Papua New Guinea High Commission
39-41 Forster Crescent
Yarralumla ACT 2600
PO Box E432 Kingston ACT 2604
Tel: +61 2 6273 3322 
Fax: +61 2 6273 3732

South Pacific Trade Commission
Level 30, 133 Castlereagh Street
Sydney NSW 2000
Tel:  +61 2 9283 5933
Fax: +61 2  9283 5948