Fruit and vegetables to Germany

(Last updated: 18 Dec 2007)

Trends and opportunities

The market

Due to Australia’s small market presence in Germany, there is little existing demand for Australian produce. However, potential does exist for committed exporters who are willing to develop this segment jointly with selected importers and retailers.

Australia’s fruit and vegetable exports to Germany total around $12 million annually. Australia supplies a small amount of:

• onions
• premium apples
• stone fruit
• berries
• citrus fruits
• pears
• tropical fruits (eg. mangoes)

Germany is the largest importer of fresh fruit and vegetables in Europe. Around 80 per cent of all fresh produce is sold via supermarkets and retail outlets, and 10 per cent through specialty shops and weekly street markets.

In general, there is a growing trend for pre-packed produce, ready for the retail outlet shelves, cooling counters and freezers. Exporters to Germany are supplying more value-added products such as pre-packed produce in small, attractive consumer packages such as baby vegetables, and double packs of 2 x 125 grams of tropical fruit salad.

Germany’s agriculture ministry is currently in the process of introducing a Europe-wide eco-certification scheme that will complement the recent developments and rapid growth in the bio and eco sector.

Fruit

German per capita fresh fruit consumption ranges between 94.5kg and 99.5kg. A growing trend is the year-round availability of fruit with varieties stocked over longer periods.

The German fruit sector is traditionally supplied via specialised importers. Generally, supermarket chains and discounters don’t import directly from a supplier, however, there is an emerging trend for supermarkets to contract directly with an overseas supplier, and with customs clearance, storage and distribution being handled by an appointed importer.

Fruit juices and fruit juice drinks are very popular in Germany. The per capita consumption of more than 40 litres per year is the highest in the European Union and about 13 per cent above per capita consumption in the USA.

Vegetables

The major vegetables consumed are cabbage, cauliflower, carrots, tomatoes and cucumbers. Imports of off-season vegetables, such as asparagus and mushrooms are also increasing. Per capita vegetable consumption is 85.1 kg.

Organic products often carry 50-100 per cent mark up in retail, which is considered too expensive for the consumer. This is reflected in the slow growth rate for organic fruit and vegetables in the German market.

Opportunities

During the off-season (September-May), opportunities exist for Australian exporters to supply fruit to Germany.

Other opportunities include supply of stone fruit from late November to February and for citrus and apples from April to May. Lower priced related varieties, such as Pink Lady apples could provide an interesting possibility to be developed together with strong German importers/distributors.

Opportunities for organically grown products are growing, albeit slowly. Retailers are reluctant to widen the range of organic products, as this involves difficult and expensive auditing procedures.

Competitive environment

Germany has a lower price structure than the UK or France, however, high quality is expected and this provides a strong challenge to potential Australian suppliers who have to meet the stringent volume and consistency requirements of German importers.

Competition in Germany is intense not only from within Europe but also from Africa and South America. The main competition for off-season produce comes from South Africa, Chile and New Zealand.

The main vegetable suppliers to Germany are the Netherlands, Spain, Italy, France and Belgium.

Fruit:

• Citrus fruit is available year-round, imported seasonally from Morocco, Israel, USA, South Africa, Argentina, Uruguay, and Brazil.
• Deciduous fruit, such as apples, apricots, berries, cherries, grapes, nectarines, pears, peaches and plums, are mainly imported from Chile, Argentina, Brazil, and South Africa.
• Tropical fruit, such as avocados, melons, kiwis, lychees, mangoes, papayas and pineapples, are imported from the Southern Hemisphere.

Tariffs, regulations and customs

Germany is part of the harmonised trade system of the European Union (EU).  A Common Customs Tariff is applicable to goods from non-EU countries, including Australia. Most duties are ad valorem (%), based on the GATT Valuation Code (approximate CIF value). Produce from other EU member states enters Germany duty-free while Australian produce carries full duty and high transportation charges.

Before shipping any goods to Europe, you should obtain a written customs duty ruling, known as Binding Tariff Information (BTI) from the customs service in the destination country. Getting the BTI is free and will ensure there is no conflict over customs or excise duty.

Once your goods have landed in Germany, a variety of costs can be added to the product price. This is mostly covered by the importer/distributor and needs to be carefully considered in export price calculations. Costs include:

• For import duties - 0.5 per cent to 6 per cent
• For fruit importers, depending on the degree of involvement, logistics and cost coverage provided - 5 per cent to 20 per cent commission.  New import/distribution models, however, could mean lower commissions through more direct trading
• Up to 10 per cent mark-up imposed by discounters
• Up to 30 per cent mark-up imposed by supermarkets
• Promotional material required for supermarkets and retail chains when new lines or products are introduced
• Seven per cent Value Added Tax (VAT) on basic foodstuffs (19 per cent VAT on luxury goods)

Customs procedures in Germany are governed by the laws of the EU and of the Federal Republic of Germany. Except for minor procedural regulations, customs laws in the EU is completely harmonised in the form of a customs code that is legally binding on all EU member states. Goods traded within the EU are not subject to any customs duties.

The EU protects its domestic markets by increasing the import duty rates seasonally. From October to April, rate increases can vary from 0.5 per cent to 6 per cent. Import duties relating to fresh produce are based on the variety, method of preservation, packaging and the country of origin. Duty rates can reach up to eight per cent for Australian fruit and vegetables, depending on the seasonal variations of rates.

Goods imported into the Federal Republic of Germany are generally subject to VAT. In the case of farm products, the rate is seven per cent and, in the case of most industrial goods, it is 16 per cent of the customs value together with the customs duty and the costs incurred up to the first domestic place of destination (eg. the freight costs). Under the VAT exemption rules, no VAT is levied on sample and specimen goods, advertising materials, and temporarily imported goods (eg. exhibits at fairs).

All imports of plants or parts of plants are subject to EU phytosanitary regulations and a phytosanitary certificate is required to accompany all shipments into Europe/Germany. The Australian Quarantine and Inspection Service (AQIS) manages the inspection and phytosanitary certification program for Australian suppliers. All shipments need to be accompanied by an inspection certificate. Exporters should check first with AQIS Phyto and then their German agent/importer, prior to shipping.

Industry standards

German fruit and vegetable industry standards are governed by European Union (EU) regulations for imports. Further information should be obtained from the local AQIS office.

Since the implementation of the EU single market policy, imports from listed third countries (non-EU countries such as Australia) are permissible only at the external borders of the EU and thus only at certain points of entry (including seaports Bremerhaven, Hamburg and Frankfurt airport).

The EU directive relating to genetically modified (GM)-free foods has been in force since October 1998. The ‘non-GM’ label certifies that all the ingredients contained in the product are GMO-free. German retailers have begun to remove GM-affected foods from their shelves.

Specifications for labelling, packaging, quality and other factors vary greatly depending on the type, kind, state of product, the final usage and the individual requirements of the importer or customer. Produce within the EU is packed and handled preferably on standardised EURO-pallets. A typical lorry supplying retail chains carries 24-26 pallets.
Exact specifications should be obtained directly from the importer. German importers will not tolerate diversions from exact specifications and demand absolute compliance with EU/German standards.

Marketing your products and services

Market entry

In order to successfully enter the German fruit and vegetable industry, Australian firms should consider the following:

• Obtaining necessary EU export certification through the Australian Quarantine and Inspection Service (AQIS).
• Identifying suitable market sectors and importers for your products.
• Visiting the market and meet with interested importers.
• Cultivating strong relationships with German importers and maintain regular contact. This will assist in defining upcoming windows of opportunity, new market developments, changes in legislation, and labelling.
• Keeping them well informed about developments/changes, promotional strategies. A highly controlled supply chain management from growing to shelving, coupled with a dependable German importer, is crucial to success.

In order to market your products in the German fruit and vegetable industry, you should consider the following:

• Visiting the market regularly and following up on visits.
• Preparing comprehensive promotional packs (possibly bi-lingual, English/German) profiling your company, your products and seasonal availability.
• A joint approach with a retailer (after a relationship with the importer has been formed). This may be considered as a promotional and educational step to develop the market further.
• Actively promoting your product in the market.  Participation in food-related trade exhibitions such as Fruit Logistica in Berlin and ANUGA in Cologne is recommended. There is also an industry-driven campaign, called ‘5 am Tag’ (5 a Day) (in German only), promoting the consumption of five servings per day of fruit and vegetables to German consumers.
• Forming a strong export promotion body (eg. the NZ-ZESPRI model), which is well perceived and supported by German media and industry.
• Developing value-added products in conjunction with your German importer/retailer.
• Emphasising Australia’s clean, green environment for the specific purpose of niche-marketing organic produce.

It is essential that Australian exporters work closely with importers to ensure that their products are ready for the German market and comply with local regulations for particular products, packaging and labelling. As packaging varies greatly with different products, exact specifications need to be obtained from the respective importers.

Consideration should be given to export via specialised consolidators who have already entered the German fruit and vegetable industry.

German consumers are generally well informed, expect high quality (at low prices) and seek new products. German supermarkets and chain outlets tend to promote fruit when supply is high and prices are low due to market saturation; therefore the supermarkets tend to determine consumption levels. Consumers only tend to buy fruit if it's amply stacked on fruit shelves - small quantities don’t attract attention in the fresh section of the markets. 

Although there are trading platforms for fruit and vegetables such as online food markets, a large majority of trading is still conducted via direct communications between companies. Food retailing via the Internet is still very minimal in Germany and personal contacts and interactions are still crucial factors in this industry.

Distribution channels

Specialised fruit and vegetable trading-houses traditionally import most of the fresh produce into Germany. German importers work hand in hand with retailers and other outlets for fresh produce.

Supermarket chains and discounters generally do not import direct. Sometimes, however, supermarkets will contract direct with an overseas supplier, with customs clearance, storage and distribution being handled by an appointed importer.

Around 80 per cent of all fresh produce is sold via supermarkets and retail outlets, with approximately 10 per cent through specialty shops and 10 per cent via the weekly street markets.

Discounters have experienced considerable growth and, as a result, supermarkets and other food stores (both big and small) have experienced a slight decrease in market share. German discounters reportedly operate on very small margins of only one to two per cent compared to the following typical margins:

• Spain – 6-8 per cent
• UK – 6-8 per cent 
• Holland – 6 per cent
• France – 4-6 per cent

Moreover, prices for the product lines which discounters tend to sell, tend to be low for all food retailers because non-discounters are forced to match discounter prices.

Transport

Imported fresh produce enters Germany are via sea through Bremerhaven, Hamburg and the Netherlands or via air through Frankfurt or Cologne airport (high priced produce).

Specialised importers are equipped to handle incoming fresh produce in a very efficient and qualified manner, with integrated temperature controlled storage, logistics and transportation (ie. air, water, rail or truck) to the final German destination. 

Links and industry contacts

Fruit and vegetable–related resources

Anuga – www.anuga.de
Fruit Logistica – www.fruitlogistica.de
German Fruit Trade Association (Deutscher Fruchthandelsverband) – www.dfhv.de
German Ministry for Agriculture – www.ble.de
Organic Europe – www.organic-europe.net/default.asp

Government, business and trade resources for Germany

European Union Customs – http://europa.eu.int/comm/taxation_customs/customs/index_en.htm
European Union portal – http://europa.eu.int/index-en.htm
German Chamber of Commerce and Industry – www.germany.org.au
German Federal Statistics Office – www.statistik-bund.de/e_home.htm
German Government – www.bundesregierung.de/en
German Ministry for Foreign Trade – www.bfai.com/home_b3.htm 
Federal Agency for Agriculture and Food – www.ble.de

Logistics

Nagel Airfreight – www.nagel-airfreight.de
Frankfurt Airport – www.fraport.de

Media

Fruit Trade Magazine (Fruchthandel Magazin) – www.fruchthandel.de
Central Market & Price Report Office (Zentrale Markt- und Preisberichtstelle) – www.zmp.de
In German only/subscription service

Contact details

The Australian Trade Commission (Austrade) is the Australian Government’s trade and investment development agency, operating as a statutory agency within the Foreign Affairs and Trade portfolio.

Austrade assists Australian businesses contribute to national prosperity by succeeding in trade and investment, internationally, and promoting and supporting productive foreign investment into Australia.

Austrade:

• Delivers services that assist Australian businesses initiate, sustain and grow trade and outward investment.
• Promotes Australia as an inward investment destination and, with the States and Territories, supports the inflow of productive foreign direct investment.
• Administers the Export Market Development Grants scheme.
• Undertakes initiatives designed to improve community awareness of, and commitment to, international trade and investment.
• Provides advice to the Australian Government on its trade and investment development activities.
• Delivers consular, passport and other government services in designated overseas locations.

A list of Austrade offices (in alphabetical order of country) is available.

More information

For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au

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