Food and beverage to China
Trends and opportunities
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 vegetables |
Baked foods, cereals, dried fruit and nuts |
Health foods with functional claims |
National |
Bilateral protocol required |
|
|
|
Business |
Business registration with AQSIQ.
Processing approved by CNCA.
Infant formula required to be registered by CFDA
|
Registration with AQSIQ |
Registration with AQSIQ* |
Registration with AQSIQ* |
Product |
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
|
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.
Producer |
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|
|
Consumer |
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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)
|
|
|
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Direct purchase e-commerce websites (Kaola.com, JD Worldwide, VIP.com) |
|
|
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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)
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.
Contact details
The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:
- develop international markets
- win productive foreign direct investment
- promote international education
- strengthen Australia's tourism industry
- seek consular and passport services.
Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.
For more information on how Austrade can assist you, contact us on:
Australia ph: 13 28 78 | Submit your enquiry
A list of Austrade offices (in alphabetical order of country) is also available.