Food to Thailand

Trends and opportunities

The market

Thailand is the second-biggest economy in ASEAN and a major global tourism destination. This dynamic and consumer-driven market with rising disposable income and a huge visitor market of around 35 million is increasing its demand for imported food and beverages, offering many opportunities for Australian exporters.

The economic growth and urbanisation in Thailand over the last few decades has contributed to growing demand for higher-value fresh and processed products among a well-educated, middle and upper-income population. Quality and health considerations, rather than price, are becoming key purchasing factors. Bangkok’s metropolitan area remains Thailand’s largest consumer market but higher disposable incomes and increased tourism in regional Thailand is also fueling new demand for quality imported food and beverages in these areas.

Thai consumers are paying more attention to a healthy diet and view Australia as a reliable, reputable supplier of clean, healthy and high quality products. Australian products do not compete with lower–priced, locally manufactured products, but with other imported products from the US, Japan, European Union and Korean markets.

Australia is the major market supplier for premium imported beef and lamb, competing with the US, New Zealand and Japan. Dairy imports are dominated by New Zealand, but there is now a wide variety of Australian dairy produce currently being imported, presenting a significant opportunity to grow sales in this area.

Although the majority of consumers still prefer traditional fresh food markets, they are increasingly turning to modern supermarkets and ready-to-eat food items are emerging as popular alternatives to home cooking.

Opportunities

Thailand is a leading global supplier of a wide variety of commodities and products including rice, rubber, cassava, sugar, seafood, poultry meat, frozen food, ready-to-eat foods and processed fruits and vegetables.

The country is a regional and global food manufacturer , particularly for tuna, prawns and chicken. Thai Union Frozen is the world’s largest processor of seafood products. Thailand is home to one of the biggest agribusiness conglomerates, the Charoen Pokphand Group (CP), which has extensive investments and production in over 20 countries. Other Thai agribusiness conglomerates are looking at diversification and expansion internationally.

Thailand’s tourism and hospitality industry, featuring major local and multinational hotel and restaurant chains source considerable volumes of imported foods. The food and beverage manufacturing industry also sources products internationally and uses Australian ingredients, including dairy products, food additives, flavourings and cereals.

Thailand has a developing dairy production industry but imported processed dairy products still account for 65 per cent of annual needs.

International cuisine has become increasingly popular among Thais. Imported food items needed to meet the demands of the food service industry include:

• fresh fruit and vegetables
• smoked salmon and seafood
• Japanese-style delicacies
• grain and cereal products
• chocolate and confectionery
• 100 per cent fruit juice and drinks
• jams and spreads
• dairy products and milk powder
• pasta
• salted snacks
• ready-to-eat meals
• meat and meat by-products.

The Thai Government has developed a policy to present Thailand as the ‘kitchen of the world’. This provides Australian exporters with an opportunity to supply quality raw materials for the manufacture of food products.

Thailand is also a major manufacturer of halal certified food for export to the Muslim world, and there are opportunities for Australian suppliers of raw materials with halal certification to export to Thailand.

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 Thailand can be found in the following report.

Tariffs, Regulations and Customs

From 1 January 2020 tariff rates will decrease to zero on a number of Australian beef and dairy products imported into Thailand under the Thailand-Australia Free Trade Agreement (TAFTA) and the ASEAN-Australia-New Zealand FTA (AANZFTA).

Under TAFTA, a special agricultural safeguard provision will remain in place for some beef and dairy products until the end of 2020. This safeguard limits the quantity that can be imported under the TAFTA preferential tariff rate (zero rate).

However, under AANZFTA, from 1 January 2020 the same beef and dairy products will have a zero tariff rate and no quotas. This makes AANZFTA a more favourable option for exporters and importers of products with TAFTA special safeguards still in place in 2020.

To utilise AANZFTA, exporters need to register in advance with their local certifying authority, if they have not done so already, and follow the AANZFTA COO procedures. Freight forwarders and importers will also need to follow the process for clearing goods under AANZFTA.

You can compare tariff rates under TAFTA and AANZFTA using the DFAT FTA portal, or view the TAFTA Special Safeguard Schedule for clarification.

For information on Certificates of Origin, contact your nearest Authorised Body:

Australian Chamber of Commerce and Industry
Australian Industry Group
International Export Certification Services (IECS)

Appendix One – Australian beef and dairy products that will have tariffs reduced to zero on 1 January 2020.

Thai regulations prohibit processed food ingredients containing genetically modified organisms, such as the Cry9C DNA sequence, which potentially includes frozen or chilled corn, taco shells, corn chips, corn flakes, corn meal or corn flour.

Control of the importation, marketing, distribution and sales in the processed food industry is shared between a number of Thai Government agencies including:

• Food and Drug Administration (FDA)
• Ministry of Finance’s Customs Department
• Revenue Department
• Ministry of Agriculture and Cooperatives
• Ministry of Commerce

Most food products (fresh or processed) attract over 30 per cent tariff on the Cost, Insurance and Freight (CIF) value, plus seven per cent Value Added Tax (VAT). Products can be imported tariff-free if the final product is for re-exportation.

Thai law requires that only locally registered companies can conduct importation. The Thailand Board of Investment provides information on establishing a company.

Industry standards

Quality and hygiene are areas of major focus areas in the processed food sector. Many international firms have established a presence in Thailand to supply services related to food safety and hygiene issues.

The following food safety standards are required when exporting food items to Thailand:

• Good Manufacturing Practice (GMP) – a general standard.
• Hazard Analysis at Critical Control Points (HACCP) – an internationally accredited standard.

Food products must be approved and registered with the Thai FDA prior to importation. This process typically takes two to eight weeks per individual product.

The Thai FDA only recognises documents issued by a government organisation or a commercial organisation that is certified by the International Accreditation Forum. The accredited body for Australia is JAS-ANZ.

The commercial organisations (certifying bodies) that are recognised by JAS-ANZ to issue certificates are the only certifying bodies accepted by the Thai FDA for the purpose of product registration. The FDA requires all documentation to be certified as true copies by the relevant embassy. Austrade Bangkok provides this certification service to exporters free of charge.

When seeking registration, suppliers must provide:

• two samples of each product
• details of the exact composition by percentage of each ingredient
• a production flowchart
• six labels.

Food products must display the following information in English:

• name and brand of the product (both generic and trade)
• registration number
• name and address of the importer
• manufacturing and expiry dates
• net weight and volume
• any additives used
• health and nutritional claims (if any).

For more information, visit the Thai Food and Drug Administration website.

Marketing your products and services

Market entry

The following market entry strategies should be considered:

• Appoint a local importer, agent or distributor (as a locally-registered company must handle importation procedures and documentation).
• Establish and manage a cool chain for consistent supply of fresh produce.
• Invest in local (or regionally based) food production facilities to take advantage of the ASEAN Free Trade Area program and more efficiently service the market.
• Participate in food exhibitions, which provide effective exposure for your company and products.

There is no English-language industry news for the processed food industry available in Thailand, but the National Food Institute and Royal Thai Customs have statistics and further information on the processed food industry.

Distribution channels

A local importer, agent or distributor can establish direct sales to supermarkets and retail chains. Local operators better understand the needs of the local customer and can suggest improvements for tailoring products accordingly. The leading supermarkets and hypermarkets in Thailand include: Tesco, Makro, Big C, Foodland, The Mall Group, Villa Market, Rim Ping and Tops.

Australian companies have a reputation for making good business partners and Thai companies value long-term, personal business relationships.

Transport

Airfreight – the only option for perishable products – is used to ship product samples in small quantities. Several airlines transport goods between major ports in Australia and Thailand.

Large volumes of products can be transported by sea freight and take about two weeks from Australia to Thailand. Once imported products arrive in Thailand and any duties have been paid, products can be transported freely in the country.

Consider a good freight forwarder, insurance company and customs broker for transporting your product. Austrade can provide you with a list of these service providers.

Links and industry contacts

Government, business and trade

Thailand-Australia FTA Portal
Airports of Thailand PLC
Australian Embassy Bangkok
Australian-Thai Chamber of Commerce
Ministry of Commerce
Ministry of Foreign Affairs
Qantas freight
Royal Thai Customs Department
Stock Exchange of Thailand
Thai Airways International
Thai International Freight Forwarders Association
Thai National Food Institute
Thailand Board of Investment
The Food and Drug Administration (FDA)
Tourism Authority of Thailand

Media

The Bangkok Post
The Nation

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

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