Market Information
Europe

The Food Ingredients Market in Germany

December 2003

Prepared by the Market Research Centre and the
Canadian Trade Commissioner Service

© Department of Foreign Affairs and International Trade
(FaxLink no. 0800003)

The Market Research Centre produces a wide range of market reports by region and sector for Canadian exporters. For further information, contact:

Market Research Centre (TMR)
Department of Foreign Affairs and International Trade
E-mail: mrc@dfait-maeci.gc.ca
Internet: http://www.dfait-maeci.gc.ca

Trade Evaluation and Analysis Division (TEAD)
Agriculture and Agri-Food Canada
Contact: Andy Archibald
Tel.: (613) 759-7665
Fax: (613) 759-7505
E-mail: archibalda@agr.gc.ca
Internet: http://ats.agr.ca

The Government of Canada has prepared this report based on primary and secondary sources of information. Readers should take note that the Government of Canada does not guarantee the accuracy of any of the information contained in this report, nor does it necessarily endorse the organizations listed herein. Readers should independently verify the accuracy and reliability of the information. This report is intended as a concise overview of the market for those interested in its potential and is not intended to provide in-depth analysis which may be required by the individual exporter.

EXECUTIVE SUMMARY

After the United States, Germany is the largest market for additives and ingredients in the world. In 2002, conservative estimates1 of the food ingredients market in Germany have the market's value reaching close to $6 billion.2

Over the next five years, market growth is projected to be between 2% and 3% per year. Weak pricing is expected to erode profit margins as inexpensive Asian products enter the international market. Volume growth will outpace market value in most food ingredient segments, except in functional and organic ingredients and natural colourings or foodstuffs. Increasing demand for these products, which are forecast to grow 4.5% annually over the next five years, is the result of several important trends in German society. German consumers are placing more importance on nutrition, preventative health and consumer protection in their purchasing habits. They are also concerned about environmentally sound land-management and farming practices. These trends are reflected in the German government's 2002 agri-food policy report. Organic farming is viewed by German consumers and government as a means of ensuring the safety of the food supply while protecting the environment.

For Canadian ingredient producers, the German food ingredients market offers excellent opportunities for organic ingredients, colouring foodstuffs and functional food ingredients imported as food ingredients, not as nutraceuticals.

MARKET OVERVIEW

Germany is the world's third-largest economy and the largest market in the European Union (EU)3. With a gross domestic product (GDP) estimated at $3.2 trillion, Germany accounts for close to one third of the GDP of the euro-zone4. With a population of 82 million people and the average per-capita income approaching $40 000 a year, Germany has one the highest standards of living in the world.

Yet in recent years, the German economy has not performed well. In the last quarter of 2002, economic growth was flat. Following growth of 0.6% in 2001, the economy grew a only 0.2% in 2002. Low growth rates are believed to be the result of a steady decline in consumer spending and business investment, combined with weakening exports. Significant economic recovery will be dependant on improvement in the global economy and increased demand for German exports. Private consumption within Germany is forecast to remain depressed. The forward-looking indicators point to continued economic weakness: in 2003, GDP growth is forecast to be 0.4%.

Germany is a leading trading nation in agricultural products and has considerable influence in the formulation of EU regulations and the EU Common Agriculture Policy (CAP). It is Canada's fourth-largest export market. In 2002, total Canadian agri-food exports to Germany were valued at over $240 million.

Germany has a large and well-developed food processing sector. As a result, there is a considerable market for food additives and ingredients. Because the food ingredients sector has such a low profile, it has proven difficult to define and, in turn, to measure. Sources differ as to the size of the market, primarily due to different definitions of the product portfolio. Leatherhead Food International places conservative estimates of the value of the German additive and ingredients market at $6 billion.

Leatherhead Food International divided the 2001 German market for food additives into the following segments: flavours, 30%; hydrocollids, 17%; acidulants, 13%; flavour enhancers, 12%; sweeteners, 6%; colours, 5%; emulsifiers, 5%; vitamins and minerals, 5%; enzymes, 4%; chemical preservatives, 2%; and anti-oxidants, 1%.

Over the next five years, annual growth is projected to be between 2% and 3% per year. Weak pricing is expected to erode margins as inexpensive Asian products enter the international market. Volume growth will outpace market value in most food ingredient segments.

The exceptions to this trend will be in functional and organic ingredients, and colouring foodstuffs. These products can bridge traditional segments. It is possible for an ingredient to have all three of these properties (e.g. organic blueberries or cranberries) Demand for these products is forecast to grow at annual rates of over 4.5% in the next five years.

Key Factors Shaping Market Growth

Three key factors- product safety, environmental protection and innovation- affect market growth in Germany. German consumers are well-informed and deeply concerned about nutrition and product safety. They are aware of food additives, read labels and demand a lot of information about the products they consume. Recent adverse publicity about food safety (e.g. acrylamide found in high-starch snack food and banned antibiotics found in some imports of shrimp and sausage ingredients from China) has led to even more intense scrutiny. Adverse publicity can have long-term consequences for product marketability and may even spread further to affect the reputation of an entire country's agri-food sector.

German consumers are also very concerned about their natural environment. They want food that has been produced and packaged in an environmentally sensitive manner. This is true even at the industrial level, where food processors will insist that imported ingredients are shipped in recyclable bags and on pulpable skids.

The food processing and food ingredients industries in Germany are highly developed and sophisticated. In this market, as in any mature market, innovation drives growth. German consumers appreciate quality and taste and are always looking for new and healthier foods and beverage choices.

Regulatory Environment

Defining Functional

A functional ingredient is an ingredient that claims to give a positive health benefit. Examples of functional ingredients are probiotics (bacteria that aid digestion) and calcium (when added to orange juice can help prevent osteoporosis). In Germany, as in Canada, food products can not claim to have direct therapeutic effects. Marketing of functional foods has therefore needed to be creative, inferring a health benefit without actually stating it. This also creates fluidity between functional and enhanced foods. The European Food Authority is drafting a legislative proposal to regulate health claims that can be made on food packaging. A draft of the legislation is currently under review and is expected to come gradually into force by 2005. At present, there is no legal definition or formal medical authorization required in order to make a positive health claim. Also there are differing degrees of regulation throughout the European Union member states. The uncertainty of the regulatory framework is a factor that is limiting growth in this sector.

Common Agriculture Policy

The Common Agricultural Policy (CAP) is a major factor determining the composition of Canadian agri-food imports to Germany. Through the CAP, the European Union has established a system of common prices, marketing aids, production, storage arrangements, import controls, export restitutions and specialization of production. The German Agri-food Policy Report 2002 calls for profound revision and re-direction of the CAP. The German government wants to place more emphasis on consumer protection, organic farming and environmental protection. It is not clear, however, if the German government wants to end its system of subsidies and protection.

Genetically Modified Organisms

The moratorium on approving and importing genetically modified (GM) products was lifted throughout the European Union in October 2002. However, GM foods are very slow to find their way to the market due to the enforcement of labelling and traceability rules.

In November 2002, the Agriculture Council of the European Union agreed by a majority decision that food containing more than 0.9% GM material will have to be labelled as containing genetically modified organisms (GMOs). The Council also agreed that labelling of GM material in food should be extended to include food or ingredients produced with GM crops. The proposal calls for complete transparency for the consumer and the ability to trace every GMO back to the farm on which it was grown. The agreement will have to go before European Parliament before any legislation can come into effect.

It is important to note that while EU regulations on GM foods may appear to function as trade barriers, these regulations are in response to public pressure. German consumers have made it very clear that they do not want to consume GM food or beverages.

Opportunities

Canadian producers offering innovative, high-quality products should find a receptive market in the following categories.

Organic Ingredients

Organic food products are one of the fastest-growing segments of the German food industry and present important opportunities for Canadian exporters in the ingredients sector. Canadian companies can build on Canada's solid reputation in Europe for quality and traceability in the organic sector, especially in soy beans.

In 2001, Germany introduced a logo for organic food products. This new logo - officially dubbed the Bio-Siegel - replaced a private-industry label and conforms to EU organic market regulations (EEC 2092/91).

Functional Ingredients

The functional foods market in Germany was valued at $1.3 billion in 2002 and is forecast to account for 20% of the German food and drinks market by 2010. Probiotic products account for close to 80% of the drinking yogurt market and 20% of the fruit yogurt market.

In any high-growth sector, there is accompanying risk. The recent launch of Unilever's pro becel active, a margarine spread that the company claims will lower cholesterol, quickly became the subject of controversy: only registered drugs are allowed to make this kind of specific claim.

Yet, many market analysts remain convinced that even with the uncertain and shifting regulatory environment, demand for functional food and beverages will continue to grow. Market research indicates that German consumers want healthy choices and that they prefer to get their nutrients from food rather than supplements and pills.

Germany is expected to sustain a small trade deficit in bulk nutrients and minerals and will continue to rely on imports of amino acids. This trade deficit has not gone unnoticed by companies working to take advantage of these opportunities. Germany-based Amino GmbH has introduced a full line of food-grade amino acids derived from beet sugar molasses. Omega Tech, a leading producer of fatty acids headquartered in the United States, has opened a research facility in Germany and Celanese Ventures, operating out of Frankfurt, has commercialized a naturally occurring micro-algae that is used to fortify food and beverages.

Canadian producers are in a position to take advantage of their strong capacity in phytosterols (cholesterol lowering ingredients), probiotics (fax/yeasts) and soy. Producers should ensure that all claims of health benefits derived from their products are supported by sufficient scienctific evidence.

Producers interested in exporting functional ingredients to Germany are advised to ensure that their ingredients can be imported into Germany as foodstuffs under the agricultural regulatory framework.

Colouring Foodstuffs

Colouring foodstuffs include fruit and vegetable juices (dried, concentrated and powdered extracts). Examples of Canadian products that could be used for colouring are blueberry or cranberry concentrates. Colouring foodstuffs do not contain carriers or additives and may be listed as ingredients. Thus, they are not E-numbered5 food additives.

The total European food colours market was valued at $332 million in 2001. While natural colouring foodstuffs represents a smaller portion of this market, it is projected to grow 10-15% per year through 2008. When and if current health claims of some colouring foodstuffs are substantiated, this will promote further growth in this segment.

Actual and Planned Projects

The Scientific Committee on Food (SCF) is responsible for approving the use of food additives in the European Union. Once an additive is approved it receives an E-number. E-numbers are only assigned to substances added directly to food products. The system was introduced to facilitate identification. However, additives such as enzymes, processing aids and colouring foodstuffs are not included in the E-number system. The system, which was intended to promote clarity, has been widely criticized as confusing. Moreover, in Germany E-numbers have actually become a stigma. Many German consumers indicate that they believe substances requiring an E-number are unsafe.

In January 2003, the EU Environment Committee called for a review of the safety level for food additives used in confectionery, soft drinks and snacks that are consumed in larger quantities by children and adolescents. The Committee also voted unanimously in favour of a report banning the use of the additive konjac (E425) in confectionery. In 2002, the European Commission compiled a register of all flavouring substances authorized in different EU member states. It has also attempted to indicate prohibitive measures that exist in certain member states, in an attempt toward harmonizing regulations that have, in effect, served as trade barriers. This list can be downloaded from http://www.europa.eu.int/comm/food/fs/sfp/addit_flavor/flav17_en.pdf. There is also an amendment to harmonize the authorization of food additives in the European Union. These amendments are not expected to be applied throughout the European Union before 2006. The text of the amendment can be downloaded from http://www.europa.eu.int/comm/food/fs/sfp/addit_flavor/
additives/proposal_2002_0662_en.pdf.

COMPETITIVE ENVIRONMENT

Local Capabilities

Germany has a well-developed food ingredients industry and is one of the world's mostactive developers of nutrients and functional ingredients. There are also large multinational corporations that have significant local operations in Germany, such as Novartis and BASF. In addition, there are numerous small and mid-sized companies that are very active in this industry. Germany's leading ingredients producers include Sudzucker, Degussa and Haarmann & Reimer, which together saw sales in excess of $9.8 billion in 2001 (see Table 1).

Source: Sauer, Pamela "It's feast or famine for food additives players," Chemical Market Reporter. June 17, 2002.

International Competition

EU exporters are in a better position to supply German food processors than non-EU exporters. In addition to benefitting from the time and cost advantages of geographical proximity, products from EU countries are not subject to tariffs.

Source: Sauer, Pamela "It's feast or famine for food additives players," Chemical Market Reporter. June 17, 2002.

Canadian Position

Canada's presence in the market is small. Canadian exports of products destined as inputs for Germany's food processing sector were estimated to be over $23 million in 2002. Top exports included wild blueberries, mustard preparations and mustard flour, oil seeds (flax, mustard, sunflower) and cocoa preparations. Shipping costs and tariffs put Canadian manufacturers at a disadvantage when attempting to compete in the German market on the basis of price. Canada's comparative advantage lies in the ability to provide high-quality and innovative products.

Competitive Advantage Through Canadian Government Policies and Initiatives

Canadian Commercial Corporation

The Canadian Commercial Corporation (CCC)6 gives Canadian companies access to financing and better payment terms under the Progress Payment Program (PPP). The PPP concept was developed as a partnership between major Canadian financial institutions and the CCC. It enables the exporter's bank to open a project line of credit for the exporter's benefit, based on CCC approval of the project and the exporter's ability to perform. The CCC will also act as a prime contractor on behalf of Canadian small and medium-sized enterprises, giving those businesses increased credibility and competitive advantage.

Export Development Canada

Export Development Canada (EDC) offers export financing and insurance to Canadian exporters. Additionally, insurance can be provided for larger transactions that are subject to the terms and conditions established by the buyer. EDC prefers to work through letters of credit, bank credits or bank guarantees. Approval for financing is considered on a case-by-case basis. Further information is available from EDC's Internet site at http://www.edc.ca or by calling, toll-free, 1-866-283-2957 (for companies with annual export sales up to $1 million) or 1-866-278-2300 (for companies with annual export sales over $1 million).

New Exporters to Overseas

The New Exporters to Overseas (NEXOS) program helps Canadian companies that have not yet exported to Europe. NEXOS introduces the essentials of exporting and provides practical information and first-hand exposure to European markets. The program emphasizes information in areas such as customs procedures, market access, shipping, labelling, distribution channels and currency regulations. Flexibility and fast turnaround times are the hallmarks of this program. Each mission includes thorough briefings on how to find an agent, a distributor or an associate. In other words, NEXOS shows Canadians how to do business in the destination country.

NEXOS missions are arranged for groups of companies in the same general sector. Accordingly, applications from individual firms cannot always be entertained. Individual companies are advised to work with a Canadian organization such as an industry association, chamber of commerce, international trade centre or provincial government to assemble a group of at least six companies on whose behalf a program can be arranged.

The mission is usually built around an event such as a national or international trade fair. Participants are responsible for their own transportation, accommodation and living expenses. NEXOS will cover associated program expenses such as meeting rooms, speakers and local transportation.

Canadian firms must be registered with the Trade Commissioner Service to be eligible to participate.

Contact the Department of Foreign Affairs and International Trade (DFAIT), European Business Development Section (REB) for more information about NEXOS.

Program for Export Market Development

The Program for Export Market Development (PEMD) helps Canadian companies enter new markets by sharing the costs of activities that companies normally could not or would not undertake alone, thereby reducing risks involved in entering a foreign market. Eligible costs and activities include market visits, trade fair participation abroad, incoming buyers, product testing for market certification, legal fees for international marketing agreements, air transportation costs of offshore company trainees, product demonstration costs and other costs necessary to execute a market development plan. Activity costs are shared on a pre-approved, 50/50 basis.

The PEMD refundable contribution ranges from $5000 to a maximum of $50 000. Preference is given to companies with fewer than 100 employees for a firm in the manufacturing sector and 50 in the service industry, or with annual sales between $250 000 and $10 million. Other components of the program include international bid preparation (Capital Projects Bidding) and, for trade associations, developing international marketing activities for their membership. For additional information, visit http://www.dfait-maeci.gc.ca/pemd or call 1-888-811-1119.

Virtual Trade Commissioner

The Virtual Trade Commissioner (vTC) is an on-line service offered by Canada's Trade Commissioner Service of the Department of Foreign Affairs and International Trade. Through a personalized and password-protected Web page, vTC-registered Canadian exporters will receive timely and relevant information on contacts and business opportunities in targeted foreign markets. The vTC offers registered users direct on-line access to market information, including market reports, business news, events and business leads related to the companies' industry sectors and markets of interest. Users can request services on line from a trade commissioner responsible for the industry sector in their target markets. They will also automatically receive new information as it becomes available. Canadian exporters can register for a Virtual Trade Commissioner at http://www.infoexport.gc.ca.

MARKET LOGISTICS

The distribution system within Germany is highly efficient and contains various channels to ensure speedy delivery of products. Germans take pride in their efficiency, and it is therefore not surprising that the costs associated with the distribution of food products within the country are relatively low. Germany's location, combined with its existing distribution channels, also make it a good base from which to ship products to other countries.

Channels of Distribution

By law, the German importer has legal liability for imported products marketed in Germany. Therefore, the importer has an important incentive to work well with foreign suppliers to ensure that products meet all regulatory requirements. Finding the right partner can make all the difference when trying to enter the German market.

Direct Sales

Large multinational food processing companies, as well as companies that produce functional foods, may purchase directly from suppliers. However, most food processors prefer to deal with a local agent/distributor, who is better able to provide after sales and follow-up service. In addition, there is an emerging class of importers that specialize in functional ingredients.7

Distributors and Wholesalers

Using wholesalers and distributors can be a very effective way to introduce a product to the German market. Exporters should note that it may be necessary to use more than one distributor or agent in order to ensure national distribution.

When seeking the services of a distributor or wholesaler, exporters should consider the relationship that these individuals have with local governments, buyers and banks; the condition of their facilities; and their willingness and ability to keep inventory. Canadian producers are advised to review the provisions of German/EU law with a qualified lawyer before entering into an agreement with a prospective partner.

Agents and Sales Representatives

Working with an agent is also an excellent way to introduce a new product into the German market. While agents solicit business and enter into agreements on behalf of the exporter, they do not take ownership of the products they sell.

An exporter must weigh a number of factors when selecting an agent, including:

• region(s) covered by the agent;
• reputation;
• product knowledge;
• experience in handling the exported product;
• commission to be paid;
• what (if any) after-sales service is provided;
• track record; and
• size and quality of the agent's staff.

These attributes can best be assessed during a visit to Germany. Manufacturers should also ensure that responsibilities are clearly defined before entering into a long-term relationship.

Joint Ventures

Pursuing a joint venture or strategic alliance can be a successful strategy for Canadian producers of functional ingredients. There is a wide range of food processors who are looking to include functional foods and beverages in their product portfolios.

Co-branding - whereby an established food processor will partner with a functional ingredient producer and introduce the logo of the ingredient on its packaging- has proven to be a successful strategy to add value to an existing product.

Market-entry Considerations

Suggested Business Practices

Germans have a well-deserved reputation for precision. All aspects of conducting business, from arriving on time for a meeting to carrying out the details of a contract, are important. Germans generally do not appreciate exaggeration and insist on data to support all claims. This preference for facts over emotion is also seen in advertising. Factual information dominates opinion.

Personal relationships also tend to be separate from business relationships. Canadian exporters may need years of contact with German counterparts before more personal relationships develop.

The German bureaucracy and regulatory environment can also pose significant challenges. Moreover, European Union attempts to harmonize the regulations and standards of member states creates further complications. To the extent to which EU standards are developed, there is a high probability, especially in agriculture, that the existing German standard will be its basis. In many instances, Germany will be the first country to implement newly enacted EU regulations. Canadian companies are advised to know precisely which EU or German standards and regulations apply to their products.

German consumers also demand additional quality certifications that may not be legally required but may greatly improve a product's marketability. An example of this is the Duales System Deutschland or "green dot." The green dot on a package signifies that packaging is environmentally considerate: minimalist, recyclable and made from recycled materials.

Evidence of a Canadian company's long-term commitment is important. German businesspeople appreciate foreign exporters who are willing to make this commitment and tend to be wary of those who appear interested only short-term goals or dumping excess production. New products generally require 12-18 months before success can be assessed accurately. In addition, German importers and distributors expect adequate after-sales support, regardless of the exporter's distance from the market. Providing this kind of support will help Canadian producers to overcome proximity disadvantages with respect to EU competitors.

Canadian producers are strongly advised to attend food ingredients trade fairs in Germany and other European countries (see Promotional Events). The trade fairs will give those Canadian producers who are unfamiliar with German and European markets a sense of the business culture and the different ways products are presented and marketed. For Canadian exporters presently active in the German market, trade fairs are an excellent opportunity to increase visibility and local contacts.

Import Regulations

As a member of the European Union, Germany follows the Community Integrated Tariff (TARIC) system, which applies duties to all imports from non-EU countries. EU/German import regulations, duties and tariff-rate quotas protect domestic industries by limiting the range of foreign products entering the market. Combined with transportation costs, these factors usually result in Canadian products being higher-priced. Product-specific TARIC information can be obtained from the EU tariff database at http://europa.eu.int/comm/taxation_customs/dds/en/tarhome.htm.

Value-added tax (VAT) is applied on a non-discriminatory basis to all goods and most services. The tax is levied at the time of customs clearance for all imported goods and is currently 16%. There is a reduced rate of 7% for some agricultural products. Canadian companies should consult with customs officials to confirm import tax rates on their products.

Germany uses the Harmonized System (HS) to classify goods for international trade. An importer must have an HS number to determine the amount of duty required. In order to clear customs, goods must be accompanied by the proper shipping documents, bill of lading (or air waybill) and a detailed commercial invoice.

Local Standards, Certificates or Registrations

All products exported to Germany must be accompanied by a standard set of shipping documents. Due to the complexity of German/EU regulations, Canadian exporters should request any additional information from the importer prior to shipping. It is recommended that Canadian exporters use the services of a German customs broker, importer, agent or distributor to ensure that all essential documentation is correctly prepared and arrives with the shipment. All documents should be completed in both German and English to avoid unnecessary delays.

Commercial Invoice

The commercial invoice serves as a bill to the buyer from the exporter and must accompany every shipment to Germany. Invoices should be thoroughly checked, since any error or omission can result in delays, fines or even confiscation. Invoices must include the following information:

• place and date of issue;
• names and addresses of importer and exporter;
• detailed description of the merchandise, including identifying marks, quantities in units customary to international trade), numbers and varieties;
• method of shipment;
• signature, name and title of responsible officer;
• all insurance and freight charges; and
• shipper's invoice number and customer's order number.

Exporters should consult with their customs broker to determine how many copies of the commercial invoice should be sent with each shipment, since the number required varies according to the product being shipped. Any promotional information should also be included with the commercial invoice.

Export Declaration Form

For statistical purposes, Canada requires exporters to complete an Export Declaration (Form B-13A), which can be filed electronically at http://www.ccraadrc.gc.ca/E/pbg/cf/b13abp/README.html. Although exporters are technically responsible, agents, brokers or carriers typically complete and submit the form on behalf of the exporter.

Packing List

A packing list is necessary when multiple packages are shipped, unless the commercial invoice provides the required information. This list should include:

• the number of packages within one case;
• the net, gross and legal weights of each case, and of the total shipment; and
• the volume of individual packages, as well as of the shipment as a whole.

Between four and seven copies of the packing list should be included in any shipment, depending on the product being shipped.

Bill of Lading

The bill of lading is the shipper's recognition of receipt of the shipment. Each shipment may contain a set of bills of lading, one copy of which should be kept on file, while other copies are sent to the importer and customs broker, respectively. The bill of lading should include:

• description of the product(s);
• weights and measurements of the packages and their types;
• ports of origin and destination;
• names and addresses of shipper, importer and customs broker;
• any freight or other charges incurred;
• number of bills of lading in the full set; and
• carrier's acknowledgment of receipt "on board" of the goods for shipment.

Depending on the product, it may be necessary for exporters to include storage temperature and other storage requirements on the bill(s) of lading.

Certificate of Origin

A certificate of origin verifies that the goods originate in Canada and are therefore subject to all duties or taxes that apply to Canadian products.

Packaging and Labelling

It is recommended that Canadian exporters examine both German and European Union regulations regarding packaging and labelling standards. All imported agri-food labels must include:

• name of the product;
• statement of what the product is;
• expiry date and any other storage requirements;
• product's country of origin;
• alcohol content, by volume (when applicable);
• manufacturer's lot or batch number;
• all nutritional information;
• list of ingredients and weights in metric units; and
• list of additives, preservatives or colouring used.

EU regulations on the use and labelling of novel food additives can be downloaded from http://europa.eu.int/eur-lex/pri/en/oj/dat/2000/l_006/l_00620000111en00150017.pdf.

See also the Appendix for a list of EU regulations on food and food additives.

Authentication of Documents

Documents that need to be authenticated, such as certificates of sale and letters authorizing an exporter's local agent or importer to act on their behalf, must first be notarized in Canada. Exporters can have the notarized documents authenticated, at no cost, by sending them to the Authentication and Services of Documents (JLAC) at the Department of Foreign Affairs and International Trade.

Export Credit Risks, Restrictions on Letters of Credit, Currency Controls

Germany implements no restrictions on letters of credit or currency controls. Generally, the method of payment is a matter for negotiation between the individual supplier and importer. Usual practice is for payment to be made by terms of a letter of credit for 30- 60 days. In cases where distribution arrangements are concluded, exporters are advised to prepare a contract detailing all major points of agreement, rights and responsibilities.

PROMOTIONAL EVENTS

Event/Description Organizer

Food Ingredients (Fi) Europe 2003
November 18-20, 2003 (Biennial)
Frankfurt, Germany
Europe's largest gathering of international ingredients suppliers, food producers and manufacturers

CMP Information
PO Box 200
3600 AE Maarssen, Netherlands
Tel.: (31-346) 559-444
Fax: (31-346) 573-811
E-mail: Fi@cmpinformation.com
Internet: http://www.fi-events.com

BioFach: World Organic Trade Fair
February 19-22, 2004 (Annual)
Nuremberg, Germany

BioFach
NürnbergMesse GmbH
Messezentrum
D-90471 Nürnberg, Germany
Tel.: (49-0-911) 8606-8648
Fax: (49-0-911) 8606-8634
E- mail: besucherinfo@nuernbergmesse.de
Internet: http://www.biofach.de

Confectionery Manufacturing Expo Europe, 2004
April 27-29, 2004
Wiesbaden, Germany
Europe's only show dedicated to the suppliers and buyers of the chocolate and confectionery manufacturing industry.

Simply Group Ltd.
Zeal House, Deer Park Road
London SW19 3GY
United Kingdom
Tel.: +44 (0)20 8 542 9090
Fax: +44 (0)20 8 542 9191
E-mail: info@simply-events.com
Internet: http://www.cm-expo.com/europe/index.htm

Hi Europe 2004
November 16-18, 2004 (Biennial)
Amsterdam, The Netherlands
Health ingredients and dietary supplements show

CMP Information
PO Box 200
3600 AE Maarssen, Netherlands
Tel.: (31-346) 559-444
Fax: (31-346) 573-811
E-mail: Fi@cmpinformation.com
Internet: http://www.hi-events.com

KEY CONTACTS AND SUPPORT SERVICES

Canadian Government Contacts

Consulate of Canada in Dusseldorf
Benrather Strasse 8
D-40213 Dusseldorf, Germany
Contact: Stephan Rung, Commercial Officer
Tel.: (49-211) 1721-70
Fax: (49-211) 3591-65
E-mail: stephanr.rung@dfait-maeci.gc.ca
Internet: http://www.canada.de
Responsible for agriculture and agrifood sector promotion in Germany

Canadian Embassy in Berlin
Internationales Hadelszetrum
Freidrichstrasse 95, 12th Floor
D-10117 Berlin, Germany
Tel.: (49-30) 20312-0
Fax: (49-30) 20312-115
E-mail: brlin-td@dfait-maeci.gc.ca
Internet: http://www.canada.de

Consulate of Canada in Hamburg
Ballindamn 35, 5th Floor
Hamburg, Germany
Tel.: (49-40) 4600-270
Fax: (49-40) 4600-2720
E-mail: hamburg@dfait-maeci.gc.ca
Internet: http://www.canada.de

Consulate of Canada in Munich
Tal 29
Munich, Germany
Tel.: (49-89) 2199-570
Fax: (49-89) 2199-5757
E-mail: hamburg@dfait-maeci.gc.ca
Internet: http://www.canada.de

Honorary Consul of Canada at Stuttgart
Lange Strasse 51
70174 Stuttgart, Germany
Tel.: (49-711) 223-9678
Fax: (49-711) 223-9679
E-mail: hcons.stuttgart@consulates-canada.de
Internet: http://www.canada.de

Department of Foreign Affairs and International Trade (DFAIT)
125 Sussex Dr.
Ottawa, ON K1A 0G2
Internet: http://www.dfait-maeci.gc.ca

Authentication and Services of Documents (JLAC)
Tel.: (613) 992-6602
Fax: (613) 992-2467

European Business Development and Connectivity Initiatives (REB)
Contact: Bob Rutherford, Deputy Director, European Business Development
Tel.: (613) 995-6439
Fax: (613) 944-1008
E-mail: robert.rutherford@dfait-maeci.gc.ca

Market Research Centre (TMR, formerly TCM)
Contact: Sean McLean
Tel.: (613) 996-0688
Fax: (613) 943-1103
E-mail: sean.mclean@dfait-maeci.gc.ca
Internet: http://www.infoexport.gc.ca

Market Support Division (TMM, formerly TCM)
Contact: Rick Winter
Tel.: (613) 995-1773
Fax: (613) 944-0050
E-mail: rick.winter@dfait-maeci.gc.ca
Internet: http://www.infoexport.gc.ca

Northern Europe Division (REN)
Tel.: (613) 995-9401
Fax: (613) 995-6319
E-mail: ren@dfait-maeci.gc.ca

Northern European Business Development (REB)
Tel.: (613) 996-5568
Fax: (613) 944-1008

Tariffs and Market Access Division (EAT)
Tel.: (613) 992-2177
Fax: (613) 992-6002 or (613) 944-4840

Canadian Food Inspection Agency
59 Camelot Dr.
Nepean, ON K1A 0Y9
Tel.: (613) 225-2342
Fax: (613) 228-6653
E-mail: cfiamaster@em.agr.ca
Internet: http://www.inspection.gc.ca

Agriculture and Agri-Food Canada
Sir John Carling Building
930 Carling Ave.
Ottawa, ON K1A 0C5
Tel.: (613) 759-7726
Fax: (613) 759-7506
Internet: http://www.agr.gc.ca

Export Development Canada (EDC)
151 O'Connor St.
Ottawa, ON K1A 1K3
Tel.: (888) 332-3320 or (613) 598-2500
Fax: (613) 237-2690
E-mail: export@edc-see.ca
Internet: http://www.edc-see.ca

Canadian Industry Associations

British Columbia Functional Food and Nutraceutical Network (BCFN)
c/o Faculty of Agricultural Sciences
University of British Columbia
Food, Nutrition and Health Bldg.
2205 East Mall, Room 218
Vancouver, BC V6T 1Z4
Tel.: (604) 822-6920
Fax: (604) 822-5143
E-mail: info@bcfn2.com
Internet: http://www.bcfn2.com

British Columbia Herb Growers Association
(BCHGA)
4607 23rd St.
Vernon, BC V1T 4K7
E-mail: membership@bcherbgrowers.com
Internet: http://www.bcherbgrowers.com

Canadian Association of Importers and Exporters
438 University Ave., Suite 1618
Toronto, ON M5G 2K8
Tel.: (416) 595-5333
Fax: (416) 595-8226
E-mail: info@caie.ca
Internet: http://www.importers.ca

Canadian German Chamber of Industry and Commerce Inc.
Internet: http://www.germanchamber.ca

In Montreal
1010 Sherbrooke St. W, Suite 1604
Montreal, QC H3A 2R7
Tel.: (514) 844-3051
Fax: (514) 844-1473
E-mail: info.montreal@germanchamber.ca

In Vancouver
750 W Pender St., Suite 1101
Vancouver, BC V6C 2T8
Tel.: (604) 681-4469
Fax: (604) 681-4489
E-mail: info.vancouver@germanchamber.ca

Canadian Manufacturers & Exporters Association
1 Nicholas St., Suite 1500
Ottawa, ON K1N 7B7
Tel.: (613) 238-8888
Fax: (613) 563-9218
E-mail: deborah.turnbull@cme-mec.ca
Internet: http://www.cme-mec.ca

Canadian Food Exporters Association
885 Don Mills Rd., Suite 301
Don Mills, ON M3C 1V9
Tel.: (888) 227-8848 or (416) 445-3747
Fax: (416) 510-8044
E-mail: info@cfea.com
Internet: http://www.cfea.com

Food Processors of Canada (formerly Food Institute of Canada)
1600 Scott St., Suite 415
Ottawa, ON K1Y 4N7
Tel.: (613) 722-1000
Fax: (613) 722-1404
E-mail: fpc@foodprocessors.ca
Internet: http://www.foodprocessors.ca

Quebec Agri-Food Export Club
668 Montée Montarville
PO Box 10
Saint Bruno, QC J3V 6B1
Tel.: (450) 461-6266
Fax: (450) 461-6255
E-mail: clubexport@clubexport.ca
Internet: http://www.clubexport.ca

Canadian Health Food Association
550 Alden Rd., Suite 205
Markham, ON L3R 6A8
Tel.: (905) 479-6939
Fax: (905) 479-1516
E-mail: mdawood@chfa.ca
Internet: http://www.chfa.ca

Saskatchewan Nutraceutical Network
105 North Rd.
Saskatoon, SK S7N 4L5
Tel.: (306) 652-2783
Fax: (306) 933-7208
E-mail: info@nutranet.org
Internet: http://www.nutranet.org

German Government Contacts

Embassy of the Federal Republic of Germany
1 Waverly St.
Ottawa, ON K2P 0T8
Tel.: (613) 232-1101
Fax: (613) 594-9330
E-mail: 100566.2620@compuserve.com
Internet: http://www.germanembassyottawa.org

Consulate General of the Federal Republic of Germany–Montreal
Marathon Building, 43rd floor
1250 Rene Levesque W
Montreal, QC H3B 4W8
Tel.: (514) 931-2277
Fax: (514) 931-7239
E-mail: 106167.425@compuserve.com

Federal Biological Research Centre for Agriculture and Forestry
(Biologische Bundesanstalt [BBA])
Königin-Luise-Strasse 19
D-14195 Berlin, Germany
Tel.: (49-30) 830-41
Fax: (49-30) 8304-2002
Internet: http://www.bba.de

Central Committee for Biological Safety
(Zentrale Kommission fuer Biologische Sicherheit [ZKBS])
Robert Koch Institute
Wollankstrasse 15-17
D-13187 Berlin, Germany
Tel.: (49-30) 4547-0
Fax: (49-30) 4547-3060
Internet: http://www.rki.de/GENTEC/GENENG/GENTEC_E.HTM

Consulate General of the Federal Republic of Germany–Toronto
77 Admiral Rd.
Toronto, ON M5R 2L4
Tel.: (416) 925-2813
Fax: (416) 925-2818
E-mail: 106167.430@compuserve.com

Federal Ministry of Consumer Protection, Food and Agriculture
(Bundesministerium für Verbraucherschutz, Ernährung und Landwirtschaft [BMVEL])
Wilhelmstrasse 54
10117 Berlin, Germany
Tel.: (49-30) 2006-0
Fax: (49-30) 2006-4262
E-mail: internet@bmvel.bund.de
Internet: http://www.verbraucherministerium.de

Federal Ministry of Education and Research
(Bundesministerium für Bildung und Forschung [BMBF])
Hannoversche Strasse 30
10115 Berlin, Germany
Tel.: (49-30) 1888-570
Fax: (49-30) 1888-575270
Internet: http://www.bmbf.de

German Industry Contacts

German Association for Natural Foods and Products
(Bundesverbande Naturkost Naturwaren [BNN])
Ebertplatz 1
50668 Cologne, Germany
Tel.: (49-0221) 139756-22
Fax: (49-0221) 139756-20
E-mail: BNN-Grosshandel@t-online.de
Internet: http://www.n-bnn.de

Duales System Deutschland GmbH
Frankfurter Strasse 720-726
51170 Cologne, Germany
Tel.: (49-2203) 937-260/1
Fax: (49-2203) 937-191

Federation of German Wholesale and Foreign Trade
(Bundesverband des Deutschen Gross und Aussenhandels)
Kaiser-Friedrichstrasse 13
D 5300 Bonn 1, Germany
Contact: Jürgen Hasler, Managing Director
Tel.: (49-3059) 0099-560
Fax: (49-3059) 0099-460
E-mail: Juergen.Hasler@BGA.DE
Internet: http://www.bga.de/bga/default.htm

German Research Foundation (Deutsche Forschungsgemeinschaft e.V. [DFG])
Kennedyallee 40
D-53175 Bonn, Germany
Tel.: (49-228) 8851
Fax: (49-228) 8852-777
Internet: http://www.dfg.de

German Importers

UBF Foodsolutions / Knorr Caterplan GmbH
Knorrstr. 1
D - 74074 Heilbronn
Tel.: 49 (0) 7131 / 501-1
Fax: 49 (0) 7131 / 501-206
E-mail: serviceteam@knorr-caterplan.de
Internet: http://www.knorr-caterplan.de

Felix Koch Offenbach Couleur & Karamel GmbH
Lindenstr. 170
D - 63071 Offenbach
Tel.: 49 (0) 69 / 985 4200
Fax: 49 (0) 69 / 985 42088
E-mail: office@koch-felix.de
Internet: http://www.koch-felix.com

Helm AG
Nordkanalstr. 28
D - 20097 Hamburg
Tel.: 49 (0) 40 / 23750
Fax: 49 (0) 40 / 2375-1845
E-mail: info@helmag.com
Internet: http://www.helmag.de

Interorgana Chemiehandel GmbH
Feldbergstr. 21
D - 60323 Frankfurt
Tel.: 49 (0) 69 / 710 0090
Fax: 49 (0) 69 / 710 00999
E-mail: info@interorgana.com
Internet: http://www.interorgana.com

Loryma GmbH
Am Falltor 7
D - 64673 Zwingenberg
Tel.: 49 (0) 6251 / 71071
Fax: 49 (0) 6251 / 73964
E-mail:info@loryma.de
Internet: http://www.loryma.de

Nordmann, Rassmann GmbH & Co.
Kajen 2
D - 20459 Hamburg
Tel.: 49 (0) 40 / 3687-307
Fax: 49 (0) 40 / 3687-249
E-mail: info@nrc.de
Internet: http://www.nrc.de

ESTA Food Ingredients GmbH
Eulenweg 20 b
D - 21337 Lueneburg
Tel.: 49 (0) 4131 / 46010
Fax: 49 (0) 4131 / 46089

Worlée Natur Produkte GmbH
Grusonstrasse 22
D - 22113 Hamburg
Tel.: 49 (0) 40 / 733 33-129
Fax: 49 (0) 40 / 733 33-290
E-mail: e.h.worlee@nr.worlee.de
Internet: http://www.worlee.de

Hipp Organic Ingredients
Georg-Hipp-Strasse 7
D - 85276 Pfaffenhofen
Contact: Mr. Johannes Schreiner
Tel.: 49 (0) 8441 / 757-519
Fax: 49 (0) 8441 / 757-455
E-mail: johannes.schreiner@hipp.de
Internet: http://www.hipp.de

Rudolf Wild GmbH & Co. KG
Rudolf-Wild-Strasse 4-6
D - 69214 Eppelheim-Heidelberg
Tel.: 49 (0) 6221 / 799-0
Fax: 49 (0) 6221 / 799-398
E-mail: info@wild.de
Internet: http://www.wild.de

Henry Lamotte GmbH
Postfach 10 38 49
D - 28038 Bremen
Tel.: 49 (0) 421 / 5239-0
Fax: 49 (0) 421 / 5239-199
E-mail: info@lamotte.de
Internet: http://www.lamotte.de

Flavex Naturextrakte GmbH
Postfach 11 40
D - 66775 Rehlingen
Tel.: 49 (0) 6835 / 9195-0
Fax: 49 (0) 6835 / 9195-95
E-mail: info@flavex.com
Internet: http://www.flavex.com

Raps & Co.
Adalbert-Raps-Str. 1
D - 95326 Kulmbach
Tel.: 49 (0) 9221 / 807 130
Fax: 49 (0) 9221 / 807 100
E-mail: info@raps.de
Internet: http://www.raps-co.de

European Union Associations

Federation of European Food Additives and Food Enzymes Industries
Avenue des Gaulois, 9
B-1040 Bruxelles, Belgium
Tel.: (32-2) 736-5354
Fax: (32-2) 732-3427
Internet: http://www.elc-eu.org
Provides a compact overview of additives in Europe

Trade Publications
Chemical Market Reporter
Schnell Publishing Co., Inc.
Two Rector Street
New York, NY 10006-1819
Tel.: (212) 791-4200
Fax: (212) 791-4310
Internet: http://www.chemicalmarketreporter.com

Food Ingredient News
Business Communications Company, Inc.
25 Van Zant Street
Norwalk, CT 06855-1781
Tel.: (203) 853-4266
Fax: (203) 853-0348
Internet: http://www.buscom.com/food

International Food Ingredients (IFI)
United Business Media
Ludgate House 245, Blackfriars Road
London SE1 9UY
United Kingdom
Internet: http://www.ifi-online.com

APPENDIX

European Community Regulations and Directives

• Directive 2000/13/EC lays out the main rules on labelling, presentation and advertising of foodstuffs marketed in the European Union.
• Annex II to the labelling directive lists the categories of additives that must be designated by the name of their category, followed by their specific EEC number.
• Annex III describes the way of designating flavourings in the list of ingredients.
• Directive 95/2/EC: authorization of food additives other than colours and sweeteners
• Directive 50/2000/EC: GM additives
• Directive 89/107/EEC: general harmonized additives
• Directive 94/35/EC: sweeteners
• Directive 94/36/EC: colours
• Directive 2202/46/EC: dietary supplements

All EC regulations can be downloaded from http://europa.eu.int/eur-lex/en/search/search_lif.html

Exporters might also find the following standards guides useful:

• "Traditional Herbal Medicinal Products Directive":
  http://europa.eu.int/eur-lex/en/com/pdf/2002/en_502PC0001.pdf
• "Restricted or Prohibited Herbal Ingredients":
  http://www.mca.gov.uk/ourwork/licensingmeds/
  herbalmeds/prohibit.pdf
• "Guide to What is a Medicinal Product":
  http://www.mca.gov.uk/inforesources/publications/gn8.pdf

BIBLIOGRAPHY

Print

Dun & Bradstreet. Exporters' Encyclopaedia. "Germany," 2002.

Economist Intelligence Unit. EIU Viewswire. "Germany: Economy: News Analysis: Another year of gloom," February 27, 2003.

Euromonitor. The Market for Over The Counter Healthcare in Germany. April 2002.

Freedonia Group. World Nutraceuticals to 2006. June 2002.

Leatherhead Food Research Association. Key Players in the Global Food Additives Industry -- 2nd edtion. March 2003

O'Donnell, Claudia D. "Ten Trends in Nutritional Ingredient Use," Prepared Foods. March 2003.

Reuters News. "German find more antibiotics in food from China," March 5, 2002.

Sauer, Pamela "It's feast or famine for food additives players," Chemical Market Reporter. June 17, 2002.

Wolfe, Scott. "Potential Benefits to Functional Foods and Nutraceuticals to the Agri-Food Industry in Canada," March 2002.

Electronic

Canada. Agriculture and Agri-Food Canada. "Functional Foods and Nutraceuticals," December 14, 2001. Downloaded from http://www.agr.gc.ca/food/nff/enutrace.html on October 18, 2002.

- - - . "Exports From Canada - Germany," August 2002. Downloaded from http://ats.agr.ca/stats/trade_data/UnitedKingdom_x08.pdf on October 31, 2002.

Germany. Ministry of Agriculture. "Agri-food Policy Report 2002." Downloaded from http://www.verbraucherministerium.de/ on March 28, 2003.

Just-food.com. "WORLD: Functional food continues to dominate producers' strategies," February 26, 2002. Downloaded from http://just-food.com/news_print.asp?art=50478 on March 3, 2003.

- - - . "E-number and food additives in the EU," February 28, 2002. Downloaded from http://justfood.com/news_print.asp?art=48964 on February 22, 2003.

- - - . "EUROPE: Colouring manufacturers must face challenge form colouring foodstuffs," April 16, 2002. Downloaded from http://just-food.com/news_print.asp?art=48964 on March 3, 2003.

- - - . "EUROPE: Ambitious reform planned for CAP," July 10, 2002. Downloaded from http://justfood.com/news_print.asp?art=50478 on March 3, 2003.

- - - . "EU: New GMO directive takes effect- but US remains skeptical," October 18, 2002. Downloaded from http://just-food.com/news_print.asp?art=52072 on March 3, 2003.

- - - . "EU: Ministers reach agreement on GM labelling," November 29, 2002. Downloaded from http://just-food.com/news_print.asp?art=52487 on March 3, 2003.

- - - . "EU: Committee calls for food additive safety review." January 24, 2003. Downloaded from http://just-food.com/news_print.asp?art=53304 on February 22, 2003.

- - - . "EU: Byrne GM move blocked by EU Member States," February 23, 2003. Downloaded from http://just-food.com/news_print.asp?art=53304 on March 3, 2003.

Nutraingredients.com. "Victory for Supplements Industry in European Parliament," October 25, 2002. Downloaded from http://www.nutraingredients.com/news/news.asp?id=5754 on October 25, 2002.

- - - . "Tesco Makes Move in Healthcare Market," November 12, 2002. Downloaded from http://www.nutraingredients.com/news/news.asp?id=5851# on November 12, 2002.

- - - . "European Sports Nutrition Enters Mainstream Market," November 13, 2002. Downloaded from http://www.nutraingredients.com/news/news.asp?id=5858# November 13, 2002.

OTHER REFERENCE MATERIAL

Useful Internet Sites

Agriculture and Agri-Food Canada. Agri-Food Trade Service: http://ats.agr.ca

Functional Foods and Nutraceuticals: http://www.agr.gc.ca/food/nff/enutrace.html

Biotechnology Regulatory Atlas: http://www.dti.gov.uk/bioguide

Canadian Food Inspection Agency: http://www.cfia-acia.agr.ca

Department of Foreign Affairs and International Trade: http://www.dfait-maeci.gc.ca

German Ministry of Agriculture: http://www.verbraucherministerium.de

Europa. The European Union On-Line: http://europa.eu.int

European Federation of the Intermediate Products Industries for the Bakery and Confectionery Trades (FEDIMA): http://www.fedima.org

European Food Information Council: http://www.eufic.org

EU Council Regulations: http://europa.eu.int/eur-lex

European Network for Scientific Research Co-ordination in Organic Farming: http://www.cid.csic.es/enof/index.html

ExportSource: http://exportsource.gc.ca

Food Ingredients.com: http://www.foodingredientsonline.com

InfoExport: http://www.infoexport.gc.ca

Saskatchewan Nutraceutical Network: http://www.nutranet.org

1 There is variation among sources for market data in the food ingredients sector. While it is a crucial part of the food and beverage industry, the sector maintains a low profile that is not clearly defined. Thus, much of the variation in the data can be attributed to sources including different products in their definitions of the product portfolio.

2 All monetary amounts are expressed in Canadian dollars, unless otherwise indicated. The conversion rate to Canadian dollars is based on IDD Information Services, Tradeline, March 2003.

3 Germany is member a of the European Union (EU). The EU is built on an institutional system which is the only one of its kind in the world. The Member States delegate sovereignty for certain matters, including international trade and commerce to independent institutions which represent the interests of the Union as a whole, its member countries and its citizens.

4 Euro-zone refers to the aggregate of countries in the EU using the euro as their sole form of currency. These countries are: Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Austria, Portugal and Finland

5 E-numbers is a system implemented by the European Union to regulate and harmonize food additives (see Actual and Planned Projects).

6 For contact information regarding key organizations mentioned in this report, see Key Contacts.

7 See Key Contacts and Support Services for a list of these importers