Market Information
Southeast Asia

FOOD AND BEVERAGE
WHOLESALE/RETAIL SURVEY
BRUNEI

March 2000

CANADIAN HIGH
COMMISSION

Chong Vui Hiung
Ang Ley Bie
Audrey Choo

CONTENT

Section 1: Introduction Page

1.1 Background and Aim of the Survey 

Section 2: Results

2.1 Companies Surveyed 
2.2 Descriptive Data
2.2.1 Food and Beverages Currently Imported 
2.2.2 Types of Canadian Products Currently Imported 
2.2.3 Product Line Expansion 
2.2.4 Importing/Distributing Canadian Food and Beverage Products

Section 3: Conclusions

3.1 Findings from the Survey
3.2 Issues to be taken into account
3.2.1 Sample Pool 
3.2.2 The 'Halal' Issue 
3.2.3 Competition from Local and Regional Products 
3.2.4 Beverages 
3.2.5 Importing Directly from Canada 
3.3 Suggestions 

Company Index

1 INTRODUCTION

1.1 Background and Aim of the Survey

The Wholesale/Retail survey is the first of its kind being carried out by the High Commission of Canada in Brunei with consultation from the Universitiy Brunei Darussalam. According to the statistics provided by the Canadian High Commission, Brunei imports almost 90% of their food requirements. This indicates that wholesalers and retailers in Brunei currently import a large quantity of food and beverages. The main aims of the survey is to determine the types of food products that are currently being imported, as well as to determine whether any Canadian products are among the food products being imported by wholesalers and retailers in Brunei. We also hope to find out whether wholesalers and retailers in Brunei are interested in expanding the type of food and beverage products they are currently importing to include Canadian products.

The data for this survey were collected using an 11-item questionnaire, which was designed by the Commercial Officer of the Canadian High Commission. A list consisting of 25 wholesalers and retailers were drawn up and the survey questionnaires were distributed to them via fax. Twenty-three out of the 25 companies responded to the survey.

The survey report will provide general information to Canadian food & beverage exporters who are interested in the Brunei market. Attached is a list of potential importers in Brunei whom Canadian exporters may wish to contact.

To summarize, here are the two main objectives of the present survey:

• To determine the types of products that wholesalers and retailers in Brunei are currently importing, and the type of Canadian products, if any.
• To determine whether there is a potential for expanding Canadian food and beverage products into the Bruneian food and beverage import market.

2. RESULTS

2.1 Companies Surveyed

Questionnaires were circulated to the different companies by fax. Twenty-five companies were faxed a copy of the questionnaire and 23 W/R replied, giving us a return rate of 92%. Out of the 23 companies, 12 were Wholesalers, six were Retailers and the remaining five were Wholesalers and Retailers. Companies that were surveyed ranged in sizes, in terms of annual turnover and staff strength. Staff strength ranged from a minimum of only seven to a maximum of 350 people (with mean = 96). The table and graph below show the variation annual turnover of the companies:

2.2 Descriptive Data

2.2.1 Food and Beverages Currently Imported

To determine the type of food products the W/R surveyed are currently importing from various countries, eleven (11) food type categories were drawn up in the survey to indicate the type of products. These 11 categories are:

As the data above suggest, a large number of W/R currently import a variety of food products. This provides us an indication that there is a thriving market for food imports, especially Dairy Products, Snacks, Confectionary, and Canned Meat/Food/Vegetable, which are imported by more than half of the W/R surveyed. Other food products are also imported by W/R, with Deli Meats being the lowest in demand.

As with food, beverages that were currently imported were also surveyed. 4 categories of drinks were included in the survey:

2.2.2 Types of Canadian Products Currently Imported

6 out of the 23 W/R surveyed indicated that they are currently importing some Canadian food products. These Canadian food products are:

• Whipping Cream
• French Fries (frozen)
• Edible Oil
• Snacks
• Maple Syrup, Oil, Juices

2.2.3 Product Line Expansion

The W/R surveyed were asked whether they have any interest in expanding into any Canadian food products. Some W/R have indicated an interest in the various food categories, highest being the Snacks, Canned Meat/Food/Vegetable, Confectionary, Cereal/Health Foods, Dairy Products, and Syrups/Jams/Spreads categories, with between eight to 12 W/R indicating an interest in importing these products from Canada. The table below shows the number of W/R that are interested in importing the food types from Canada:

2.2.4 Importing/Distributing Canadian Food and Beverage Products

The W/R surveyed were also asked whether they have any long-term objectives, in terms of importing and distribution of Canadian food and beverage products. 10 (44%) wholesalers/retailers indicated that they would like to import directly from Canada, one (4%) is interested in going through Hong Kong, five (22%) through Singapore, two (9%) through Malaysia while three (13%) W/R had no plans. One W/R indicated they were interested in importing through another destination (though unspecified by the W/R). A summary of the figures is presented below:

It is important to note that some W/R who are interested in importing directly from Canada also indicated that they are interested in importing through another country (e.g. Singapore, Hong Kong, and Malaysia). Although a high interest is shown from W/R to import directly from Canada, it may not be viable and the reasons for this will be discussed below.

3. CONCLUSIONS

3.1 Findings From the Survey

The present survey was carried out to determine whether there is a potential market in Brunei for Canadian food and beverage products. From the present survey, we have found that a high number of W/R in Brunei are currently importing a variety of food products. With statistics provided by the Canadian High Commission suggesting that Brunei imports nearly 90% of its food requirements with an estimated B$400 million annual food import bill for a population of around 0.35 million people, we can see that the Brunei food import industry is thriving.

At present, Canadian food and beverage products have only a small footing in the Brunei imported food and beverage market. The types of Canadian products currently imported include French Fries, Edible Oil, Snacks, Maple Syrups, Whipping Cream and Juices. This shows that at the present moment, only a small area of the food and beverage market has been tapped, covering only three to four food categories out of the 11 categories that we have surveyed.

There is a huge potential to expand Canadian products into all the food and beverage product categories that are currently dominated by produce from other countries. It may also be very encouraging for Canadian exporters to know that most W/R that we surveyed indicated their interest in expanding into various Canadian products (as listed in Table 4), covering almost all of the food categories (except Deli Meats - reasons for lack of interest in this food category will be discussed later).

Therefore it is our suggestion that the Brunei import food market, though relatively small as compared with neighboring countries (e.g. Singapore, Malaysia), has room for Canadian products to be marketed in Brunei. At present, as reported by the Canadian High Commission, the top food exporter for Brunei is Singapore, followed by Thailand and Malaysia. Next on the list of importers is Australia, the USA and followed by Europe (please note that Singapore appears top of the list of importers not due to production but because Singapore is a transshipment center for products from other countries). Perhaps with the strategic planning and marketing, Canadian products can be introduced to compete with these food and beverage products that are currently imported.

3.2 Issues to be taken into account

There are several precautionary issues that have to be taken into account, i.e. issues pertaining to the nature of the survey, to rules and regulation that govern the importation of food products into Brunei. Let us look at the issues related to the survey first, and then we will look at issues with regards to rules and regulations within the Brunei imported food and beverage products market which Canadian exporters may wish to take into account:

3.2.1 Sample Pool

The survey questionnaires were sent out to 25 companies, and out of the 25 companies, 23 replied. Although we have a good return rate of over 90%, the sample pool is an underestimation of the actual number of wholesalers and retailers that are currently operating in Brunei. As we mentioned earlier, only the top 25 companies were surveyed and this may not give us an accurate figure on the annual turnover of wholesalers and retailers in Brunei. The exact number of wholesalers and retailers currently operating in Brunei is not available for the present survey, and wholesalers and retailers that are operating within the other 3 districts of Brunei were not surveyed (Brunei has four districts, namely Brunei-Muara, Tutong, Kuala Belait, and Temburong. Only companies operating within the Brunei-Muara district where the capital of Brunei is situated were surveyed). Hence figures for annual turnover of W/R may be underestimated and actual figures could be higher.

We shall now look at some of the potential problems Canadian food and beverage exporters may face when introducing their products into the Bruneian market:

3.2.2 The 'Halal' Issue

Brunei is a Muslim country which adhere strictly to religious regulations towards the types of food that can be sold and consumed by the Muslim population, which comprise more than 80% of the total population of Brunei. These regulations apply specifically to all meat products (chicken, beef, and lamb), including canned meat, as well as any food products which may contain animal by-products such as gelatin. Meat products that are sold in the Brunei market must be "halal". Halal food refers to meat products produced from animals that have been slaughtered and prepared according to Muslim rites. Food items with animal by-products as part of their ingredient are only considered halal if these animal by-products are obtained from animals that were slaughtered according to Muslim rites. Canned meat sold in Brunei must have a "halal" stamp on it if they are meant for consumption by Muslims. Hence any canned meat or deli meats that are imported into Brunei must have been slaughtered according to Muslim rites with a "halal" certification. Please take note that this does not include the following:

• Pork, which cannot be consumed by Muslims at all,
• Seafood such as fish, prawns, etc. which are not subject to the Halal regulation and can be consumed without restrictions.

Recently the Brunei Government has been very strict with non-halal food being brought into the country. It is therefore advisable for exporters to be cautious if venturing into this food category. Perhaps, due to this reason, none of the 23 W/R surveyed indicated any interest in expanding into the Deli Meat products. However, seafood products are not subject to halal regulations and therefore seafood products (e.g. canned fish, tuna, prawns, etc.) may be a potential food category that can be targeted.

Although pork cannot be consumed by Muslims, there is a small market within Brunei that caters to non-Muslims. Although, the amount of pork being imported is regulated, no pork and pork products are produced within Brunei.  All pork products have to be imported from neighboring states (e.g. Malaysia). Therefore pork products may be a potential market area where Canadian products may be able to venture into.

3.2.3 Competition from Local and Regional Products

Canadian products may face competition from the variety of local and regional products that are available in terms of costs, diversity and palatability. Cost may be a very important factor and these local and regional products may be more economical than Canadian products, which may be subjected to extra costs from shipping and tax. For example, in one supermarket surveyed, we found that Canadian produced maple syrup cost B$10.40 while other maple syrup produced from other countries cost an average of B$7.00. This also applies to Canola Oil from Canada which generally cost more than regionally-produced palm oil, which is still widely used for cooking. However, for the Canola Oil, the increasing health awareness among Bruneians may be an asset when marketing this food category. Perhaps Canadian exporters could target this and perhaps, through a Canadian Food Fair, educate Bruneians on the health benefits of low fat edible oil from Canada while at the same time marketing their edible oil products.

It is also important to mention that Brunei is a member of the Association of South East Asian Nations (ASEAN) which encourage intra-ASEAN trade, which may affect the importation of products. Hence products outside the ASEAN region may be subjected to import quota which may restrict the amount of products that can be imported from other countries. The favourable currency exchange may also encourage Brunei to import from neighboring countries such as Malaysia, Indonesia, Thailand, etc, which have lower currency rates than Brunei. Currently, Brunei dollars are at a par with Singapore Dollars, which has the highest rates among all the ASEAN countries ($1.00 Brunei Dollar is approximately $1.00-$1.10 Canadian Dollar).

3.2.4 Beverages

It is important to note that since Brunei is a Muslim country, there is strictly no importation of any form of alcoholic beverages. At present, alcohol may only be brought in for personal consumption from neighboring countries, under strict quota regulations. Canadian beverages such as mineral water, soft drinks, and fruit juices, may face competition from local and regional products. Most soft drinks are produced in the region and most are canned in Brunei (e.g. Pepsi, F&N soft drinks). Brunei produces their own mineral water as well (Sehat mineral water) and the import of mineral water is regulated by the government to give the Brunei produced mineral water a fair share of the local market.

3.2.5 Importing directly from Canada

Some of the W/R surveyed indicated an interest in importing their products directly from Canada. Perhaps this would cut shipping costs for Bruneian W/R by shipping direct, rather than going through regional transshipment ports. However, the amount of Canadian food and beverage products currently imported is very minimal and to ship directly from Canada would be highly impractical. This will only become a viable option when Canadian products are imported in larger quantities.

3.3 Suggestions

From what we have found in the present survey, we conclude that although the Bruneian food import market is relatively small, a potential market exists for Canadian food and beverage products in specific food categories (as listed in Table 4). W/R in Brunei are interested in expanding their product lines into Canadian food and beverage products, and at present the potential is largely untapped. More aggressive strategies such as raising awareness of the benefits of Canadian products (perhaps in terms of prices, palatability, and health issues) should be adopted if a venture into the Brunei market is planned. At present, Australian products enjoy an annual marketing program via an Australian Food Fair. Perhaps Canadian exporters should consider such a marketing strategy which will no doubt benefit greatly by raising awareness of the specific advantages that Canadian products may have over rival imported products.