In 2014, United Arab Emirates (UAE) spent 9.59 billion USD for food consumption. According to updated data on food commodities of Alpen Capital, due to population growth and high number of foreign tourists as well as high income per capita, consumption of foods in this area may reach 49.1 million tons in 2017. This figure shows the annual growth rate is 301% from 2012 to 2017.
Consumer’s income increase and UAE are more dependent on imported products, which will bring great opportunities for food exporters in Vietnam foods and beverages, particularly in the field of high-value processed foods. The processed food products account for over 50% of food consumed in the region (according to the statistics of the Business Monitor International). In addition, increase in food consumption is a challenge for the governments of the GCC but a opportunity for private companies to expand the scale of operation in this market.
Market Opportunities
Vietnam Food & drink exporters can find a lot of business opportunities in the UAE market. However, the market is highly competitive due to the open trade policy of the UAE.
UAE and Saudi Arabia has become the largest re-export center of the region due to their strategic geographical location. These countries have become an important link in the food chain of the region, supported by infrastructure development, favorable geographical location and transport routes (air, sea and road) developed at a high level.
The number of foreign tourist arrivals has increased rapidly and greatly affected, which has spurred demand for food products of high quality, organic and specialty. The opening of hypermarkets and super stores to help restore the retail sector, providing a variety of food categories with a wide selection of different flavor to the group of foreigners residing here. In recent years, there is a change in food consumption habits, consumers shift from traditional foods to western-style convenience foods.
Although the market has appeared the food processing company, there are significant gaps in capacity of processing and packaging food.
Some major food sectors can bring many opportunities, including:
- Fast food: the available foods, fresh foods, bakery and milk products
- Processed foods: Processed of fresh products, pre-cut vegetables, marinated meats, frozen foods and semi-processed / canned or processed
- Healthy food
- Organic food
- Soft drinks and flavored drinks
Competitive environment
Food vendors from around the world compete intensely to gain market. Some competitive factors include: cost of transport, the quality, price of goods, etc. Most domestic products is from exclusive agent and large supermarket chains, import some products directly from the abroad suppliers.
US companies dominate the high-quality food market and companies of Europe, with licenses from American manufacturers, dominating the grain market. Australia is one of the main supplier of beef and lamb. France, Australia, Britain and the Netherlands dominate cheese market.
Regulations of tariffs and import
UAE and other GCC member countries (such as Bahrain, Kuwait, Oman, Qatar and Saudi Arabia) are trying to unify the rules concerning labeling, product life cycle and food safety for the whole area. However, differences in the regulations by the Member States have not reached agreement, so each country will have separate rules.
UAE stipulate that foods and beverages imported into the countries are subject to import duties of 5% (excluding alcohol products). A certain number of products are exempt from this tax.
Alcoholic beverages are not allowed to use as raw material or food additive drinks. The import of pork and pork products are allowed, but there are very strict regulations. Food labels are not allowed to have pictures or recipes are not allowed to list pork or alcoholic beverages. Alcoholic beverages are sold in the UAE market, but the import is strictly limited, only allow licensed importers to import wines and spirits from around the world.
Health license to ensure the product suitable for human consumption is issued by the competent authorities of health care in the country of origin.
Source: VIETRADE
