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THE COMPETITION IN 1997
U.S. and
Competitor Expenditures on Export Promotion and
Export Subsidies for Agricultural, Forestry and Fishery Products
Germany
Germany is the world's largest importer of food and agricultural products. The Government of Germany does not maintain an official export promotion system for agriculture. However, agricultural export promotional activities are conducted by a quasi-governmental agency, the German Central Marketing Agency for Agriculture (Centrale Marketing-Gesellschaft der Deutschen Agrarwirtschaft or CMA) and by private sector wine promotion organizations. Total funding for CMA and the private sector wine promotion organizations was $29.5 million in 1996.
German Promotion Activity:
CMA was established under the auspices of the 1972 Agricultural Sales Promotion Act, which stipulates that the German food industry (producers and processors) must contribute a certain portion of their proceeds to the promotion agency. In 1993 this law was revised to increase the contributions for producers of some products. Most of CMA’s funds come from producer checkoffs. Approximately three-quarters of CMA’s estimated $104-million budget is dedicated to domestic promotion activities. About 70 percent of CMA’s funds come from the meat and dairy sectors. A major component of CMA’s marketing efforts remains the emphasis on food quality with its CMA Seal of Quality for German food products.
CMA's funding for export promotion in 1996 was $25.5 million. CMA's export promotional efforts primarily focus on other EU markets (approximately 70 percent of German agricultural exports are sold to other EU countries). Its export activities include arranging trade shows, seminars and advertisements, finding foreign importers, offering subsidized booths at trade shows and subsidization of a clearing house to connect firms to distributors overseas. Its export efforts in general are concentrated on promoting meat, dairy products, bakery products, sweets, juices, beer and wine.
CMA maintains foreign offices in Belgium, France, Great Britain, Greece, Italy, Japan, Spain, and the United States. It is looking increasingly at Brazil, China and Eastern Europe. CMA promotes all agricultural products except wines, forest products, and fish. Major promotional tools employed by CMA include: in-store promotions, advertising, and participation in agricultural, food, and beverage trade fairs.
The promotion of German wines is carried out independent of CMA by two organizations, the "Deutscher Weinfond" (German Wine Fund) and the "Deutsches Weininstitut" (German Wine Institute). The activities of the Deutscher Weinfond and the German Wine Institute are conducted on a generic basis. The two organizations coordinate their activities and are managed jointly by two executive directors. Export promotion funds for the two organizations totaled $4 million in 1996.
The Deutscher Weinfond was established in 1961 by a Federal Act on "Wine Industry Affairs" that was last amended on October 18, 1990. It is supported by the German wine industry and legally accountable to the Federal Ministry of Food, Agriculture and Forestry. Wine growers pay DM 130 (about $80) per hectare of vineyard area; wine traders, producers, and bottlers pay DM 130 per hectoliter of grape must or wine.
The Weinfond is primarily responsible for non-profit industry related activities and supports programs such as the use of advertising and public relations agencies. The Weinfond has created an international network of press offices located in public relations agencies or bilateral Chambers of Industry and Commerce in most important export markets for German wines, including the United Kingdom, Ireland, the Netherlands, Belgium, France, Italy, Sweden, Japan, the United States, Canada, Brazil and Mexico.
The German Wine Institute was founded as a private company in 1949 under the name "Deutsche Weinwerbung" (German Wine Promotion). Its current shareholders are the German Wine Growers Association, the Federal Association of German Wine and Spirits Merchants and the Deutscher Weinfond. The Institute's overall strategy is developed by the shareholders and monitored by a supervisory board. The German Wine Institute is financed by income generated from its activities and by contributions from both the Deutscher Weinfond and individual wine-producing states.
The Institute conducts activities with an independent staff. Export marketing activities sponsored by the Institute include: public relations and advertising, international trade fair participation, special events, information services and communication, sales promotion and development, and development of point-of-sale materials. The Wine Fund has created an international network of press offices at public relations agencies or bilateral Chambers of Industry and Commerce in important export markets for German wines. Wine promotion activities have taken place in such countries as Great Britain, Japan, the United States, Canada, the Netherlands, Belgium, the Nordic countries, Denmark, France, Brazil, Ireland, Mexico, South Korea, Southeast Asia, Eastern Europe and the Baltics.
Competitor Activity:
Most competitor activity in Germany is by other EU member states. For example SOPEXA, the government funded French market promotion organization, has an office with a staff of 25 in Dusseldorf. Its promotions focus on wine, cheese, meat, fruit, vegetables and seafood. In 1996 this office spent $9.4 million on advertising, public relations, supermarket promotions, trade shows and the promotion of wine on the Internet. Bord Bia, the Irish food promotion agency, also has an office in Dusseldorf which primarily promotes Irish meat. Its funding is from both government appropriations and producer contributions. The Dutch meat and horticultural bureaus, funded exclusively by producer levies, are also active in Germany. Italy and Spain promote their agricultural products in Germany, as well. The Norwegian Seafood Export Council recently launched a major promotional effort in cooperation with Germany’s largest seafood wholesaler. This is a year-long campaign involving retailers and caterers.
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