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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
Mexico
The Mexican government does little export promotion. Services, such as buyers lists and overall market analysis are provided by the Mexican Commerce Ministry (SECOFI) and the Mexican Export and Development Bank (BANCOMEXT). Both SECOFI and BANCOMEXT have offices in seven of the largest cities in the United States which provide information and services to U.S. importers. They also support the participation of Mexican companies in U.S. fairs, trade missions and "Mexico Weeks" in department stores throughout the United States. No information is available on promotional expenditures for these organizations.
Competitor Activity:
Until 1986, the Mexican market was virtually closed to imports of most food and agricultural products. In the short time since the market has opened, imports of food and agricultural products have increased sharply. As a result of this growth, it is expected that most countries competing in the Mexican market will significantly increase their product promotion spending levels. Currently Canada, Australia, New Zealand, the EU countries, Argentina and Chile are our main competitors in Mexico. Grains, meat, fruits, dairy and processed products and forest products are the principal sectors where this competition is played out.
U.S. wheat, corn and malt face competition in the Mexican market from countries such as Canada (barley, wheat, malt), Argentina (corn and sorghum), Brazil (corn) and South Africa (corn). Canada has become more aggressive in promoting and exporting its feed grains and by-products through more frequent visits of Canadian trading groups that conduct both technical and commercial seminars throughout Mexico. Argentina has had a small market presence in Mexico, but is trying to improve its market share. Promotion budget estimates are $500,000 for Canada and $100,000 for Argentina.
A number of countries participate in Mexico’s meat market. These include: Canada, Denmark and Norway for pork; Ireland, Costa Rica, Finland, Panama, Honduras and Guatemala for beef; and New Zealand and Australia for beef and lamb. The Central American countries are seeking special access to the Mexican market for their beef products through their recent free trade agreements with Mexico. The European countries mainly use export subsidies to remain competitive. Australia, New Zealand and, increasingly, Canada use export promotion through trade servicing as their main competitive tool. This includes trade team visits and translation and distribution of brochures and sale catalogues. Seminars and supermarket promotions are expected to become more common in the future. It is estimated that expenditures for meat promotion are $200,000 for Australia, $100,000 for New Zealand and $75,000 for Canada.
Chile, Canada and New Zealand are our principal foreign competitors for fresh fruit such as pears, apples, and kiwifruit. Greece is also a major competitor for canned peaches. These countries primarily compete on the basis of price, although New Zealand did spend $30,000 on in-store promotions for its apples which have been discontinued. New Zealand does aggressively promote its kiwifruit, organizing sales missions to and from Mexico, participating in trade shows and conducting retail demonstrations, product sampling and support to retailers. In order to protect the product’s origin image they have changed the name of kiwifruit from New Zealand to "Zespri". Substantial product or cash bonuses are also given to importers based on the quantity of fruit they sell. It is estimated that New Zealand’s budget for kiwifruit promotion is $250,000. Greece and Chile are our main competitors for canned peaches. Greece, benefiting from generous subsidies, has more than half of the canned peach market.
Cheese and processed products are promoted through advertising, in-store promotions and food shows, but no expenditure information is available. New Zealand and EU countries are our principal foreign competitors for cheese, while Canada, Argentina, Chile and the EU countries are our main competitors for processed products such as wine, confectionery, canned foods and bakery items.
Canada is our main competitor for forest products, organizing seminars and reverse trade missions and promoting the use of timber frame housing. The Council of Forest Industries of British Columbia (COFI) is active in Mexico. The Chilean Producers’ Association also maintains a presence in Mexico City. No expenditure information is available for either Canada or Chile.
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