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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
The United Kingdom
UK efforts to promote domestic and export sales of agricultural products are coordinated by Food from Britain (FFB), a quasi-governmental agency established in 1983. It employs about 65 full-time staff -- 25 in London and the rest in its overseas offices. Food from Britain spent about $12.4 million in 1995/96 of which about 56 percent came from the government (about $6.9 million). Industry membership fees, consultancy fees, publication sales, and exhibition fees account for the remainder of FFB’s budget. About $5.8 million is spent on promotional activities. The rest is used to cover overhead expenses such as office space and salaries.
U.K. Promotion Activity:
UK government promotion: Food from Britain maintains offices in Belgium, Denmark, France, Germany, Italy, Japan, the Netherlands, Spain and North America (Marietta, Georgia). About 70 percent of Food from Britain's budget is directed toward export markets in the EU, North America and Asia. The offices in Denmark and Japan were opened late in 1995.
Food from Britain offers export marketing and promotion services to the UK's value-added food products industry. Such services include market intelligence reports, trade missions, participation in Food from Britain pavilions at international trade exhibitions, advice on advertising and public relations in export markets, and putting exporters in contact with retail outlets for in-store promotions.
Food from Britain receives financial support from the United Kingdom’s Department of Trade and Industry (DTI) for its pavilions at international trade shows (about 50 percent of space rental costs and 40 percent of pavilion construction costs). No set annual budgeting is provided by DTI, but funds are allocated upon request. Food from Britain’s trade show participation charges are structured to achieve a full-cost recovery on those costs not subsidized by DTI.
The UK Ministry of Agriculture, Fisheries and Food (MAFF) also conducts some trade promotion activities such as overseas fact-finding tours, trade fairs outside the EU and Ministerial trade missions. No expenditures were available for MAFF agricultural product activities
Producer promotion organizations: The Meat and Livestock Commission (MLC) promotes beef, pork, lamb and other red meats. MLC’s promotion budget was estimated at $18 million in 1996/97, although only about $250,000 was spent on export promotions. MLC is funded almost entirely through producer levies. MLC's export marketing program has been severely curtailed because of BSE-related import bans in its major beef markets. During this past year, it provided promotional materials to supermarkets in France and Spain which were running UK lamb promotions and assisted UK pork traders in making contacts with Japanese buyers.
British Cereal Exports (BCE) promotes exports of British cereals. It is estimated that BCE spent $660,000 on export promotion in 1995/96. BCE continues to promote exports of malting barley under a 3-year program sponsored by the Department of Trade and Industry. BCE’s officials accompanied the Agricultural Minister on a trade mission to China in late April 1996. One of the mission objectives is to seek a share of the large Chinese market for malting barley.
A new promotion effort, the Horticultural Export Bureau, was opened in Louth, Lincolnshire, in July 1996. The Bureau is funded by a grant from the Ministry of Agriculture, Food and Fisheries of $225,000 annually for 3 years. Industry members match this amount with their own. contributions The Bureau conducts trade servicing through a database of UK producers/exporters and overseas customers and will collect market intelligence for dissemination to the horticultural industry. In its first year of operations, the Bureau concentrated on export expansion of vegetables, salad and processed salads. Fruits will be introduced next year, followed by flowers and plants in the third year. Initially, the Bureau’s efforts are focused on other EU countries.
The Scottish Salmon Board promotes Scottish salmon in the U.K. and abroad. In 1996 its promotion budget was approximately $2.5 million, $910,000 of which was spent outside of Great Britain. The board conducts promotional campaigns aimed at retailers and wholesalers. Scottish salmon producers are under pressure from imported Norwegian salmon. This will lead to a reduction in funding for the board. The June 1997 agreement between the EU and Norway to resolve a dumping/subsidy complaint against Norwegian salmon will not alleviate this pressure because the agreed minimum import price is still below Scottish production costs.
Competitor Activities:
Most of the European, and many other promotion groups are active in the U.K. market, especially with wine, meat and fruit promotions. No budget information is available but direct advertising expenditures are available from a British media consultant. French wine exporters spent about $4.5 million on advertisements, while Australia, Bulgaria, Italy and Germany also promoted their wine with smaller expenditures. Denmark and New Zealand each spent about $1.4 million promoting pork and lamb, respectively. The Netherlands also promotes its pork in the U.K. France, New Zealand the Netherlands and South Africa each spent over $500,000 advertising their apples, pears, citrus and other fruits and vegetables and Israel’s Citrus Marketing Board also has a substantial budget for promotion activities in the U.K. Most of these expenditures are producer financed. All of these countries also participate in trade shows, and some, such as Canada, France, Chile and Israel also use in-store promotions. Most of the wine promotions include trips to the host country wineries for local journalists.
A number of countries also promote forest products in the U.K. These include the Malaysian Timber Council which has an office with more than 5 people, the Timber Export Development Board of Ghana, three Canadian provincial associations, the Nordic Timber Council which spends more than $400,000 per year and the French Office du Bois which is a major competitor in the market for temperate hardwoods.
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