Expenditures and Activities of
Cairns Group Countries
Argentina maintains two national export promotion programs that emphasize processed or high-value products, primarily through trade fairs and trade missions. The chief government-assisted programs are PROMEX (Non-Traditional Agricultural Exporters' Program) and Export-AR (a Foreign Ministry program to encourage exports by small firms). Promotion funding for these two programs was $4.4 million for 1998. Several provincial governments also run programs emphasizing key regional products; however, these programs are much smaller. They often work with the two national organizations to do activities. Argentina is developing a strategy to capitalize on increased consumer interest in wholesome foods by promoting its products as "natural". Argentina developed the marketing theme "Argentine Food--A Natural Choice" several years ago, and continues to use it in most of its promotional activities. Because organic production is growing, that sector receives increased funding emphasis. Major markets for export promotions are the United States, Europe, Latin America, and Asia, especially Japan.
Argentine Export Promotion
Promex, an agency of the Secretariat of Agriculture, has helped promote a narrow range of products--such as fish, spices, fruits and vegetables, wine, flowers and animal products--by partially subsidizing attendance at international fairs and providing market information. Formally, these funds were targeted at small businesses, but recently, the program has been adjusted to assist more products, these include apples, organic products, pears and beef, produced by larger companies. Helping these other industries export benefits the country. However, small industries still receive priority. Promex also works with regional organizations, such as ProMendoza, located in the province of Mendoza, to promote regional goods in foreign markets, and with MAPO, the organic organization. Promex invites international brokers to Argentina to visit smaller local firms that would not be able to travel to other destinations to promote their wares. Due to inherent risk, Promex concentrates on expanding exports of products already present in a given market, consulting with the private sector as to which products have the best potential in a foreign country.
Promex has received loans from the World Bank since 1992, but the funding terminated recently. The program may be supported only by Argentine government funding, unless additional international loans are secured. Promex pays all actual show costs, such as stands and show services, but does not pay travel costs for officials of participating companies.
Funds are allocated to those industry groups or individuals pass a competitive cost/benefit evaluation based on international market information and in-house research. The program is administered by a private/public sector committee, chaired by the Secretariat of Agriculture, and supported by a staff of eight people in Buenos Aires.
Export-AR is a government/private sector program administered and funded by the Ministry of Foreign Affairs. It promotes exports of all Argentine products, including agricultural goods. Export-AR has 55 offices throughout Argentina, with market database links to 108 diplomatic offices overseas, as well as six Export-AR offices covering the United States, Europe, and Brazil. Export-AR purchases space for exhibitors. At trade shows, exhibitors pay for travel and living expenses. Export-AR services include a listing of commercial opportunities, a Mercosur report, market briefs, lists of foreign buyers, export opportunities, foreign trade assessments, foreign trade data, and participation in shows, fairs and trade missions.
Promex and Export-AR are for export promotion only. Argentina does not have official or private organizations dedicated to promoting domestic consumption of agricultural products. Producers are not required to contribute funds to either public or private institutions for market promotion in either domestic or export markets.
Argentina does not operate any other export expansion programs. However, farm groups have discussed the possibility of creating, together with the Argentine government, checkoff programs to promote dairy and beef exports. As currently presented, the funds created by this program could reach $12 million for each product, financed by the processors and farmers. The beef program has been in discussion for three years, but has not been activated.
Promotional activities by foreign countries are expanding particularly by Mercosur members. Argentina has one of the highest GDP's in South America, at nearly $9,000 per year. The food distribution sector is modernizing rapidly, which is allowing greater introduction of imported food products.
Several EU members are the most active countries in market promotion organized by government or quasi-government organizations. Spain is the most active, followed by France, Italy, and Germany. Other active countries include Australia, Canada, Mexico, and Argentina's fellow members or associate members of Mercosur, mainly Brazil, Uruguay, and Chile. However, Mercosur promotion by the Mercosur tends to be more carried out by the private sector, in part because the Mercosur countries are geographically closer and less in need of centrally organized activities.
Market promotion activities by other countries consist of trade missions, supermarket promotions and participation in food shows. Supermarket promotions are becoming more common. Germany, for example, sponsors a show annually, featuring one of the top retailers. Because of the high cost of advertising and promotion in Argentina, substantial funds are needed to conduct the event.
Food shows are the most common and cost-effective way to introduce and expand the presence of imported foods in Argentina. Many countries participated in SIAL Mercosur 99, an international food show held in Buenos Aires, and organized by SIAL/Paris and the Council of Food Manufacturers of Argentina (COPAL). Exhibitors and visitors agreed that this show was very successful in providing an opportunity to promote their products and develop business contacts. The success of this show demonstrates how dramatically the situation has changed in Argentina and the Mercosur countries for trade in food and beverage products. Government-assisted country pavilions included those from Spain, France, Germany, Italy, Canada, China, and Thailand.