LIVESTOCK AND POULTRY
World Markets and Trade
October 1997

Country Brief: Venezuela's Beef Market

The sharp decline in Venezuelan beef consumption since 1990 practically equates domestic production to consumption, thereby minimizing imports. Niche markets for U.S.-style prime cuts are still a possibility. Beef livers for the processing industry are also sought from the United States, but other Latin American countries are becoming more competitive because of lower prices and duty preferences extended under regional trade agreements.

Note: Our thanks to the Office of Agricultural Affairs, Caracas, for this special report.

Summary

Per capita consumption of beef in Venezuela has decreased nearly 25 percent since 1990 due primarily to a prolonged recession and to shifts in consumption patterns resulting from declining incomes. At the current level of consumption, which is not expected to increase considerably in the immediate future, Venezuela is practically self-sufficient in beef. Due to lower production costs, as compared to those for poultry, pork, and fish, beef is one of the least expensive forms of animal protein on the market. Only 5 to 10 percent of the total beef supply is used by the meat processing industry to manufacture prepared meat products. More than 90 percent of all beef is consumed fresh. Consumers prefer custom cuts to pre- cut and pre-packaged or frozen products. Growing urban populations, establishment of large expatriate communities near mining and petroleum exploration sites, and the development of a tourist industry provide important opportunities to introduce U.S.-style prime cuts. Imports of carcasses and cuts have been minimal since 1992, representing less than 1 percent of total consumption. There is a slightly larger import market for beef offal, mainly for beef livers which are used by the processing industry. The United States has had substantial participation in imports; however, several Latin American countries have begun to displace U.S. imports due to lower prices and duty preferences granted to them under regional trade agreements.

Consumption Trends

Image: Per Capita Consumption

Consumption of beef in Venezuela in 1996 was roughly 346,000 metric tons or 15.5 kg. per capita. It is believed, however, that consumption is actually lower because official population statistics could under represent the actual population by 12 to 15 percent. Consumption of beef has decreased about 25 percent since 1990 due to an economic recession. Because of the recession, a large part of the population has had to reduce its consumption of animal protein and increased its consumption of starches because they are a cheaper source of calories. Beef consumption in the last three years, however, has dropped less than the consumption of other forms of protein due to its relatively lower price compared to poultry, pork, and fish. For economic reasons, consumption is not expected to increase significantly in 1997.

Market Segments

Consumption is divided between the retail sector and the processing industry. About 92 to 95 percent of supply is absorbed by the retail sector with the rest used to produce processed meat products.

In general, beef is custom cut for consumers at in-store butcher counters. A U.S.-style meat-packing industry does not exist in Venezuela; however, a couple of processors have recently begun to offer vacuum-packed cuts, but their acceptance is still marginal. Venezuelans are accustomed to lean beef because Venezuelan cattle is generally grass-fed. The most popular cuts are "Latin" ones that, in the United States, are only seen in supermarkets found in areas with large Hispanic communities. Pre-cut and pre-packaged beef is found only in a few hypermarkets, supermarkets and upscale butcher shops because the public still prefers to order specific weights and types of fresh beef on the spot. The only major exception to this rule is hamburger. Prepared and pre-packaged hamburger has found wide public acceptance since fast-food chains became popular about ten years ago.

Standard processed meat products are typically a 80:20 pork-beef combination, particularly in the case of frankfurters. There are very few all-beef products on the market. However, a few companies have begun to market all-beef frankfurters, and vacuum-packed pastrami and corned beef, but these are usually too expensive for the average consumer -- only upper-income sectors are familiar with beef delicatessen products. Most imported beef carcasses and industrial cuts are used by the meat processing industry. The principal processors and their 1996 beef consumption volumes are shown in the following table:

Domestic

At current levels of per capita consumption, Venezuela is virtually self-sufficient in beef. Production costs are relatively low compared to other forms of animal protein because cattle is grass-fed and raised on the country's abundant grazing land. Imports are minimal and occur when there are price disputes between cattlemen and slaughterhouses or cattlemen and the meat processing industry. In the last five years, imports of carcass beef and cuts have amounted to less than 1 percent of consumption. In the case of beef offal, particularly livers, there is a slightly larger market. The meat processing industry imports beef livers and some other offal for processed products, such as liver spread and inexpensive sausages. The market for processed meat products is small. Hotel and restaurants represent the best opportunity for increasing exports of premium, pre-packed U.S.-style beef cuts, and of processed products. The hotel and restaurant industry is growing along with the tourism industry in Venezuela. Another potential market for U.S. beef exports are expatriate communities consisting of employees of foreign companies that have recently invested in Venezuela's mining and petroleum sectors. These "expat" communities are located mainly in eastern and southeastern Venezuela.

Foreign

The United States is an important source of meat, offal, and processed products for the small market for imports of this kind. The U.S. has supplied 95 to 100 percent of imported offal in the last five years. However, Venezuela is party to several trade agreements with other Latin American countries that have occasionally displaced U.S. share in other categories. Imports are chiefly industrial-grade beef. (See tables below for more detail.)

Distribution Channels

Cattle is hauled by truck to industrial slaughterhouses that are usually located in the vicinity of production areas. Carcass beef is classified according to weight, body fat, and conformation into three retail grades (A, B, C) and an industrial grade. Many slaughterhouses have their own cold storage facilities and distribute directly to retail outlets. In other cases, beef is distributed by truck in half-carcasses to private cold storage facilities or to wholesalers and processing companies. Wholesalers are the normal suppliers of product to public markets, butcher shops, and supermarkets, although hypermarkets and larger supermarket chains buy directly from slaughterhouses. The principal cold storage facilities are Tazon, on the outskirts of Caracas, and Friosa, a private wholesaler in Puerto Ordaz. The largest municipal wholesale markets in Venezuela are the Mercado de Mayoristas de Coche in Caracas, and Mercabar in Barquisimeto; sufficient refrigeration facilities are lacking at both of these centers. In 1991, the Ministry of Transport and Communications transferred authority for management of Venezuelan ports to state governments. It is anticipated that this change in policy will result in major improvements in refrigerated storage facilities at ports and airports, and that their ability to handle imports and exports that require refrigeration will improve.

Health Standards

The sanitation of fresh and frozen beef are not closely monitored due to the relatively low utilization of beef in processing and limited imports. Norms #435-82 , #792-82, and #794-82 of the Venezuelan Industrial Norms Committee, COVENIN, contain the official norms for beef carcasses and meat handling. In the case of processed products, there are specific product definitions, shelf-life requirements, physical, chemical, and microbiological guidelines for ground beef (#2301-85), industrial-grade hamburger (#2127-84), frankfurters (#412-95), bologna (#1944-93), cold cuts (#3124-94), and corned beef (# 2069-83). Microbiological criteria for food products in general are contained in norm #409 and those for additives in norm #910. Product compliance with COVENIN norms is monitored by the Ministry of Health and Social Assistance, and compliance is required for product registration and import permits. Exporters should consult these norms before exporting into the market.

Health standards for processed products broadly follow Codex criteria. However, health standards may change because negotiations to harmonize the standards of all Andean Common Market countries are currently under way. Therefore, exporters should also consult the Cartagena Board (JUNAC), the Andean Common Market regulatory and dispute settlement body, Internet web site for current information concerning JUNAC sanitary norms.

Labeling

Processed beef products must comply with COVENIN labeling regulations indicated in norm #2952-92. Labels can be pre-printed on packages and cans or affixed with a sticker. Information must be provided in Spanish although information in other languages can also be included on the label.

Product Coding

Hypermarkets and most supermarket chains require bar-coded packaging. Venezuela uses the European Article Number (EAN) 13 digit bar code system; its identification number is 759.

Import Duties, Taxes, And Permits

Import Duties

Imports of chilled and frozen beef carcasses, cuts, offal, and processed products from non-Andean Common Market countries are subject to a 20 percent ad valorem duty assessed on the CIF price. Imports of these products from Andean Common Market countries and from Nicaragua, Guatemala, Honduras, El Salvador, and Costa Rica are duty-free. The following table shows the lower duties that several Latin American countries enjoy as a result of trade agreements with Venezuela.

Taxes

Although the Venezuelan government instituted a wholesale and luxury consumption tax of 16.5 percent on all imported products in 1996, beef, offal, and processed products are exempt.

Import Permits

To clear customs, imports must have a health certificate issued by a valid authority in the country of origin and two different local health permits, one issued by the Food Hygiene Division of the Ministry of Health and Social Assistance and the other by the Ministry of Agriculture. The Venezuelan Meat Industry Association (AICAR) usually obtains the Venezuelan permits for the processing industry for carcass imports. In the case of processed products, permits are handled by importers and distributors. All products that are subject to mandatory COVENIN norms also require a certificate of registration from SENORCA, the industrial norms and quality control agency of the Ministry of Industry and Commerce.

Table 1: Beef Carcass Imports, Chilled/Frozen
Table 2: Beef Cut Imports, Chilled/Frozen
Table 3: Beef Offal Imports
Table 4: Processed Beef Imports

Last modified: Thursday, April 06, 2000