Agri-Food News from Europe

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 1 of 48 Opportunities DO-05/08-01 A German company is looking for Canadian exporters of peanut butter and wild pacific salmon (MSC certified, frozen in blocks of 7.5 kg, colour 13+, no bits and pieces, full container loads). Interested companies should contact the Canadian Consulate in Duesseldorf with reference to box number DO-05/08-01. ZI-05/08-02 A German importer is looking for Canadian suppliers of organic pulses. Interested companies should contact the Canadian Consulate in Duesseldorf with reference to box number ZI05/08-02. BI-05/08-03 A Swiss importer is looking for Canadian exporters of plant oils for the production of biodiesel. Interested companies should contact the Canadian Consulate in Duesseldorf with reference to box number BI-05/08-03. HA-05/08-04 A German company is looking for Canadian exporters of the enzyme called ‘trypsin’ as well as suppliers of casings. Interested companies should contact the Canadian Consulate in Duesseldorf with reference to box number HA-05/08-04. HK-05/08-05 A German importer is looking for Canadian exporters of dried cranberries (conventional and organic). Interested companies should contact the Canadian Consulate in Duesseldorf with reference to box number HK-05/08-05. GF-05/08-06 A German company is looking for Canadian exporters of maple syrup (bulk, conventional and organic). Interested companies should contact the Canadian Consulate in Duesseldorf with reference to box number GF-05/08-06.

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 2 of 48 Activities 2009 January

International Green Week, Exhibition for the Food Industry and Agriculture, Berlin, Germany, Jan 16 – 25, 2009, www.gruenewoche.de ISM, International Trade Fair for Sweets & Biscuits, Snacks Cologne, Germany, Feb 1 – 4, 2009, www.ism-cologne.de

February

Fruit Logistica, International Trade Fair for Fruit and Vegetable Marketing Berlin, Germany, Feb 04 – 06, 2009, www.fruitlogistica.de BioFach, World Organic Trade Fair, Nürnberg, Germany Feb 19 – 22, 2009, www.biofach.de

March

INTERNORGA, International Trade Fair for the Hotel, Restaurant, Catering, Baking and Confectionery Trades, Hamburg, Germany Mar 13 – 18, 2009, www.internorga.de Equitana, Equestrian Sports World Fair, Essen, Germany March 14 – 22, 2009, www.equitana.de ProWein, International Trade Fair for Wine and Spirits Düsseldorf, Germany, March 29 – 31, 2009, www.prowein.de

April

SIAL Montréal, Le Salon International de l’Alimentation, des Vins, Boissons et Spiritueux / International Food, Beverage, Wine and Spirits Exhibition Montréal, Canada, April 01 – 03, 2009, www.sialmontreal.ca ESE, European Seafood Exhibition Brussels, Belgium, April 28 – 30, 2009, www.euroseafood.com

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 3 of 48

TRADE FAIRS IN EUROPE - REVIEW INTERMOPRO, INTERCOOL AND INTERMEAT ATTRACTED 37,000 TRADE VISITORS Duesseldorf trade fair quartet recorded increase in visitor numbers

From September 28 until October 1, 2008, the food retail trade was attracted to Duesseldorf. Three international food fairs for chilled products were held under one roof, accompanied by ‘hogatec’, the specialty fair for the hotel trade, gastronomy and canteen services. All in all an interesting program which offered something to everyone willing to search the trade fair halls and cover long distances. Düsseldorf is a ‘first-class-menu’ said trade fair organisers, whose resume of the four-day event was throughout positive. InterCool, InterMeat and InterMopro underscored their positions as the major sectoral platforms for dairy produce, deep-freeze food, meat and sausages, while hogatec 2008 scored again as the number one fair of technology and design for the hotel trade, gastronomy and canteen services. Despite some self-promotion, the (sheer) figures of the four events prove them right. Exhibitor numbers hardly changed from 2006: The three food fairs counted 965 international exhibitors from 31 countries in 2006, compared to this year’s 970 exhibitors from ‘more than 30 countries’ and 500 exhibitors at ‘hogatec’. However, visitor numbers were nearly twice as much this time: 70,000 compared to 36,351 visitors in 2006. But figures say only little about the visitor quality: Did all the top decision-makers, which are expected to attend a specialty fair, find their way to Düsseldorf? The conditions were met: The triangle between Rhine and Ruhr hosts many Headquarters of German food retailers, with short distances to Belgium and the Netherlands. Where else would decisionmakers be able to use one ticket to visit four specialty fairs which present a comprehensive line of new products, concepts and services to the food and HRI trade? The number of top managers visiting the fairs once again increased from 2006. Nearly all decision-makers of the German and the Benelux food trade were present. Most of the foreign visitors came from the Netherlands and Belgium, followed by Austria, Switzerland and Italy. Besides, the trade fairs recorded more visitors from Eastern Europe, mainly from Poland, Romania, Bulgaria and Russia. […] Source: TK-Fisch Convenience 6/2008

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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TRADE FAIRS IN EUROPE - PREVIEW PROSWEETS COLOGNE TO TAKE PLACE FOR THE THIRD TIME, FEBRUARY 01 – 04, 2009 ProSweets Cologne will be taking place for the third time, and the trade fair is once again generating increased interest on the part of exhibitors. In all product segments, the fair will feature not only returning exhibitors but also numerous companies that will be exhibiting for the first time; more than 200 suppliers have already registered. For the first time the trade fair will take place entirely in parallel to ISM, the International Sweets and Biscuits Fair in Cologne (from 1st to 4th February 2009). As in 2006 and 2007, the focus will be on the entire spectrum of suppliers offering products for the production, processing and packaging of confectionery products. The fair encompasses the product segments ingredients (raw materials and other ingredients), confectionery packaging and packaging technology, machines and plants for the confectionery industry, and secondary segments such as food safety and quality management. A total of 289 suppliers from 26 countries presented their products and services at the last ProSweets Cologne, which took place in January 2007. About 10,700 trade visitors, including 6,500 from abroad, took advantage of the opportunity to gather specific, sector-focused information. In 2009 the synergy effects realized with ISM will be even greater thanks to the completely parallel dates of the two fairs. Design workshop and special show "healthy fruits" Complementing the range of products and services will be the fair's supporting programme, which will generate further momentum. The design workshop organised in cooperation with Berlin company Berndt & Partner, for example, will once again offer expert advice and assistance with packaging development. Under the title "Packaging Experience", trade visitors will be able to better understand the impact packaging has and how it is perceived. ProSweets Cologne also will present a special show focusing on ingredients, with a "healthy fruits" theme. The four partners of ProSweets Cologne will once again be taking part in a presentation forum on all trade fair days. The conceptual sponsors of ProSweets are the Association of the German Confectionery Industry (BDSI), SG, DLG and the Central College of the German Confectionery Industry (ZDS). At ProSweets Cologne and the leading trade fair ISM, Koelnmesse presents the confectionery industry's entire value chain at one trade fair location, from individual raw ingredients and process and packaging technology to the packaging itself and the product ready for retail sale. www.prosweets.com Source: Sweets Global Network 9/2008

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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CONFECTIONERY MARKET GERMANY: CONFECTIONERY IMPORT AND EXPORT GROWTH According to BDSI, first half of 2008 the import of the German confectionery market has increased in value 9.4% worth €1.3 billion, the volume reduced slightly to 450,034 tons (compared with the previous year: 450,296 tons). The Netherlands was the main supplier, its shipments accounted for €348.5 million (+6.3%) in value, followed by Belgium with €207.2 million (+0.4%), France with €146.2 million (+6.7%), Poland with €70.7 million (+14.3%). Austria on the fourth place with an increase of 24.8% worth €70.2 million left Italy (€67.4 million, +11.7%) and Spain (€51.9 million, -9.3%) behind. Main suppliers are the Netherlands and – among the non-EU countries – Switzerland Among the non-EU countries Switzerland came up with a considerable increase in import up to 16,033 tons (+11.3%) and in value 20.6% to total €86.2 million. Turkey, second in the ranking, increased shipments to Germany +14% (worth €47.7 million) during the first half of the year. Austrian exports of chocolate grew even faster: by 27% in volume and by 43.3% in value to total €37 million. In its turn, the German confectionery exports grew 15.8% in value compared with the previous year and totalled €1.98 billion during the first six months of 2008. The shipments grew considerably also in volume (+8.8%) up to 683,300 tons. Exports of sugar products, snacks and ice-cream performed particularly well. The German chocolate tablets, chocolate bars, followed by gum bonbons and chocolate pastry are very popular abroad. German confectionery exports to Russia have grown 22.5 percent The majority of the German confectionery exports (nearly 85%) are shipped to the EU-countries. The major consumers apart from the EU countries are Switzerland, USA and Russia, followed by Norway and Australia. The export to the USA has increased in the first part of the year, in spite of the dollar’s weakness at the time (3.4%). The exports to Russia have grown 22.5% in value over average. Source: Sweets Global Network SG 10/2008

GENERAL FOODS GERMAN FOOD RETAIL TRADE After years of stagnation, the German food retail trade is raising its prices in 2008 Strong price increases on raw material markets, especially for grains and milk, had a strong effect on sales prices in the German food retail trade during the first half of 2008: Average price increases amounted to 6%. When listing the product groups according to their price increase rates, products made from grains and cereals are leading the list, followed by dairy products, which record the second highest growth rates in the second half of 2007. The price spiral continues to turn. Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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GENERAL FOODS – CONT’D German food retail trade

Increase of retail prices in the German food retail trade Calendar weeks 1-27/2007

Calendar weeks 1-27/2008

+24.3%

+36.8%

Pasta, dry

-0.1%

+28.9%

Breadcrumbs, dry

+2.4%

+26.8%

Convenience bakery products

-6.4%

+24.3%

UHT milk

+2.3%

+23.1%

Fresh milk

+2.9%

+22.5%

Curd cheese

+4.1%

+21.6%

Cream products

+1.5%

+21.1%

Sweetened condensed milk

+1.3%

+20.3%

Cheese

+0.2%

+19.1%

Flour

Source: Information Resources GmbH, Ms. Birgit Bruns, [email protected]

TURNOVER IN THE GERMAN FOOD RETAIL TRADE UP TO €157 BILLION IN 2007 The total turnover of German food retailers amounted to nearly €218 billion in 2007, of which €157 billion were realized with food and drugstore items and €60 billion with non-food products. After realizing a food turnover of €151 billion in 2006, the industry recorded an increase of some 4% this year, whereas the turnover with non-food items was up by only 1%. The figures are based on a study called ‘Top Companies 2009’, the latest of a yearly study of the German food retail trade published by ‘Trade-Dimensions’. The Edeka-Group remains market leader – their total turnover increased by 3.1% to €36.3 billion. This is partly due to the comprehensive marketing activities for their 100th anniversary and the ongoing growth of their discount chain ‘Netto’. The Cologne ‘Rewe-Group’ ranks second, after increasing their turnover by 4.5% to €32.6 billion in 2007. For the first time, they squeezed Metro from second place, which might be due to the new concept of Rewe’s supermarkets as well as longer opening hours. With regard to food turnover, Edeka is again No. 1, followed by Rewe, ‘SchwarzGroup’ (Lidl and Kaufland) and Aldi. The top 10 realized a turnover of €187 billion in 2007, thus representing almost 86% of the market. The 30 leading retailers reached a total turnover of €212 billion, accounting for 97.2% of the market. Just about €6 billion are left for the remaining companies, i.e. a market share of 2.8%. Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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GENERAL FOODS Turnover in the German food retail trade up to €157 billion in 2007 When comparing the long-term development of turnover and market shares in the whole-range food retail trade (i.e. self service department stores, consumer markets, supermarkets and self-service shops) compared to the development of the discounters, there is no doubt about the winner: the discount segment. While the turnover of whole-range retailers has been stagnating at about €87 billion for the last 15 years, discounters have more than doubled their turnover, up by €31 billion to €61.3 billion. All of the growth has been realized by discounters alone; their market share increased from 25.8% to 41.3%, while that of the remaining food retail trade dropped from 74.2% to 58.7%. For 2008, experts anticipate an increase in turnover of 2.1% to EUR 222 billion.

Edeka-Group Rewe-Group Schwarz-Group Aldi-Group Metro-Group Tengelmann-Group Lekkerland Schlecker dm Norma Rossmann Globus Bartels-LangnessDohle-Group Coop Bünting Netto Nord Tegut Müller Ratio Handelshof Wasgau K + K Klaas + Kock Kaes Dennree Feneberg Jomo Alnatura Budnikowsky Karstadt

31995

20326 19646

23511

14452 8690 7742 5762 2715 2486 2076 1998 1755 1190 1131 1088 943 880 777 557 541 477 468 346 301 275 270 254 251 237

Food turnover in € million (gross)

Source: FischMagazin 11/2008

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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FRUITS AND VEGETABLES APPLE SEASON BACK TO NORMAL

After the record in 2007, the European harvest is bound to be sufficient German apple growers are looking forward to a good season 2008 / 09. Benefit for consumers: Prices will get back to normal. “We’re anticipating a normal apple season”, says Helwig Schwartau, Head of Market Reporting with ZMP (Center for Market Research) in Hamburg. According to their figures, the domestic apple harvest should amount to 945,000 tons, i.e. 155,000 tons less than in the record year 2007, but still in the mid-range of the last 10 years. Some areas, however, complain about hail damage, so that the share of retail quality products will likely be smaller. On the European level, supply had been scarce in 2007 but will be sufficient this year: After a moderate harvest due to frost damage in 2007, the 27 EU Member States anticipate an average harvest of some 10 million tons. Last year’s high apple prices in the food retail trade will likely come down to a normal level of 80 Cents to EUR 1.99 per kg. “After a shortage over the past months the situation is now changing”, say market experts. The first early varieties have been sold in the food retail trade since the beginning of July, but the German main harvest of ‘Elstar’, ‘Gala’ or ‘Red Holsteiner Cox’ will not start before the first weeks of September. The other most popular varieties like ‘Jonagold’, ‘Jonagored’ or ‘Braeburn’ ripen more slowly and should be available as of early October. A study of ZMP based on the household panel of the Consumer Research Institute (GfK) reveals that domestic apple varieties are increasingly popular: in 2007, 56% of the total German apple sales were produced in Germany. Four years ago, more than 51% of the apples were imported. Source: Lebensmittelzeitung No. 35, August 29, 2008

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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ORGANIC MARKET ORGANIC – BUT CHEAP, PLEASE! A study by ACNielsen revealed the top sellers among organic products, why consumers buy organic and where they still see growth potential. Fresh fruit, vegetables, dairy products, poultry and eggs – these are the favourite organic products in the food retail trade, found market researchers ACNielsen (www.acnielsen.de). Their study “ShopperTrends” also informs about buying motives of the target group: Every third consumer is convinced that organic products are beneficial to their health, while only 23 percent are prepared to spend more money for organic products, compared to 41 percent which are unwilling to pay more. In respect of different product segments, the study further reveals strong supporters and opponents among organic consumers – and a huge number of indecisive shoppers. Here, market researchers see the largest growth potential for organic products, since many customers are still not well informed. At least 74 percent of the 1,500 interviewees already know organic products.

Have you purchased organic products during the last 4 weeks?

Do you know organic products?

No 66%

Yes 74%

Yes 34%

No 26%

Do you plan to buy organic products next time? 24% 27%

Very likely Likely Maybe

25%

Unlikely 12%

12%

Very unlikely

Source: Lebensmittelzeitung Direkt 08/2008

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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ORGANIC MARKET – CONT’D ORGANIC BAROMETER 2008: TRUST BONUS FOR ORGANIC RETAILERS German organic customers mainly trust food from the specialist organic food shop when it comes to quality, but the majority of consumers still prefer to buy their organic products in supermarkets and discount stores. These are the essential results of the Organic Barometer 2008, which is prepared by the market research institute TNS Emnid on behalf of the German Ministry of Agriculture (BMELV). Some 1,000 Germans were interviewed at the end of October 2008 for the annual representative study, which shows that 53% of Germans occasionally buy organic products and 17% even buy them frequently. Almost a third (29%) of those interviewed said they never buy food with an organic label. The figures, which are almost identical with last year's survey, show that in the meantime organic products occupy a permanent place in consumers' shopping trolleys. For 66% of those interviewed, the most important aspect of buying organic food is to avoid pesticide residues. 37% meanwhile consider climate protection is especially important. www.oekolandbau.de/journalisten Source: Biofach Newsletter No. 185, November 28, 2008

ORGANIC FARMING FOR HEALTHY DRINKING WATER Bioland is currently focusing attention on biodiversity. Farms protect nature and especially promote flora and fauna, like the Wassergut Canitz farm, for example. This farm is located in the glacial valley of the River Mulde, in the water catchment area of Leipzig. At the end of the 70s, the nitrate levels in the water here almost reached the critical limit of 50 mg/l. The Leipzig waterworks therefore converted the farms to organic farming after reunification. The land had previously been farmed intensively using conventional methods. Organic farming has meanwhile halved the nitrate values (20-30 mg/l). www.bioland.de Source: Biofach Newsletter No. 175, July 11, 2008

ORGANIC NOTES The New Grammar School in Nuremberg has offered all pupils a 100 % organic meal since October and has installed the first organic milk shake vending machine in Germany. Source: Biofach Newsletter no. 184 of November 14, 2008

ORGANIC GRAIN PRODUCTION IN GERMANY The Center for Market and Price Reporting estimates that German farmers produced a total of 573,000 tons of organic grains this year, which corresponds to a 3%-increase compared to last year. Source: Lebensmittelzeitung No. 45, November 7, 2008

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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FISH AND SEAFOOD BIG FISH OUT OF THE FREEZER Fish and pizza are the most popular frozen food products in Germany. For the first time, frozen fish has pushed Italian pizza from its first place. But pizza manufacturers are convinced to resume their lead position by the end of the year. No matter whether it’s natural or breaded – fish is currently the No. 1 in German freezers. According to the German Institute for Frozen Food (DTI), frozen food sales in the retail trade and among bulk consumers increased by 5.4% last year, accounting for almost 300,000 tons. ‘Natural frozen fish’ is especially popular: The Germans consumed 66,100 tons of it, i.e. an increase of 6.6% compared to the same period in 2006. Another top seller is fish fingers, the classic frozen fish product. Last year, the per capita consumption reached a new record high of 23 pieces – ten years ago, the per capita consumption was at only 14 pieces per year. All in all, the Germans consumed almost 1.886 billion fish fingers in 2007. ACNielsen reported that – for the first time - the industry realized frozen fish sales of more than €1 billion last year, thus surpassing the long-time No. 1, frozen pizza. In the first half of 2008, frozen pizza resumed its first place, if only marginal, accounting for sales worth €547 million compared to frozen fish with sales worth €541 million. All in all, the industry is highly satisfied with this development. ‘Costa Meeresspezialitäten GmbH’, a branch of ‘Apetito AG’, realized an increase in turnover of 8% in the first six months of 2008. “The growth is mostly due to the development in the fish fillet segment, but crustaceans were also very successful and accounted for double-digit growth rates”, reports Malte Benesch, Brand Manager. ‘Costa Pacific Prawns’ is still a very successful product in their portfolio. According to their own figures, ‘Costa Pacific Prawns’ is the most sold prawn product in the food retail trade which recorded an increase of 7% compared to the previous year. “Prawns are driving growth in the frozen fish segment. For the first time, the food retail trade will sell more prawns than fish fingers this year”, expects Benesch. Strong demand for fish fillets In the fish fillet segment, Costa is very successful with their marinated products like ‘salmon fillets in dill-lemon sauce’, which accounted for a growth of 70 percent. Benesch also has an explanation for this trend: “The consumer appreciates the quality of our products and the huge selection of our ‘Costa’ line.” Competitor ‘Iglo’ in Hamburg also reports strong growth for their fish fillets. “Sales in this segment increased by 29 percent in the first half of 2008”, says Roland Tobias, General Manager of ‘Iglo’. Besides, ready fish meals are stirring up the market. New impetus comes from seasonal varieties of ‘Schlemmerfilet’ products (white fish fillets with herb/sauce topping). In the first six months of 2008, the Hamburg company realized a growth of 5% (in terms of value). The turnover with brand products accounts for some €235 million. “We were able to strengthen our leading position in the market by extending our market share to 20 percent”, Tobias happily explains. This might also be due to the sales of classic fish fingers, but this is not enough. ‘Iglo’ plans to push the segment even further through the launch of new varieties such as their launch of ‘Chilli fish fingers’ in spring 2008. Generally speaking, German consumers are very open towards new fish varieties and products. Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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FISH AND SEAFOOD Big fish out of the freezer Although the Germans have a preference for frozen Alaska Pollack, redfish and salmon, more exotic varieties are paving their way into the market. “Pangasius, Tilapia and red mullet are in part the reason why German consumers are eating more fish”, explains Steffen Neubauer, Director Retail Sales with ‘Deutsche See GmbH’. The company based in Bremerhaven tries to boost this trend through innovations. Just recently, they launched scallops and cod fillets in organic quality. Neubauer still sees huge potential for organic fish products. Apart from the convenience aspect, consumers are developing a stronger environmental awareness, and the company will try to take this into account. Further MSC-labelled and organic products are already planned. Main objective of the Marine Stewardship Council (MSC), which was founded by the WWF and Unilever in 1997, is to insure the sustainability of global fish stocks. The association based in London has created a blue ‘MSC’ label, with which it honours sustainable fishing management. ‘Femeg GmbH’ based in Bargteheide also relies on the MSC label. “New trend varieties like tilapia, barramundi and hoki fillets, which we recently added to our range, and which are only available with MSC label, have developed very positively”, explains General Manager Christian Fülbier. “Whole fish has been just as successful, and not only classic fish varieties like trout or mackerel, but also sea bass available in a 750 gram portion pack.” Potential for convenience Fülbier is convinced that premium convenience products still bear huge potential. Femeg is currently introducing a line called “The new kitchen”. It consists of four new products – fish meals which can be prepared in only 15 minutes. “What is special about these products is that all ingredients are packaged individually so that they can be cooked right to the point”, explains CEO Fülbier. Low cooking time is also key for a new product from ‘Costa’. The company will be launching a prawn ring with cocktail sauce which only has to be defrosted. “That’s how we can win new consumers for this segment”, says Malte Benesch. Manufacturers of frozen pizza, however, are unimpressed by the success of frozen fish products. The industry is confident to re-assume the lead position in this segment by the end of the year. “In the first half of 2008, we surpassed the frozen fish segment”, confirms Hans-Wilhelm Beckmann, Marketing Manager Frozen Food with Dr. Oetker. According to him, the market growth of frozen fish is mainly price-driven due to price increases for raw materials. His competitor, Wagner Tiefkühlprodukte GmbH, has no doubt about who will come out first by the end of 2008. “Frozen pizza has been and will be the top seller in the freezer. We estimate that this segment will realize a turnover of €1.1 billion by the end of the year”, forecasts Anke Barge, Spokeswoman with Wagner. Growing market share Pizza manufacturers are very satisfied with the development in the first half of 2008. According to their own figures, Wagner GmbH was able to increase their turnover of ‘Wagner’ brand products by 4.6%. The development is mainly due to their ‘original stone oven pizza’. “Here our market share rose from 21.6 to 22.2 percent”, says Barge. The winner, however, is their ‘Tarte Flambée’ (Flammkuchen), whose sales increased by 14.6% during the first half of 2008. Source: Lebensmittelzeitung No. 38, September 19, 2008

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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FISH AND SEAFOOD MSC LABEL INCREASINGLY IMPORTANT In May and June, more than 40 new fish products labelled ‘MSC’ (Marine Stewardship Council) were introduced in Germany. Thus, Germany is following Great Britain as the country with the second largest number of MSC-certified products in the food retail trade (almost 250 articles). With regard to sales volumes, one third of the total MSC labelled products are sold in Germany. Source: Lebensmittelzeitung No. 32, August 8, 2008

MEAT MARKET PORK INDUSTRY CONCERNED Export prospects dismal – EU world market share declining – dispute about piglet castration The recession following the worldwide financial and economic crises might cut the demand for pork, not only in Germany, but worldwide. However, the European Union still expects that EU pork exports in 2008 will greatly exceed last year’s levels. Third country exports of the 27 member states are expected to top last year’s level by 590,000 tons or 30.1 percent, thus accounting for 2.48 million tons. In 2009, the German slaughter pig market will largely rely on exports, or else pork prices might (again) be declining. Dietmar Weiss of the Center for Market and Price Reporting (ZMP) expects that in 2009, the number of slaughter pigs will again reach this year’s record level of 5 million tons. Thus, Germany would be the third largest pork producer in the world, following behind China and the US. To clear the market in 2008, a total of approx. 1.9 million tons of pork would have to be sold beyond German borders. A positive development certainly is Germany’s recent market access to countries like China and Japan. Gerd Müller, Parliamentary State Secretary at the German Federal Ministry of Education and Research, explained that after the opening of the Chinese market, a few last details still have to be discussed and the German companies in question will have to be certified for the market. Hong Kong, on the other hand, is already open to German suppliers; from January until August 2008, they have been exporting some 100,000 tons of pork to Hong Kong. German pork and poultry breeders might soon explore another new export destination in Asia: After signing of a bilateral trade agreement, India has opened its market to German pork and poultry. The current poultry consumption in India amounts to some 2.2 million tons per year; by 2017, the consumption is forecast to increase to 3.5 million tons annually. The outlook for the pork industry is by far not as positive – the annual pork consumption in India reaches some 524,000 tons, the figure is expected to rise to 600,000 tons by 2017. Soon, China will not only be the world’s leading pork manufacturer, but also the largest pork importer worldwide, says Knud Buhl of the ‘Danish Meat Association’. Despite their efforts to meet the domestic pork demand on their own, China’s import share – currently still small – is forecast to grow. Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 14 of 48

MEAT MARKET – CONT’D Pork industry concerned From January until August 2008, EU pork exports to China and Hong Kong amounted to 425,000 tons, accounting for 24 percent of the total third country exports of the EU. Although Buhl expects the EU pork production to remain stable, its current share of the global market will be decreasing (currently at 23.1%), since leading producer and import countries will increase their own production. While China’s total production amounts to 48 million tons (50.1%) in 2008, Buhl expects this market share to grow by 14.8 % to reach 55.1 million tons by 2012. During the same period, the global pork production is forecast to grow by 9.4% to 104.8 million tons.

1998 in mln tons

2008* in mln tons

2012* in mln tons

2012 vs. 2008 in %

EU-27

22.1

22.1

22.1

0.0

China

38.8

48.0

55.1

+14.8

USA

8.6

10.1

10.5

+4.0

Brasil

1.7

3.2

3.8

+18.8

Canada

1.3

1.8

1.9

+5.6

Russia

1.5

2.0

2.3

+15.0

*estimated figures

Balance of products in Germany in million tons 5.11 5.08

4.47 4.39 1.85 1.92

Consumption

Export

2008*

1.2 1.22 Import

Production

2009*

*estimated figures Source: Lebensmittelzeitung No. 48, November 28, 2008

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Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 15 of 48

BEVERAGES HIGH DEMAND FOR LIGHT WINES Non-alcoholic wines are getting increasingly popular – sales booming The demand for ‘light’ wines and sparkling wines has been increasing over the last years. Several million bottles are produced every year. With their motto “Quite something – but without alcohol”, Europe’s largest manufacturer of nonalcoholic sparkling wines, Schloss Wachenheim, promotes ‘light live’, their alternative to regular sparkling wines, whose sales have been soaring in Germany. “In the past business year, we sold almost 5 million bottles of ‘light wines’ – an increase of 5.5 percent – and the trend is unbroken”, says Uwe Moll, Board Member Marketing and Sales of “Wachenheimer Sektkellerei”. EAZ - Entalkoholisierungszentrum Baden Württemberg (Center for Detoxication Baden Wurttemberg) has seen the same development: Until recently, the company located in Waiblingen produced less than 1 million bottles of non-alcoholic wine on behalf of other companies. “For the first time, we will produce more than 5 million litres this year”, says General Manager Jürgen Peterhans. EAZ mostly produces by order of vintners who sell the finished product under their own label. Both producers see the reason for the growing popularity of non-alcoholic wines in a trend towards a healthier lifestyle. “Health conscious consumers are fully enjoying themselves, since ‘light’ sparkling wine has few calories”, explains Uwe Moll. ‘Light’ wines are just as positive: Their calorie-content is about one third of their alcoholic counterparts. However, they are not entirely alcohol-free. “Products can be called alcohol-free, if they contain less than 0.5%”, explains Hans Hieronimi, expert for wine law based. With an average alcohol content of 0.2%, ‘light’ wines are well below the legal benchmark. Even ‘Sauerkraut’ (choucroute) and rye bread have higher alcohol content.” The target group for non-alcoholic wines and sparkling wines does not only include health conscious consumers, but also pregnant women, diabetics, sportsmen and business people. “Our customers belong to different age groups and social classes, we cannot determine the typical buyer”, explains winery Carl Jung, whose founder developed the ‘Carl-Jung-method’ to ‘de-alcoholise’ wine in vacuum. This procedure allows to keep most of the aroma, but the most important flavour carrier– the alcohol – is gone. “The taste is very different from that of alcoholic wines, but non-alcoholic wine should not be compared to grape juice, because it is produced from already fermented wines.” Compared with the total German wine production of 9 million hectolitres, non-alcoholic wines and sparkling wines are still a niche product. Thus, the German per capita consumption of non-alcoholic wine accounted for only 6 cl in 2007. Source: Lebensmittelzeitung No. 35, August 29, 2008

GERMAN BEER CONSUMPTION DOWN IN THE FIRST HALF OF 2008 The Germans drink less beer, as per the latest figures of the German Brewers’ Association. National beer sales dropped from 52.5 million hectolitres to 51.6 million hectolitres in the first six months of 2008, i.e. a decline of 1.7%. Following are sales figures by region compared to the last year: Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 16 of 48

ALCOHOLIC BEVERAGES German beer consumption down in the first half of 2008 Berlin / Brandenburg: +9.2%, Schleswig-Holstein/Hamburg: +7.3%, all other Federal States report negative results. The smallest decrease was reported for Saxony (-0.7%), the highest was noted for Thuringia (-6.0%). Even Bavarian beer drinkers consumed less of their favourite barley drink: Bavaria realized a decline in turnover of -1.3%, Northrhine-Westfalia reported -2.4%. These two States account for the largest sales volumes in the first half of 2008: 11 and 12.5 million hectolitres respectively. Source: AGHZ online, Article published on August 7, 2008

‘INTERWHISKY’: 600 WHISKY BRANDS AT UNDER ONE ROOF This year’s specialist fair ‘InterWhisky’ (November 21-31, 2008) showcased more whisky brands than ever before: 600 different products were presented and available for tasting, said trade fair organizer Christian Rosenberg. ‘InterWhisky’ combines a trade fair with tasting opportunity and a cultural program, which again attracted a lot of visitors. Many leading whisky manufacturers were present, such as Maxxium (e.g. Jim Beam, Highland Park, Macallan), Diageo (Johnnie Walker, Caol Ila), Pernod Ricard (Ballentine’s, Chivas Regal, Jameson), Borco (Loch Lomond, Kilbeggan), Bacardi (Jack Daniel’s, Dewar’s), Campari (Glen Grant) or Underberg (Glenfiddich). Specialist seminars provided an overview of the international whisky market. For the first time, a jury awarded prices for the best whisky bar, the best whisky shop and best whisky innovations. Source: Lebensmittelzeitung No. 47, November 21, 2008

MISCELLANEOUS FOODS SKY-HIGH SPICE PRICES German spice producers are currently fighting substantial price increases and must also cope with problems in procurement markets. The increasing dollar price is intensifying the situation. According to the Spice Industry Association, times of low harvests and higher demand have nearly doubled the price of caraway in comparison to the previous year. The price for coriander rose by over 25 percent, tomato powder increased by circa 15 percent. Prices for additives like phosphates (a 100 percent plus over 2007), ascorbic acid (20 – 50 percent plus) and citric acid-based products (30 – 40 percent plus) have skyrocketed in comparison to prices of the previous year, becoming virtually incalculable. In addition, spices are traded around the world nearly always in dollars. The increasing dollar price in recent months has led to a creeping price increase for spices of 10 – 15 percent. According to the Spice Industry Association, the current cost increases are affecting the very substance of companies. www.gewuerzindustrie.de Source: Die Fleischerei, Issue 11, November 2008

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Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 17 of 48

MISCELLANEOUS FOODS STRONG APPETITE FOR PASTA

Germans love pasta. Even the price increases during the last twelve months could not change this. Despite massive price increases over the past 12 months: The German appetite for pasta is undiminished. Ninety-three percent of German households consume pasta regularly. The per household consumption slightly decreased during this period, dropping by 200 grams and now accounting for 9.2 kg. This shows that Germans are clearly pasta fans, but they are far behind their neighbours in the mother country of pasta – Italy. Last year, the per household consumption in Italy reached 35 kg. In turn, the slight decline in German pasta consumption might be due to price increases. Pasta producers reacted to exploding raw material prices of wheat which lead to significant price increases in some parts. Spaghetti is a good example to demonstrate this, as this is the most popular variety of German and Italian consumers (60%), also called ‘Varietà di Pasta numero uno’ in Italy. Top brands as well as private label producers raised their prices for spaghetti – while Aldi sold 500 grams of spaghetti for about 33 Cents in May 2007, consumers had to pay 59 Cents twelve months later. This corresponds to a price increase of 77%. But the Germans love their pasta so much that sales remained almost stable (minus 0.8%), while the turnover increased by 15.2% due to higher end consumer prices. Thus, the German food retail trade realized a turnover of pasta worth €765 million between May 2007 and April 2008. Turnover figures were particularly strong due to whole wheat pasta sales. New production methods create the same taste experience for whole wheat varieties, but they offer additional fibres, minerals and vitamins. In light of growing health awareness, sales of whole wheat pasta increased by 61%, turnover was up by 54%. Over the past year, whole wheat pasta accounted for only 3 percent of the total pasta market, but brand producers are all picking up the new trend. The forerunner is, of course, the market leader for Italian pasta. In March 2006, a new sub brand for whole wheat pasta entered German pasta shelves. Since then, the market leader was able to increase whole wheat pasta sales by 64%. The new varieties are particularly popular with young couples without kids and families with kids. Here, the consumption is clearly above the German average. Since pasta and especially Italian pasta never goes without the proper sauce, turnover of non-chilled Italian instant sauces increased by 7% while sales rose by 4%. The growth is mainly due to pesto varieties and tomato pasta sauces. The third product group within this segment, white sauces, is stagnating: Last year it realized growth rates of more than 50 percent, but now accounts for a share of turnover of only 4%, i.e. a decline in turnover of 2.2%. All in all, some 49,300 tons of pasta sauces and 463,000 tons of pasta were sold in Germany in 2007; 46% bought pasta and sauces in combination. The per household consumption of pasta sauce reaches 1.9 kg (Italy: 2.4 kg). Red pasta sauces are by far the most popular variety in Germany - 39.3%, i.e. 15.6 million households bought ‘tomato basil’ or ‘arrabiata’, clearly ahead of ‘pesto’ (16.8%) and white cream sauces (4.8%). Main distribution channel for non-chilled, Italian pasta sauces are discounters (45%), followed by the traditional consumer markets with 37%. With regard to turnover, (mainly) smaller consumer markets (1,000 – 2,499 square metres) show a positive development: their increase in turnover reached 15%. Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 18 of 48 Source: Lebensmittelzeitung No. 28, July 11, 2008

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Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 19 of 48

European Market

CONFECTIONERY TO COST MORE IN EUROPE Salty snacks and sweet biscuits are the key drivers of growth on the European confectionery market. In all European countries the price of confectionery has risen, however. Regina Schubert, confectionery expert at The Nielsen Company, takes a close look at the European price barometer. Over the past year (August 2007 – July 2008), the European confectionery business has achieved very satisfactory growth, averaging 4.8%, with sales up to €39.5 billion. The UK continues to rank first among Europe’s confectionery-loving nations (sales were worth €10.6 billion, +4.3%), although Germans are catching up fast (€10.3 billion, +4%) as regards spending on chocolate, sugar confectionery, salty snacks and sweet biscuits. France ranks third (€6.8 billion) and Italy fourth (€5.0 billion). Confectionery sales growth was particularly rapid in the Benelux states and in Spain, with rates of between 6% and 10%. Salty snacks are winners In Europe as a whole, sales of salty snacks and sweet biscuits grew at above average rates. Salty snacks do not only drive sales in Germany but also in the UK, Italy and Spain. In France they are less popular, and sales increased only modestly. By tradition chocolate confectionery is a great favourite n the UK, Germany, France and Belgium – yet growth rates in these countries varied considerably. In France and Germany growth was well above average while in the UK, Spain and Belgium sales grew slower than average. In all, chocolate confectionery sales grew faster than the market: sales of sugar confectionery on the other hand were up only slightly. Sweet biscuits remain hugely popular in Italy – as exceptionally rapid growth in this product category reveals. Confectionery sales value is growing not only because demand is increasing but also because prices have risen throughout Europe. The ACNielsen European confectionery price barometer collects and compares the retail prices of leading branded confectionery items from ten categories in various European countries. Prices were reviewed during June and July 2008 then compared with the same period the previous year. The comparison revealed price increases across the board. Confectionery to become more expensive On average, the price of a basket of identical branded confectionery items, as selected by ACNielsen, was up by €3.2, almost hitting the €20 mark. Prices increased most in Germany (+5.9%) and in the Netherlands – interestingly, the two countries where confectionery prices had been lowest up until now. The confectionery basket cost €17.78 in Germany – still over €2 cheaper than the European average of €19.85. Enjoying confectionery thus remains a reasonably priced pleasure in Germany, compared with Spain – where consumers will pay €23.01 for the same basket of confectionery products, the highest price in Europe. In Belgium the basket now costs over €20; in Italy and France the price is also above the European average.

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Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 20 of 48

European Market – Cont’d Confectionery to cost more in Europe The situation in the UK was rendered exceptional this year due to the declining pound. In local currency, British consumers paid only 0.8% more for their basket of confectionery compared with the previous year – the lowest increase reported. In Euros, and in consideration of currency translation effects, the price is down by 8%. Of course the British consumer is not paying in Euros but in pounds, so in effect confectionery has not become cheaper on the British market. In all European countries reviewed, the food retail sector remained the most significant channel for confectionery by far (market value share 82%). Growth in this channel was an above average 5.5%. Impulse channel and drugstore sales grew only slightly. The German food retail sector was able to extend market share to 89%. In most other countries growth in the food retail sector either matched or was above overall rates. In Germany the hardline discounters play a considerable role in driving food retail sector growth in general, and confectionery sales in particular – while strengthening their own position. Aldi, Lidl and Norma achieved considerable growth after extending their brand business by means of numerous promotions. Increases in the price of salty snacks and biscuits were lower in discount stores than in other food retail stores. Due to increased prices, the food retail sector is gaining in importance. This in turn is impacting on the impulse channel, which in most countries has been losing market share to big retailers. Exceptions are Spain and France, where impulse channel sales have benefitted from growth and gained market share. Impulse channel loses out The impulse channel is also traditionally strong in the UK and Italy. One third of all confectionery sales in the UK are generated in impulse channels; in Italy over 17%. This can vary considerably from category to category. In the UK, for instance, 50% of all sugar confectionery sales are realised in impulse channels, and 39% of chocolate sales. This is hardly surprising given that price differences between these channels are lowest in the UK. In Italy almost 40% of sugar confectionery sales are generated in impulse channels. Nevertheless, in both countries impulse channel market share loss was higher than average – an indication that consumers in Italy and the UK are becoming more price conscious. Source: Sweets Global Network SG 10/2008

EU ORGANIC MARKET The European organic market continued to grow in 2007. Germany remained the largest sales market for organic products in the EU, accounting for a turnover of €5.4 billion with an organic share of 3%. The area for organic cultivation increased by 7% and reached a share of about 5.2%. Source: Lebensmittelzeitung No. 26, June 27, 2008

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Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 21 of 48

European Market – Cont’d

Organic food turnover in Europe - 2007 in € million / % of total food turnover

Germany

5450 18%

UK

3330 2000

France Italy

1850 789

Switzerland Denmark

9%

8%

530

Netherlands

519

Sweden

478

Finland

18%

739

Austria

Belgium

17%

283 82

22% 13% 26%

16% 10% Source ZMP, article published in “Der Handel.” 11/2008

EU PROJECT TO CUT CERTIFICATION COSTS The certification processes are associated with considerable costs for organic farmers. The Certcost project (Economic analysis of certification systems for organic food and farming) that started on September 1st, 2008 aims to optimize the certification procedures European-wide. The project is funded with a total of €2.7 million from the 7th EU Research Framework Programme. Besides FiBL, nine other European institutions are participating, including the Aarhus University, Denmark, Aberystwyth University, Great Britain, Ege University, Izmir/Turkey, and Kassel University, Germany. The project is directed by Professor Stephan Dabbert of Hohenheim University. www.fibl.org:80 Source: Biofach Newsletter no. 184 of November 14, 2008

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Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 22 of 48

European Market – Cont’d

SOYA ON THE MENU IN EUROPE Research from RBB Economics has reveals that the European soya market has grown by 19 % over the past 2 years. Over that same period, more than half a million European households added soya products to their menu: in Belgium for example, nearly 80,000 families were introduced to soya. Interestingly, soya coexists along dairy products rather than replacing them. In 2008, 370,000 tons of soyfoods (“soya milk”, soya desserts, “soya creams”, etc.) were retailed in Europe. The total of soya products represents 1.5 % of Europe’s dairy industry. The term “soya milk” still cannot be legally used by soya producers in the European Union. They must comply with current European legislation and use the wording “soya drink” or even “soya juice” on their packaging. Ensa presented its study to the European Commission and hopes that it will relaunch the discussion on the issue of milk denomination. Ensa also rolled out the first ever European Soy for Food Week – the event took place from 19 – 27th of September with actions occurring simultaneously in Belgium, the Netherlands, Germany and the UK. Established in January 2003, Ensa represents the interests of Natural Soyfoods Manufacturers in Europe. Ensa is an association of internationally operating companies, ranging from large corporations to small, family-owned businesses. To be accepted within the association, members have to respect the charter: •

Art 1. Production process of soyfood products: The members of the association pledge to produce their soyfood products using only natural production processes.

•

Art 2. Soya and genetically modified organisms: The Ensa members pledge to guarantee that their products are free of GMOs.

•

Art 3. Source of supply of soya: The Ensa members certify that the soy they use does not come from ancient rain forest land.

•

Art 4. Scientific researches: The Ensa members pledge to encourage and promote scientific research on soy, in particular via financial support. www.Ensa-eu.org Source: Article published online at www.organic-market.info on November 11, 2008

FRUIT AND VEGETABLES The Irish market research company “Research and Markets” expects the international trade with fruit and vegetables to increase significantly by 2011. They calculate that the worldwide trade value will rise by one third, up from EUR 481 billion in 2006 to EUR 642 billion in 2011. The trade volume is forecast to grow by about 20 percent. Source: Lebensmittelzeitung No. 42, October 24, 2008

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Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 23 of 48

European Market – Cont’d

CONVENIENCE DRIVING WESTERN EUROPEAN JUICE BOOST Fruit loving western Europeans are increasingly turning to beverages like juices, smoothies and nectars in their hunt for a more convenient health kick as regional sales of the products were up by 1.6 per cent last year to €23 billion, says new findings. Industry analyst Zenith International said that consumption of juices and nectars were up by 1.1 per cent to 10.3bn litres I 2007 and were expected to continue growing across the region by reaching 11 billion by 2012. Gary Roethenbaugh, market intelligence director for Zenith, said that the image of fruit-based beverages as natural, healthy and convenient alternatives to other types of soft drink has led to growing availability of the products on shelves. “Squeezed juices, chilled juices, superfruits and smoothies are becoming increasingly popular across Europe as consumers seek new natural healthy drinks that taste great," he stated. Market specifics According to the findings, Germany, France and the UK accounted for the majority of total consumption volume in Western European, with the three markets amounting for 61 per cent of the market. During 2007, a consumer shift towards more natural premium beverages saw squeezed juice sales up 9.4 per cent, slightly behind chilled juice revenues that rose by double-digit figures in markets like Italy, Spain, Portugal, Finland and Germany, the report said. Smooth operator Another major trend identified by the analysts was the continued emergence of smoothie products that, while originating in the UK, are now gaining popularity across the region, according to Zenith. Despite the apparent consumer focus on market innovation, the tried and tested orange flavour continued to dominate the fruit drink sector, said the analyst. Packaging For packaging materials, Zenith found that 67 per cent of juice and nectar sold over the period were shipped in cartons, though polyethylene terephlate (PET) was seen as an increasingly popular option amongst consumers. Source: Article published online at www.nutraingredients.com on Nov 10, 2008 Editor: Neil Merrett, copyright: Decision News Media SAS

DEEP-RED FIGURES IN MIDDLE EUROPE The German organisation of pig producers ISN sent out a desperate message in mid-July, talking about ‘swine prices misery’ and ‘deep-red figures’. According to ISN, feed and energy prices have doubled in the last 12 months. Especially ‘for breeding companies in Middle-Europe the situation is worrying, said ISN chairman Franz Meyer zu Holte, as prices paid for pigs and piglets are nowhere near break-even at the moment. “Breeders in Middle Europe lost about €2.5 billion capital money in the last year.” In the meantime, another €1 billion can be added to that amount, according to ISN. The ISN added, “On the one hand, we’d like to provide high-quality pork at competitive prices for our consumers, but on the other hand we see deep-red figures.” Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 24 of 48 Source: Pig Progress volume 24, No. 6, 2008

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Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 25 of 48

European Market – Cont’d

AGRICULTURAL COMMODITIES TUMBLING Prices for grains & co plummeting – EU reintroduces grain import duties In the shade of the financial crisis, the markets for agricultural raw materials are shrinking continuously. Prices for grains, canola and oilseeds are in free fall. In light of this development, the European Union decided to reintroduce grain import duties, which had originally been suspended until June 2009. But the prices have decreased so much that EU Agriculture Commissioner Mariann Fischer Boel decided to limit imports again. According to the German farmers association (DBV – Deutscher Bauernverband), international grain and oilseeds markets are under strong pressure, since capital funds have been withdrawn from the markets. Grain stock exchanges in Chicago and Paris are worldwide indicators for the upcoming development. If prices drop here, it has an effect on every single farm due to the international integration of the grain markets. At the same time, harvests are rich and forecasts are promising. The pressure on the markets has been increasing so that farmers yield less for baking rye or brewing barley than in the past two years. According to the German agriculture association ‘Deutscher Raiffeisenverband (DRV)’, wheat prices at commodity exchanges exceeded EUR 260 per ton in March 2008, since then, prices have plunged by more than EUR 100 per ton until late September. Germany and the whole European Union recorded high yields per hectare, some regions even reported record harvests. Furthermore, the worldwide grain supply has grown significantly, which further increases the pressure. The European grain harvest amounted to 300 million tons, i.e. an increase of 50 million tons compared to 2007. In view of the German association for the oilseed processing industry (Verband der Ölsaatenverarbeitenden Industrie in Deutschland – OVID), price decreases for agricultural products have already reached a ‘critical level’. Prices for oilseeds and grains are already 40 percent below last year’s level, said Wilhelm Thywissen, President of OVID. After the shortages of previous years, producers have greatly expanded their production. This is the main reason for the price decline. The current price decrease is not caused by using oilseeds for the production of biodiesel, explains Thywissen. “This refutes the theory that biodiesel drives agricultural prices.” Moreover, market experts anticipate that the current price decline for crude oil will reduce the use of energy crop like canola, corn or soybeans to produce biodiesel. This could further drive the pressure to use oilseeds as nutrition and feed product. Source: Lebensmittelzeitung No. 43, October 24, 2008

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Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 26 of 48

European Market – Cont’d

HARD TIMES FOR THE EUROPEAN MOLLUSC INDUSTRY While the global production of molluscs has been rising continuously, the EU production continues to decline. Between 2000 and 2006, the volume of EU molluscs produced in aquaculture decreased by 11% down to 694,971 tons. At the same time, the mollusc fishing industry recorded losses of one third (-37.3%) down to 257,786 tons. Main problem is the lack of mussel seeds, but also the changing political conditions within Europe. According to the current statistics from FAO, the global molluscs production accounted for 17.44 million tons in 2006, of which almost one fifth (19.14%) or 3.34 million tons was wild catch (molluscs without cepahlopoda). The majority – 14.10 million tons – is produced in aquaculture, which means that aquaculture farms have already become the main producer of molluscs. This is especially true for mussel varieties (Bivalvia), of which a total of 12.35 million tons were farmed in 2006, i.e. a share of almost 90% of the total amount of mollusc produced in aquaculture. Like in the fish and crustacean segment, Asian countries are also dominating the mollusc production: In 2006, they produced 12.94 million tons of aquatic mussel and snail varieties. Even more impressive than the total production volume is the growth dynamic of the global mollusc production. In 2000, 10.77 million tons were produced in aquaculture, 6 years later, the volume increased by almost 3.5 million tons. Combining the volumes of molluscs produced in aquaculture and in the fishing industry, the total production of molluscs and snails increased by 16.5% compared to 2000. These figures exceed those of the European mollusc production by far. In 2006, the European fishing industry caught 257,786 tons, i.e. a share of 7.72% of the global mollusc production, while mollusc farms produced a total of 694,971 tons, a share of 4.93%. Fishing volumes of blue mussels plummeted These numbers are even more disillusioning when looking at the development of the fishing and aquaculture industry between 2000 and 2006. The only product for which the fishing industry recorded stable fishing volumes was scallops (70,000 tons). Many other segments faced severe losses. The catch of hard clams, ark clams and cockles decreased by almost 50% within a few years: in 2003, a total of 119,860 tons were fished in Europe, whereas 2006 accounted for only 65,362 tons. The losses are even more drastic among blue mussels, for which the catch volume dropped from 190,785 in 2001 to 71,832 tons in 2006. The figures for European molluscs produced in aquaculture are not as devastating; however, this sector still recorded bitter losses: Between 2000 and 2006, the production of blue mussels slacked by 13.2% down to 490,611 tons. Combined losses for blue mussels produced in aquaculture and in the fishing industry amount to 176,231 tons since 2000. The situation of other mollusc varieties is not as bad; though their production did not increase, they were spared from considerable losses. The volume of common scallops produced in aquaculture, for example, has been stagnating on a low level of 600 tons for several years. Oyster production has also been steady, ranging from 130,000 to 150,000 tons (2006: 135,038 tons). Fortunately, the production of hard clams, ark clams and cockles recovered: up from historical lows in 2002 and 2004 to 68,258 tons in 2006, i.e. at the same level of past years. Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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European Market – Cont’d Hard times for the European mollusc industry

Development of the EU mollusc production amount in 1,000 tons

1,500 1,000 500 0 90

92

94

96

98

Mussel fishing industry

'00

'02

Aquaculture

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

'04

'06

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 28 of 48

Development of the EU mussel aquaculture amount in 1,000 tons

1000

500

0 90

92

94

Blue mussels

96

Oysters

98

'00

'02

'04

'06

Hard clams, ark clams, cockles

European Market – Cont’d Hard times for the European mollusc industry Shortage of mussel seeds stops farm production The effect of this development reflects on the difficult situation of the mussel industry in Denmark, Germany and the Netherlands. The three countries are strongly hit by the decline of the mussel production. While accounting for a production of 330,000 tons in 1998, the amount dropped to 100,000 tons in 2006 – a decrease of more than 60%. No wonder that many fishermen and mussel farmers now fear for their economic survival. The year 2007 made it clear that there are, in fact, regional differences. While the blue mussel fishing industry in Lower Saxony did rather well, the industry in Schleswig-Holstein recorded meagre results: the local Association of Fishermen caught only 3,500 tons in the North Sea, while their catch in the Baltic Sea amounted to only 1,200 tons. This is still better than the year before (2006: 1,490 tons), but it is not enough to secure the survival of the industry, which would require a catch of about 16,000 tons, says Peter Ewaldson, CEO of the association. In this region, nearly 150 families still live from mussel production. The Danish mussel fishing industry recorded similar losses. Around 2000, they regularly caught about 110,000 tons, compared to only 54,808 tons in 2006. To fulfill their delivery obligations, traders like ‘Royal DK’ even have to buy mussels, since the catch from Limfjord fisheries is insufficient. Royal DK is said to have refused to reveal information on the mussel volume they bought in addition, thus hampering the work of the fishing control authorities, who then banned fishing in the Limfjord area for four weeks in March and April, the peak season. That hurts, since each of the nearly 50 fishermen engaged in Royal DK might face losses up to €30,000. Announcement of price increases

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 29 of 48 The Netherlands are facing a similar dilemma. The Dutch Mussel Trading Association expects a production volume between 30,000 and 40,000 this year. In the mid-90ies, they produced more than twice as much. Reasons for this decline are natural factors as well as new government regulations which banned large areas traditionally used for mussel production. In spring 2008, for example, mussel fishing was banned in the Waddenzee area, and the ban is to be lifted only partially during autumn/fall 2008. In March 2008, the Dutch Agricultural Minister Gerda Verburg had expressed hope that the ban of commercial fishing would be lifted in 2009. Until then, the restrictions will be causing major losses to the Dutch mussel industry, in which about 3,500 people are directly or indirectly involved. The industry criticizes the Dutch government for implementing the EU habitats directive too strictly. Dorette Corbey of the social-democratic party ‘Partij van de Arbeid’ thinks that Germany and Denmark are interpreting this directive more loosely (De Telegraaf, Online April 23, 2008). Last June, ‘Prins & Dingemanse’ providently announced to raise Dutch mussel prices by 15% as of the third week in July. In fact, the European Commission tries to re-define the industry’s management role of marine resources towards an ‘eco-system-based’ approach. The main objective of this directive is to minimize the influence of the fishing industry on the marine environment. Precious natural habitats and sensitive species are to be protected more efficiently, disruptions in the food chain to be avoided and the integrity of elementary processes in the eco system are to be preserved. All in all, this is a holistic approach which does not focus on ecologic interests alone, but also tries to take function, variety and the complexity of eco systems into account.

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 30 of 48

European Market – Cont’d Hard times for the European mollusc industry As reasonable as this strategy might be, its realization is raising many questions, all the more since most restrictions affect the fishing industry. Environmental organisations, for example, refer to a possible food shortage for seabirds, thus using the directive to reduce or prevent the fishing of mussel seeds in traditional production areas.

Development of the European mollusc aquaculture vs. North and South America (production in 1,000 tons)

1200 1000 800 600 400 200 0

90

92

94 Europe

96

98

'00

'02

North and South America

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

'04

'06

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 31 of 48

Development of the European mussel fishing industry (catch weight in 1,000 tons)

400 300 200 100 0

90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 Blue mussels

Hard clams, ark clams, cockles

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Scallops

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 32 of 48

European Market – Cont’d Hard times for the European mollusc industry Encouraging ideas to solve the seed problem This is particularly hard on the Danish, German and Dutch mussel production, as they have been facing a shortage of mussel seeds for years already. Other than their Spanish and French colleagues, who cultivate blue mussels on ropes or pillars, North Sea mussels between Waddenzee and Limfjord are traditionally produced in soil culture. As a first step, young mussels are fished on wild ‘fish banks’ and are then set out in special, nutrient-rich areas which are covered by water most of the time. There they will grow to market size within one and two years. This is a rather simple and eco-friendly way of growing mussels, which, on the other hand, records higher losses than other production methods through natural enemies like starfish, seabirds, and any other mussel-eating fish species. Thus, the demand for mussel seed is huge, and there are not enough young mussels growing to maturity every year. The seed problem is a matter of survival for the industry The so-called ‘breed fall’, when mussels in special areas of the Wadden Sea spawn in huge numbers so that masses of mussel larvae develop, does not occur regularly and often does not produce any amounts relevant to the fishing industry. As a result, there has been a shortage of mussel seeds in the North Sea since 2001. The situation does not only lead to lower production volumes, but also to a growing dispute about seed mussels: some associations for ecological conservation are convinced that basic food resources of many other species are threatened by the removal of mussel seeds. Mussel fishermen in Schleswig Holstein now have to import mussel seeds from England, which creates to additional costs. The seed problem has become a matter of survival for the whole fishing industry. Mussel larvae can be found in the North Sea throughout the year. In May, when their number is growing significantly, a total of 52,000 larvae have been counted in one cubic metre of water, i.e. there should be enough larvae for the seed production. Theoretically, one would only have to find a special substrate they could grow on. In his experiments at the coast in Lower Saxony, biologist Dr. Uwe Walter found out that huge numbers of mussel seeds can be grown on collectors shaped like long ropes. During the trial period, his 210 test collectors collected more than five tons of seed mussels, which did not differ from seed mussels produced the traditional way. Based on this success, Dr. Walter founded the consulting company ‘mytilamar’ in 2004. One of his first tasks was the scientific monitoring of a project to produce seed mussels for the blue mussel aquaculture, an undertaking initiated by the mussel breeder ‘David de Leeuw’ in Jever and supported by the EU and Lower Saxony between 2004 and 2006.

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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European Market – Cont’d Hard times for the European mollusc industry

Development of the European vs. the Danish blue mussel fishing industry (catch weight in 1,000 tons) 250 200 150 100 50 0

90

92

94

96

98

Total catch in Europe

'00

'02

'04

'06

Danish share

Seed collectors and artificial breeding as alternative A similar solution is the ‘Easy Farm-Concept’ developed by Prins & Dingemanse, Murre Techniek and TNO Research Institute, which can be used for collecting mussel seeds as well as for growing mussels. The basis of ‘Easy Farm-Concept’ – a net of 100 metres length and 3 metres height – is attached to floating tubes on both sides from which it hangs into the water. The net serves as ‘substrate’ to grow mussel larvae. As soon as they have reached the right size, a special ‘harvester’ detaches the mussel seeds from the net. The mussel seeds can be harvested 3 to 4 times during one season. In suitable regions, the concept can also be used for breeding mussel seeds until maturity. ‘Easy Farm’ plants are already used in Germany and in the Netherlands. Another way of artificial breeding and cultivation of mussel seeds are so-called ‘hatcheries’. These methods are well-known in Europe and North America and have been used for premium mussel varieties like oysters or scallops since the 1960ies. Artificial breeding bears additional costs, but it also offers the opportunity to improve the mussel productivity by selective breeding. This way one can create mussel breeds with particular qualities, which are ideally adapted to certain regions or markets. Besides, the breeding of mussel seeds would meet the requirements for sustainable aquaculture.

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 34 of 48

European Market – Cont’d Hard times for the European mollusc industry Chilean mussel industry pushing into the European market When breeding mussel seeds in hatcheries and maybe even improving the seed quality, it would make more sense not to raise the animals in costly soil culture, but to raise them in profitable hanging cultures, as it is common in Spain and Chile. The Spanish company ‘Cultivos Marinos’ (CULMAR) will be investing about €34 million in an Argentinean mussel farm project in the Gulf of San Matias over the next 15 years. There they plan to produce mussels on ropes hanging from floats/rafts reaching into the water, just like the methods used at mytilus farms in the Spanish Rias region. Early 2008, Argentinean authorities approved the installation of floats on an area of 4.6 hectares. While mussel producers in Europe struggle for survival, the South American mussel aquaculture experiences an enormous upswing. At first sight, this seems illogic, since mussels are hardly consumed in these countries. The lion’s share, however, is exported, mainly to Europe. Spain, France and Italy satisfy a considerable share of their demand through imports, above all from Chile. Instead of mytilus edulis or galloprovincialis, a growing number of mytilus chilensis can be found on the market, mostly in form of pure, frozen mussel meat which is used as raw material for the processing industry in Europe. Even if this is a very special market segment, producers of ‘live’ mussels are also affected. Due to imports from Chile, Spanish mussel producers have almost entirely lost their customers in the canned food industry so that they have to look for other marketing opportunities. From 2006 until 2007, the share of Spanish live mussels sold on the French market increased by almost one quarter to nearly 30%. At the same time, the market share in Italy climbed from 54% to 62%. The development of abalone species (haliotis spp.) is particularly impressive: its production quadrupled within one year, up from 254 tons in 2005 to more than 1,000 tons in 2006. Not only Chilean mussel farms, also the mussel processing industry has seen an unparalleled upswing since 2003. Exports to Europe have been rising steadily. In 2007, France, Spain and Italy imported mussel products from Chile worth almost €25 million; this is almost half of the total Chilean mussel export value. France imported a total of 13,240 tons of processed mussel products in 2007, 7,540 tons of which came from Chile alone. But the Chilean mussel industry has set itself an even more ambitious target: The volume of mussel products processed in Chile is set to increase to 250,000 tons by 2010 – this would be twice as much as in 2006. Source: Fischmagazin 7-8/2008

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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EU Country News

BELGIUM: BELGIANS BOOSTING MEAT EXPORTS Delegation to establish contacts with Romania and Bulgaria Belgium is looking for new sales markets for pork. Therefore, the Belgian Meat Office (BMO) organized networking days in Romania and Bulgaria. Belgian exporters are more than satisfied with the positive response from pork importers in these countries. “We try to diversify our sales markets for Belgian meat exports”, says BMO General Manager René Maillard. According to his figures, almost 75% of Belgian meat exports go to Germany (50%), Italy, Great Britain and the Netherlands. Romania’s import requirement for pork is expected to reach 200,000 tons, of which Belgium supplied 6,000 tons last year. “We – as well as our exporters – are convinced that there is much room for growth”, concludes Maillard. Romania does not produce sufficient raw material in the meat segment, besides, they are still suffering from the effects of swine fever. The same applies to Bulgaria. All in all, BMO welcomed 22 Romanian and 15 Bulgarian companies at their event, who together represent about 80% of the market. From the Belgian side, 12 meat exporters participated, accounting for about 70% of Belgium’s meat exports. Source: Lebensmittelzeitung No. 29, July 18, 2008

BULGARIA ORGANIC FESTIVAL IN BULGARIA The certified organic area in Bulgaria shows one of the highest growth rates in Europe. The number of only 650 ha of organic agricultural land in 2003 increased to 3.061 ha in 2006 and in 2007 this figure climbed up to 166.741 ha of organic land. The eighth edition of the National Organic Festival, organised by the Agrolink Association, on September 13 was the biggest annual event of organic agriculture and food in Bulgaria. Exhibitors like farmers, importers, retail stores, certifying agencies, scientists and publishing houses gathered Sofia to showcase their products, talk business and exchange news. The record-breaking number of exhibitors showed the high interest in the sector. The representative of the Ministry of Agriculture, which was the main sponsor of the festival, presented awards in several categories: best organic booth, youngest organic producer, best shop and the media promoting organic agriculture and food to consumers in the best way. www.organic-market.info Source: BioFach Newsletter No. 183, October 31, 2008

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 36 of 48

EU Country News – Cont’d

POSITIVE DEVELOPMENT IN BULGARIA’S ORGANIC SECTOR The National Organic Festival is the biggest annual event of organic agriculture and food in Bulgaria - a cultural, commercial and gastronomic event dedicated to organics and certified natural products. Exhibitors like farmers, importers, retail stores, certifying agencies, scientists and publishing houses gathered in a park area in the centre of Sofia to showcase their products, talk business and exchange news. The record-breaking number of exhibitors showed the high interest in the sector and made it possible that familiar and new products could be exposed. Although Bulgaria has only been a member of the European Union only since 2007, the national regulation for organic farming already came into force in 2001. Since then, certification, consulting and commercialisation have also been built up, partially also supported by the Swiss Development Aid (DEZA). Following the statistics of the Research Institute of Organic Agriculture (FiBL) and IFOAM, the organically managed area of Bulgaria has an amount of 166,741 ha, which makes a 3.1% of the total domestic agricultural area. In comparison: the pan-European average of organic agricultural area is only a bit higher with 4%. A big part of the organic area of Bulgaria is grassland and pastures (155,793 ha). However, the proportion of organic animal husbandry is still very low due to the prohibition of at-farm-production and at-farm-selling, which is still law. The rest of the organic area of almost 11,000 ha is covered by fruit orchards (3,566 ha), medicinal and aromatic plants (1,428 ha), cereals (1,362 ha) and textile crops (1,285 ha). Another 1,577 ha have not been used at time of census. On the remaining 1,729 ha, organic producers have been growing organic fodder plants, wine and potatoes. Beside the land used for agriculture, many areas are certified as organic wild collection, e.g. for collecting herbs, mushrooms and berries. Wild collection adds up to 242,677 ha, but the area is probably smaller in reality due to overlapping certified areas. As Dagmar Diener und Oskar Wendt state in their report, the volume of the entire organic food market in Bulgaria is estimated at €800,000, which makes a 0.023% of the total domestic food market. Organic products are available in specialised organic food stores, supermarkets and health food shops. However, the offer is only available in bigger cities. In the rural areas, certified organic products can barely be found. […] The biggest part of the product range is still imported. The health food shops generally offer 20 to 50 organic products. And the biggest turnover of organic food products is achieved in regular supermarkets. Primarily Bulgarian supermarkets like Piccadilly, Fantastico and Elemag offer organic products, but also the German enterprise Metro and the Austrian supermarket chain Billa offer a small product range of organic products. Most of the Bulgarian organic food is produced for export. The most important products are fruits, nuts, infusions, aromatic oils and some vegetables such as tomatoes and cucumbers. Organic yogurt, white cheese, bread and medicinal herbs are also produced for the domestic market. Organic chocolate, noodles, olive oil, pulses, granola and baby food are mainly imported from countries like Greece, Italy and Germany. Generally, people are more and more interested in buying healthy food even though most people are not acquainted with the European Standards for organic food products. Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 37 of 48

EU Country News – Cont’d Positive development in Bulgaria’s organic sector The Bulgarian Ministry for Agriculture developed a national label for organic food products, which is not obligatory for producers, however. Therefore, stakeholders of the organic sector try to put more effort into informing consumers, e.g. via internet and on an annual organic festival in Sofia and has a wide coverage in the newspapers, in television and in other media. The potential consumer group of organic food includes mainly health-conscious people with a superior education, who belong to a well-off middle class. In comparison with other European countries, upper middle class is proportionally small in Bulgaria. The gap between the rich and the poor is quite wide. Therefore, there are three other important consumer groups such as tourists and Bulgarians who come back from abroad where they got to know organic products as well as rich Bulgarians who buy organic products as a kind of status symbol. Within the national development plan of 2006, the Bulgarian government has written down ambitious aims for the organic agriculture: until 2013, 3% of the total food should be organic, and 8 % of the agricultural area should be managed organically. Even though this requires big efforts, most of the organic stakeholders see the future with optimism and pin their hopes on a steady economic increase. Bulgaria looks back at a hundred years of tradition of wild collection and cultivation of medicinal and aromatic plants. Also, breeding and research in the sector started many decades ago. Farms with cultivation according to the EU regulation on organic agriculture ((EEC) No. 2091/92) have been built up for fifteen years. The organic cultivation of medicinal and aromatic plants is also a part of a government programme. In 2001, the Bulgarian Ministry of Labour and the United Nations Development Programme (UNDP) started with JOBS project, which has raised interest throughout the country. A network of eight socalled business centres has been built up. It includes fifteen organic farms and 627 producers; 3,845 new jobs have been created. The centres are being managed by experts of the former phyto pharmaceutical centre, the research centre for roses and aromatic and medicinal plants and the Bulgarian academy of sciences. Within the project, demonstration fields have been planted, the seedling production has been enlarged and experts are holding classes about good agricultural practices. Mainly Bulgarian varieties and several foreign varieties of balm, peppermint, savory, thyme, sage, clary sage, chamomile, lavender, rose hip, valerian, calendula, corn flower, hyssop, basil, mountain tea, marshmallow, chokeberry and echinacea pupurea are grown organically. In her report, Dr. Rumyana Todorova from the Bulgarian Herb Association states that besides that, the wild collection of blue berries, raspberries, black berries, currants and wild strawberries is certified organic according to the EU regulation on organic agriculture ((EEC) No. 2091/92). The Swiss IMO Institute, The English Soil Association and the national certification body Balkan Biocert are responsible for certification. During the JOBS project, the participants developed modern drying and packaging machines. Since the biggest part of the production is being exported, further processing and distillation systems are constructed according to quality standards of the destination countries. 60 - 70% of the merchandise is still sold abroad and 30 - 40% is sold at the domestic market, while the overall demand is steadily increasing. Source: Article published on October 31, 2008 at www.organic-market.info

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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EU Country News – Cont’d

DENMARK ORGANIC MARKET IN DENMARK DOUBLED IN FOUR YEARS With the latest figures from the grocery sector, overall organic sales are expected to be in the region of DKK 4.5 billion in 2008 (€0.6 billion). In 2004, sales totalled just over DKK 2 billion (€268 million). Organic Denmark expects this growth to continue such that sales will have doubled again by 2013 and reach DKK 9 billion (€1.2 billion). Ongoing reports from grocery chains and organic companies to Organic Denmark point to an overall increase of at least 30 percent in sales so far this year, and the growth in organic sales continues despite the general economic slowdown. Families with young children are among those who are increasingly choosing to buy organic products. According to the National Statistics Office in Denmark, exports of organic goods in 2007 were 73% higher than the previous year, so total exports amounted to a good €70 million. www.organicdenmark.com Source: Biofach Newsletter No 186, December 12, 2008

NEW INTERNATIONAL ORGANIC RESEARCH CENTRE IN DENMARK The Minister of Agriculture, Eva Kjer Hansen's, has welcomed the new international centre for organic research in Denmark: "With the establishment of ICROFS as an open international research centre, it is my ambition that Denmark becomes the leading country for increasing international cooperation on organic research. Through shared knowledge and cooperation across countries and continents, all of us will get the best out of the research resources. Further, organics has some interesting potentials in relation to sustainable production of foods and adaptation to climate changes." ICROFS (www.icrofs.org) has just published its first 9-page newsletter www.icrofs.org/Pages/Publications/2008_1.pdf Source: Biofach Newsletter no. 184 of November 14, 2008

DANISH BEEF MARKET – FACTS AND FIGURES • • • • • •

About 16,000 Danish farms own or breed cattle; 6,000 of them are only active in the dairy industry, about 9,100 raise cattle for the meat industry and 900 farms breed bulls. Total livestock in Denmark: approx. 1.6 million cattle 473,000 cattle are slaughtered annually, and 16,400 animals are exported live 8 Danish slaughter facilities are certified for the export Annual beef exports amount to 62,000 tons worth €310 million Annual beef imports add up to 83,6000 tons worth €390 million Source: Die Fleischerei 7-8/2009

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 39 of 48

EU Country News – Cont’d

MEAT FOR THE PREMIUM CLASS For a number of years, Denmark has been ranking high on the list of leading pork producers worldwide. But beef, veal and lamb are also part of the Danish portfolio. Even the trade with animal furs developed into a lucrative business. It is still pork that accounts for the lion’s share of the Danish meat production and export. The Danish pork industry counts about 7,000 farms which produce about 26.3 million pigs per year. 3.9 million pigs are exported live, the majority of the remaining animals are slaughtered by the two associations ‘Danish Crown’ and ‘Tican’ (19.6 million), and only 1.7 million animals are slaughtered at private slaughter facilities. The export ratio amounts to some 90% and yields EUR 3.7 billion. After various mergers of slaughter associations, only two – Danish Crown (91.2% of all slaughters) and Tican (8.8%) – are still on the market. They drive growth even more. While the export volume amounted to only 600,000 tons in 1970, it has increased to 1.9 million tons. Main customers are Germany, ahead of Great Britain and Sweden, followed by Russia, Poland and Japan. While demand for ham, shoulder and steaks is highest in Germany and Italy, loin ribs are exported to the US, filet and bacon to Japan and Great Britain. China – despite their huge domestic pork production – is primarily purchasing snouts, ears, tails and paws. Market giant Danish Crown counts among the global players of the pork – for them, premium quality is key in the export business. Last year, the annual turnover amounted to EUR 6.0 billion, a total of 20 million pigs and 400,000 cattle were slaughtered. Danish Crown, which is operated cooperatively, counts 13,500 members and employs a staff of 25,000. In 2007, a total of 205,000 tons of pork were exported to Germany, which corresponds to EUR 340 million. The cattle slaughterhouse in Husum slaughtered 100,000 animals worth EUR 110,000 million. Together with their subsidiaries ‘Dat-Schaub’ and ‘Tulip’, Danish Crown accounted for a turnover of EUR 581 million. Quality is key The product line for Germany ranges from half pigs to shoulders, ham, intestines and meat for processing. The cuts are prepared according to customers’ preferences. Besides the meat industry, a rising number of caterers are also buying pork from Denmark. Thus, market leader Danish Crown is primarily focussing on high-end clientele in the catering industry. A campaign with top chefs will underline the quality standard of the premium range. Source: Die Fleischerei, Issue 11, November 2008

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 40 of 48

EU Country News – Cont’d

FINLAND After a decline in 2006, the area of organic land in Finland in 2007 has risen again by 3% to 148,760 ha (6.6% of the total area). Oats remains the most important kind of corn and accounts for almost half the area used for growing organic corn.

FRANCE FRANCE FOOD RETAIL TRADE The French food retail trade has also been raising prices during the past months, but not as strongly as in Germany. Compared to the first half in 2007, prices for energy and sports drinks in France have risen strongest – plus 25 percent compared to the previous year. Prices for products made from grains such as flour and pasta soared by more than 20 percent, butter, egg and milk prices increased by 16 to 17 percent. These changes are drastic, but price increases in the above mentioned products groups are still not as high as in Germany, for example. Increase of retail prices in the French food retail trade

Pasta

39.10%

Cream

29.60%

Hair restorer

28.00%

Spread Flour Tuna

26.80% 21.20% 18.90%

Chilled Food

17.70%

Mincemeat

17.30%

Nutrional Food

16.30%

Bread and bakery products

15.90%

Source: Information Resources GmbH, Ms. Birgit Bruns, [email protected]

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 41 of 48

EU Country News – Cont’d

FRENCH ORGANIC FOOD WHOLESALE TURNOVER UP IN 2008 A survey of the French organic food wholesale trade by the corporate consultant Ecozept shows clear growth of the companies' turnover in the first half of 2008 – with an expected average of 19 % more business than the previous year. The fluctuation is from 10% to over 40%. The wholesalers had already registered almost 30% growth from 2006 to 2007, and are actively promoting this growth by extending their range. They stock 5 % more articles today than in 2007. Some of them are also extending their spectrum of customers and supply the conventional retail trade, the catering trade and industrial catering facilities. According to investigations by Ecozept, however, growth has slowed down in the second half of 2008. www.organic-market.info Source: Biofach Newsletter No. 185, November 28, 2008

FRENCH DRÔME REGION TO BECOME ORGANIC VALLEY In a recently published interview in the Localtis magazine, Didier Jouve, Vice President of the RhôneAlpes Côtes d’Azur region, reported on plans to set up a large-scale project for a "Drôme Organic Valley". Jouve, who is responsible for regional planning and long-term development, emphasized the importance of organic agriculture, which already accounts for 25% of the land in some areas. Since the beginning of October, a French news information service has been on the Internet to supplement the services of the online magazines Bio-Markt.Info (German) and Organic-Market.Info (English). Bio-Marche.Info offers daily news information on organic agriculture and organic marketing in France. www.bio-marche.info Source: BioFach Newsletter No. 183, October 31, 2008

ITALY: LATEST FIGURES OF THE ITALIAN ORGANIC SECTOR The Chamber of Commerce of Milan has revealed some figures of Biobank, which confirm Italy’s dominance in the organic sector. With 1.1 million hectares, Italy continues to be the most important country for organic cultivation in Europe and is the fifth in the world after Australia, China, Argentina and the United States of America. Italy holds the first place for producers (27% of the total), and for the area dedicated to cereals (28.7%), vegetables (37.4%), grapes (46.9%), wheat (52. %), olives (41%) and for citrus fruits (80%), reports Greenplanet. Italy - together with Spain - is the most important organic producer of fruit and vegetables, with 23.8 million tons of fruit, vegetables and citrus fruits produced in 2007 – a plus of 1.1% on 2006, and a turnover of €22.8 billion. Italians spend an average of €25 per capita on organic products every year, after the Swiss (€105), the Danish (€51) and the Swedish (€47). Most of the 638 school cafeterias in the country working according to organic standards can be found in Emilia Romagna. www.greenplanet.net Source: Article published on December 2, 2008 at www.organic-market.info

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 42 of 48

EU Country News – Cont’d

GREAT BRITAIN FOOD RETAIL TRADE IN GREAT BRITAIN The development of raw material prices has also shifted prices in Great Britain. Highest prices increases were recorded for pasta. Like in other European countries, also in Great Britain prices for every-day food and beverage products increased significantly. Products made from grains and were hit the most so that flour prices increased by more than 20% compared to the same period last year. Prices for bread and bakery products were 16% higher than a year before. Steep price increases have also been recorded for dairy products: Cream prices were up by almost 30%. Even typically British products like mincemeat recorded a price increase of 17.3% compared to 2007. Increase of retail prices in the British food retail trade Pasta

39.10%

Cream

29.60%

Hair restorer

28.00%

Spread Flour Tuna

26.80% 21.20% 18.90%

Chilled Food

17.70%

Mincemeat

17.30%

Nutrional Food

16.30%

Bread and bakery products

15.90% Source: Information Resources GmbH, Ms. Birgit Bruns, [email protected]

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 43 of 48

EU Country News – Cont’d

FAIRTRADE IN GREAT BRITAIN Fairtrade UK has announced that Fairtrade products have experienced a rapid growth in the past an in the current year. More people than ever recognise the Fairtrade mark in the UK – 70%. Farmers and workers in 54 countries supply Fairtrade goods to the UK. One of four bananas sold in the country is a Fairtrade product. More than 1,800 new products were licensed in 2007. Almost £500 million were spent on Fairtrade products in that year. Sales grew by 72%. The organisation has also published “Tipping the Balance” – their plan to increase the impact and reach of Fairtrade. 60 more producer groups started supplying Fairtrade products to UK markets from February 2007 to February 2008. 90% of farmers in the Windward Islands are growing Fairtrade bananas. In 2007, for the first time, more Fairtrade coffee was sold by cafés, restaurants and kiosks than by supermarkets and independent shops. Waitrose started selling 100% Fairtrade bananas and all Co-op hot drinks and sugar are Fairtrade. Marks & Spencer now uses Fairtrade sugar in all their preserves. Virgin trains converted all its hot drinks to Fairtrade. Top Shop and Fairtrade pioneer company People Tree created a Fairtrade cotton clothing range. 6,000 farmers in Belize benefited from Tate and Lyle’s sugar switch. www.fairtrade.org.uk A full list of all Fairtrade products is available at: www.fairtrade.org.uk/products. Source: Article published at www.organic-market.info on October 7, 2008

GREAT BRITAIN: SALES OF READY FISH MEALS DECREASING Sales of premium ready meals based on fish and seafood are suffering from the overall weak economic situation in Great Britain. AC Nielsen and the British marketing organisation ‘Seafish’ report that the amount of sales of dishes using high-quality fish varieties have been decreasing during the last 12 months (up until July 14th), both in terms of volume and value. Sales of ready meals with cod were down by 29% (volume) and 20% (value), sales figures for salmon ready meals dropped by 18%, and those of tuna based ready meals declined by 15%. Even ready meals with fish varieties, which are normally very popular in Great Britain, were affected: While the turnover of shrimps increased by 15%, sales of ready meals made of shrimps dropped by 9%. By now, the food retail trade has asked manufacturers to use cheaper products, said Lorna Jack, Marketing Manager with Seafish. For many British food producers, ready meals are an important source of income, since they permit higher margins than simpler food products. Source: TK-Fisch Convenience 5/2008

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 44 of 48

EU Country News – Cont’d

GREECE: FOOD RETAIL TRADE IN GREECE During the first half of 2008, Greek food and beverage prices increased far less than in other European countries. The product group with the highest price increase – convenience food – recorded a figure of +16.5%, which is well below the average price increase in Europe (in some product groups in Europe, price increases reached up to 40%). The product group with the second highest price increase was bread and bakery products (+15.1% in the first half of 2008). In comparison: German bread and bakery prices soared by 24.5%, those in England by 15.9%). In light of rising raw material prices, costs of consumer goods climbed only moderately. Increase of retail prices in the Greek food retail trade

Pasta

39.10%

Cream

29.60%

Hair restorer

28.00%

Spread Flour Tuna

26.80% 21.20% 18.90%

Chilled Food

17.70%

Mincemeat

17.30%

Nutrional Food

16.30%

Bread and bakery products

15.90%

Source: Information Resources GmbH, Ms. Birgit Bruns, [email protected]

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 45 of 48

EU Country News – Cont’d

THE NETHERLANDS: FOOD RETAIL TRADE IN THE NETHERLANDS In the Dutch food retail trade, highest price increases were registered for milk, pasta, however, was not affected. When comparing the price increases for different product groups in individual European countries, it is obvious that Dutch milk prices increased the most during the first half of 2008: Prices for UHL milk were up by 30%, those for fresh milk rose by 22%. For pasta, whose prices went hand in hand with rising grain prices, English consumers had to pay 40% more, Spanish buyers faced a 30%-price increase. In the Netherlands, however, pasta prices rose by only 12%. Increase of retail prices in the Dutch food retail trade 30.60%

UHL milk Fresh milk

21.70% 19.30%

Canned food Frozen desserts and juices

18.30%

Cocoa

18.00% 17.40%

Canned fruits Chewing gum Sugar confectionery Baby and infant food Pasta

16.20% 15.30% 14.20% 12.20%

Source: Information Resources GmbH, Ms. Birgit Bruns, [email protected]

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 46 of 48

EU Country News – Cont’d

SPAIN FOOD RETAIL TRADE IN SPAIN A number of staple foods in Spain have become more expensive. Here, as well, dairy products rank top of the list. In the first half of 2008, Spanish milk prices increased by 37.5%, which has an impact on other dairy products such as cheese (+18.4%) or sweetened condensed milk (+16.2%). Other staple foods like margarine (+18.3%) and eggs (+14.2%) are further driving the cost of living for Spanish consumers. All in all, price in creases in Spain are still not as high as in Germany, which is obvious when comparing prices for goods such as pasta (Germany: +36%) and sweetened condensed milk (Germany: +20.3%). Increase of retail prices in the Spanish food retail trade Milk

37.5%

Dairy desserts, non-chilled

34.7%

Pasta

30.0%

Shakes

23.5%

Cheese

18.4%

Margarine

18.3%

Sweetened condensed milk

16.2%

Imported cheese

15.9%

Alcoholic beverages

15.6%

Eggs

14.2% Source: Information Resources GmbH, Ms. Birgit Bruns, [email protected]

SPANISH ORGANIC SUPERMARKET CHAIN TO DOUBLE NETWORK The organic supermarket chain Veritas is backing more growth. Despite the crisis, the company is growing between 5% and 10% with the same number of shops, according to General Manager Silvio Elías. The company aims to double turnover and the number of branches to 30 within two years. Five new stores are planned for 2009 alone. Veritas expects a turnover of €14 million in 2008. The chain with headquarters in Barcelona currently has fifteen outlets and recently opened its fourth organic supermarket this year. Veritas sells 4,000 organic products in its stores and has 40,000 regular customers. www.ecoveritas.es Source: Biofach Newsletter No. 185, November 28, 2008

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

Agri-Food News from Europe Volume One / Number Four g December 2008 g Page 47 of 48

EU Country News – Cont’d

ORGANIC FARMERS IN SPAIN At BioCultura, the fair for organic products in Madrid, organic farmers and distributors were hoping to gain consumers in Spain, where organic products are viewed more as part of an alternative lifestyle despite the country’s huge production. Spain is Europe’s second biggest organic producer in a continent which has 24% of the world’s land used for organic farming, according to the 2008 report of IFOAM. The ministry of agriculture estimates there are more than 18,000 organic farms in Spain, with a total of around one million hectares. But most of the food goes to northern Europe, led by Germany and Britain, and finding such products within Spain can be difficult, BusinessWorld reports. There are some signs, however, that the attitude is changing. In the Salamanca district, for example, the all-organic Baby Deli opened earlier this year among designer boutiques. "I think environmental consciousness has grown among Spaniards, in recycling, care for the environment in general, etc., and that will help organic consumer products," Mr. Serrano of Madrid’s organic agricultural committee said. Catalonia has launched a campaign to convince domestic consumers of the benefits of organic produce. Traders at BioCultura were also hoping the fair might convince Spaniards to think of their health and the quality of the product rather than the cost. www.bworldonline.com Source: Article published on November 30, 2008 at www.organic-market.info

NO COEXISTENCE RULES YET FOR GM CROPS Three years after the announcement of a national monitoring programme by the Spanish government to control the coexistence of GM and conventional farming, not even a draft measure on this has been prepared and the subject has been shelved until further notice. In the opinion of the Director General for Industry and Food Markets, Francisco Mombiela, the question of coexistence has "no priority at the moment". In contrast to Spain, ten EU countries have already regulated coexistence with minimum separations between GM and conventional farming to reduce the possibility of genetic contamination and enable the EU labelling standards to be met. There was a proposal for a planned separation of up to 200 metres between GM and conventional farming, but no agreement was reached. Spain grows 70% of the genetically modified variety Bt corn in Europe, which equates to 75,148 ha. www.elpais.com Source: Biofach Newsletter no. 184 of November 14, 2008

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm

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EU Country News – Cont’d

SWITZERLAND BIO SUISSE CALLS FOR QUALITY STRATEGY FROM SWISS FEDERAL COUNCIL Bio Suisse welcomes the Swiss government's negotiations with the EU for an Agricultural Free Trade Agreement. However, the aim of the agreement should be to combine the reduction of customs duties with the integration of the Swiss food and agriculture sector. The Swiss organic federation thinks this needs a policy strategy and the inclusion of the whole value creation chain. "The quality strategy is based on economic, ecological and social prosperity, in contrast to a purely quantitybased strategy to secure the market position with the lowest possible prices," is the wording of a press release from Bio Suisse. Achievements like food safety, comprehensive declaration, environmental protection and animal welfare, which apply to the whole production, should not be undermined. www.bio-suisse.ch Source: Biofach Newsletter no. 184 of November 14, 2008

Canadian Consulate Ø Agri-Food Section Benrather Straße 8 Ø D - 40213 Düsseldorf Tel: +49 / 211 / 172 17-18 Ø Fax: +49 / 211 / 35 91 65 http://ats-sea.agr.gc.ca/eu/home_e.htm