1. Workshop on EU import requirements for vegetables, fruits and berries AGR 56876 organised in co-operation with Ukrainian Ministry of agrarian Policy and food of Ukraine Ukrainian Agribusiness club

2. An overview of contracting practices with EU counterparts Grant Wilkinson Department of Food and Rural Affairs (Defra) U.K.

3. The EU market potential Major points about EU markets which potential exporters need to consider, include: The EU market for fruit and vegetable products is one of the largest in the world. The EU has some of the leading exporters/re- exporters of fruit and vegetable products. Re-exporters are countries that import products from one country, and then re-export/distribute them to other countries. The EU market is well developed and organized (includes the whole retail chain).

4. The major obstacles for exporters who want to enter the EU market include: EU quality/market standard requirements (Ukrainian exporters are familiar with GOST standards). Requirement for GLOBALGAP standards for food production. Strong competition within the EU, and the existence of high quality products. Traditional patterns of trade which favour long term trading/business relationships The lack of knowledge about products in EU markets. The supply season which has to compete with long term suppliers, e.g. suppliers in Holland and Spain, who offer good quality products throughout the whole year European standards of good agricultural production, covering food safety, use of agrochemicals, protection of worker health and safety, and protection and conservation of the environment.

5. Accreditaion In order to access any part of the market in the EU, accreditation is the key. Without there is no access: To the fresh market, To the retail sector, The catering and food processing supply chains.

6. The possibilities The EU remains a potential market for Ukranian products, but to enter the EU market will require additional efforts and investment by exporters and producers. Using modern technologies and varieties the Ukraine could change the current production and supply situation and compete with existing suppliers.

7. Globalgap – what is Globalgap An Integrity Program for food certification. The aim is to build confidence and trust between producer and buyer. Designed to ensure consistent delivery and implementation of a auditable worldwide standard of production management. It promotes transparency and integrity throughout the entire G.A.P. process.

8. BRC started by UK retail sector BRC Global Standards provides safety and quality certification programmes for food manufacture, packaging, storage and distribution. Recognised worldwide, based on the Global Food Safety Initiative. Standards are designed in consultation with technical specialists, retailers, manufacturers and certification bodies from around the world, so everything is rooted in practicality, rigour and clarity.

9. Ethical trading It is the norm in the EU. Business Social Compliance Initiative (BSCI) was established in 2003 by the Foreign Trade Association (FTA) in order to create consistency and harmonisation to improve social responsibility in the global supply chain. It is a common platform in the EU with Codes of Conducts and monitoring systems.

10. Now start talking business and money

11. Supply agreements Based on crop type and variety. Agreements on supply programmes are based on time of year Programmes maybe based on pre-determined volumes for set price Volumes limits may be +/- 15% Additional volumes may attract premiums

12. Specifications and packaging Product specifications are set Quality standards agreed Product sizes, counts and weights agreed Parameters may include tolerances, fruit pressures and sugar levels Carton types and sizes agreed

13. Delivery agreements

14. Delivery option 1 FOB – Free on Board (or Freight on Board). Most commonly used for seafreight. This basically means that the cost of delivering the goods to the nearest port is included but the buyer is responsible for the shipping from there and all other fees associated with getting the goods to the country/address.

15. Delivery option 2 CIF – Cost, Insurance and Freight. In this case, the price also includes sea freight charges and insurance to deliver the goods to the nearest port. But only to port – from that point onwards, the buyer take the shipment into his hands.

16. Delivery option 3 CNF – Cost & Freight (or Cost, no Insurance, Freight). Similar to CIF only this time insurance is not included. Most common system for road shipments as the transporter carries that responsibility. (It is important that transit temperatures are specified and the right vehicles are used)

17. Delivery While the CNF price can look very attractive, keep in mind that there will be other costs involved when your goods arrive, such as: Customs clearance fee Value Added Tax Import Duty Inspection fees Port security charge Fuel surcharge Docking charge Warehouse storage fee

18. The CNF price is not the actual price paid for products you are exporting.

19. Don’t forget! Duty is calculated on the CNF value. Do not be fooled into under or over valuing either the price of the product or the cost of the freight. Explore all the options

20. Payment terms Payment is usually 21 days after arrival Currency set by agreement Failure to supply or to supply produce out of specification may be subject to penalty In the event of a dispute an independent third party surveyor is used EU MS legal system is used The result is binding!

21. Investigate the market It is the same for every market Find the right partner and stick with him Exporting is not a speculative business Find out what the target market is looking for If you can meet the requirements go ahead If you can not, then walk away

22. Other factors to consider Check the competition's seasons, Arriving earlier or later in the season can achieve premiums e.g. Sweet cherries in August. Avoid peaches/nectarines etc. when all of Europe is in season. When prices for experienced sources are low, a newcomer will suffer more.

23. Look at premium value products e.g. Blueberries, Cranberries. Vegetables (tomato, capsicum, broccoli, long peppers and chillies, can be interesting but are extremely volatile. Check varieties - what may be suitable for the east will not necessarily work in the West. Best example is apples and pears. Cost and time of transportation (road lorries) will be high due to distance - product must be good as it eventually pays for the logistics.

24. Links http://www.mygfsi.com/ http://www.globalgap.org/uk_en/ http://www.brc.org.uk/brc_home.asp http://www.bsci-intl.org/ http://www.unece.org/unece/welcome.html http://www.trademap.org/