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November 15, 2012

INTERVIEW: FDEA director Sullivan emphasises UK focus on China growth

If UK food companies are to take full advantage of the export opportunity in China they must focus on developing a strategy to expand in the market - and they must do it now - the UK Food and Drink Export Association's Sandra Sullivan tells just-food.

If UK food companies are to take full advantage of the export opportunity in China they must focus on developing a strategy to expand in the market – and they must do it now – the UK Food and Drink Export Association’s Sandra Sullivan tells just-food.

Speaking from the Food and Hotel China exhibition in Shanghai, Sullivan said that in order for UK companies to successfully develop an export presence in the Chinese market they must be prepared to put sufficient resource behind the attempt.

“Exporting to China requires a long-term commitment and companies looking to capture a share of the market need to be out here now. Companies with the right products and who are willing to give China sufficient resource and attention will be the ones that succeed,” Sullivan said.

Sullivan is attending the trade show with a delegation of UK food manufacturers, which has been organised by the FDEA.

The organisation is hoping to place a spotlight on the potential of China and other Asian markets for British exporters, who are largely focused on exporting to Europe.

“Europe is still the largest market for UK food and drink exporters. But concerned with a lack of growth in Europe, existing exporters are increasingly looking to Asia for new business. Markets like Hong Kong and Singapore have been strong targets for exporters but more and more companies are reporting success in countries including South Korea and Thailand.”

In 2011, the FDEA organised its first visit to a trade show in China, when it helped 15 companies attend the Food and Hotel China event. This year, the number of companies attending the show with the FDEA has risen to 53.

“The opportunities in the Asian markets are largely untapped by UK companies and China cannot be ignored,” Sullivan insists. “There are now a number of excellent high quality supermarkets importing a wide range of food and drink, and foodservice outlets. Categories such as bakery, dairy, confectionery and tea are in high demand and are sectors in which the UK excels.”

According to Sullivan, one of the primary selling points for UK food manufacturers in China is their reputation for providing safe, healthy foods.

“During a focus group research panel in Shanghai last year, we very clearly identified Chinese consumers requirement for safe, healthy foods,” Sullivan said. “Imported foods meet this demand and are now being purchased by affluent consumers. The high standards required of UK retailers means that UK exporters are well placed to give the assurance and guarantees of safe, healthy food required by the Chinese.”

Because imported foods are primarily purchased by more affluent Chinese consumers, the slow-down of the Chinese economy has not had a great impact on demand, Sullivan said. And, with GDP growth still standing at around 7%, Sullivan believes that there are still plenty of opportunities for the UK food industry to grow in China. “There is still a large untapped market which a wide range of UK producers will be able to develop,” she suggested.

However, Sullivan does acknowledge that there are a number of hurdles for UK companies who want to build an export presence in China.

“There are a number of processes which exporters must complete including registering as an exporter specially around product certification and the strict import regulations which are changing all the time,” she said.

In order to help its members grow in China, the FDEA is “working closely” with partners like the China Britain Business Council and UK Trade and Investment in China in order to keep “up to date with the changes” and “help companies deal with issues that arise especially whilst clearing goods at customs”, Sullivan said.

There has been a spike in interest in the opportunity that China affords UK food manufacturers and Secretary of State for the Environment Owen Paterson came to Shanghai this week to support UK exhibitors. 

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