U.S. exports of agricultural and food products to Saudi Arabia have been growing at a fast pace in the past few years, reaching $1.33 billion in 2011, about 55 percent higher than 2010.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
Required Report - public distribution
GAIN Report Number: SA1217
Hassan Ahmed, U.S. Embassy, Riyadh
Hussein Mousa, U.S. Embassy, Riyadh
U.S. exports of agricultural and food products to Saudi Arabia have been growing at a fast pace in the
past few years, reaching $1.33 billion in 2011, about 55 percent higher than 2010. The U.S. consumer-
oriented products that have good export potential in the Saudi market include dairy products, processed
fruit and vegetables, snack foods, fresh fruit, nuts, diet and organic food products. With an affluent
population of 27 million people, Saudi Arabia offers excellent opportunities for U.S. suppliers of
agricultural and food products to further expand their exports to this important and growing market.
This Exporter Guide Report provides updates on the overall high value food product market, business
tips and information that the U.S. exporters would need in order to enter and succeed this important
I. MARKET OVERVIEW
The most recent available trade data shows that Saudi agricultural product imports totaled $14.6 billion
(exporting counties, value in FOB basis) which represents an increase of about 28 percent over imports
in 2010. This increase was mainly due to growth in population and an increased number of pilgrims to
According to U.S. Customs data, Saudi Arabia imported more than $1.3 billion worth of U.S.
agricultural and food products in 2011, an increase of 55 percent compared to 2010. As the potential
for agricultural production in Saudi Arabia is limited, the demand for imported food products will
remain very strong in the future.
Table I. Exports of Agricultural and Food
Calendar Years (January-December)
2007 2008 2009 2010 2011
Bulk Total 275,493 303,818 242,830 284,590 550,917
263,468 341,608 202,973 229,404 310,807
Consumer Oriented Total 171,108 244,439 248,055 325,604 445,002
Forest Products 16,370 21,051 20,767 20,946 24,937
Fish Products 655 2,775 6,603 1,404 1,269
Agricultural Products 710,069 889,865 693,858 839,598 1,306,726
Ag, Fish & Forest Products 727,094 913,691 721,228 861,948 1,332,932
Source: U.S. Bureau of the Census, Trade Data
Consumer-oriented food products account for about 35 percent of total Saudi agricultural and food
imports, roughly about $5 billion in 2011. The vast majority of food products are subject to a 5 percent
import duty. Selected processed food products, however, are assessed higher import duties. In order to
protect local food processors and production from competitively priced imports, Saudi Arabia ties
import duties to the level of local production of similar products. As a general rule, a maximum import
tariff rate of 40 percent is applied when local production of a food or agricultural product exceeds a
Food products made in the United States are generally viewed as meeting higher quality standards
compared to imports from other countries and those produced locally. Under normal political and
economic conditions, U.S. origin and brand products have highly favorable consumer preferences and
demand. Each year, several new-to-market U.S. food products are introduced to the Saudi Arabian
market, particularly following FMI/USFES, and regional shows such as ANUGA, SIAL Paris and
Gulfood organized annually in Dubai. Saudi consumers like to try new products and are shopping more
often at hypermarkets and supermarkets. The rapid increase in the number of hypermarket and
supermarket outlets throughout the Kingdom offers an ample opportunity to distribute high-value U.S.
food products. Saudi Arabia’s population is growing at about three percent annually and its population
is projected to reach 40 million in the next 20 years. With a young and rapidly growing population,
Saudi Arabia will continue to be a growth market for U.S. food products in the years to come.
Advantages and Challenges
Saudi Arabia has limited agricultural resources and depends Price competitiveness of local products
heavily on imports for its food and agricultural needs. A new and imports from Arab and Asian
Saudi agricultural policy aims at eliminating production of countries has impacted U.S. market
water intensive crops will increase demand for imported grains share.
and other basic food products.
The Kingdom is a growing market for high value food products Freight costs from the U.S. are higher
and consumers have affinity for trying new food products, than those from export competitors in
offering greater opportunities for new-to-market U.S. food Europe and Asia.
Ready to eat foods, home meal replacements, fast foods and Local importers prefer to initiate
"take-away" foods are increasingly popular with the young business deals with small orders;
Saudi population. conditions many U.S. exporters are not
willing or able to meet.
The market for consumer oriented food products is expanding Saudi Arabia maintains dual date
and Saudis prefer high quality foods which enhances the labeling system (production and
demand for U.S. food products. expiration) for all food products.
The U.S. is recognized among the business community as a High markups, listing and other fees
reliable supplier. that major retailers charge significantly
increase the cost of launching new
products in the Saudi market.
The U.S. is considered a supplier of quality foodstuff Some food retailers require to get
products. Major Saudi importers are constantly looking for reimbursed for expired products they
new to market products. sell in their outlets.
High per capita income and purchasing power help increase General lack of brand awareness and
increased the demand for relatively expensive imports. loyalty by consumers.
Saudi Riyal (SR) is pegged to the U.S. dollar at the rate of $1
The more than 7 million expats that live and work in Saudi Negative attitude towards foods
Arabia creates demand for greater diversity and ethnic foods.
A containing or made from biotech n increasing number of pilgrims come to Saudi Arabia every
yea products r (8 million pilgrims) and create demand for institutional
Saudi importers have well developed infrastructure to handle Some consumers perceive U.S. food
all sorts of food products including fresh as well as frozen products as overly promoting relatively
items. unhealthy life-style.
II. EXPORTER BUSINESS TIPS
Local Business Customs
All food products are imported by the private sector. The vast majority of food products are subject to a
5 percent import duty. Selected products produced in significant quantities carry a 12 or 20 percent
import duty. On March 31, 2008, the Saudi government exempted wheat, wheat flour and other grains
from import duties and reduced duties levied on 75 other foodstuffs to 5 percent. The decree aims at
alleviating the impact of the rising cost of living in Saudi Arabia. Major foodstuffs that benefited from
the reduced 5 percent import tariff included chilled and frozen poultry and their products, eggs (fresh,
dried and powdered), cheese, cream cheese, vegetable oils, pasta, canned meat, fruit and vegetable
juices, mineral and ordinary water, long life milk, corn flakes, peas, beans, peanut butter, yeast and
For religious reasons, Saudi Arabia bans imports of alcoholic beverages, live swine, pork and food
ingredients or additives that contain pork products, including pork fat and gelatin. Meat and poultry
shipments must be accompanied by a "Halal" slaughter certificate issued by an Islamic center in the
country of origin. Additional statements on the health certificate accompanying poultry and livestock
meat shipments must indicate that the animals slaughtered for export to the Kingdom were not fed with
feed containing protein, fat or remnants of animal origin and were not treated with any growth
There are dozens of food importers in the Kingdom, with about 25 accounting for the bulk of food
imports from the United States.
1. Private labels are becoming common in Saudi Arabia. Some large Saudi importers pack
foodstuffs under their own brand names locally and in foreign countries, including in the United
States. These firms have developed private labels, which appeal to Saudis and other Arabs in the
Kingdom. Others use labels with Western-sounding names to appeal to British, Americans, and
other Western expatriates. Salim Basamah Company, perhaps the largest importer of grocery
products in Saudi Arabia, places its private label, "Goody" on a wide variety of food products
imported from the United States. "Goody" appeals to American, British, and other Western
expatriates. Another large importer uses an Arabic sounding private label, "Al-Alali" to appeal to
Saudis and Arabs, even though a significant percentage of his products are American origin.
Hence, a can of American peaches can be marketed in Saudi Arabia under several different labels:
--under an established U.S. brand such as Monarch or Libbys
--under a Saudi private label: like Goody, Freshly or Al-Alali.
--a U.S. private label representing the exporter/consolidator: such as American Garden or
2. Some importers contact directly with U.S. companies manufacturers of national brands, such as
Kellogg’s, Campbell Soup, Budweiser non-alcoholic beer and usually require sole agency
agreements. The Saudi importer will help build the brand, but will request support from the U.S.
company. The U.S. manufacturer usually offers promotional and marketing assistance.
3. Some companies import a wide range of food products for mass distribution, employing the use of
consolidators in the United States. Often, the consolidators are sole regional agents of major U.S.
manufacturers or brand owners covering the entire Middle East and African regions. Most U.S.-based
consolidators assist Saudi food importers by sourcing products from wholesalers, such as Fleming, and
providing services such as placing stickers on labels. Current Saudi regulations allow U.S. suppliers to
place an Arabic language sticker on the original English language label. The stickers translate key
ingredient and product information into Arabic. Stickering is a laborious task and most manufacturers do
not want to bother with this. Most U.S. consolidators are based in Houston, New York, Miami and in
other port cities that have large wholesalers.
4. The French hypermarket chain, Carrefour as well as many locally-based supermarket chains,
such as Tamimi and Danube import part of their food products needs directly from suppliers.
Tamimi and Danube, the two most upscale Saudi supermarkets, import several containers of
American food products each month for sale in their stores, lending support to a wide range of
brands without a binding agency agreement.
If a product has performed well in the market, a U.S. company may opt to go beyond the sticker
stage and develop a bilingual label in both Arabic and English. Monarch is one of many U.S.
companies, which have developed bilingual labels for the Middle East. Non-alcoholic Budweiser
beer was launched in the Kingdom in 1999, with a red, white, and blue bilingual label. However,
a significant number of U.S. origin grocery items found in Saudi supermarkets continue using
Saudi importers are constantly searching for new products, and often request support from
suppliers for promotion and advertising. The Saudi consumer is a discriminating consumer,
closely examining labels and looking for the best deal. Advertising is considered a necessity to
win Saudi consumers. Two-for-one deals are very popular in large supermarkets in moving items
that are approaching their expiry dates. Major Saudi supermarkets have introduced category
management and eliminated low moving product brands. The entrance of the French hypermarket
chain Carrefour in Saudi retail market in 2004 along with the opening of Hyper Panda (local
chain) in the same year has launched a new era of retailing in the Kingdom characterized by a
state of the art shopping experience and aggressive competition.
Hyper Panda is the largest supermarket chain in Saudi Arabia, with about 150 outlets distributed in all
major cities of the Kingdom. Local distributors (depending on the size and power of the distributor) are
being asked for listing fees ranging from $2,000 to $27,000 per Stock Keeping Unit (SKU) by major
hypermarkets. The bigger the distributor, the more power he has to negotiate a lower listing fee. In
addition to listing fees, distributors are asked to provide a specified percentage rebate on total annual
turnover, contribute to advertising campaigns, carry out store merchandizing activities for its products
seven days a week, provide at least 60 day payment terms, rent gondolas and reimburse for expired
items. Distributors frequently authorize retailers to conduct special offers to consumer such as buy one
and get one mainly for products with 60 days or less of remaining shelf life.
Client Base and Consumer Preferences
Saudi Arabia is located between Europe and Asia. With its large expatriate population, the Kingdom is a
multi-ethnic society. Consequently, foods from around the globe are found in Riyadh, Jeddah,
Dammam, and other urban areas in the Kingdom. There are two basic consumer categories in the
Saudi citizens (19.1 million)
Expatriates workers residing in the Kingdom (8 million)
Saudi consumers are discriminating consumers and enjoy new food products. With a young and
growing population supporting a significant increase in retail outlets, U.S. food and agricultural exports
to the Kingdom will continue to expand in the coming years.
A growing import demand for institutional-size food products by the catering sector is being driven by
the large number of expatriate third country nationals working in Saudi Arabia and the increasing
number of foreign pilgrims visiting the two holy cities (Mecca and Madina). There are seven million
expatriate workers residing in the Kingdom, most of who are from the Sub Continent of Asia (India,
Pakistan, and Bangladesh) and the Philippines. The number of foreign pilgrims coming for Hajj and
Umra rituals is estimated at about eight million per annum.
Dining at fast food restaurants is popular among Saudi families and expatriate workers. International
fast food chains such as KFC, On The Border, Burger King, and McDonald’s, Chili’s, Apple Bees,
Fuddruckers, TGI Fridays, together with local chains such as Herfy, and Kudu, import at least part of
their food needs from the United States. Large catering companies, especially those serving Western
expatriates, also buy a portion of their requirements directly from the United States.
Most expatriates are from South Asia (Indian, Pakistan, Bangladesh, Sir Lanka) Egypt, Sudan, Yemen,
the Philippines, and East Africa. The number of Western expatriates is estimated at more than 100,000.
Some Saudi supermarkets employ Americans and British general managers, operation managers, and
Saudi and middle income expatriates are the largest consumers of American consumer-oriented products
and the principal shoppers in Class A supermarkets. The consumers in Saudi Arabia are becoming
increasing educated about quality, nutritional value, price, and packaging. They pay attention to expiry
dates on products and enjoy new products. Domestic supermarkets that offer a wide variety of food
products will have the best chance for prospering in this competitive market.
A recent trend in the Kingdom has been the decline in canned food products in favor of fresh or frozen
food items. Frozen foods are perceived by consumers as being fresher than canned foods.
Changing lifestyles and an increasing number of women entering the workplace are driving demand for
prepared foods. A significant percentage of Saudis continue to purchase a large percentage of their food
at wholesale markets, but more and more Saudis are shopping regularly at supermarkets and
hypermarkets. Hypermarket/supermarket shopping is considered a primary form of entertainment for
the shoppers in Saudi Arabia. Recently introduced hypermarkets offer shoppers a one-stop shopping
experience. The hypermarkets are huge (up to 200,000 square feet), offer up to 60 checkout counters,
and provide more than 55,000 items including foodstuffs, clothing, tools, toys, computers, various
electronics. Some hypermarkets have built large play areas for children and are surrounded by, specialty
shops such as photo, music, and fast food outlets.
Corner grocery stores, commonly referred to as Bakalahs are found in every neighborhood in the
Kingdom. They cater mainly to Saudis and third country nationals. Despite the tremendous increase in
the number of Class A supermarkets and the growing number of hypermarkets, the number of bakalahs
has not decreased significantly as once predicted. Perhaps the main reason for this is that women
cannot legally derive cars in Saudi Arabia. Also, many third country nationals working in the Kingdom
do not own automobiles. Most expatriate housing compounds contain one or two grocery stores. The
Saudi company, "Arabian Food Supplies," has small grocery stores located in many "Western"
compounds in Riyadh, Jeddah, Al-Khobar and in Saudi/ARAMCO compounds. The number of corner
grocery stores is increasing in response to urban expansion. They are filled with many imported
consumer-oriented products. Most have the capability to offer frozen foods, and all contain
If, and when, women are legally allowed to drive in the Kingdom and the Saudi-ization work policy
results in the departure of more than third of the country national expatriates from Saudi Arabia, some
analysts expect that the number of Bakalahs will decrease significantly. The Saudi government has put
teeth over the past few years in its long-standing Saudi-ization program by compelling private sector
firms to increase the percentage of Saudis in their workplace by five percent per year. For example, the
Saudi Government decreed in 2004 that all checkout counters at hypermarkets\supermarkets must be
manned exclusively by Saudi citizens. In 2000, the government banned expatriates from working in
fruit and vegetable markets and in 2002 the ban was extended to bakalahs (corner stores) with less than
40 square meters. There are more than 50,000 bakalahs in the Kingdom.
In addition to corner grocery stores, there are thousands of ethnic stores in the Kingdom, catering to
Indians, Pakistanis, Filipinos, and other Asians. Foods from many parts of the world are found in the
Food Standards and Regulations
In May 2009, Saudi Food and Drug Authority (SFDA) took over from the Saudi Arabia’s Ministry of
Commerce and Industry (MOCI) the responsible of inspecting imported high value food products for
biotech content at the Kingdom’s 27 ports of entry. In June 2011, the SFDA took over the responsible
for setting new food standards and implemented existing ones from the Saudi Arabian Standards
Organization (SASO). In the past, standards were set by SASO while imported foodstuffs were tested
by MOCI at ports of entry. SFDA will take over from the Saudi Ministry of Agriculture (MOA) the
responsibilities of inspecting of imported animal feed, fruits, vegetables and drugs in the next few
SFDA has recently commenced rigorously implementing officially SASO foodstuff regulations. For
example SFDA is enforcing a SASO standard for grape leaves (SASO 1909/2001) that limit stem length
of grape leaves at 0.5 cm. Even though, the standard was issued in 2001, it has never been strictly
applied until a few weeks ago. This SFDA’s strict implementation of SASO 1909/2001 has resulted in
the rejection of several shipments of U.S. grape leaves that SFDA laboratories tests identified as
containing stem length more than the allowed 0.5 cm.
Another standard that the SFDA has recently started to strictly implement includes GSO labeling
standard number 9/2007 particularly section 7/2/2/1 which requires only manufacturers to place stickers
on food products that they export to GCC country. The implementation of this standard makes it
unacceptable for consolidators to place stickers on at their warehouses on product they export to Saudi
Key Saudi regulations which U.S. exporters must adhere to include:
Manufacture determined production and expiration dates (for most foodstuffs)
Animal feed and growth hormone free certification for imported meat
In December 2005, Saudi Arabia implemented a voluntary shelf life standard (manufacturer-determined
use-by dates) for most foodstuffs, with the exception of selected perishable foods (fresh or chilled meat
and poultry; fresh milk and fresh milk based products; margarine; fresh fruit juice; table eggs, and baby
foods) that must meet Saudi Arabian Standards Organization’s (SASO) established mandatory
expiration periods. The revised standard (SASO 457/2005) will no longer ban imports of food products
with less than half of its shelf life remaining.
Shelf life can only be shown by clear and unambiguous production and expiration dates. The use of any
of the following statements for expressing expiration date is permissible.
Use by (date)
Fit for (from the day of production)
Use Before (date)
Sell by date (for food products having an expiration period exceeding 3 months).
The production and expiration dates should be declared on the label of the package in uncoded manner
Day-Month-Year: for foodstuffs with an expiration period less than three months.
Month-Year: for foodstuffs with expiration exceeding three months.
Dates shall be engraved or printed or stamped with permanent ink directly on all packages or on their
original label by the producer only. Adding stickers for production and expiration dates in not
permissible. There shall be not more than one date of production or of expiration on the same package.
Both dates shall not be subject to deletion, change or deceit.
Products with No Specific Expiration Date: for products with no specified shelf life such as salt, spices,
milled rice, etc. only the date of production or processing need be shown as: mm/yy.
We recommend that when putting together an order for a Saudi importer, a U.S. exporter cross check
information contained on his/her food label, including Production/Expiration dates, with the Saudi
General Prepackaged Foodstuffs Labeling
Regulations for labeling of prepackaged foodstuffs are found in Gulf Standard number 9/2007. In sum,
prepackaged food product labels should be in Arabic or include an Arabic language translation of the
label. At a minimum, product labels must contain the name of the product, name of the packer, country
of origin or manufacture, listing of ingredients, consumer instructions, and production/expiry dates.
SFDA Implements Gulf Standards Organization (GSO) No.9/2007
On June 9, 2010, the Saudi Food and Drug Authority (SFDA) informed Council of Saudi Chambers of
Commerce & Industry that it will fully implement section 7/2 of Gulf Standards Organization (GSO)
No.9/2007 titled “Labeling of Prepackaged Food Stuffs”. The most important requirement in the SFDA
circular No. E/991 is the decision to accept only Arabic language stickers affixed by manufacturers
(section 7/2/2/1 of GSO 9/2007) on labels of exported prepackaged food products. In the past, Saudi
Arabia has allowed food products exporting houses or consolidators to place Arabic language stickers
on labels of prepackaged food products at their warehouses.
SFDA granted a six month grace period that ends on December 9, 2010 for domestic foodstuff
importers to fully implement the new requirement. SFDA has informed its food inspection laboratories
at Saudi ports of entry to reject any prepackaged food products shipment that does not comply with the
new Arabic language stickers requirement.
Section 7/2 states the following:
7/2/1: Labeling and adjoining explanatory statements shall be in Arabic and, where another
language is used, it shall be alongside the Arabic. All the information provided in another
language shall be identical with those written in Arabic.
7/2/2: If the Arabic information is stated in a supplementary sticker adjacent to the original label
, the following shall be met:
7/2/2/1: It shall be a single sticker provided by the manufacture only to fulfill all the
relevant stipulations provided in this standard.
7/2/2/2: It shall not obscure any information required by this standard.
7/2/2/3: It shall not contain any statement discrepant with the original labeling.
7/2/2/4: It shall be irremovable in the ordinary handling and circulation conditions of the
Following is a summary of the biotech labeling decree which were implemented by the MOCI in 2001.
The SFDA will continue to apply the decree until a biotech standard is issued.
On December 1, 2001, the Saudi Ministry of Commerce and Industry (MOCI) implemented the
Ministerial decree number 1666 issued on December 11, 2000 regarding labeling of foodstuffs
containing biotech animal products.
Following is the summary of the MOCI’s Directive No 1666:
A. Positive labeling: If a product contains one or more genetically modified plant ingredient, the
information should be clearly communicated to the consumer by labeling. A triangle should be drawn
on the label with text that should read "Contains Genetically Modified Product (s). The Ministry will not
accept a statement that says "This Product May Contain biotech Ingredients." Saudi Arabia does not
permit imports of foodstuffs that contain genetically engineered animal products. According to the
MOCI, local food producers must also abide by the biotech labeling requirements.
B. Bilingual labeling: The biotech statement must be clearly written in Arabic and English languages
with ink color different from that of the main product tag.
C. Health certificate: Biotech products exported to Saudi Arabia must have been approved in the
country of origin for human or animal consumption. Each shipment must be accompanied by a health
certificate issued by a government agency stating that the biotech ingredient used in the foodstuff is
approved in the country of origin for human or animal consumption.
D. PCR Real Time Method: MOC approved the PCR Real Time Method for GE testing and set 0.9
percent threshold. If the test results reveal more than 0.9 percent of GE ingredient, the product is either
destroyed locally or re-exported to the country of origin. Products with less than 0.9 percent of GE
content are exempt from further testing for six months. If still on the market after six months, these
products must be tested and recertified. Presently, no GE-labeled retail food products are marketed in
Saudi Arabia, but GE-labeled bulk commodities and products destined for institutional end users are
imported and marketed.
E. Biotech health certificate: The Saudi Ministry of Commerce and Industry has agreed to accept
health certificates issued by state departments of agriculture for high value products instead of the
previous requirement that the certificates be issued by a federal government agency such as USDA or
FDA for U.S. products. The Ministry has reiterated its refusal to consider any health certificate issued
by exporting companies or other private organizations including notary public statements.
F. Quality Standard: All biotech foods products should be in compliance with legal and ethical controls
observed in the Kingdom and must meet pertinent Saudi Arabian standard specifications.
Certificate of Islamic Slaughter
Per Saudi Arabia Standard No. SSA 630/1998 (Animal Slaughtering Requirements According to
Islamic Law), a Certificate of Islamic Slaughter must be issued for all meat and poultry products
entering the Kingdom of Saudi Arabia. This certificate is issued by Islamic institutions in the United
States, which are recognized by the Saudi Embassy and/or Consulates. Information related to the
approved Islamic institutions may be obtained from the Saudi Embassy in Washington, D.C. or the
nearest Saudi Consulate (New York, Houston, and Los Angeles).
General Import and Inspection Procedures
The majority of Saudi food imports enter the country via Jeddah port on the Red Sea or Dammam port
on the Arabian Gulf. About two-thirds of all foodstuffs enter Jeddah. Imports from Jordan, Syria, and
nearby countries enter the Kingdom by truck.
King Khalid International Airport in Riyadh and King Abdulaziz International Airport in Jeddah also
receive significant quantities of food items, particularly fresh fruits, vegetables and chilled meat. Fresh
and chilled products are usually cleared within 24 hours of arrival.
Import of Samples
Samples destined to potential Saudi buyers or for display in food shows are exempt from Saudi labeling
and shelf life regulations but are subject to inspection at ports of entry. Samples, usually sent to Saudi
Arabia by DHL and similar carriers, require a commercial invoice specifying that the product is not for
sale and has no commercial value. The invoice will provide information such as consignee's name and
address, details of product (s) and country of origin of the product. A packing list also is useful if
samples of many different products are shipped. The documents do not require legalization by the
Saudi mission (an exporting company stamp and signature are sufficient.) It is advisable to show on the
invoice a nominal value of $5 -$10 for Customs purposes and state that the goods are "Not For Sale –
No Commercial Value”.
For clearance of a commercial sea or airfreight cargo exceeding $500, a full set of documentation is
required. For courier samples which do not require special certifications such as Halal, an invoice and
country of origin certificate will be sufficient, provided the value a sample is not more than $10,000.
A Two-Stage Document Notarization Procedure
First Notarization Stage
Depending on the types of certificate required for a particular agricultural product, the following
documents must be signed by an authorized person or agent and authenticated either by the National
U.S.-Arab Chamber of Commerce, any U.S. - Arab Chamber of Commerce, the U.S.-Saudi Arabian
Business Council, or the U.S. Chamber of Commerce located in the city or area where the exporting
firm is based.
Country of Origin Certificate
Halal Certificate for meat and cheese products if the rennet used in the cheese is of animal
Radiation Free Certificate (for foodstuffs imported from former USSR countries
and Europe.) Dioxin Free Certificate (for foodstuffs imported from Europe (usually dioxin free
statement is included in the health certificate).
Animal Protein Free Feed (Producer Self-Certification) to certificate to confirm that the bovine
animals and poultry slaughtered were not fed with feed containing animal-protein, animal-fats or
animal-manure and that the animals were not treated with growth hormones.
Some American exporters use a local U.S. notary public service to meet this first stage authentication
requirement, however, SFDA requires that the certification conducted by a chamber of commerce where
the exporting company is based.
Second Notarization Stage
After the first attestation, documents should be forwarded to a Saudi Consulate or the Saudi Embassy in
the U.S. for a final attestation.
Note: On March 29, 2006, the Saudi Arabian Customs Authority issued a memorandum to drop a
requirement that a Saudi embassy or consulate notarize commercial invoices and country of origin
certificates issued by exporting companies to clear shipments on arrival at Saudi ports. Saudi Customs
will accept the original commercial invoice and a country of origin certificate attested by a local
chamber of commerce located in a city or area where the foodstuff are purchased and shipped. This
measure is expected to save time and money for U.S. foodstuffs exporters to Saudi Arabia.
Standard Commercial Terms of Payment
Saudi importers use one or more of the following types of payment when importing goods from U.S. or
other foreign suppliers:
1. Letter of Credit (LOC): A letter from a bank guaranteeing that a buyer's payment to a seller will be
received on time and for the correct amount. Depending on the trust level between Saudi importers and
foreign suppliers, one of the following types of LOCs is used as payments for imported products:
A. Irrevocable Letter Of Credit (ILOC): A letter of credit that cannot be canceled. This guarantees
that a buyer's payment to a seller will be received on time and for the correct amount.
B. Sight Letter of Credit (SLC): A letter of credit that is payable as soon as the required documents
have been presented.
C. Deferred Payment Letter of Credit -- A letter of credit that allows the buyer to take possession of
goods by agreeing to pay the issuing bank or the confirming bank at a fixed future date, for example up
to 90 days after shipment.) This kind of payment is used where a buyer and a seller have a close
working relationship because, in effect, the seller (beneficiary of the L/C) is financing the purchase by
allowing the buyer a grace period for payment.
2. Cash against Document (CAD): A payment term which states that a buyer must pay in cash
before he gets shipping papers in order to get possession of the imported goods. The transaction
involves a third party, usually an importer’s bank, to keep shipping papers until it receives a full
payment from the buyer. The problem with this type of payment is that if the importer changes his
mind and does not want the goods, the exporter has to re-take possession of the goods and pay for the
shipping and other costs. To use this type of payment, the U.S. exporter must have developed a close
working relationship with his Saudi buyer.
3. Cash in Advance: In this case, the importer pays for his goods in advance before the exporter ships
the goods to the importer. This kind of payment is the most advantageous to an exporting company.
As a final point, OAA Riyadh recommends that new-to-market American firms request an irrevocable
letter of credit until a close working relationship is developed.
The SFDA inspects all imported foodstuff, feed concentrates, health, herbal preparations and
supplementary foods at ports of entry. The Ministry of Agriculture tests live animals, plants, seeds and
grain feed. If a consignment is rejected for not adhering to Saudi standards, the importer is requested to
either re-export or destroy the product in the country.
As stated earlier, shipments of food products must be accompanied by a commercial invoice, health
certificate, and other selected documents. An importer is responsible for translating the commercial
invoice into Arabic (per Saudi Customs requirements) and to provide the translated document to his
Customs agent in order to start the clearing process. Containers are normally cleared in less than ten
days provided all documents are in order and imported products meet Saudi standards and
SFDA Inspectors at Border Inspection Posts (BIPs)
Imported foods are generally inspected independently by SFDA inspectors at a Saudi port of entry
without any interference from the SFDA headquarters in Riyadh. If imported consignment is in
compliance with pertinent Saudi or GCC standards and regulations, it is cleared. Otherwise, it is
rejected. The domestic importer has no access to SFDA internal report during the process. SFDA
informs the importer its final decision whether it to clear the product for sale in Saudi Arabia or reject it
due to lack of compliance with established standards or regulations. Reject products have to re-
exported or destroyed domestically under SFDA’s supervision.
SFDA’s mandatory a four stage verification process at BIPs involves the following:
1. Required documents verification
2. Identity check
3. Physical examination
4. Laboratory test
Failure to comply with pertinent Saudi or GCC standards and regulations at any of the above stage may
result in a rejection of the imported food product.
If a product is rejected by one of SFDA’s BIPs for alleged lack of adherence to established
specifications at any of the above four stages, the domestic importer has the right to appeal the decision
in writing to the Executive Department of the Imported Food Control (EDIFC) at the SFDA
headquarters and ask for reconsideration of the inspection results. In such cases, EDIFC forwards
appeal to SFDA’s especial committee that studies shipment documentation and the BIP test results to
verify compliance with established rules and regulations. If the BIP action was found to be in
compliance with the rules and regulations pertain to the rejected product, then EDIFC considers the BIP
findings and decision as final. If, for any reason, there was a misjudgment by the BIP inspectors,
EDIFC repeals the decision and inform the importer to clear the consignment cleared from Customs.
For religious reasons, Saudi Arabia bans imports of alcoholic beverages, live swine, pork, and foodstuff
ingredients or additives that contain pork products, including pork fat, and gelatin. Other banned
products include meat of asses, mules, hinnies (fresh chilled, or frozen), frog legs, poppy seeds, hemp
seeds, opium and hops and swine leather.
III. MARKET SECTOR STRUCTURE AND TRENDS
Currently, there are 60 hypermarkets in the Kingdom based in the five major cites Riyadh, Dammam,
Jeddah, Mecca and Madina. The number of hypermarkets is expected to increase significantly in the
next five years as the major foodstuff retailers such as Azizia Panda, Carrefour, Lulu Saudi
Hypermarket and Danube open new branches in major cities of the Kingdom.
Class A and B supermarkets in the Kingdom total more than 450 and are increasing in number. Most
are comparable to those in the United States. Major supermarket chains include Tamimi Markets,
Panda, Othaim, Al Raya, Danube, Farms, Bin Dawoud, Alsadhan, and Manuel Supermarkets. All of
these supermarkets have modern frozen food sections and handle a number of food products from the
United States. Tamimi Markets, Othaim, Danube, Manuel Supermarket and Al Azizia-Panda often are
involved in direct imports of processed foods, fruit, vegetables and livestock and poultry meat mostly
through consolidators. Selected produce are flown from the U.S. and Europe while others are shipped
Tamimi Markets began as a partnership with Safeway USA, but has been wholly owned by the Tamimi
family since late 70s. Tamimi continues, however, to sell Safeway brand products. All supermarket
chains in the Kingdom are wholly owned by Saudi companies with the exceptions of Carrefour, which
is joint venture between French owners and Saudi investor. Lulu Saudi Hypermarket is owned by
U.A.E. based Emke Group.
Al Azizia-Panda Inc. is the largest local supermarket chain, has grown from a few stores in the early
1990 to more than 150 stores today, mainly through acquisition of existing supermarket chains. With
more than 120 stores, Othaim is the second largest supermarket chain in Saudi Arabia.
The supermarket business has become very competitive. Larger volumes will enable selected chains to
import directly, in an effort to lower costs. Currently large supermarket chains are importing a
percentage of their stock directly, but the majority of imported foodstuffs continue to be handled by
Strict shelf life regulations imposed by the Saudi Arabian Standards Organization makes inventory
control a challenge. Saudi supermarket chains get reimbursed from distributors for products expired on
the shelf. If unopened cartons of products stored with retailers expire, distributors do not have the
obligation to take them back. Supermarkets also depend on merchandising services offered by
importer/distributors, i.e., stocking shelves and keeping inventory. Many supermarkets also earn
significant revenues from suppliers in the form of listing fees, gondola/shelf space rentals and various
fees and discounts. It is not unusual for major supermarket chains to receive up to 90 days credit terms
from their suppliers.
The recent introduction of hypermarkets and continued increase in the number of supermarkets in the
Kingdom have produced stiff competition among retailers as each hypermarket and supermarket chain
strives to gain a larger client base. Managers are looking to cut costs and expand product range.
Competitive pricing is essential, but promotional and advertising support are key as well as the ability of
a vendor to offer a wide selection of products. Advertising is often geared toward women, who play a
greater role in purchasing decisions.
Food Processing Sector
Local manufacturing of food products has expanded rapidly over the past few years. The Saudi
government has assisted the food industry by providing attractive financing and subsidies on some
equipment and by imposing higher import tariffs up to 20 percent on selected imports that compete with
locally produced products (poultry meat, table eggs, sugar, macaroni and similar products, etc.).
Locally produced food products also have an advantage over imported food products because they can
be exported duty free to other countries in the Gulf Cooperation Council (GCC): Kuwait, Oman, Qatar,
Bahrain, and the United Arab Emirates. Hence, the market for locally manufactured products consists
of the entire Arabian Peninsula, including Yemen. The expanded market has prompted many
international companies to set up licensing agreements with local manufacturers in Saudi Arabia to
produce their brand. Such companies include Kraft/General Foods, Frito Lay, Delmonte, Pepsi, and
Potato chips, snack foods, juices, biscuits, peanut butter, hot sauce, cookies, cereals, and ice cream are
all produced in the Kingdom. However, processed food products "produced" in Saudi Arabia depend
heavily on imported ingredients.
Food Service Sector
About 70 percent of Saudis are in their teens. Dining at fast food restaurants is popular and is a major
form of entertainment for the Saudi family. International fast food chains such as KFC, Burger King,
McDonald’s, Chili’s, Fuddruckers, and TGI. Fridays, Pizza Hut, Dominos, and local chains such as
Herfy, Al-Beck, Taza, Dajen, and Kudo continue to expand and are found in major urban areas. Many
of the international fast food chains and selected local outlets such as Herfy import a significant share of
required ingredients directly from the United States.
The demand for institutional-sized food products by the catering sector remains strong because of the
large number of ex-pats (7 million) and the huge number of pilgrims visiting the Kingdom to perform
Hajj or Umra (more than eight million annually). The Muslim pilgrims usually stay from two weeks to
up to two months in the cities of Mecca, Medina, and Jeddah and require room and board. Also, with the
new Saudi Government emphasis on tourism, Muslim pilgrims are allowed to visit other cities and stay
up to two months in the Kingdom. This will further increase demand for food products.
A recent trend has been an increase in the number of resorts in the Kingdom, catering mainly to Saudis
and other Arabs. Many are being built on the Red Sea and the Arabian Gulf.
IV. BEST HIGH-VALUE PRODUCT PROSPECTS
The following is a list of some consumer ready food products with high export potential.
Potato chips and savory snacks
Fresh apples and pears
Processed fruits and vegetables
Jams and jellies
Fruits and vegetable juices
Sweet pastry and biscuits
Processed fruit and vegetables
Key Trade and Demographic Information for 2011
Agricultural Imports From All Countries ($Mil) $14,600*
U.S. Market Share (%) 9.2
Consumer Food Imports From All Countries ($Mil) estimated at 35% of total imports $5,110
U.S. Market Share (%) 8.7
Edible Fishery Imports From All Countries ($Mil) $209
U.S. Market Share (%) 0.7
Total Population (Millions) 27**
Annual Growth Rate (%) 3.2% **
Urban Population (Millions) 22.3 **
Annual Growth Rate (%) N/A
Number of Major Metropolitan Areas 13 **
Size of the Middle Class (Millions) Growth Rate (%) N/A
Per Capita Gross Domestic Product (U.S. Dollars) $16,245 **
Unemployment Rate (%) 11% **
Per Capita Food Expenditures (U.S. Dollars) estimated at 40% of GDP $6,498+
Percent of Female Population Employed 15% **
Exchange Rate US$1 = 3.75 Saudi Riyals (SR) SR 3.75
* Major exporting countries data
**Saudi government data
V. KEY CONTACTS AND FURTHER INFORMATION
Office of Agricultural Affairs
P.O. Box 94309, Riyadh 11693
Dr. Hassan F. Ahmed, Agricultural Attache
Tel: 966-1-488-3800, Extension 4351
E-Mail Address: Agriyadh@fas.usda.gov
SFDA sets foods standards and inspects imported food products at various Saudiports of entry. The
following are coordinates SFDA:
Dr. Ibrahim S. Al-Mohizea
Vice President Food Affairs
Saudi Food & Drug Authority
Tel: 966-1-275-9222, ext. 1204
Live animals, plants, fruits and vegetables, and animal feed are inspected by the Saudi Ministry of
Agriculture (MOA). Following are coordinates of some of the important departments.
Dr. Abdulgani Al Fadil
Plant and Animal Quarantine Department
Mr. Mohammed Al-Mazroa
Director General (registers and testes seed as well as pesticides used in foodstuffs)
Agricultural Research Department
Tel: 966-1-405-5848/401-6666 ext, 2062