Demand in Colombia for consumer oriented and other high-value food products have been growing steadily since the early 1990’s. Specific products showing an increase in sales since then are red meats, fresh/frozen pork, mechanically de-boned chicken meat, hatching eggs, fresh fruits, processed fruits and vegetables, pet food, beer, nursery products, and various types of snack foods. In 2011, two main conditions supported the rise of consumer oriented products: Colombia’s economic growth of 5 percent which is optimistic compared with other South American countries, and Colombian Peso’s constant revaluation that increased purchasing power. In addition, GOC reduced to zero import duty for equipment and machinery for the industry and reduced import duties for food products via Decree 4114 and 4115to improve the competitiveness of the agriculture and food sectors. This has resulted in a dynamic fast-food industry and has led to drastic changes in the way food marketing is done in Colombia.
Sub-Sector Best Prospects
For 2012, strong foreign direct investment in Colombia is likely to continue and it is unlikely that the Colombian peso will be weaker against the dollar, which will have a positive impact on imports from the United States.
Historically, Chile has been the principal supplier of imported fresh fruits to Colombia, but U.S. fruits can compete during certain times of the year and Colombian retailers are seeking to increase their supply of U.S. products. Foreign competition in wine primarily comes from Chile, Argentina, Spain, and France. Marketing efforts continue to introduce high-quality U.S. wines into the Colombian market, but success has been limited due to the 15 percent tariffs. South American countries receive preferential duty rate because they are members of the Latin American Integration Association (LAIA) and/or the Andean Community of Nations. The implementation of the Colombia-U.S. FTA will reduce import duty to zero for most of the U.S. value added products and establishes a phase out period of 5 years for a few products. The FTA will level the playing field for US consumer products exported to Colombia.
Although the production of domestic processed foods is growing, imports play an increasingly important role to meet consumer demand for these products. Sustained economic growth in the past two years and strong competition in the supermarket sector has also had an important impact on imports. The United States is the principal foreign supplier of consumer-ready food products to Colombia. U.S. food products are highly regarded in the Colombian market for their quality and value as well as for their wide diversity.
U.S. food companies looking to break into the Colombian market for consumer oriented food products and beverages should consider visiting Colombia in 2012 as a preliminary market analysis before the FTA is ratified. The FTA implementation expected in 2012 year will provide increased opportunities for U.S. food and beverages and it is important to develop business relationships early. There will also be increased opportunities for direct foreign investment with local food processing companies.
Trade Shows: Alimentec is a general food industry exhibition that takes place every two years. Alimentec will occur in Bogotá in June, 2012. Information can be found at www.corferias.com
Information on the processed food sector in Colombia can be obtained from Ms. Maria Carolina Lorduy, Executive Director of Food Industry Chamber at the National Association of Industrialists (ANDI): Calle 73 No. 8-13, Piso 6, Torre A, Bogotá, D.C., Colombia. Telephone (57-1) 326 8521/40, fax (57-1) 347-3196/98, e-mail: email@example.com
The National Institute for the Control of Food and Drugs (INVIMA) is the Colombian government agency that regulates processed food products and is controlled by the Ministry of Social Protection. The main contact is Mr. Cesar Jauregui, Deputy Director for Food and Alcoholic Beverages, INVIMA, Carrera 68D No. 17-11or 17-21, Bogotá, Colombia. Telephone (57-1) 294-8700 Ext. 3922, fax (57-1) 294-8700, Ext. 345. E-mail: firstname.lastname@example.org, or email@example.com. Web site: www.invima.gov.co.