Required Report - public distribution

**Date:** 11/15/2004

**GAIN Report Number:** EZ4026

EZ4026

**Czech Republic**

**Retail Food Sector**

**Annual Report**

**2004**

**Approved by:**

![](media/image1.wmf)Sarah Hanson

U.S. Embassy

**Prepared by:**

Petra Choteborska

**Report Highlights:**

The Czech retail sector is becoming increasingly concentrated with the
top ten retailers having 55% market share. This trend will continue with
the market share of the 'top ten' reaching 67% and total retail sales
growing by \$2 billion by 2006. Discount, specialized and convenience
stores are increasing in number. Ready-to-eat meals have a strong growth
potential. About 25% of food products are imported. As consumers become
more affluent, quality will become more important. U.S. food exports
with good sales potential include dried fruits, nuts, wine, distilled
liquors, seafood, rice, sauce, spices, baking mixes, and snacks.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Vienna \[AU1\]

\[EZ\]

SECTION I. Market Summary

-   In 2003, annual turnover for the Czech retail sector amounted to
    \$11 billion.

-   Annual growth is 6% per year.

-   The sector has reached a high level of concentration with 74% of
    consumers shopping at one of the top 10 stores and turnover for the
    top 10 amounting to 55% of total sales. This trend will continue
    with the market share of the 'top ten' reaching 67% and total retail
    sales growing by \$2 billion by 2006. Differentiation among
    retailers will be the next step.

-   Roughly 25% of food products are imported.

-   Expenditures on food, beverages and tobacco eat up 26% of an average
    income

#### Retail Food Sector Market Share - 1997

![](media/image2.wmf)

#### Retail Food Sector Market Share - 2003

![](media/image3.wmf)

-   The popularity of hypermarkets is growing due to their wide range of
    products, low prices, high quality of fresh food products, large
    parking lots, and a variety of services offered.

-   Average store size is 253 square meters per 1,000 inhabitants (in
    Germany it is 330 sq.m.).

-   There is highly competitive environment in the Czech retail sector -
    supply is higher than demand and retail chains fight for customers
    by keeping prices low, introducing cheap private labels (some chains
    even high quality private labels), bonus/loyalty cards,
    advertisements in the press.

[Services:]{.underline}

-   Some stores have longer opening hours (e.g. Tesco hypermarkets are
    open "24-7", Carrefour hypermarket in Prague center closes at
    midnight) than in other European countries (however, with the
    upcoming EU accession in May, a draft law restricting opening hours
    at night, on weekends and official holidays, is now in the
    Parliament)

-   Many retail chains offer home delivery

-   Various financial services enable higher-purchase payments

-   Some chains offer electronic shopping through their webpages

-   There are no restaurants, pharmacies, banks etc. located in the
    supermarkets. However, there are usually many stores and fast food
    restaurants right outside the large hypermarkets in shopping malls;
    only some hypermarkets have tables next to their grill for
    on-the-spot consumption of grilled meat products

-   Most retailers sell some ready-to-eat products at the deli counter
    (fried fish, fried chicken, sandwiches, etc.), the larger
    hypermarkets sell grilled chicken and offer a range of uncooked
    seasoned meats

[Future:]{.underline}

-   Concentration in the retail sector will continue and it is expected
    that there will be lower number of stronger retailers in the future

-   Convenience stores and ready-to-eat meals have a strong growth
    potential

-   Concentration will increase: in 2003. At present, top 10 retailers
    have a 55% market share. In 2006, they will have 67% market share

-   High competition will force chains to focus on differentiation (with
    new product categories -- e.g. organics; stronger branding; cost
    reduction; services -- e.g. health care, banks, restaurants, etc.)

-   The number of shopping centers will grow (especially in medium sized
    cities)

-   Retailers will grow if they offer convenience and services
    (catering, financial, medical)

-   The independent specialty store will gain ground

-   Currently, prices play a key role. However, in three years quality,
    time spent in the store, and price will have almost equal importance
    for choosing a shopping location

-   New specialized wholesale companies will emerge

+-----------------------------------+-----------------------------------+
| **Advantages**                    | **Challenges**                    |
+-----------------------------------+-----------------------------------+
| Retail sector is the most         | After the EU accession, some      |
| developed segment of the          | retailers started purchasing some |
| agricultural/food sector          | products directly from their      |
| (processors still have space to   | central office in the EU in order |
| improve); chains offer a great    | to save costs (some US products   |
| variety of high quality products  | on the Czech market may not get   |
|                                   | to the stores)                    |
+-----------------------------------+-----------------------------------+
| Czech economy is growing,         | Tougher competition with EU       |
| increased consumption is expected | suppliers                         |
+-----------------------------------+-----------------------------------+
| Food consumption will grow        | Higher transportation costs from  |
| moderately (people switch from    | the U.S.                          |
| basic to more luxury food)        |                                   |
+-----------------------------------+-----------------------------------+
| #########                         |                                   |
| Weaker \$US makes exports cheaper |                                   |
+-----------------------------------+-----------------------------------+

## SECTION II. ROAD MAP FOR MARKET ENTRY

### Entry Strategy

-   All supermarket and hypermarket chains import products through Czech
    importers and wholesalers; this may change with the EU accession as
    some retail chains may centralize buying to European headquarters in
    order to save costs (this would be applied for grocery products not
    fresh food)

-   Consolidators in the EU supply some international retail chains with
    U.S. products -- the list of these can be found at:
    [http://www.american-foods.org](http://www.american-foods.org/)

-   Since retailers have a stronger position in the Czech Republic than
    suppliers or wholesalers (where concentration has not happened yet),
    most suppliers have to pay huge sums to get their products on the
    store shelves. This so called "listing fee" depends on the market
    position of the supplier. The less known the brand or the less
    indispensable the product is, the higher the listing fee.

-   U.S. exporters should contact Czech importers directly (the FAS
    office in Prague can provide a list of importers upon request)

-   Importers usually specialize in a product area, i.e. dry groceries,
    frozen products, beverages, dried fruit and nuts, alcoholic
    beverages, etc.

-   Retailers do not want to carry products containing biotech products
    and require that each imported product be accompanied with a
    statement "that it does not contain genetically modified organisms
    (GMO). This requirement has been a problem for exporters of some
    U.S. food products -- corn chips, baking mixes containing soya,
    etc.)

-   Exporters should also be aware that importers expect that
    new-to-market products will be supported with some marketing
    activities at least partially paid by the exporter

### Market Structure

### Company Profiles

*A. Hypermarkets, supermarkets, etc.*

-   Hypermarkets and discounts stores are growing, however, its growth
    pace is slowing down

-   In the future discounts, specialized and convenience stores will
    grow

-   Supermarkets are stagnating and are looking for new concepts to
    attract customers (e.g. Delvita's new concepts "Delvita Proxy" and
    "Delvita City" for quicker and more convenient daily shopping in
    smaller stores)

-   Retailers buy products mostly from Czech importers

-   Makro Cash and Carry buys products from a special wholesaler

Table shows company profiles of top 10 retailers in the Czech Republic:

(Notes: C&C = cash and carry, HM = hypermarket, SM = supermarket, DIS =
discount store)

+-------------+----------+-------+---------+------------+------------+
| **Retailer  | **Owne   | **Tur | **No.   | **L        | **         |
| Name and    | r-ship** | nover | of      | ocations** | Purchasing |
| Outlet      |          | in    | Ou      |            | Agent      |
| Type**      |          | 2     | tlets** |            | Type**     |
|             |          | 003** |         |            |            |
|             |          |       |         |            |            |
|             |          | **(\$ |         |            |            |
|             |          | M     |         |            |            |
|             |          | il)** |         |            |            |
+-------------+----------+-------+---------+------------+------------+
| Makro C&C   | Dutch,   | \$    | 10 C&C  | larger     | cash and   |
| CR          | owned by | 1,385 |         | cities     | carry,     |
|             | Metro,   |       |         |            | imports    |
| (C&C Makro) | Germany  |       |         |            | through    |
|             |          |       |         |            | Hopi       |
+-------------+----------+-------+---------+------------+------------+
| Ahold       | Dutch    | \$    | 43 HM   | hy         | retailer   |
|             |          | 1,250 |         | permarkets |            |
| (HM         |          |       | 177 SM  | in large   |            |
| Hypernova,  |          |       |         | cities,    |            |
| SM Albert)  |          |       |         | su         |            |
|             |          |       |         | permarkets |            |
|             |          |       |         | in larger  |            |
|             |          |       |         | and small  |            |
|             |          |       |         | cities     |            |
+-------------+----------+-------+---------+------------+------------+
| Swarz CR    | German   | \$    | 53 HM   | mid size   | retailer   |
|             |          | 1,038 |         | and        |            |
| (HM         |          |       | 51 DIS  | smaller    |            |
| Kaufland,   |          |       |         | cities,    |            |
|             |          |       |         | rural      |            |
| DIS Lidl)   |          |       |         | areas      |            |
+-------------+----------+-------+---------+------------+------------+
| Rewe CR     | German   | \$865 | 73 SM   | Large, mid | retailer   |
|             |          |       |         | size and   |            |
| (SM Billa,  |          |       | 142 DIS | smaller    |            |
| DIS Penny   |          |       |         | cities     |            |
| Market)     |          |       |         |            |            |
+-------------+----------+-------+---------+------------+------------+
| Tesco       | U.K.     | \$827 | 16 HM   | larger     | retailer   |
| Stores CR   |          |       |         | cities     |            |
|             |          |       | 6 SM    |            |            |
| (HM Tesco,  |          |       |         |            |            |
|             |          |       |         |            |            |
| SM Tesco)   |          |       |         |            |            |
+-------------+----------+-------+---------+------------+------------+
| Globus CR   | German   | \$700 | 10 HM   | large and  | retailer   |
|             |          |       |         | mid size   |            |
| (HM Globus) |          |       |         | cities     |            |
+-------------+----------+-------+---------+------------+------------+
| Tengelmann  | German   | \$465 | 107 DIS | mid size   | retailer   |
| CR          |          |       |         | cities,    |            |
|             |          |       |         | rural      |            |
| (DIS Plus)  |          |       |         | areas      |            |
+-------------+----------+-------+---------+------------+------------+
| Carrefour   | French   | \$480 | 9 HM    | large      | retailer   |
| CR          |          |       |         | cities     |            |
|             |          |       |         |            |            |
| (HM         |          |       |         |            |            |
| Carrefour)  |          |       |         |            |            |
+-------------+----------+-------+---------+------------+------------+
| Delvita     | Belgium  | \$427 | 94 SM   | large, mid | retailer   |
|             |          |       |         | size and   |            |
| (SM         |          |       |         | smaller    |            |
| Delvita)    |          |       |         | cities     |            |
+-------------+----------+-------+---------+------------+------------+
| Spar CR     | German   | \$346 | 14 HM   | mid size   | retailer   |
|             |          |       |         | cities     |            |
| (HM         |          |       |         |            |            |
| Interspar)  |          |       |         |            |            |
+-------------+----------+-------+---------+------------+------------+

##### B. Convenience stores, gas marts, kiosks

-   There are no convenience store chains in the Czech Republic similar
    to the 7-Eleven style of shop in the U.S., but only tiny stores
    called "vecerka" (the evening stores), which are open from late
    afternoon to late evening

-   In the last 14 years, many large international gas station chains
    built gas stations and marts throughout the country

-   There are several international gas station chains that operate gas
    marts (e.g. OMV, Esso, Shall, Agip, Aral) and a Czech chain Benzina

-   Gas marts are operated as franchises, and the owners have a contract
    with the parent firm which in turn has a contract with food
    suppliers

-   Gas marts are supplied either directly by producers (e.g. Coca Cola)
    or by wholesalers

-   The best way to get U.S. products to the gas marts and kiosks is
    through specialized importers (note: a list is available upon
    request from the FAS office in Prague)

-   Gas marts are open 24 hours

-   Kiosks are located in tourist areas and usually sell fast food and
    some drinks

-   A new phenomenon in the Czech Republic are popcorn stands in large
    movie theaters - the kiosks are supplied by specialized importers

-   Besides gas stations some hypermarkets are open 24 hours, 7 days a
    week

##### C. Traditional Markets, Independent stores

-   Small independent stores have 25-30% market share, international
    retail chains have 70-75% market share (for comparison, small stores
    represent 7% in France and 60% in Greece)

-   Independent stores buy products from wholesalers, importers, or from
    a cash & carry (i.e. Makro)

-   In order to get volume discounts, smaller firms are forming
    "purchasing alliances" to buy in bulk from suppliers, and "voluntary
    alliances" to deal with selected wholesalers

-   In large and mid-size cities, traditional stores have been pushed
    out by hypermarkets and supermarkets

-   Most small grocery stores in rural areas are part of some
    cooperative

-   In the future, many small-sized stores will either offer some extra
    service (e.g. opening hours) or will focus on specialties

-   There are also traditional open markets selling mainly produce or
    seasonal items (i.e. live carp at Christmas)

SECTION III. COMPETITION

The following table from the UN Trade Statistics shows U.S. import value
in 2002 and market share with consumer-oriented agricultural products:

<table>
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</colgroup>
<tbody>
<tr class="odd">
<td colspan="22"><h6
id="czech-republic-imports-of-consumer-oriented-agricultural-products">Czech
Republic Imports of Consumer-Oriented Agricultural Products</h6></td>
</tr>
<tr class="even">
<td colspan="22"><strong>(In Millions of Dollars)</strong></td>
</tr>
<tr class="odd">
<td> <strong>Imports from the World Imports from the U.S. U.S. Market
Share</strong></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
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<td></td>
<td></td>
</tr>
<tr class="even">
<td colspan="2"><table style="width:100%;">
<colgroup>
<col style="width: 1%" />
<col style="width: 53%" />
<col style="width: 1%" />
<col style="width: 5%" />
<col style="width: 6%" />
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<col style="width: 2%" />
<col style="width: 4%" />
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</colgroup>
<tbody>
<tr class="odd">
<td colspan="2">CONSUMER-ORIENTED AGRICULTURAL TOTAL</td>
<td> </td>
<td></td>
<td>1,400</td>
<td></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="3">25</td>
<td> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="3">2%</td>
<td></td>
</tr>
<tr class="even">
<td> </td>
<td>Snack Foods (Excl. Nuts)</td>
<td> </td>
<td>163</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">1</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">0.12%</td>
</tr>
<tr class="odd">
<td> </td>
<td>Breakfast Cereals &amp; Pancake Mix</td>
<td> </td>
<td>11</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">1</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">0.84%</td>
</tr>
<tr class="even">
<td> </td>
<td>Red Meats, Fresh/Chilled/Frozen</td>
<td> </td>
<td>52</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">0</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">0%</td>
</tr>
<tr class="odd">
<td> </td>
<td>Red Meats, Prepared/Preserved</td>
<td> </td>
<td>18</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">1</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">1%</td>
</tr>
<tr class="even">
<td> </td>
<td>Poultry Meat</td>
<td> </td>
<td>33</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">0</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">0%</td>
</tr>
<tr class="odd">
<td> </td>
<td>Dairy Products (Excl. Cheese)</td>
<td> </td>
<td>77</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">1</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">0.40%</td>
</tr>
<tr class="even">
<td> </td>
<td>Cheese</td>
<td> </td>
<td>47</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">0</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">0%</td>
</tr>
<tr class="odd">
<td> </td>
<td>Eggs &amp; Products</td>
<td> </td>
<td>4</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">1</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">6%</td>
</tr>
<tr class="even">
<td> </td>
<td>Fresh Fruit</td>
<td> </td>
<td>206</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">1</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">0.02%</td>
</tr>
<tr class="odd">
<td> </td>
<td>Fresh Vegetables</td>
<td> </td>
<td>137</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">1</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">0.00%</td>
</tr>
<tr class="even">
<td> </td>
<td>Processed Fruit &amp; Vegetables</td>
<td> </td>
<td>118</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">3</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">2%</td>
</tr>
<tr class="odd">
<td> </td>
<td>Fruit &amp; Vegetable Juices</td>
<td> </td>
<td>28</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">1</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">1%</td>
</tr>
<tr class="even">
<td> </td>
<td>Tree Nuts</td>
<td> </td>
<td>22</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">7</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">33%</td>
</tr>
<tr class="odd">
<td> </td>
<td>Wine &amp; Beer</td>
<td> </td>
<td>56</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">1</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">0.37%</td>
</tr>
<tr class="even">
<td> </td>
<td>Nursery Products &amp; Cut Flowers</td>
<td> </td>
<td>65</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">1</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">2%</td>
</tr>
<tr class="odd">
<td> </td>
<td>Pet Foods (Dog &amp; Cat Food)</td>
<td> </td>
<td>22</td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="3">1</td>
<td colspan="2"> </td>
<td colspan="2"> </td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td> </td>
<td colspan="2">3%</td>
</tr>
</tbody>
</table></td>
<td colspan="6"></td>
<td> </td>
<td colspan="6"><strong>Imports from the U.S.</strong></td>
<td> </td>
<td colspan="6"><strong>U.S Market Share</strong></td>
</tr>
</tbody>
</table>

-   The main competitors to U.S. exporters of consumer oriented
    agricultural products are the EU countries and other neighboring
    countries

-   This is a result of both geographic closeness and also trade
    agreements (EU Accession Agreement, CEFTA)

-   As off May 1, 2004, the Czech Republic will apply EU's harmonized
    tariff schedule found at:
    <http://europa.eu.int/comm/taxation_customs/dds/cgi-bin/tarchap?Lang=EN>

-   Both domestic food processing and food trade are dominated by strong
    multinational food companies (e.g. Phillip Morris, Danone, Master
    Foods, etc)

-   About 25% food products are imported

-   The main advantage of domestic products is price (e.g. pastas) and
    in some cases exceptionally good quality (e.g. beer). The advantages
    of imported products are primarily the lack of domestic products
    (e.g. seafood, some produce) and more selection for customers

```{=html}
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-   U.S. products are labeled with stickers that provide information
    required by Czech regulations, which mainly conform to European
    Union labeling requirements (see at
    [http://www.useu.be/agri/label.html]{.underline}.)

-   There is little U.S. vs. U.S. product competition in the Czech
    market with only few exceptions (e.g. peanut butter, popcorn)

-   U.S. products have limited or no international competition in the
    following categories: peanut butter, Tex-Mex foods, cranberry sauce
    and juice, and microwave popcorn

-   Most U.S. products enjoy favorable shelf placement and are
    prominently displayed

Imports of foodstuffs and live animals (SITC 0) in 2003 by country in %
-- total value \$2 billion

![](media/image5.wmf)

####### Imports of beverages and tobacco (SITC 1) in 2003 by country in % -

**total value \$270 million**

![](media/image6.wmf)

## 

## 

## SECTION IV. BEST PRODUCT PROSPECTS

**A. Products Present in the Market Which Have Good Sales Potential**

-   Dried fruit and nuts (almonds, pistachios, raisins, prunes, dried
    berries: blueberries, cranberries, cherries, macadamia, peanuts)

-   Wine -- Czech consumers are starting to replace beer consumption
    with wine consumption; New World wines are growing

-   Distilled liquors - bourbons

-   Seafood -- especially Alaska salmon; Maine lobster; scallops,
    shrimps, tuna, etc.

-   Rice

-   Sauces

-   Spices

-   Baking mixes

-   Peanut butter

-   Various snacks

**B. Products Not Present in Significant Quantities but Which Have Good
Sales Potential**

-   Beef -- after the EU accession U.S. hormone-free beef that is
    exported to the EU may be imported to the Czech Republic (and new
    steak houses are expected to emerge)

-   Frozen Juice concentrate -- not on the market yet due to higher
    prices of U.S. frozen juice concentrate, but in the future this may
    be a very good item since high quality frozen citrus concentrates
    are not locally available

**C. Products Not Present Because They Face Significant Barriers**

-   All products containing genetically modified organisms (GMOs) due to
    retailers unwillingness to carry these products (all buyers request
    from an importer a certificate that a product is GMO free)

SECTION V. POST CONTACT AND FURTHER INFORMATION

If you need more detailed information, please contact the Agricultural
Office in Prague:

######## American Embassy

Ms. Petra Choteborska

Agricultural Specialist

Trziste 15

118 01 Praha 1

Czech Republic

Tel: +420-257-531-170

Fax: +420-257-531-173

E-mail: <petra.choteborska@usda.gov>

URL: [www.usembassy.cz](http://www.usembassy.cz/)

Other useful contacts:

######## State Agricultural and Food Inspection

Dr. Jana Palackova

Head of Department of International Relations

Kvetna 15

603 00 Brno

Czech Republic

Tel: +420-543-540-204

Fax: +420-543-540-202

E-mail: <Jana.Palackova@szpi.gov.cz>

URL: [www.szpi.cz](http://www.szpi.cz/)

[Czech Ministry of Agriculture]{.underline}

Ms. Eva Pribylova

Director of Food Department

Tesnov 17

117 05 Prague 1

Czech Republic

Tel: +420-221-812-795

Fax: +420-222-314-117

E-mail: <pribylova@mze.cz>

URL: [http://www.mze.cz]{.underline}

######## State Veterinary Administration

Dr. Milan SehnalHead of Foreign Section

Slezska 7

120 56 Prague 2

Czech Republic

Tel: +420- 227-010-183

Fax: +420- 227-010-198

E-mail: <m.sehnal@svscr.cz>

URL: [www.svscr.cz](http://www.svscr.cz/)

Please visit our Internet home page for more information on the [Czech
Republic]{.underline}. Other useful websites include our regional office
based in Vienna:
[www.usembassy-vienna.at/usda](http://www.usembassy-vienna.at/usda)

and Foreign Agricultural Service's homepage
[www.fas.usda.gov](http://www.fas.usda.gov/)

Our reports can be downloaded from:

[http://www.fas.usda.gov/scriptsw/attacherep/default.asp]{.underline}

Other reports on the Czech Republic include:

EZ3020 Consumers Perceptions of Biotechnology

EZ3019 Organic Products

EZ3014 Exporter Guide

EZ3010 Tree Nuts

EZ3009 HRI Food Service Sector

EZ2012 Rice

EZ2011 Bourbon and Whiskey

EZ2010 Wine

EZ2009 Seafood

EZ2002 Food Processing Ingredients Sector

(Exchange rate: February 2004: 1 USD = 26 CZK)