Voluntary Report - public distribution

**Date:** 11/22/2004

**GAIN Report Number:** AM4003

AM4003

**Armenia, Republic of**

**Exporter Guide**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Randall Hager

U.S. Embassy

**Prepared by:**

Randall Hager

**Report Highlights:**

Growth in the domestic economy and insufficient domestic production of a
range of foodstuffs opens up opportunities for American exporters of
high value and other agricultural products to Armenia.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Moscow \[RS1\]

\[AM\]

Table of Contents

[**SECTION I. MARKET OVERVIEW 3**](#section-i.-market-overview)

[Business Climate 3](#business-climate)

[General perspective on market opportunities
3](#general-perspective-on-market-opportunities)

[The size and structure of consumer foods and edible fishery product
market
3](#the-size-and-structure-of-consumer-foods-and-edible-fishery-product-market)

[Table 1. Market size of selected food products for 2001-2003
5](#table-1.-market-size-of-selected-food-products-for-2001-2003)

[Key demographic developments 6](#key-demographic-developments)

[ADVANTAGES AND CHALLENGES FOR U.S. EXPORTERS
6](#advantages-and-challenges-for-u.s.-exporters)

[Table 2. Summary of Advantages and Challenges Facing US Exporters
6](#table-2.-summary-of-advantages-and-challenges-facing-us-exporters)

[SECTION II. EXPORTER BUSINESS TIPS
7](#section-ii.-exporter-business-tips)

[Business practices 7](#business-practices)

[General consumer tastes and preferences
7](#general-consumer-tastes-and-preferences)

[Table 3. Average per capita Annual Consumption of Main Food Products
7](#table-3.-average-per-capita-annual-consumption-of-main-food-products)

[Food standards and regulations 8](#food-standards-and-regulations)

[Table 4. The List of Products Subject to Mandatory Certification
9](#table-4.-the-list-of-products-subject-to-mandatory-certification)

[General import and inspection procedures
9](#general-import-and-inspection-procedures)

[Table 5. Specific Duties for Tobacco Products *(Law on Fixed Charges
for Tobacco Products)*
10](#table-5.-specific-duties-for-tobacco-products-law-on-fixed-charges-for-tobacco-products)

[Table 6. Specific Duties for Alcoholic Beverages
10](#table-6.-specific-duties-for-alcoholic-beverages)

[Table 7. Summary of Import Procedures and Requirements
11](#table-7.-summary-of-import-procedures-and-requirements)

[SECTION III. MARKET SECTOR STRUCTURE AND TRENDS
11](#section-iii.-market-sector-structure-and-trends)

[Retail trade 11](#retail-trade)

[Table 8. Retail Trade Market (2001-2003)
12](#table-8.-retail-trade-market-2001-2003)

[Food processing 12](#food-processing)

[Tourism sales, holiday gift sales, and Internet sales
12](#tourism-sales-holiday-gift-sales-and-internet-sales)

[The restaurant business 13](#the-restaurant-business)

[Promotional/marketing strategies and tactics
13](#promotionalmarketing-strategies-and-tactics)

[Diaspora and expatriates 13](#diaspora-and-expatriates)

[SECTION IV. BEST PRODUCT PROSPECTS
14](#section-iv.-best-product-prospects)

[Table 9. Information on selected food products with outstanding export
opportunities
14](#table-9.-information-on-selected-food-products-with-outstanding-export-opportunities)

[Table 10. Selected Statistical Information (2001-2003)
16](#table-10.-selected-statistical-information-2001-2003)

[Table 11. Agro-food Imports, by Main Trading Partners, percent
(1998-2002)
16](#table-11.-agro-food-imports-by-main-trading-partners-percent-1998-2002)

[SECTION V. KEY CONTACTS AND FURTHER INFORMATION
17](#section-v.-key-contacts-and-further-information)

[USDA/FAS AND ATO SERVICES 17](#usdafas-and-ato-services)

[OTHER MARKET REPORTS 18](#other-market-reports)

[OTHER USEFUL CONTACTS: 18](#other-useful-contacts)

# SECTION I. MARKET OVERVIEW

## Business Climate

The Armenian business environment, which includes liberal price and
trade systems and straightforward business entry procedures,
increasingly stimulates foreign investment. Promotion and development of
small and medium size enterprises is a stated priority for the
Government of Armenia, and this policy is considered to be a major
engine for economic growth. There are no wage controls in the private
sector, and the Government determines only the minimum wage of AMD[^1]
5,000 (about USD 10 per month). Armenia has been a full member of the
World Trade Organization (WTO) since February 2003.

Registering a business can be completed through a simple and short
procedure of state registration, which normally takes about five days
for legal entities and two days for individual entrepreneurs under the
*Law on State Registration*. Some types of businesses are subject to
additional licensing for health, safety, security, or environmental
purposes under the *Law on Licensing.* A simple licensing requirement is
applied to the production of food products, tobacco, and beverages. The
*Law on Foreign Investment* ensures national treatment and protection of
foreign investors' basic rights. It permits foreign investment in almost
all spheres of the economy and provides a "grandfather" clause
protecting investment against legislative changes for a period of five
years. The opportunity for dispute settlement in Armenian and
international courts as well as easy exit and full repatriation of
revenue and property are guaranteed by law.

However, in some lucrative sectors such as brewing, mineral water
bottling, production of soft drinks, tobacco, cognac, ice cream, and
sparkling wine (where one or two of the largest producers control over
2/3 of the market)[^2], there is a high level of market concentration,
and some important commodity markets such as sugar and wheat are
dominated by a few firms.

## 

## General perspective on market opportunities 

Armenia is characterized by stable macroeconomic situation with a high
growth rate, low inflation, and a stable exchange rate. In 2003 the
economy grew at a rate of 13.9 percent, and average real growth during
the most recent five years was over eight percent. Despite the
considerable improvement of the current account position (the deficit
was reduced by over 2.5 times during the most recent five years and was
USD 190.6 million in 2003, or seven percent of GDP), the foreign trade
deficit is still high and constitutes more than 20 percent of GDP.

The country suffers from an uneven distribution of wealth, high
unemployment, and poverty. According to official statistics, roughly 42
percent of Armenia's population is poor, and about seven percent of the
total population is very poor (i.e., average monthly consumption is
lower than the food poverty line). A recent internationally sponsored
study using consumption as a measure rather than income measures
estimated the real poverty rate at 32 percent. In 2002, the official
registered unemployment rate stood at 9.6 percent, while the rate of
unemployment calculated in accordance with International Labor
Organization (ILO) standards is three times higher.

The low level of income implies a high proportion of spending on food
products. According to a recent survey on household spending conducted
by the National Statistics Service (NSS), 64.6 percent of total
household spending is used for food products, plus an additional one
percent for alcoholic beverages and over five percent for tobacco.

## The size and structure of consumer foods and edible fishery product market 

In 2001, the value of retail food trade was about AMD 346 billion (about
USD 690 million). The share of food products in total retail trade was
68.5 percent, with the main food products given by the following shares
(in percentages) as follows: meat and meat products -- 6.7; fish and
fish products - 0.15; oils of animal origin -- 2.5; vegetable oils --
1.3; margarine -- 0.58; fats -- 2.18; diary products -- 0.58; cheese --
0.3; eggs -- 0.3; sugar -- 0.87; confectionary -- 1.0; tea -- 0.58;
bread -- 55.5; flour -- 3.0; macaroni -- 0.58; potato -- 0.3; vegetables
-- 0.15; grapes, fruits and melons -- 0.3; alcoholic beverages -- 4.0.
The country is a net food importer, with high dependency on food imports

During the most recent three-year period, the consumer food product
market has been growing at an average rate of ten percent. The size and
dynamics of main food product markets (including edible fish) is
presented Table 1 below.

### Table 1. Market size of selected food products for 2001-2003

<table style="width:100%;">
<colgroup>
<col style="width: 14%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 5%" />
<col style="width: 5%" />
<col style="width: 5%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 3%" />
<col style="width: 3%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
</colgroup>
<thead>
<tr class="header">
<th><strong>Product</strong></th>
<th><strong>Unit</strong></th>
<th colspan="3"><strong>Imports</strong></th>
<th colspan="3"><strong>Exports</strong></th>
<th colspan="3"><strong>Domestic production</strong></th>
<th colspan="4"><p><strong>Market size =</strong></p>
<p><strong>(Imp.+D.P.) -Exp.</strong></p></th>
</tr>
<tr class="odd">
<th></th>
<th></th>
<th><strong>2001</strong></th>
<th><strong>2002</strong></th>
<th><strong>2003</strong></th>
<th><strong>2001</strong></th>
<th><strong>2002</strong></th>
<th><strong>2003</strong></th>
<th><strong>2001</strong></th>
<th><strong>2002</strong></th>
<th colspan="2"><strong>2003</strong></th>
<th><strong>2001</strong></th>
<th><strong>2002</strong></th>
<th><strong>2003</strong></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td>Beef</td>
<td>Tons</td>
<td>7162</td>
<td>7663</td>
<td>9658</td>
<td>0</td>
<td>0</td>
<td>594</td>
<td>25080</td>
<td>24432</td>
<td colspan="2">23996</td>
<td>32242</td>
<td>32095</td>
<td>33061</td>
</tr>
<tr class="even">
<td>Pork</td>
<td>Tons</td>
<td>597</td>
<td>620</td>
<td>965</td>
<td>0</td>
<td>19</td>
<td>0</td>
<td>7360</td>
<td>6934</td>
<td colspan="2">7042</td>
<td>7956</td>
<td>7535</td>
<td>8007</td>
</tr>
<tr class="odd">
<td>Poultry</td>
<td>Tons</td>
<td>12923</td>
<td>11755</td>
<td>12480</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>1600</td>
<td>3695</td>
<td colspan="2">4368</td>
<td>14523</td>
<td>15450</td>
<td>16848</td>
</tr>
<tr class="even">
<td>Fish</td>
<td>Tons</td>
<td>248</td>
<td>219</td>
<td>188</td>
<td>73</td>
<td>454</td>
<td>10</td>
<td>682</td>
<td>746</td>
<td colspan="2">-</td>
<td>857</td>
<td>512</td>
<td>178</td>
</tr>
<tr class="odd">
<td>Butter</td>
<td>Tons</td>
<td>3830</td>
<td>3303</td>
<td>3605</td>
<td>0</td>
<td>0.2</td>
<td>0</td>
<td>17.7</td>
<td>28</td>
<td colspan="2">48</td>
<td>3847.2</td>
<td>3331</td>
<td>3652</td>
</tr>
<tr class="even">
<td>Cheese</td>
<td>Tons</td>
<td>157</td>
<td>180</td>
<td>253</td>
<td>41</td>
<td>96</td>
<td>1003</td>
<td>4767</td>
<td>4812</td>
<td colspan="2">5007</td>
<td>4882.5</td>
<td>4896</td>
<td>4258</td>
</tr>
<tr class="odd">
<td>Coffee</td>
<td>Tons</td>
<td>10276</td>
<td>10587</td>
<td>9976</td>
<td>74</td>
<td>607</td>
<td>1831</td>
<td>0</td>
<td>0</td>
<td colspan="2">0</td>
<td>10202</td>
<td>9979</td>
<td>8145</td>
</tr>
<tr class="even">
<td>Wheat</td>
<td>Tons</td>
<td>294960</td>
<td>330519</td>
<td>304037</td>
<td>0</td>
<td>30</td>
<td>21</td>
<td>241679</td>
<td>284673</td>
<td colspan="2">216677</td>
<td>536639</td>
<td>615162</td>
<td>520693</td>
</tr>
<tr class="odd">
<td>Bread</td>
<td>Tons</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>297292</td>
<td>294349</td>
<td colspan="2">293051</td>
<td>297292</td>
<td>294349</td>
<td>293051</td>
</tr>
<tr class="even">
<td>Rice</td>
<td>Tons</td>
<td>11076</td>
<td>14071</td>
<td>15686</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td colspan="2">0</td>
<td>11076</td>
<td>14071</td>
<td>15686</td>
</tr>
<tr class="odd">
<td>Flour</td>
<td>Tons</td>
<td>24663</td>
<td>14241</td>
<td>6097</td>
<td>80</td>
<td>0.8</td>
<td>0</td>
<td>111873</td>
<td>108489</td>
<td colspan="2">131391</td>
<td>136456</td>
<td>122730</td>
<td>137488</td>
</tr>
<tr class="even">
<td>Eggs</td>
<td>Mill. item</td>
<td>5.2</td>
<td>2.9</td>
<td>0.4</td>
<td>14</td>
<td>15.5</td>
<td>33.2</td>
<td>448</td>
<td>478</td>
<td colspan="2">502</td>
<td>440</td>
<td>465</td>
<td>468.8</td>
</tr>
<tr class="odd">
<td>Plant oil</td>
<td>Tons</td>
<td>13118</td>
<td>12097</td>
<td>18610</td>
<td>0</td>
<td>0.2</td>
<td>433</td>
<td>261</td>
<td>1167</td>
<td colspan="2">2122</td>
<td>13379</td>
<td>13264</td>
<td>20298</td>
</tr>
<tr class="even">
<td>Margarine</td>
<td>Tons</td>
<td>2370</td>
<td>3249</td>
<td>4884</td>
<td>58</td>
<td>0.6</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td colspan="2">0</td>
<td>2311.5</td>
<td>3248.5</td>
<td>4884</td>
</tr>
<tr class="odd">
<td>Sugar</td>
<td>Tons</td>
<td>73445</td>
<td>68400</td>
<td>86963</td>
<td>20</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td colspan="2">0</td>
<td>73425</td>
<td>68400</td>
<td>86963</td>
</tr>
<tr class="even">
<td>Macaroni</td>
<td>Tons</td>
<td>1468</td>
<td>1254</td>
<td>1996</td>
<td>0.5</td>
<td>0.1</td>
<td>1.1</td>
<td>659</td>
<td>848</td>
<td colspan="2">903</td>
<td>2126.5</td>
<td>2102</td>
<td>2898</td>
</tr>
<tr class="odd">
<td>Wine</td>
<td>000’ liter</td>
<td>59</td>
<td>62</td>
<td>22</td>
<td>1372</td>
<td>711</td>
<td>217</td>
<td>6393</td>
<td>6535</td>
<td colspan="2">2042</td>
<td>5080</td>
<td>5886</td>
<td>1847</td>
</tr>
<tr class="even">
<td>Ethil spirit</td>
<td>000’ liter</td>
<td>0</td>
<td>0</td>
<td>160</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>2358</td>
<td>1912</td>
<td colspan="2">1177</td>
<td>2358</td>
<td>1912</td>
<td>1336</td>
</tr>
<tr class="odd">
<td>Cognac</td>
<td>000’ liter</td>
<td>7</td>
<td>1.8</td>
<td>2</td>
<td>4803</td>
<td>5899</td>
<td>7302</td>
<td>5026</td>
<td>6145</td>
<td colspan="2">7093</td>
<td>230</td>
<td>-</td>
<td>-</td>
</tr>
<tr class="even">
<td>Vodka</td>
<td>000’ liter</td>
<td>289</td>
<td>640</td>
<td>1198</td>
<td>137</td>
<td>108</td>
<td>128</td>
<td>9427</td>
<td>10598</td>
<td colspan="2">11105</td>
<td>9579</td>
<td>-</td>
<td>12175</td>
</tr>
<tr class="odd">
<td>Canned fruits and vegetables</td>
<td>000’ cans</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>52649</td>
<td colspan="2">89629</td>
<td>-</td>
<td>-</td>
<td>-</td>
</tr>
<tr class="even">
<td>Tobacco</td>
<td>000’ box</td>
<td>100583</td>
<td>84482</td>
<td>98643</td>
<td>24306</td>
<td>8018</td>
<td>9682</td>
<td>81150</td>
<td>140755</td>
<td colspan="2">161095</td>
<td>157426</td>
<td>217220</td>
<td>250056</td>
</tr>
</tbody>
</table>

## 

## Key demographic developments

The population of Armenia is highly homogeneous with Armenians
constituting 98 percent of population. According to the 2001 population
census, the permanent population of Armenia as of January 1, 2003 was
3.21 million people, with urban share at 64.2 percent. About 53.4
percent of the urban population (or over one million people) lives in
Yerevan.[^3]

Twenty-eight percent of the total population is under the working age
(children of 0-16 years of age), and 9.7 percent is 65 years or over.
The age structure of urban and rural population differs considerably.
For example, the proportion of children in rural areas is 32.9 compared
to 26.8 in urban areas. However, on reaching working age, many young
people move from rural to urban areas to continue their education or to
find a job. The proportion of working age population in urban areas
exceeds that of rural areas by 7.3 percent, while the proportion of
children and elderly population is higher in rural areas, and the social
burden per 100 people of working age in rural areas is 76 dependants
compared to 55 in urban areas.

One of the key implications of Armenia's demographic situation is that
the consumer market is highly concentrated in urban areas, mostly in
Yerevan, the capital of Armenia. The per capita purchasing power is
higher in urban areas. The Yerevan market is also characterized by
generally higher consumer awareness, including awareness of quality
requirements for food products.

## 

## ADVANTAGES AND CHALLENGES FOR U.S. EXPORTERS

A summary of the main advantages (strengths and market opportunities)
and challenges (weaknesses and competitive threats) facing US exporters
in Armenia is presented in table 2 below.

### Table 2. Summary of Advantages and Challenges Facing US Exporters

  -----------------------------------------------------------------------
  **Advantages**                     **Challenges**
  ---------------------------------- ------------------------------------
  Availability of skilled and        Landlocked country with few
  inexpensive labor force.           transportation routes and high
                                     transportation costs, plus a
                                     transportation blockade.

  In general, liberal market and     Competition with domestic producers
  investment-friendly environment.   as well as with relatively cheap
                                     food imports from Russia and other
                                     CIS countries, as well as Iran and
                                     Turkey.

  Armenia is net food importing      Competition with high-quality,
  country. Domestic producers are    relatively expensive imports from
  not able yet to satisfy the demand European countries.
  for such products as meat and      
  poultry products, sugar, flour,    
  soft drinks, alcoholic beverages,  
  rice, plant oil, and grocery and   
  high value food products.          

  Presence of a large Armenian       
  Diaspora in large Russian cities,  
  which can serve as a good business 
  and marketing link.                

  Presence of a significant Armenian 
  Diaspora in the United States,     
  with opportunities for joint       
  ventures.                          
  -----------------------------------------------------------------------

# 

# SECTION II. EXPORTER BUSINESS TIPS

## Business practices

In general, Armenians possess a strong entrepreneurial spirit. As a
rule, business relationships are closely linked to personal
relationships, and may frequently be accompanied by visits to homes and
historic sites in the countryside, wining and dining, as well as gift
giving. Remnants of the Soviet mentality and working style still exist,
especially with Armenians over 40 years of age. This often is manifested
in slow replies to business correspondence, unwillingness of mid-level
officials to provide information, and other delays.

Foreign businessmen may encounter problems related to the differences in
language interpretation and understanding of some business terminology
and customs. There are some Western business concepts and customs that
are completely new for Armenia. Therefore, it is very important to
ascertain (and double check) that the content of communications,
negotiations, and agreements with Armenian partners is thoroughly
understood and/or similarly interpreted.

Pricing is largely determined by supply and demand. Some of the factors
that continue to contribute significantly to pricing decisions are the
low purchasing power of Armenians, high transportation costs, limited
competition, or absence of locally manufactured products in many
categories.

## General consumer tastes and preferences 

According to NSS, the food basket (the cost of one-month supply of basic
food products) for 2003 was AMD 7,742. An important feature of the
Armenian diet is that bread, bakery products, and potatoes are still the
most important components, representing about 40 percent of retail food
trade. However, there is a clear decreasing trend for the proportion of
bread and potatoes, and increasing trend for the proportion of meat and
meat products, animal fats, and eggs.

### Table 3. Average per capita Annual Consumption of Main Food Products

  ------------------------ ---------- ------------ -------------- ----------
                           **1996**   **1999**     **2001**       **2002**

  Bread and bakery (kg)    195.8      174.0        166.0          159,7

  Potato (kg)              70.2       49.2         43.6           39,9

  Vegetables (kg)          21.2       55.2         60.8           60,7

  Fruits and grapes (kg)   19.2       28.8         32.8           29,5

  Sugar (kg)               6.2        7.2          5.8            5,8

  Plant oil (liter)        2.4        2.4          2.8            2,5

  Meat and meat products   8.0        12.0         13.9           15,8
  (kg)                                                            

  Cheeses, all sorts (kg)  4.6        6.4          7.2            7,8

  Milk and yogurt (liter)  16.6       20.2         18.7           21,6

  Butter (kg)              1.3        1.2          1.4            3,5

  Egg (million items)      55         70           86             91,7

  Fish and fish products   5.5        4.8          4.8            4,6
  (kg)                                                            
  ------------------------ ---------- ------------ -------------- ----------

Food product demand is highly price elastic. For the majority of
Armenians, the decisive factor affecting the choice of products is
price, and thus food quality and safety issues are less important for
consumers. Traditionally, Armenians prepare homemade preserved food
(canned fruits and vegetables, and also meat) for winter. Therefore, the
demand for such products is low (excluding juices, for which there is
high demand). The tradition is changing slowly, especially in young
families with stable and relatively high income.

## Food standards and regulations

Armenia applies the metric system of weights and measures. Most of the
standards applied include old Soviet State Standards (GoSTs) or CIS
(Commonwealth of Independent States) interstate standards (over 18,000
standards). Under the WTO, Armenia committed itself to complete the
process of standards harmonization with internationally accepted rules
by the end of 2004, though this task will be difficult to complete. The
State Quality Inspectorate under the Ministry of Trade and Economic
Development (SARM) accepts ISO 9001 and ISO 9002 business management
standards.

Armenia is a member of *International Organization for Standardization
(ISO)* and the *Euro Asian Council for Standardization, Metrology and
Certification (EASC)*. For the preparation, adoption and application of
standards, Armenia follows the WTO's TBT Code of Good Practice. The main
legislative acts regulating the fields of standardization and conformity
assessment (certification) are: the *Law on Standardization,* the *Law
on Conformity Assessment,* the *Law on Uniformity of Measurements,
Government Decree No. 9, 11 January 2000*.

Armenia is a member of the *International Codex Alimentarius* commission
and of the *International Epizootic Office* and follows their standards
and guidance in establishing procedures on food safety, veterinary and
phytosanitary controls for importation and exportation *(Law on Food
Safety, Law on Veterinary,* and the *Law on plant Protection and Plant
Quarantine)*. Sanitary requirements are established by so called
"*SanPins" (Sanitary and Hygienic Rules and Norms)*, issued by the
Ministry of Health of Armenia. These requirements, among other things,
place limits on the amounts of toxic compounds, additives, and
contaminants in foodstuffs.

On health and hygiene grounds, as well as for protection of consumer
rights, there are mandatory conformity assessment (mandatory
certification) requirements applied to a range of foodstuffs, alcoholic
and non-alcoholic beverages, and tobacco products (*Government Decree
No. 239, 12 May 2000*). Certification schemes applied in Armenia
*(*fixed by *AST 5.3* standards*),* are in compliance with
internationally accepted rules, and include such methods as testing of
samples, analysis of production systems, quality system certification or
declaration of suppliers.

Simplified procedures are applied for the recognition of foreign
certificates if the Armenian authorities are satisfied that
certification procedures in foreign countries offer adequate assurance
of conformity, and the safety requirements and norms conform to those in
force in Armenia *(Government Decree No. 247 of 18 May 2000).*
Certification procedures for most products (except pharmaceuticals)
normally take 2-3 days and may involve a laboratory test and a fee.

There is an agreement between the United States Department of
Agriculture (USDA) and SARM via exchanged letters that SARM agrees to
recognize USDA safety certificates for meat and poultry products and
take into consideration manufacturer certificates for other products.

### Table 4. The List of Products Subject to Mandatory Certification

+-----------------------------------------+----------------------------+
| **Product Description**                 | **CN code**                |
+=========================================+============================+
| Meat of bovine animals, frozen.         | 0202                       |
+-----------------------------------------+----------------------------+
| Meat of swine, frozen                   | 020321-020329              |
+-----------------------------------------+----------------------------+
| Edible offal of bovine animals and      | 020621 000, 020622, 020641 |
| swine, frozen                           |                            |
+-----------------------------------------+----------------------------+
| Meat and edible offal of poultry,       | 020712, 020714, 020725,    |
| frozen                                  | 020727,                    |
|                                         |                            |
|                                         | 020733, 020736             |
+-----------------------------------------+----------------------------+
| Pig fat                                 | 020900 110                 |
+-----------------------------------------+----------------------------+
| Meat and edible meat offal, salted, in  | 0210                       |
| brine, dried or smoked                  |                            |
+-----------------------------------------+----------------------------+
| Fish, fish meat, frozen, dried, salted, | 0303, 030420, 0305         |
| smoked                                  |                            |
+-----------------------------------------+----------------------------+
| Milk and milk products                  | 0401, 0402, 040310,        |
|                                         | 040510, 040590, 0406       |
+-----------------------------------------+----------------------------+
| Birds\' eggs                            | 040700                     |
+-----------------------------------------+----------------------------+
| Natural honey                           | 040900 000                 |
+-----------------------------------------+----------------------------+
| Peas, chickpeas, lentils                | 0713-071340                |
+-----------------------------------------+----------------------------+
| Bananas, dates, pineapples, dried       | 080300, 080410 000, 080430 |
| grapes, melons, dried fruit             | 000,                       |
|                                         |                            |
|                                         | 0805, 080620, 0807, 0813   |
+-----------------------------------------+----------------------------+
| Coffee, tea                             | 0901, 0902                 |
+-----------------------------------------+----------------------------+
| Rice                                    | 1006                       |
+-----------------------------------------+----------------------------+
| Cereal flours                           | 110100, 1103               |
+-----------------------------------------+----------------------------+
| Soya-bean, olive, sunflower-seed, maize | 150710 900, 150990 000,    |
| oil                                     | 151219 910, 151529 900     |
+-----------------------------------------+----------------------------+
| Animals and Vegetable fats and oils,    | 1516, 1517                 |
| margarine                               |                            |
+-----------------------------------------+----------------------------+
| Preparations of meat, fish or           | 1601-1605                  |
| crustaceans, mollusks and other aquatic |                            |
| invertebrates                           |                            |
+-----------------------------------------+----------------------------+
| Sugar, sugar confectionery              | 1701, 170290, 1703, 1704   |
+-----------------------------------------+----------------------------+
| Cocoa, preparations containing cocoa    | 180500 000, 1806           |
+-----------------------------------------+----------------------------+
| Baby food                               | 190 110 000                |
+-----------------------------------------+----------------------------+
| Preparations of cereals, flour, starch  | 1902-1905 (ex. 190590 300) |
| and milk, pastry cooks\' products       |                            |
+-----------------------------------------+----------------------------+
| Preparations of vegetables, fruit, nuts | 2001-2009                  |
| or other parts of plants                |                            |
+-----------------------------------------+----------------------------+
| Miscellaneous edible preparations,      | 2101-2105, 210690 100      |
| yeast, ice-cream, cheese fondues        |                            |
+-----------------------------------------+----------------------------+
| Beverages, spirits and vinegar          | 2201-2209                  |
+-----------------------------------------+----------------------------+
| Tobacco and manufactured tobacco        | 2401-2403                  |
| substitutes                             |                            |
+-----------------------------------------+----------------------------+
| Table salt                              | 250 100 910                |
+-----------------------------------------+----------------------------+

Before finalizing any transaction, food exporters should know the
labeling requirements regarding food products. Labels must include the
manufacturer's name, contents, weight, and the expiry date. There is a
language requirement for imports of some (mainly food) products. That
is, Armenian is the required language, though a sticker or other
materials in a second language can be applied directly to the product or
package. The complete list of labeling requirements may be obtained from
the SARM, and companies wishing to obtain bar codes for their products
should make an application to that organization.

## General import and inspection procedures

The main legislative act regulating customs matters is the *Customs
Code*. Armenia's tariff regime is liberal, applying *ad valorem* customs
duties of from zero to ten percent on imports, and no duties on exports.
Armenia uses the international Harmonized Commodity Description and
Coding System (HS). As a general rule the zero percent rate is applied
to capital goods and inputs, and ten per cent rate is applied to goods
imported for final consumption. A uniform customs fee of about USD 6.50
for customs processing and specific weight related fee of USD 0.55 per
ton for freight inspection are applied to imports. There are two taxes
imposed on imports and domestic production, the value added tax (VAT),
and services and excise tax on certain goods. The VAT for most imported
products is collected by the customs service at the border.

There are few exceptions from the *ad valorem* rule, namely for tobacco
and alcoholic beverages.

### Table 5. Specific Duties for Tobacco Products *(Law on Fixed Charges for Tobacco Products)*

  ---------- -------------------- -------------------- --------------------
  **CN       **Description**      **Rate (USD for 1000 **Rate (USD for 1000
  Code**                          items) for imported  items) for domestic
                                  products**           products**

  2402 10    Cigars               3000                 2200
  001                                                  

  2402 100   Cigarillos           30                   22
  09                                                   

  2402 20    Cigarettes with      11                   8
  900        filters                                   

  2402 20    Cigarettes without   6                    3.5
  910        filters                                   
  ---------- -------------------- -------------------- --------------------

### Table 6. Specific Duties for Alcoholic Beverages

  -------- --------------------------------- ----------------- ------------
  **CN     **Brief Description**             **Unit Measure**  **Rate
  Code**                                                       (AMD)\***

  2203     Beer                              1 liter           50

  2204     Grape wines                       1 liter           100

  2204 10  Sparkling wines                   1 liter           75

  2205     Vermouth and other wine of fresh  1 liter           140
           grapes flavored with plants and                     
           aromatic substances                                 

  2206     Other brewed drinks (for example, 1 liter           60
           cider, Perry, mead)                                 

  2207     Ethyl spirit                      1 liter (by       70
                                             recalculation of  
                                             100% spirit)      

  2208     Spirit drinks, including                            

  220820   Made from distillation of grape   1 liter (by       1100
           wine and wine ingredients         recalculation of  
           (cognac, armagnac, etc)           100% spirit)      

  220830   Whiskies                                            370

  220840   Rum and tafia                                       420

  220850   Gin and Geneva                                      450

  220860   Vodka                                               240

  220870   Liquor, and fruit vodka                             600

  220890   Other                                               240
  -------- --------------------------------- ----------------- ------------

\*AMD stands for the local currency -- Armenian Dram.

The primary method for determination of the customs value is transaction
value. The Customs Code provides for the same six methods of valuation
laid out in the WTO Customs Valuation Agreement. The rules of origin of
goods are also in compliance with the WTO Agreement on Rules of Origin.
However, importers may face additional documentary requirements, which
may create difficulties related to discretionary treatment by customs
officers when using the customs valuation method.

There is no limit on hard currency imports to Armenia, but amounts over
USD 10,000 must be reported. Personal belongings are imported duty free.
Persons arriving in Armenia for permanent residence can import their
belongings duty free. Procedures and documentary requirements with
respect to importation are summarized in the table below.

### Table 7. Summary of Import Procedures and Requirements 

+--------------------+-------------------------+----------------------+
|                    | **Importation**         | **Products           |
|                    |                         | affected**           |
+--------------------+-------------------------+----------------------+
| **General          | a\) an invoice;         | > All products       |
| requirements**     |                         |                      |
|                    | b\) a contract;         |                      |
|                    |                         |                      |
|                    | c\) consignment         |                      |
|                    | documents;              |                      |
|                    |                         |                      |
|                    | d\) a certificate on    |                      |
|                    | the country of origin   |                      |
|                    | (if importers or        |                      |
|                    | exporters ask for       |                      |
|                    | preferential            |                      |
|                    | treatment).             |                      |
+--------------------+-------------------------+----------------------+
| **Mandatory        | Certificate issued by   | Products subject to  |
| certification**    | SARM on conformity of   | mandatory            |
|                    | the goods with Armenian | certification        |
|                    | requirements.           | (Government Decree   |
|                    |                         | No 239, 12 May       |
|                    |                         | 2000).               |
+--------------------+-------------------------+----------------------+
| **Phytosanitary    | a\) a phytosanitary     | Plants and products  |
| control**          | certificate issued by   | of plant origin      |
|                    | the Phytosanitary       | (Government Decree   |
|                    | Service of the          | No. 171, 11 March,   |
|                    | exporting country;      | 1998).               |
|                    |                         |                      |
|                    | b\) decision on         |                      |
|                    | conformity with         |                      |
|                    | phytosanitary           |                      |
|                    | requirement given by    |                      |
|                    | the Plant Quarantine    |                      |
|                    | Service of the Ministry |                      |
|                    | of Agriculture.         |                      |
+--------------------+-------------------------+----------------------+
| **Veterinary       | Decision on conformity  | Animals and products |
| control**          | with veterinary         | of animal origin     |
|                    | requirements given by   | (Government Decree   |
|                    | the Veterinary Service  | No. 171, 11 March,   |
|                    | of the Ministry of      | 1998)                |
|                    | Agriculture.            |                      |
|                    | Representatives of the  |                      |
|                    | Veterinary Service are  |                      |
|                    | available at the        |                      |
|                    | customs border          |                      |
+--------------------+-------------------------+----------------------+
| **To perform       |                         |                      |
| customs clearance  |                         |                      |
| business entities  |                         |                      |
| must be registered |                         |                      |
| in their           |                         |                      |
| respective         |                         |                      |
| regional customs   |                         |                      |
| house as an entity |                         |                      |
| involved in        |                         |                      |
| foreign economic   |                         |                      |
| activity.**        |                         |                      |
+--------------------+-------------------------+----------------------+

# 

# SECTION III. MARKET SECTOR STRUCTURE AND TRENDS

**[Qualitative assessment of market opportunities in the retail, HRI
food service, and food processing sectors]{.underline}**

## Retail trade 

The retail industry in Armenia is primarily driven by the private
sector. The majority of retail (as well as wholesale) trade in terms of
volume, 80.5 percent, is concentrated in Yerevan, while only 44 percent
of 12,754 business entities involved in retail trade are located in
there. The volume of retail trade in 2001-2003 is represented below. In
2001, the proportion of retail food trade was 68.5 percent of total
retail trade (the proportions for 2002 and 2003 did not change
considerably).

### Table 8. Retail Trade Market (2001-2003)

  ------------------------------ ------------- ------------- -------------
                                 **2001**      **2002**      **2003**

  Retail trade volume (AMD       504.3         588.9         710.2
  billion)                                                   
  ------------------------------ ------------- ------------- -------------

The demand for consumer products, including food, is satisfied through
sales in stores, open markets for food and non-food products, and kiosks
(jointly representing about 99 percent of retail trade). During recent
years, stores situated in fixed structures took over the leading
position from open-air markets in terms of sales volume. In 2003, the
proportion of food product sales through stores was over 52 percent of
total sales (open-air markets -- 37.7, and kiosks -- 8.9 percent). The
number of retail outlets, especially small-sized food providers has been
growing rapidly. The majority of these stores employ from three to ten
people. They operate largely on a consignment basis with various
wholesalers, although importers themselves own some outlets. Most of the
retail transactions are conducted through cash payment, because credit
card and check payments are not common in Armenia.
Domestic/international company-to-company sales are typically conducted
through bank transfer (especially in the state sector), or letters of
credit.

In large open-air markets, hundreds of individual vendors offer
relatively inexpensive food and other consumer products. Many of them
take individual "shopping-tours" to countries such as Turkey, the UAE,
Iran, and China on a regular basis to buy products for resale in
Armenia. Some of these open-air markets, especially those trading food,
serve also as wholesale markets for retailers. There are around 30 such
open markets in Yerevan. Though prohibited by law, vendors readily
accept US dollars, especially for expensive items.

## Food processing

Armenia is famous for its fruits and vegetables, which, thanks to the
country\'s soil and climatic conditions, high altitude, and low use of
chemicals, are ecologically clean and flavorful. The food processing
industry is one on the fastest growing industries in Armenia,
representing more than half of the country's industrial output in 2003.
The main products are soft drinks, mineral water, cigarettes, alcohol,
canned fruits and vegetables, milk and dairy products, meat and meat
products, mixed feed, flour, and bread. Establishing a food processing
business and/or joint venture in this sector would be one of the best
approaches for entering the Armenian market, which would also open
opportunities for exporting to CIS countries and other countries. With
modern processing and packaging technologies, Armenian fruit and
vegetable products can successfully enter international markets. Most of
Armenia's food processing plants are actively looking for foreign
partners to increase their exports.

However, agricultural producers and the food processing industry are yet
unable to satisfy the demand for number of important commodities. More
than 70 percent of all food consumed in Armenia is imported. Imported
foodstuffs are mainly of Iranian, Turkish, Russian, United Arab Emirates
(UAE), European, and US origin. A significant portion of commercial
imports from the US is meat and poultry products, grocery items, and
alcoholic beverages.

## Tourism sales, holiday gift sales, and Internet sales

The tourism sector is developing quickly. According to the Ministry of
Trade and Economic Development, gross income from tourism was about USD
164 million in 2001. In 2003, over 206,000 foreign visits were made to
Armenia, an increase of over 27 percent compared to 2002. About two
dozen new high-quality service hotels and hotel-like lodgings were
opened during the period of 1998-2002 (from 1,600 hotel beds to about
2,300). Considerable investments have been made for improving the
tourism infrastructure, including renovation of museums and cultural
sites, and roads*.*

The biggest and the most important gift sales take place during New Year
and Christmas holidays, noting that Armenians celebrate Christmas after
the New Year, on 6^th^ of January, and that the New Year is much more
important for sales purposes. Sales via the Internet are a quite new
practice in Armenia and are not yet popular.

## The restaurant business 

Restaurants are an attractive investment and partnership opportunity for
US firms. Franchise offers from well-known American chains will be of
interest to local companies as well. The number of restaurants and
catering businesses has been rapidly expanding, pushed by growing
demand. Most of the growth is taking place in Yerevan, which is
experiencing a real boom in the restaurant business. While no well-known
chains have been established in Armenia so far, the fast-food concept is
gaining popularity. Recently opened restaurants also offer international
cuisine: Chinese, French, Indian, Italian, Lebanese, Mexican, and
others.

## Promotional/marketing strategies and tactics 

Advertising in Armenia is rapidly gaining in popularity. The official
language for advertising is Armenian *(Law on Advertising),* but
Armenian text may be accompanied by foreign language text in smaller
script. This provision does not cover newspapers, special publications,
trademarks, etc., that are issued or printed in foreign languages. An
advertisement may be copyrighted under Armenian law. The law prohibits
advertisements promoting the stimulating or relaxing effects of alcohol
and cigarettes.

Television accounts for the majority of the advertising industry\'s
market share. Locally made TV ads are usually of low quality, and the
Armenian audience is more receptive to ads placed on Russian channels
(ORT, Perviy Kanal and Rossiya) available in Armenia that feature
world-class advertising. More ads are being placed on private Armenian
TV channels, which are growing in number. A few private FM radio
stations are also aggressively entering the market.

## Diaspora and expatriates

The Armenians have a quite sizeable Diaspora in various countries all
over the world, which plays an increasingly important role in Armenia's
economy and business life. According to a recent NSS survey about 20
percent of household monetary income is attributed to transfers, mostly
from Armenians working abroad and sending money home to family members.

Diaspora-Armenian interrelationships are active and are becoming more
intensive, particularly in business. There are number of ambitious
all-Armenian non-commercial projects and funds financed by Armenian
communities abroad. Diaspora representatives are also active in
establishing business presence and investing in Armenia.

The Armenian Diaspora in Russia and in the United States are among the
biggest, estimated numbers are about two million and one million,
respectively. Close ties to the United States through the
Armenian-American Diaspora, accompanied with strong entrepreneurial
spirit, provides attractive prospects for joint venture partners and
other business linkages with the United States. This creates wide range
of opportunities for business cooperation including the establishment of
joint ventures in Armenia. Particularly, they can create a good
marketing linkage in the case when companies invest in food processing
and wish to import raw materials from the United States. An important
opportunity for doing business in Armenia is created also by the
presence of American-Armenians permanently residing in Armenia, who can
serve as a good contact point and provide good linkages with local
businessmen.

# 

# SECTION IV. BEST PRODUCT PROSPECTS

** **

### Table 9. Information on selected food products with outstanding export opportunities

<table>
<colgroup>
<col style="width: 9%" />
<col style="width: 4%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 3%" />
<col style="width: 15%" />
<col style="width: 25%" />
</colgroup>
<thead>
<tr class="header">
<th><strong>category</strong></th>
<th><strong>Unit</strong></th>
<th><strong>Market size in 2003</strong></th>
<th colspan="3"><strong>Imports</strong></th>
<th colspan="3"><strong>Imp. tariff rate</strong></th>
<th><strong>Key constraints over market development</strong></th>
<th><strong>Market attractiveness for USA</strong></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td></td>
<td></td>
<td></td>
<td><strong>1999</strong></td>
<td><strong>2000</strong></td>
<td><strong>2001</strong></td>
<td><strong>2002</strong></td>
<td><strong>2003</strong></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td><strong>1</strong></td>
<td><strong>2</strong></td>
<td><strong>3</strong></td>
<td><strong>4</strong></td>
<td><strong>5</strong></td>
<td><strong>6</strong></td>
<td></td>
<td><strong>7</strong></td>
<td><strong>8</strong></td>
<td><strong>9</strong></td>
<td><strong>10</strong></td>
</tr>
<tr class="odd">
<td>Beef</td>
<td>Tons</td>
<td>33061</td>
<td>1580</td>
<td>6252.5</td>
<td>7162</td>
<td>7663</td>
<td>9658</td>
<td>10</td>
<td>Competition with domestic producers.</td>
<td><p>Domestic producers are not able yet to satisfy demand.</p>
<p>There is also demand by industrial users.</p></td>
</tr>
<tr class="even">
<td>Pork</td>
<td>Tons</td>
<td>8007</td>
<td>756</td>
<td>1189</td>
<td>596</td>
<td>620</td>
<td>965</td>
<td>10</td>
<td>Competition with domestic producers.</td>
<td></td>
</tr>
<tr class="odd">
<td>Poultry</td>
<td>Tons</td>
<td>16848</td>
<td>16677</td>
<td>14310</td>
<td>12923</td>
<td>11755</td>
<td>12480</td>
<td>10</td>
<td>Competition with domestic producers, and imports from other
countries (Brazil).</td>
<td>Domestic producers are not able yet to satisfy the demand.</td>
</tr>
<tr class="even">
<td>Fish</td>
<td>Tons</td>
<td>178</td>
<td>45</td>
<td>55</td>
<td>248</td>
<td>220</td>
<td>188</td>
<td>10</td>
<td>Competition with imports from Russia, Baltic States, and
others.</td>
<td>Armenia has limited variety of own production. There is modest
demand for fish products not indigenous to Armenia.</td>
</tr>
<tr class="odd">
<td>Butter</td>
<td>Tons</td>
<td>3652</td>
<td>4229</td>
<td>3646</td>
<td>3830</td>
<td>3303</td>
<td>3605</td>
<td>10</td>
<td>Competition with imports from European countries, Russia, and
others.</td>
<td>Minor domestic production.</td>
</tr>
<tr class="even">
<td>Coffee</td>
<td>Tons</td>
<td>8145</td>
<td>6538</td>
<td>7926</td>
<td>10276</td>
<td>10587</td>
<td>9976</td>
<td>10</td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>Wheat</td>
<td>Tons</td>
<td>520693</td>
<td>228250</td>
<td>366050</td>
<td>294960</td>
<td>330519</td>
<td>304037</td>
<td>0</td>
<td>Competition with imports from Russia, and a highly concentrated
domestic market.</td>
<td>Armenia is a traditional importer of wheat. Demand will increase
with the development of local livestock production as well as with the
tendency among farmers of moving from wheat production to other
crops.</td>
</tr>
<tr class="even">
<td>Rice</td>
<td>Tons</td>
<td>15686</td>
<td>12698.5</td>
<td>12071</td>
<td>11076</td>
<td>14071</td>
<td>15686</td>
<td>0</td>
<td><mark></mark></td>
<td>No domestic production.</td>
</tr>
<tr class="odd">
<td>Vegetable oil</td>
<td>Tons</td>
<td>20298</td>
<td>11055</td>
<td>11918</td>
<td>13120</td>
<td>12097</td>
<td>18610</td>
<td>10</td>
<td>Competition with imports from Russia, Iran, and others.</td>
<td>Insignificant domestic production.</td>
</tr>
<tr class="even">
<td>Margarine</td>
<td>Tons</td>
<td>4884</td>
<td></td>
<td></td>
<td>2370</td>
<td>3250</td>
<td>4884</td>
<td>10</td>
<td></td>
<td>No domestic production.</td>
</tr>
<tr class="odd">
<td>Sugar</td>
<td>Tons</td>
<td>86963</td>
<td>68150</td>
<td>69814</td>
<td>73445</td>
<td>68400</td>
<td>86963</td>
<td>10</td>
<td>Competition with imports from Brazil, and a highly concentrated
domestic market.</td>
<td><p>Armenia is a traditional importer of sugar.</p>
<p>No domestic production.</p></td>
</tr>
<tr class="even">
<td>Macaroni</td>
<td>Tons</td>
<td>2898</td>
<td>10826.5</td>
<td>7849</td>
<td>1468</td>
<td>1254</td>
<td>1996</td>
<td>10</td>
<td>Competition with imports from Europe (Italy), Russia, and
others.</td>
<td>Domestic production is of relatively low quality.</td>
</tr>
<tr class="odd">
<td>Alcoholic beverages</td>
<td>000’ liter</td>
<td>15600</td>
<td>807.9</td>
<td>304.5</td>
<td>355</td>
<td>703.8</td>
<td>1382</td>
<td>-</td>
<td>Competition with imports from European countries.</td>
<td>There is demand for alcoholic beverages other than beer, wine,
cognac, and vodka.</td>
</tr>
<tr class="even">
<td>Tobacco</td>
<td>000’ box</td>
<td>250056</td>
<td>53537</td>
<td>111393</td>
<td>100583</td>
<td>84482</td>
<td>98643</td>
<td>-</td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="11"><strong>For most products, a general constraint to
exporting to Armenia is the price constraint related to the high
transportation costs.</strong></td>
</tr>
</tbody>
</table>

**[Annex I: General statistical information]{.underline}**

### Table 10. Selected Statistical Information (2001-2003)

  ---------------------------------------------- ---------- ---------- ----------
                                                 **2001**   **2002**   **2003**

  Agricultural imports from all countries (USD   \-         \-         \-
  Mill)/US market share (%)                                            

  Consumer food imports from all countries (USD  \-         \-         \-
  Mill)/US market share (%)                                            

  Edible fishery imports from all countries (USD \-         \-         \-
  Mill)/US market share (%)                                            

  Total population (millions)/annual growth rate \-         3.21       \-
  (%)                                                                  

  Urban population (millions)/annual growth rate \-         2.06       \-
  (%)                                                                  

  Number of metropolitan areas                   1          1          1

  Size of middle class (millions)/growth rate    \-         \-         \-
  (%)                                                                  

  Per capita gross domestic product (USD)        680        737        871

  Unemployment rate (%)                          10.4       9.4        9.8

  Per capita food expenditures (USD)             167        \-         \-

  Percent of female population employed          \-         43.4       \-

  Exchange rate (USD 1 = AMD)                    555.07     573.35     578.77
  ---------------------------------------------- ---------- ---------- ----------

Statistics on consumer food and edible fishery product imports from the
world and the USA for 1998-2002 are represented in the table below.

### Table 11. Agro-food Imports, by Main Trading Partners, percent (1998-2002)

  --------- ----------- ------------ ------------ ------------ -----------
            **1998**    **1999**     **2000**     **2001**     **2002**

  Russia    3.3         2.2          3.0          4.9          23.1

  Iran      6.7         14.2         14.2         15.1         11.9

  Ukraine   0.8         1.1          2.4          6.8          9.6

  USA       14.3        12.2         15.1         6.3          5.1

  Georgia   1.9         3.0          2.2          1.1          3.5

  Turkey    10.9        7.1          3.3          3.4          3.5

  Italy     8.0         2.8          3.8          6.4          4.4

  France    5.9         1.9          3.6          2.5          1.3

  UAE       6.4         5.9          3.4          3.2          3.3

  Brazil    0.1         0.0          0.0          0.1          8.0

  Germany   4.0         3.7          8.6          5.4          4.0

  Others    37.7        45.9         40.4         44.8         22.3

  Total     100.0       100.0        100.0        100.0        100.0

                                                               
  --------- ----------- ------------ ------------ ------------ -----------

The United States was the largest exporter of agro-food products into
Armenia in 1998, the main export product being cereals (wheat). The
position was taken over by Russia, Iran and Ukraine, and the decisive
factor in this shift was price (in 2001-2002 the price per metric ton of
wheat from the USA was USD 171-173, against USD 130-133 per ton of wheat
from Russia, Ukraine and Georgia. The price factor was decisive also in
the case of Brazil taking over (from the UK) the leading exporter
position for sugar into Armenia.

# SECTION V. KEY CONTACTS AND FURTHER INFORMATION

***Contact Information for FAS Offices in Russia and in the United
States:***

Eric Wenberg, ATO Director

Olga Taybakhtina, Marketing Assistant

U.S. Agricultural Trade Office

American Embassy

Bolshoy Devyatinskiy Pereulok 8

121099 Moscow, Russia

Tel: 7 (095) 728-5560; Fax: 7 (095) 728-5069

E-mail: <atomoscow@usda.gov>

*For mail coming from the U.S.:*

Agricultural Trade Office

PSC 77 AGR

APO, AE 09721

*For international mail*:

Agricultural Trade Office

U.S. Embassy - Box M

Itainen Puistortie 14

00140 Helsinki, Finland

*General Information on FAS/USDA Market Promotion Programs and
Activities:*

AgExport Services Division

Room 4939

14^th^ and Independence, SW

Washington, DC 20250

Tel: (202) 720-6343; Fax: (202) 690‑0193

**FAS Website:** [www.fas.usda.gov](http://www.fas.usda.gov/)

*For Trade Policy/Market Access Issues, General Information on the
Armenian Agricultural Sector, etc:*

Allan Mustard, Minister-Counselor

Office of Agricultural Affairs

American Embassy

Bolshoy Devyatinskiy Pereulok 8

121099 Moscow, Russia

Tel: 7 (095) 728-5222; Fax: 7 (095) 728-5133 or 728 5102

E-mail: <agmoscow@usda.gov> or <agmoscow@corbina.ru>

USDA Marketing Assistance Program in Armenia

Jeffrey Engels, Director

74 Teryan Street

Yerevan, Armenia 375009

Tel: (3741) 56-00-14

Fax: (3741) 58-79-28

Email: map@usda.am

www.usda.am

## USDA/FAS AND ATO SERVICES

The Foreign Agricultural Service and the Agricultural Trade
Office/Moscow offer a variety of programs, services, and information
resources to help U.S. exporters of food, beverage, and agricultural
products learn more about the Russian market, establish initial contact
with Armenian buyers, and promote their products in the local market.
Following is a partial listing of programs and services.

***Trade Leads*** are direct inquiries from Armenian buyers seeking U.S.
sources for specific food, beverage, or agricultural products. U.S.
companies can receive these Trade Leads by contacting the AgExport
Services Division, FAS/USDA or by visiting the USDA/FAS Homepage (see
contact information above).

***Buyer Alert*** is a bi-weekly publication providing information on
specific food, beverage, and agricultural products offered by U.S.
exporters. U.S. companies may place ads in Buyer Alert by contacting the
AgExport Services Division, FAS/USDA (see contact information above).

***U.S. Supplier Lists*** are drawn from an extensive database of
companies that can supply a wide range of U.S. food, beverage, and
agricultural products. The ATO Moscow supplies these lists to Armenian
importers on request. U.S. companies that wish to be included in this
database should contact the AgExport Services Division, FAS/USDA (see
contact information above).

***Foreign Buyer Lists*** are drawn from an extensive database of
Armenian importers dealing with a wide range of food, beverage, and
agricultural products. U.S. companies can order these lists through the
AgExport Services Division, FAS/USDA (see contact information above).

The ATO/Moscow also coordinates U.S. participation in local trade shows,
sponsors supermarket and menu promotions, provides support for trade
missions, and can help arrange appointments for first-time visitors to
Armenia. For more detail on these and other programs or activities,
please contact the ATO/Moscow (see contact information above).

The USDA/FAS website is an excellent source of information on other
USDA/FAS export promotion/assistance programs, such as the Market Access
Program (MAP) and Credit Guarantee Programs, as well as a wide range of
information and reports on market opportunities for U.S. food, beverage,
and agricultural exports world-wide.

## OTHER MARKET REPORTS

Reports on the Armenian food and agricultural market are also available
on the FAS website. U.S. exporters may also contact ATO/Moscow for
copies of these reports (see contact information at the beginning of
this section).

## OTHER USEFUL CONTACTS:

The ATO/Moscow works with a large number of U.S. industry organizations,
some of which have local offices to assist U.S. exporters of these food
and agricultural products:

U.S. Poultry and Egg Export Council (USAPEEC)

Petrovskiy Bulvar, 15, Stroyeniye 1

127051 Moscow, Russia

Tel.: 7 (095) 980-6140; Fax: 7 (095) 980-6141

E-mail: <usapeec@usapeec.ru>

U.S. Meat Export Federation (USMEF)

9th Floor, Business Center, Leninsky Prospekt, 2

117049 Moscow, Russia

Tel: 7 (095) 239-1578; Fax: 7 (095) 230-6849

E-mail: <Moscow@usmef.org>

U.S. Wheat Associates

Ul. Petrovka, 27, Stroyeniye 2, Entrance 3

107031 Moscow

Tel: 7 (095) 956-9081

Fax: 7 (095) 956-9080

E-mail: <uswmow@dol.ru>

U.S. Grains Council (USGC)

Denezhniy Pereulok, 7, Bld. 2

103051 Moscow, Russia

Tel: 7 (095) 795-0662; Fax: 7 (095) 795-0663

E-mail: <fgcmow@online.ru>

Pear Bureau Northwest

Ul. Nekrasovskaya, 88 A, 4^th^ Floor, Office 302

690002 Vladivostok, Russia

Tel/Fax: 7 (4232) 53-22-36

E-mail: katerina@newmark.ru

California Almond Board

Ul. Yefremova, 18, Bld. 41

119048 Moscow

Tel/fax: 7 (095) 246-0359

E-mail: Irina.Koziy@mail.ru

American Soybean Association

Bolshoy Cherksskiy Per., 15, Office 323

109012 Moscow

Tel/fax: 7 (095) 925-4349

E-mail: soyaru@rol.ru

California Wine Institute

35, Perovskiy Proyezd

111024 Moscow

Tel/fax: 7 (095) 787-7750, 787-7758

E-mail: dc_wines@mail.ru

Pet Food Institute

4, Ul. Pudovkina

119285 Moscow

Tel: 7 (095) 145-0308

Fax: 7 (095) 937-9618

E-mail: agerman@globalworks.ru

Renderers

82, Vernadskogo Avenue

119571 Moscow

Tel/fax: (7-095) 434-9114

E-mail: lischenko@ane.ru

An additional resource on Armenian agriculture is:

**[List of associations and Government agencies:]{.underline}**

> Ministry of Agriculture, Davit Lokian, Minister, 48 Nalbandyan Street,
> Yerevan-375010, Tel: (374-1) 524-641, Fax: (374-1) 151-583;
> [www.minagro.am](http://www.minagro.am/).
>
> Ministry of Trade and Economic Development; 5 Hanrapetutyan St.,
> Yerevan 375010: Tel: (374-1) 538-082, Fax: (374-1) 588-321, 151-081;
> [www.minted.am](http://www.minted.am/).
>
> State Quality Inspectorate under the Ministry of Trade and Economic
> Development; e-mail: <armstandard@sarm.am>, <press@sarm.am>;

[^1]: AMD stands for the local currency -- Armenian Dram

[^2]: Source: State Commission for Protection of the Economic
    competition (2001).

[^3]: The population outside Yerevan is predominantly rural. Other large
    cities of Armenia are: Gyumri, Vanadzor, Vagharshapat, Gavar and
    Hrazdan with 7.3, 5.2, 2.7, 2.8, 2.6 percent of urban population,
    respectively.