Required Report - public distribution

**Date:** 9/28/2004

**GAIN Report Number:** AU4025

AU4025

**Austria**

**Exporter Guide**

**Annual**

**2004**

**Approved by:**

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

U.S. Embassy

**Prepared by:**

Dr. Roswitha Krautgartner

**Report Highlights:**

Economic indicators signal that a recovery has started in Austria with
economic growth projected to reach 2.5% in 2005. Retail food sales are
expected to increase by 2% annually over the next few years. Organic
food consumption amounted to 4% of total food sales in 2004 and
continues to increase. The trend towards convenience food and
ready-to-eat meals will continue. Seafood, dried fruits, nuts, organics,
wine, and gourmet foods offer the best U.S. export opportunities.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Vienna \[AU1\]

\[AU\]

# 

# I. Market Overview

## Economic situation and how it affects consumer spending and sales of U.S. products

Austria, with its well-developed market economy and high standard of
living, is closely tied to other EU economies, especially Germany\'s.
Membership in the EU has drawn an influx of foreign investors attracted
by Austria\'s access to the single European market and proximity to EU
aspirant economies. Slow growth in Germany and elsewhere in the world
held the Austrian economy to 0.7% growth in 2001, 1.4% in 2002, and less
than 1% in 2003. However, recent data signal that a recovery has
started. The government estimates economic growth of 1.7-2.1% in 2004
and 2.5% in 2005, driven mainly by higher exports. In spite of brisk
expansion rates achieved for Central and Eastern European markets,
Austrian exports continue to be focused on Western Europe.

Austrian manufacturing, due to its close supply ties, is benefiting from
the swift recovery in the German export-oriented sector. Investment is
tentatively heading up, with spending on machinery and equipment boosted
by rising sales expectations of firms and construction activity.

Private household consumption remains subdued, because of sluggish
income growth, although cuts in direct taxes next year should provide
some forward momentum. The substantial increase in raw material prices,
notably for crude oil, is pushing up inflation by some ¼ percentage
point to an annual rate of 1.9 percent this year. Employment is set to
gain 0.6 percent this year, assuming the usual reaction pattern to
stronger activity. The sizeable inflow of foreign workers will
nevertheless keep unemployment at its present level.

The tax reform 2004-05 includes tax cuts for income taxation (-2.2
billion Euro) and corporate taxation (-1.1 billion Euro), as well as
increases of several excise taxes (232 million Euro). A positive effect
of the tax reform on GDP and employment is expected.

The strong Euro exchange rate is dampening inflation; the inflation of
1.4% in 2003 confirms that a high degree of price stability will be
maintained.

Food Expenditures

In 2003 (latest available statistics), total household expenditures for
food and non-alcoholic beverages amounted to 16.1 billion Euro (US\$
18.18 billion). This was up 1.90% compared to 2002. In the same period,
total expenditures for alcoholic beverages and tobacco rose by 2.78% to
3.7 billion Euro (US\$ 4.18 billion).

Annual household expenditures for food and non-alcoholic beverages rose
to 3,875 Euro (US\$ 3,914) in 2002. Annual alcoholic beverages and
tobacco products expenditures amounted to Euro 797 (US\$ 805) per
household, which corresponded to 2.7% of total household expenditures.

## Key demographic developments and their impact on consumer buying habits

The number of single households and childless double working
partnerships is rising. While at the beginning of the sixties there were
not even a half million single households in Austria, today there are
nearly one million which corresponds to almost one third of all
households. The number of larger households has not risen as strongly.

The rise in single households boosts demand for convenience products and
for food eaten outside the home. Singles are not only young urban
working people but also retired persons. The rising number of elderly
people, many of whom have significant disposable income, creates
additional demand for health and dietetic foods.

When responding to polls, consumers usually express a preference for
high quality foods; however, when it comes to actually buying, price
appears to be the major purchasing factor for a majority of the
population. However, for special events most people, even those on a low
income, are willing to spend more for "exclusive" products. In addition,
the higher income and gourmet market segments (which regular buy high
priced foods) is growing.

The traditional Austrian diet is based on pork, flour, and vegetables.
Cakes and bakery products are also important parts of the diet. Austrian
dishes are rich in cholesterol and fat and the most important ingredient
is meat, either pork or beef. The increasing interest in wellness,
especially among younger people, who are more concerned about their
health makes low-fat food more and more popular.

Because of environmental concerns, increasing health awareness, a very
negative perspective of Austrian consumers towards biotech products,
organically produced food is expected to grow steadily. Within the last
two years the market share of 3% could be increased to 4% in 2004.
Austria is within the EU the country with the highest percentage of
organic farms.

Due to the increasing number of single households and the rising number
of older people seeking companionship, the number of pets should
continue its upward trend. This should stimulate demand for pet food in
the coming years.

Size and growth rate for the consumer foods and edible fishery product
markets

**[General]{.underline}**

The food sector grew by 7.9% in the 1999 to 2003 period to Euro million
10,568.3 (US\$ million 11,936.2), mainly due to the expansion of
discounters like Hofer, Mondo and Lidl (Table 1). The grocery sector is
the biggest outlet type in the retail sector and is expected to show a
revenue growth of 10.3% in the 2003 to 2008 period. In 2003, total
retail sales of food outlets (including non food products) accounted for
Euro million 15,202.5 (US\$ million 17,170.21).

Table 1: Retail Sales Food 1999-2003

EUR million

  --------------------------- --------- --------- --------- ---------- ----------
                              1999      2000      2001      2002       2003

  Food                        9,798.6   9,701.9   9,952.5   10,274.5   10,568.3

  \% growth                             -1.0      2.6       3.2        2.9

  Index 1999 = 100            100.0     99.0      101.6     104.8      107.7
  --------------------------- --------- --------- --------- ---------- ----------

Source: Euromonitor IMIS/SA/Wirtschaftskammer

Consumer expenditures on food and beverages increased by 11.95 in the
period from 1999 to 2003 (Table 2). Fresh food is still regarded as a
necessity by Austrian consumers, however, growth was also seen in
pre-cooked food and convenience food due to the rising number of
single-person households and "time-poor" parents.

Table 2: Consumer Expenditure on Food/Beverages/Tobacco/Groceries
1999-2003

EUR million, current prices

  --------------------------- -------- -------- -------- -------- --------
                              1999     2000     2001     2002     2003

  Food/Non-alcoholic          14.5     14.9     15.4     15.8     16.1
  beverages                                                       

  Alcoholic                   3.2      3.4      3.5      3.6      3.7
  beverages/Tobacco                                               

                                                                  

  TOTAL                       17.7     18.3     18.9     19.4     19.8
  --------------------------- -------- -------- -------- -------- --------

Source: 1999-2002 SA, 2003 Euromonitor estimates\
Note: Totals may not sum due to rounding

**[Organic Food]{.underline}**

History, consumer acceptance, and government support have worked
together to transform organic foods in Austria from a niche market to a
market segment of considerable importance. Production, imports and
exports are still growing and the Austrian government is supporting
programs designed to increase organic consumption. The Austrian market
for organic products is dominated by supermarket chains, all of which
have their own organic labels. In 1994, the REWE Group Austria started
with the organic brand name "ja natuerlich". Several supermarket chains
followed this example. Perhaps unique to Austria, food retailers focus
their marketing resources on organic foods in an effort to shape the
overall image of the store. Organic foods are promoted in an effort to
build consumer confidence in all of the food products sold by the chain.

The importance of organic food continued to increase in 2002. Sales of
organic food experienced a boost in 2002 as discounter Hofer launched
"Natur Aktiv". "Natur Aktiv" continues a trend of private label ranges
being the main movers of the organic market in Austria. According to
"Bio Ernte Austria", which is by far the largest association
representing organic farmers, some 60% of its production is sold via
private label ranges, some 20% is sold directly at the farm and 20% is
exported. In 2002, total sales of organic food in Austria were estimated
at some 350 million Euro (US\$ million 357.3), which corresponds to
about 4% of total food sales.

There are especially good market opportunities for U.S. organic dried
fruits and nuts.

**[Packaged Food]{.underline}**

[]{.mark}

In 2003, sales of packaged food in Austria are expected to increase by
3% in current value terms, just slightly ahead of inflation. Packaged
food accounts for about one third of total Austrian food expenditures.
Current value sales will be up in all sectors except meal replacement
products. In volume terms the only declining sectors will be meal
replacement products, canned food and oils and fats, with baby food
stagnating. In percentage terms, the only sector with double-digit
growth in both value and volume terms will be noodles, albeit from a
very low base. Ready meals will be the only other sector with close to a
double-digit increase in volume terms, but intense price competition in
this sector will mean slower growth in value sales.

Variety, convenience and wellness are the main trends. Consumer tastes
are becoming increasingly varied and less fixated on particular product
types and flavors. Furthermore, eating habits are changing, with greater
demand for snack-sized and light products with low calorie content.
While demanding greater variety, consumers want to reduce the time they
spend shopping and preparing meals. An increasing degree of health
consciousness underpins growth for products marketed under the wellness
aspect. At the same time, increased focus on variety has also led again
to greater emphasis on the concepts of indulgence and enjoyment.

**[Ready Meals]{.underline}**

In 2003, sales of ready meals are expected to increase by 4.7% in
constant value terms to reach 169.3 million Euro. Volume sales are
expected to reach 34,225MT in 2003, up by 8.6% on 2002. This is compared
to average annual growth in volume over the review period of 8.8%. See
Table 3.

There is clear polarization between premium and mass products. Volume
sales of ready meals are growing stronger than value due to competition
from private labels, which places downwards pressure on prices.

Frozen ready meals are expected to register a good performance in 2003,
with 7.9% growth in constant value terms and a 13% volume increase, to
reach Euro million 67.9 and 15,645MT respectively. This is compared to
average annual growth in constant value terms of 8%. Chilled ready meals
are expected to grow by 7.6% in constant value terms to reach Euro
million 37.8.

Chilled pizza is the fastest growing niche, with growth of 8.2% in
constant value terms expected in 2003 to reach Euro million 1.7 million.
Chilled pizza is also seen as a premium product, which explains the
stronger growth in value compared to volume. Chilled pizza offers
freshness, convenience and a growing variety of tastes. Furthermore,
chilled pizza requires a significantly shorter preparation time than
frozen pizza. Although chilled pizza is becoming increasingly popular,
2003 is also expected to be a comparatively good year for frozen pizza.

Table 3: Retail Sales of Ready Meals: Value 1998-2003

Euro million

  ---------------------- -------- -------- -------- -------- -------- --------
                         1998     1999     2000     2001     2002     2003

  Canned ready meals     12.1     11.5     10.9     10.4     10.0     9.8

  Frozen ready meals     42.2     48.0     49.4     55.0     61.9     67.9

  Dried ready meals      1.8      1.8      1.8      1.8      1.8      1.8

  Chilled ready meals    22.8     25.1     27.9     31.2     34.6     37.8

  Dinner mixes           \-       \-       \-       \-       \-       0.3

  Frozen pizza           53.0     51.8     49.2     48.5     49.2     50.0

  Chilled pizza          1.0      1.0      1.2      1.4      1.5      1.7

  Ready meals            132.9    139.2    140.4    148.3    159.1    169.3
  ---------------------- -------- -------- -------- -------- -------- --------

Source: Official statistics, trade press, company research, trade
interviews, Euromonitor estimates\
Note: 2003 provisional data

**[Sweet and Savory Snacks]{.underline}**

Sweet and savory snacks look set to experience growth of 2.2% in current
value terms in 2003 to reach Euro million 119.1. See Table 4.

The reason for the good performance of sweet and savory snacks is the
fact that companies are concentrating on stronger advertising activities
aimed especially at younger generations and on strengthening the brand
awareness of their products. Companies affirmed that greater attention
is being put on innovative products.

Petrol/gas/service stations, in particular, is one of the most important
convenience retailers. Products in sweet and savory snacks are often
bought on impulse and are offered in smaller packaging through
petrol/gas/service stations.

Chips/crisps looks set to grow by 5.1% in current value terms in 2003 to
reach Euro million 36.5.

Table 4: Retail Sales of Sweet and Savory Snacks: Value 1998-2003

Euro million

  ---------------------- -------- -------- -------- -------- -------- --------
                         1998     1999     2000     2001     2002     2003

  Fruit snacks           \-       \-       \-       \-       \-       \-

  Chips/crisps           29.5     30.6     31.7     33.1     34.7     36.5

  Extruded snacks        31.3     30.1     28.9     28.5     28.2     28.4

  Tortilla/corn chips    \-       \-       \-       \-       \-       \-

  Popcorn                9.4      9.6      9.7      9.8      9.8      10.0

  Pretzels               22.3     22.0     21.6     21.3     21.2     21.0

  Nuts                   19.9     20.7     21.2     21.8     22.5     23.2

  Other sweet and savory \-       \-       \-       \-       \-       \-
  snacks                                                              

  Sweet and savory       112.3    113.0    113.2    114.5    116.5    119.1
  snacks                                                              
  ---------------------- -------- -------- -------- -------- -------- --------

Source: Official statistics, trade associations, trade press, company
research, store checks, trade interviews, Euromonitor estimates\
Note: 2003 provisional data

**[Beverages]{.underline}**

The heat wave of summer 2003 has had a positive effect on total soft
drinks sales, which are expected to be up by 7.8% in volume terms on
2002. All product types benefited from the heat. Even carbonates, which
have seen years of stagnation or decline, saw a recovery and
participated in the overall demand growth. Off-trade volume sales are
expected to be up 8.3% in 2003, whilst on-trade sales are likely to
increase by 6.4%.

Bottled water remains the largest soft drinks sector in volume terms
through the off-trade channel in 2003, with carbonates the largest in
value terms. Boundaries between sectors or different product types are
becoming increasingly blurred as manufacturers take the positive
features of one product and try to incorporate them into another in
attempts to add value. Thus, a fast growing niche within bottled water
has been \"functional\" flavored water, positioned as a wellness product
due to the nature of the flavors. See Table 5.

Table 5: Off-Trade versus On-Trade Sales of Soft Drinks (as sold) by
Sector: Volume 2003

Million litres

  --------------------------------------- ----------- ---------- ---------
                                          Off-trade   On-trade   TOTAL

  Carbonates                              473.9       240.6      714.5

  Fruit/vegetable juice                   222.1       79.8       301.9

  Bottled water                           664.8       128.8      793.6

  Functional drinks                       27.6        10.8       38.4

  Concentrates                            22.8        1.1        23.9

  RTD tea                                 113.5       15.6       129.1

  RTD coffee                              3.1         0.1        3.1

  Soft drinks                             1,527.7     476.9      2,004.7
  --------------------------------------- ----------- ---------- ---------

Source: Trade press (Cash, LK Handelszeitung), trade interviews,
Euromonitor estimates\
Note: Volume totals exclude powder concentrates

In 2003, volume sales of alcoholic drinks are expected to see a small
increase on 2002, driven by a positive performance from all products.
Flavored alcoholic beverages were the most dynamic, with an increase of
just over 5% in volume terms. Beer saw the slowest growth, but contrary
to a long-term trend, sales still were up slightly, which follows the
surprise growth of beer in 2002. Meanwhile, wine sales saw an increase
in the low single digits, driven by healthy off-trade growth. See Table
6.

With total per capita consumption of just over 106 liters expected in
2003, beer is clearly the most popular alcoholic drink in Austria.
Consumption has been on a long-term decline, but recovered slightly in
2002, when it saw an increase, stagnating again in 2003.

Wine is the second most popular drink, with expected per capita
consumption of more than 35 liters in 2002, (including vermouth and
fortified wine as well as sparkling wine). Still wine sales saw a shift
from direct sales towards more purchases made in supermarkets, as
retailers improved their wine ranges. White wine still accounts for the
majority of still wine sales, but red wine has seen faster growth. There
is a strong market for imported wines -- in 2003 some 24% of wine sales
were comprised of imported wines -- of which 20% were red, and only 4%
white. Foreign red wines have a particularly high share in many
restaurants, but also in the retail channel. Austrian consumers are
willing to spend more money on high quality wine for special occasions
and are willing to try out new products.

Table 6: Sales of Alcoholic Drinks by Sector: Total Value 1998-2003

EUR million

  ---------------------- --------- --------- --------- --------- --------- ---------
                         1998      1999      2000      2001      2002      2003

  Beer                   2,290.0   2,343.8   2,337.2   2,349.4   2,381.4   2,422.2

  Cider/perry            \-        \-        \-        \-        \-        \-

  FABs (flavoured        35.7      46.9      60.4      72.6      160.4     179.2
  alcoholic beverages)                                                     

  Wine                   2,405.9   2,571.2   2,576.8   2,674.1   2,770.6   2,843.9

  Spirits                609.6     620.6     622.5     648.2     653.2     656.6

  Alcoholic drinks       5,341.2   5,582.5   5,596.9   5,744.3   5,965.6   6,101.9
  ---------------------- --------- --------- --------- --------- --------- ---------

Source: Trade press, trade interviews, Euromonitor estimates

**[Pet Food]{.underline}**

Overall the pet population increased by 9% in the period 1998 to 2003.
The dog population increased by 10%, which is linked to the larger
number of retired people. In 2002, 15% of all households owned a dog,
while 19% of all households owned a cat. Most of the dog owning
households own just one dog, while it is estimated that some 60% of the
cat owning households have more than one cat.

Dog and cat food lost the momentum it showed in the first half of the
review period, despite a trend towards higher value products, especially
in wet pet food. Greater convenience and more freshness were important
trends underpinning a shift from cans towards products packaged in bowls
and single-portion bags. Single-portion bags where the main trend in
2002 and 2003, especially in cat food, but in 2003 they were also
extended into dog food with the launch of Pedigree pouches. See Table 7.

Dry dog and cat food is still under-represented, as Austria has a long
tradition of using wet dog and cat food. In the first half of the review
period, there were some signs of a catch-up with fast growth of dry
products.

Treats continued to be the most dynamic area in 2003 and 2002; both cat
treats and dog treats, although growth seems much higher for cats than
dogs (15% current value 2003). This is due to the fact that consumer's
treat their pets like humans and enjoy rewarding them with little
treats. Growth in treats was driven both by an increase in the number of
consumers, as well as by existing consumers feeding treats to their pets
more often.

Table 7: Retail Sales of Pet Food and Pet Care Products by Sector: Value
1998-2003

EUR million

  ---------------------- -------- -------- -------- -------- -------- --------
                         1998     1999     2000     2001     2002     2003

  Dog and cat food       212.3    218.3    227.9    235.2    236.3    237.9

  Other pet food         17.3     17.9     18.3     18.8     19.1     19.3

  Pet care products      37.3     38.9     40.1     41.0     41.5     41.7

  Pet food and pet care  266.9    275.1    286.4    294.9    296.8    298.9
  products                                                            
  ---------------------- -------- -------- -------- -------- -------- --------

Source: Trade press, trade interviews, Euromonitor estimates

**[Seafood]{.underline}**

Seafood consumption (including fresh and salt water fish and
invertebrates; fresh frozen and canned) is low but rising. Most Austrian
families spend about 1% of their total food budget on purchases of fish
and fish products. Per capita consumption, which was 6.0 kg in 2002,
increased to around 6.2 kg in 2003. Freshwater fish consumption accounts
for roughly 10% of total seafood consumption. Imports of seafood rose in
the period 2002 to 2003 by 3.6% to 48,574MT. Frozen fish/seafood sales
are expected to experience growth of 2.8% in constant value terms, also
canned seafood is expected to grow by 2.7%.

It is expected that seafood consumption will continue its overall upward
trend in the coming years. The reason for this trend is the rising
standard of living, health awareness, the rising number of restaurants
serving seafood, and the fact that tourism to coastal countries has
acquainted the population with seafood. Most fresh/frozen whole fish is
consumed in restaurants, whereas housewives still prefer natural or
breaded frozen filets or sticks of cod, hake and flatfish. Among canned
fish, tuna and sardines lead.

Consumption of seafood includes fish (fresh, chilled, frozen 2kg/capita;
dried and/or salted, smoked etc. 0.4kg/capita), crustaceans (fresh,
chilled, frozen 0.1 kg/capita), and mollusks (fresh, chilled, frozen,
dried 0.1 kg/capita). Consumption of canned and marinated seafood
products is around 24,400 MT of which 23,000 MT account for by fish and
1,400 MT for by crustaceans and mollusks. Among saltwater fish, most in
demand are cod (chilled or frozen), cod filets (breaded and frozen),
canned fish (sardines, anchovy, tuna, herring), pickled fish (mainly
herring), and smoked fish (various types). There has been a definite
upward trend in the popularity of salmon (mostly from Norway and
Scotland) and luxury products such as lobster and shrimp.

####### Advantages and Challenges for U.S. Suppliers on the Austrian Market

  ---------------------------------- ------------------------------------
  Advantages                         Challenges

  An aging population                Reservation towards foods containing
                                     or made from biotech products

  Urban population growing           Reservations towards products with
                                     chemical food additives

  High quality of U.S. products      Average tariff levels are high

  Good reputation of certain U.S.    Large distance to this market keeps
  products                           shipping costs high

  Promotion can possibly be carried  High promotion costs to increase
  out in cooperation with Embassy    consumer awareness
  marketing efforts of U.S. products 

  Interest in organic U.S. products  Highly concentrated food retail
  by traders                         market

  Good infrastructure, efficient     Difficult to acquire shelf space in
  distribution system, most          large supermarket chains
  importers speak English            

  Interest in new food articles      Usually relatively small quantities
                                     are imported.

  Marginal domestic seafood          Unawareness of high U.S. quality by
  production                         consumers

  Certain fruits, vegetables not     
  produced by domestic agriculture   

  Undeveloped niche market for       
  certain game meats                 

  Growing interest in ethnic foods   
  and sea foods due to rising        
  vacations in distant and costal    
  areas                              

  Growing pet food market            
  ---------------------------------- ------------------------------------

# II. Exporter Business Tips

######## Local business Customs

In general, food retailers buy domestic and imported products from
Austrian and/or German wholesalers. The large supermarket chains have
their own purchasing sections, which buy and store foodstuffs centrally
for their own retail stores. The central purchasing sections also carry
out imports. However, some items are purchased through wholesale
importers (e.g. almonds). Due to the strong concentration of the food
retail sector, the supermarket chains are very powerful vis-a vis
producers and slotting fees for retail space are the norm.

General consumer tastes and preferences

Austrians have conservative tastes that are reflected in the local
cuisine and in local production methods and marketing. In recent years,
attention has been drawn to food additives. Austrians prefer foods
without artificial flavors, stabilizers, emulsifiers, and preservatives.
In addition, most consumers reject foods containing biotech products.
For this reason, the leading supermarket chains banned such products
from their shelves. Similarly, there is significant consumer interest in
organic products. Sales of these products are still low but are steadily
rising. Economists believe that organic products may someday reach 10%
of the total food market. Light products are also in; however, consumers
do not seem to tolerate a loss in flavor as compared to 'normal'
products.

As in other western countries, beef consumption has been declining,
whereas pork, poultry, and lamb have been increasing. The latter is
mainly a result of immigration from Islamic countries. Cheese
consumption, which is already high, will continue rising. This is
particularly true for semi-hard and fresh cheeses.

With fruit juices, certain acidity is preferred. This applies also to
white wines. Jams and marmalade are more appealing to Austrians if fruit
pieces are included and if they are not too sweet. Cereals sell better
if they are crunchy.

Food standards and regulations

With regards to foods: See Food and Agricultural Import Regulations and
Standards report AU4021 (this may be found at: )

Regarding pet food: Registration is not required; however, the products
have to comply with EU regulations.

######### General import and inspection procedures

Incoming goods go either to the customs storage (small) or to a freight
forwarder's facility at transport terminals or airports. Storage and
removal from storage is carried out under the supervision of a customs
officer who compares the documents with the commodities. Later, the
invoice for import duty is issued. Food inspectors at the port of entry
storage do not routinely check packaged foods. However, the customs
officer may take samples to double check for ingredients (sugar, milk
powder, alcohol) and that customs duties are paid for these ingredients
according to their proportion.

Veterinary and customs import documents must be in German. However, if a
customs officer or border veterinarian can read another language, he may
accept it. Veterinary certificates are usually bi-lingual. There is no
appeal of decisions by the customs office or the veterinary service.

If an importer objects to the quality of the product, the case can be
brought to the arbitration center.

Complete information on EU import rules for food products may be found
at:

# III. Market Sector Structure and Trends

Trends toward industry concentration and strategic implications for U.S.
suppliers

Since EU accession, concentration in the food industry and food retail
sector has accelerated. Many food-processing companies are too small to
survive alone in a large market and therefore merge with larger national
or foreign firms. U.S. companies may be interested in acquiring Austrian
food factories or retail shops. So far, Master Foods appears to be the
only U.S. enterprise in Austria involved in food processing.

######### Domestic industry capacity versus availability of foreign-supplied products

More than three quarters of all agricultural supplies, including raw
material for the food industry comes from other EU countries. Regarding
imports of processed foods, 90% come from other EU countries.

The strongest branch of Austria's food industry is the beverage sector,
particularly the brewing industry and the fruit juice industry. The
latter imports concentrated citrus juices, particularly orange juice.
The hard alcohol drinks industry is suffering from heavy competition.

######### Trends in promotional/marketing strategies and tactics

The most efficient advertising is television, which nonetheless tends to
be more expensive in Austria than in the U.S. The industry uses this
medium for promoting food and pet food brands, and the two largest
supermarket chains have regular TV spots. Supermarket and hypermarket
chains have their own weekly or bi-weekly flyers where products
available in their stores are advertised. These fliers reach a wide
range of interested purchasers and thus are regarded as efficient.
In-store promotions are also very successful. There are several U.S.
products which have probably good chances on the Austrian market, dried
fruits and nuts, seafood, wine, etc.

######### Trends in tourism sales, holiday gift sales, and Internet sales

Tourism contributed 9 billion Euro (4.2%) to Austria's GDP in 2002 and
plays an important economic role. Each year around 80 million overnight
stays by foreigners are logged. The major share of tourists comes from
Germany (about 50 million), followed by Netherlands (8 million). The
main tourist areas are the western and southern alpine regions
(provinces Tyrol 39 million, Salzburg 20 million, Carinthia 13 million).

In general, tourists, particularly those from Germany, favor the local
Austrian cuisine during their vacation. However, in recent years ethnic
foods have become more popular (in part because of immigration and
Austrians traveling abroad) and the demand for seafood has increased.

**IV. Best High-Value Product Prospects**

The 15 consumer food/edible fishery products, which offer the best U.S.
export opportunities, are as follows:

Alaska Salmon

Catfish

Lobster

Shrimp

Pecans (conventional and organic)

Walnuts (conventional and organic)

Pistachios (conventional and organic)

Almonds (conventional and organic)

Dried cranberries (conventional and organic)

Other dried fruits (conventional and organic)

Cranberry juice

Wine

Tobacco

Pet food (conventional and organic)

Beef, non-hormone treated

**V. Key Contacts and Further Information**

American Embassy

Office of Agricultural Affairs

Dr. Roswitha Krautgartner, Agricultural Specialist

Boltzmanngasse 16

A-1090 Wien

Phone: + 43 (1 ) 31 339/ext 2249

Fax: + 43 (1 ) 310 8208

e mail: agvienna@usda.gov

Website: http://www.usembassy.at/en/usda/

Bundesministerium fuer Wirtschaft und Arbeit

(Federal Ministry for Economic Affairs)

Abteilung II/11

(Division II/11)

Stubenring 1

A-1011 Wien

Phone: + 43 (1 ) 71100/ext. 5774

Fax: + 43 (1 ) 715 96 51

Website:http//.www.bmwa.gv.at/

Bundesministerium fuer Land- und Forstwirschaft, Umwelt und
Wasserwirtschaft

(Federal Ministry for Agriculture and Forestry, Environment and Water
Management)

Abteilung III A 2

(Division III A 2)

Stubenring 1

A-1011 Wien

Phone: + 43 (1 ) 71100/ext. 2878

Fax: + 43 (1 )71100 2937

Website:http://www.lebensministerium.at

Agrarmarkt Austria (AMA)

(Agricultural Market Austria)

Dresdnerstr. 70

A-1200 Wien

Phone: + 43 (1 ) 33 151 0

Fax: + 43 (1 ) 33 151 399

Website: http://www.ama.at

Austrian Economic Chamber

Wiedner Hauptstr. 63

A-1045 Wien

Phone: + 43 (1 ) 501 050

Fax: + 43 (1 ) 502 06 250

Website: http://portal.wko.at/

Bundesanstalt fuer Lebensmitteluntersuchung und -Forschung

Kinderspitalg. 15

A-1090 Wien, Austria

Phone: + 43 (1) 404 90/ext 27801

Fax: + 43 (1) 404 90 9278

Website: http://www.luvie.ages.at/

Bundesanstalt fuer Lebensmitteluntersuchung

Burgerstr. 47

A-4020 Linz, Austria

Phone: + 43 (732) 77 90 71

Fax: + 43 (732) 77 90 71 15

Bundesanstalt fuer Lebensmitteluntersuchung

Zweigstelle Salzburg

Innsbrucker Bundesstraße 47

A-5020 Salzburg, Austria

Phone: + 43 (662) 833357 - 0

Fax: + 43 (662) 833357 - 100

Bundesanstalt fuer Lebensmitteluntersuchung

Beethovenstr. 8

A-8010 Graz, Austria

Phone: + 43 (316) 32 75 88

Fax: +43 (316) 32 75 88 396

Bundesanstalt fuer Lebensmitteluntersuchung

Technikerstr. 70

A-6020 Innsbruck, Austria

Phone: + 43 (512) 22 440

Fax: + 43 (512) 22 440 15

Lebensmitteluntersuchungsanstalt der Stadt Wien

Hennebergg. 3

A-1030 Wien, Austria

Phone: + 43 (1) 795 14 97955

Fax: + 43 (1) 79514 99 97955

Oesterreichische Agentur fuer Ernaehrungssicherheit

Spargelfeldstrasse 191

Postfach 400

A-1226 Wien

Phone: + 43 (1) 73216 -- 0

Website: http://www.ages.at/

### Appendix I

## Table A. Key Trade and Demographic Information

**AUSTRIA**

  ---------------------------------------------------- ---------- -----------
  TABLE A: KEY TRADE & DEMOGRAPHIC INFORMATION         **YEAR**   **VALUE**

  Agricultural Imports From All Countries (\$Mil)/U.S. 2002       4,821 / 1%
  Market Share (%)                                                

  Consumer Food Imports From All Countries             2002       3,421 /
  (\$Mil)/U.S. Market Share (%)                                   0.74%

  Edible Fishery Imports From All Countries            2002       180 / 0.11%
  (\$Mil)/U.S. Market Share (%)                                   

  Total Population (Millions)\*/Annual Growth Rate     2002       8.2 / 0.2%
  (%)\*                                                           

  Urban Population (Millions)\*/Annual Growth Rate     1999       5.12 /
  (%)\*                                                           0.27%

  Number of Major Metropolitan Areas                   2002       1

  Size of the Middle Class (Millions)/Growth Rate (%)  n/a        n/a

  Per Capita Gross Domestic Product (U.S. Dollars)\*   2002       \$27,700

  Unemployment Rate (%)\*                              2002       4.8%

  Per Capita Food Expenditures (U.S. Dollars)\*\*      2000       \$1,598.4

  Percent of Female Population Employed\*\*            2001       48.9%

  Exchange Rate (US\$1 = X.X local currency)           8/26/03    0.92
  ---------------------------------------------------- ---------- -----------

\*denotes information collected from
www.odci.gov/cia/publications/factbook/

\*\* denotes information collected from www.statistik.at

######### Table B. Consumer Food & Edible Fishery Product Imports

![](media/image2.wmf)

![](media/image3.wmf)![](media/image4.wmf)

**Table C. Top 15 Suppliers of Consumer Foods & Edible Fishery
Products**

Table C 1

#### AGRICULTURAL, FISH & FORESTRY TOTAL - 900 

  -------------------------- -------------- -------------- --------------
  Reporting Country:\        Import                        
  Austria\                                                 
  Top 15 Ranking                                           

                             2000           2001           2002

                             1000\$         1000\$         1000\$

  Germany                    2,187,656      2,318,065      2,472,615

  Italy                      530,602        603,342        636,184

  Netherlands                414,997        425,281        495,502

  Czech Republic             228,699        232,914        258,232

  France                     222,191        265,800        251,285

  Hungary                    197,280        201,138        244,383

  Spain                      147,676        161,703        183,199

  Switzerland                185,498        179,282        161,909

  Belgium                    102,158        114,108        143,012

  Slovakia                   88,860         91,646         91,019

  Poland                     70,684         80,315         89,381

  Turkey                     73,191         86,025         77,952

  United States              75,605         73,674         74,051

  Denmark                    65,791         67,378         70,920

  Brazil                     59,888         68,284         68,015

  Other                      889,225        890,927        931,213

  World                      5,540,218      5,860,062      6,249,071
  -------------------------- -------------- -------------- --------------

**Table C 2**

#### BULK AGRICULTURAL TOTAL - 10 

  ------------------------------------ ----------- ----------- -----------
  Reporting Country:\                  Import                  
  Austria\                                                     
  Top 15 Ranking                                               

                                       2000        2001        2002

                                       1000\$      1000\$      1000\$

  Hungary                              30,318      25,156      57,856

  Germany                              52,967      57,852      56,110

  Brazil                               37,623      44,191      35,369

  United States                        31,854      30,670      32,501

  Cote d\'Ivoire                       18,016      23,990      31,842

  Italy                                16,076      21,635      24,086

  Greece                               7,034       11,310      13,038

  Colombia                             10,662      13,364      12,112

  Belgium                              12,874      12,976      11,920

  Slovakia                             5,335       8,348       10,303

  Zimbabwe                             3,890       7,092       8,585

  Indonesia                            5,509       6,308       8,059

  Uzbekistan, Republic of              13,194      14,200      7,819

  China (Peoples Republic of)          4,404       5,516       7,162

  Turkey                               5,927       6,501       6,958

  Other                                128,701     123,884     122,030

  World                                384,415     413,007     445,771
  ------------------------------------ ----------- ----------- -----------

#### Table C 3

#### INTERMEDIATE AGRICULTURAL TOTAL - 200 

  ------------------------------ ------------- ------------- -------------
  Reporting Country:\            Import                      
  Austria\                                                   
  Top 15 Ranking                                             

                                 2000          2001          2002

                                 1000\$        1000\$        1000\$

  Germany                        364,143       390,945       419,496

  Netherlands                    93,199        88,532        116,466

  Italy                          72,621        99,625        98,933

  France                         53,136        81,882        65,309

  Belgium                        12,155        26,185        44,901

  Ireland                        29,735        33,583        36,341

  Czech Republic                 11,950        16,122        15,073

  Hungary                        13,028        16,920        14,009

  Slovakia                       6,554         9,280         11,174

  Spain                          3,616         3,999         11,025

  Thailand                       13,695        10,120        10,891

  Switzerland                    7,463         9,588         10,252

  United States                  9,041         9,900         8,992

  Denmark                        7,998         8,855         8,833

  Yugoslavia                     1,771         1,843         8,603

  Other                          51,169        70,155        73,445

  World                          751,297       877,553       953,779
  ------------------------------ ------------- ------------- -------------

#### Table C 4

#### CONSUMER-ORIENTED AGRICULTURAL TOTAL - 400 

  -------------------------- -------------- -------------- --------------
  Reporting Country:\        Import                        
  Austria\                                                 
  Top 15 Ranking                                           

                             2000           2001           2002

                             1000\$         1000\$         1000\$

  Germany                    1,205,825      1,301,256      1,401,254

  Italy                      392,251        433,915        463,008

  Netherlands                292,799        308,473        352,976

  Spain                      139,843        152,741        167,482

  France                     138,645        154,400        158,608

  Switzerland                80,951         95,994         110,038

  Hungary                    93,114         102,152        108,123

  Belgium                    71,567         68,735         79,594

  Turkey                     63,033         76,919         67,213

  Poland                     38,524         45,444         38,391

  Ecuador                    33,367         34,464         30,756

  Denmark                    25,205         27,437         30,060

  Czech Republic             22,604         23,440         29,091

  Brazil                     18,527         20,233         28,516

  United Kingdom             31,710         27,908         27,518

  Other                      294,962        303,720        328,234

  World                      2,943,047      3,177,352      3,420,979
  -------------------------- -------------- -------------- --------------

#### Table C 5

#### FOREST PRODUCTS (EXCL. PULP & PAPER) - 600 

  --------------------------- -------------- -------------- --------------
  Reporting Country:\         Import                        
  Austria\                                                  
  Top 15 Ranking                                            

                              2000           2001           2002

                              1000\$         1000\$         1000\$

  Germany                     496,446        485,604        508,120

  Czech Republic              187,491        186,621        206,077

  Slovakia                    71,975         68,845         64,289

  Hungary                     60,562         56,705         64,098

  Poland                      27,099         25,112         41,709

  Switzerland                 96,852         73,495         41,316

  Italy                       41,765         38,182         39,495

  Finland                     45,695         41,948         37,426

  Slovenia                    29,130         26,644         29,565

  Ukraine                     25,472         26,933         27,637

  Russian Federation          32,126         31,421         26,302

  Romania                     36,349         18,043         21,914

  Croatia                     20,024         16,972         18,382

  France                      20,215         16,398         17,394

  Bosnia-Hercegovina          12,656         13,918         14,338

  Other                       109,998        93,066         90,503

  World                       1,313,866      1,219,920      1,248,577
  --------------------------- -------------- -------------- --------------

#### Table C 6

#### FISH & SEAFOOD PRODUCTS - 700 

  ------------------------------ ------------- ------------- -------------
  Reporting Country:\            Import                      
  Austria\                                                   
  Top 15 Ranking                                             

                                 2000          2001          2002

                                 1000\$        1000\$        1000\$

  Germany                        68,275        82,408        87,635

  Denmark                        19,758        21,026        19,066

  Netherlands                    13,847        14,947        14,290

  Italy                          7,889         9,985         10,662

  Thailand                       5,906         5,497         5,185

  France                         4,452         5,427         4,960

  Portugal                       823           1,534         3,074

  Belgium                        1,884         2,515         2,861

  Poland                         1,326         3,771         2,859

  Slovenia                       1,636         1,707         2,678

  Norway                         2,001         2,410         2,229

  United Kingdom                 1,632         1,583         1,804

  Russian Federation             560           939           1,778

  Czech Republic                 1,303         1,278         1,553

  Seychelles                     1,098         1,457         1,483

  Other                          15,171        15,733        17,835

  World                          147,593       172,230       179,965
  ------------------------------ ------------- ------------- -------------