Required Report - public distribution

**Date:** 10/24/2005

**GAIN Report Number:** HK5030

HK0000

**Hong Kong**

**Market Development Reports**

**Exporter Guide**

**2005**

**Approved by:**

![](media/image1.wmf)Lloyd Harbert

U.S. Consulate General, Hong Kong

**Prepared by:**

David Wolf & Caroline Yuen

**Report Highlights:**

A revived economy with bourgeoning tourism as well as rising stock and
property markets provided U.S. exporters with promising export
opportunities in Hong Kong. Between January -- July 2005 compared with
the same period last year, retail sales of food in traditional markets
and supermarkets increased 4.9 percent and 5.9 percent respectively. For
the first half-year of 2005, total restaurant receipts amounted to \$3.5
billion, representing a rise of 5.3 percent over the same period in
2004. This report provides a snapshot of the Hong Kong market with a
general background of the economy, retail and HRI sectors, and trade
statistics.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Hong Kong \[HK1\]

\[HK\]

Table of Contents

[SECTION I. Market Overview 3](#section-i.-market-overview)

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

[Importer Lists 4](#importer-lists)

[Language 5](#language)

[Travel Visa 5](#travel-visa)

[General Consumer Tastes and Preferences
5](#general-consumer-tastes-and-preferences)

[General Import and Inspection Procedure
7](#general-import-and-inspection-procedure)

[Labeling of Biotech Foods 7](#labeling-of-biotech-foods)

[Section III. Market Sector Structure and Trends
7](#section-iii.-market-sector-structure-and-trends)

[Food Retail 7](#food-retail)

[Supermarkets 8](#supermarkets)

[Convenience Stores 11](#convenience-stores)

[Traditional Markets 11](#traditional-markets)

[Trends in Promotional/Marketing Strategies and Tactics
12](#trends-in-promotionalmarketing-strategies-and-tactics)

[Hotel, Restaurant and Institutional (HRI)
14](#hotel-restaurant-and-institutional-hri)

[Trends in Promotional/Marketing Strategies and Tactics
16](#trends-in-promotionalmarketing-strategies-and-tactics-1)

[Food Processing 16](#food-processing)

[SECTION IV. BEST CONSUMER ORIENTED PRODUCT PROSPECTS
18](#section-iv.-best-consumer-oriented-product-prospects)

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

[APPENDIX - STATISTICS 23](#appendix---statistics)

[Table A. Key Trade & Demographic Information Year 2004 23](#year-2004)

[Table B: Consumer Food & Edible Fishery Product Imports
24](#table-b-consumer-food-edible-fishery-product-imports)

[Table C: Top 15 Suppliers of Consumer Foods & Edible Fishery Products
25](#table-c-top-15-suppliers-of-consumer-foods-edible-fishery-products)

# SECTION I. Market Overview

Food Imports

-   Hong Kong is an important market for consumer-oriented American
    foods and ranks number eight as a U.S. export destination for these
    products. Hong Kong imported over \$800 million of consumer-oriented
    products from the United States in 2004 accounting for 16 percent of
    the market share. Of all U.S. consumer-oriented exports to Hong
    Kong, poultry meat, fresh fruit, processed fruit & vegetables and
    tree nuts are the leading items. For fish and seafood products, the
    United States exported \$50 million worth of products to Hong Kong,
    maintaining 3 percent of the market share.

-   Due to limited land resources and rapid urbanization, Hong Kong has
    to rely heavily on imports for its food supply. In 2004, local
    production contributed only 4 percent of fresh vegetables, 41
    percent of live poultry, and 22 percent of live pigs. However, Hong
    Kong's total imports of consumer-oriented products and fish &
    seafood products amounted to \$4.9 billion and \$1.8 billion
    respectively.

Economy

-   Being one of the most affluent economies in Asia, Hong Kong's 2005
    forecast per capita GDP is \$24,200.

-   The Hong Kong economy has exhibited a solid, broad-based upturn. In
    the first half of 2005, real GDP rose by 6.5 percent, following a
    growth of 8.1 percent in 2004, amid robust performance of the
    external sector and an upsurge of consumer spending and investment.
    On account of the prevailing upturn, the official forecast of GDP
    growth is maintained at 4.5 to 5.5 percent for 2005.

-   The second phase of the Mainland-Hong Kong Closer Economic
    Partnership Arrangement (CEPA II) was concluded in August 2004,
    providing further liberalisation measures on trade in goods and
    services entering the mainland and promising great benefits for Hong
    Kong's economy. It's expected to provide a new source of growth for
    the city's economy.

-   After more than five years of decline, the monthly consumer prices
    rose again from July 2004 onwards. In the first eight months of
    2005, consumer prices posted a modest gain of 0.8 percent.

-   Tourist arrivals increased by 40.4 percent to 21.8 million in 2004
    and 7.8 percent to 15 million for the first eight months of 2005.
    Hong Kong Disneyland, which was opened in September this year, has
    become a popular tourist attraction. In the coming year, the Tung
    Chung Cable Car System, Hong Kong Wetland Park and 23 hotel projects
    will be completed.  All these are favorable factors for tourism
    growth. In 2004, tourists spent \$1,052 million in restaurants other
    than meals taken in hotels, accounting for 14 percent of Hong Kong's
    HRI business. As such, a robust tourism not only has the merit of
    stimulating a series of peripheral businesses but also has a
    positive direct impact on HRI revenue.

Demographic Factors

-   Two demographic trends contribute to the good potential for
    "convenience" and processed foods. 1. An increasing number of women
    in the work force. In 2004, 51.8 % of women in Hong Kong were in the
    labor force. 2. A youthful work force: 56.1 percent of the labor
    force is in the age group of 25 - 44. In addition, this younger
    population is very receptive to new food varieties.

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

  World's freest economy (Economic    Severe competition between
  Freedom of the World, 2004 Annual   different supplying countries.
  Report, published by the Cato       
  Institute of the United States in   
  conjunction with the Fraser         
  Institute of Canada and some 50     
  other research institutes around    
  the world). Consistent free trade   
  and free enterprise policies. No    
  import duty except on wine, liquor, 
  cigarettes, hydrocarbon oils and    
  methyl alcohol. Separate customs    
  territory from Mainland China. No   
  foreign exchange controls.          

  H.K. dollar pegged to the U.S.      A very price sensitive market;
  dollar, so U.S. products are not    importers' buying decisions depend
  subject to price fluctuations based largely on price.
  on exchange rates. (Can be a        
  disadvantage when U.S. dollar is    
  strong. Then products from other    
  supplying countries become more     
  price competitive compared to U.S.  
  products.)                          

  Foreign and local businesses        U.S. products are disadvantaged by
  operate on a level playing field.   a higher transport cost when
                                      compared with Australian and
                                      Chinese products.

  As one of the most affluent         Lack of trader and consumer
  economies in Asia, a market leader  awareness of U.S. foods.
  for new products.                   Traditional preference for European
                                      foods, due to previous ties with
                                      the U.K.

  International city; residents       A virtual duopoly in food retailing
  travel frequently and are receptive allows retailers to charge high
  to western and novel food.          slotting (shelf space) fees. See
                                      section on Supermarkets.

  Sophisticated, reliable banking     
  system.                             

  Consistent import regulations and   
  rule of law.                        
  ----------------------------------- -----------------------------------

## 

# SECTION II. EXPORTER BUSINESS TIPS 

## Importer Lists

## 

ATO provides Hong Kong importer lists to U.S. exporters and assists to
arrange meeting appointments provided adequate lead time is given.

## Language

## 

The official written languages in Hong Kong are Chinese and English. The
official spoken languages are Cantonese (the prominent Chinese dialect
in Hong Kong and South China) and English. In general, all
correspondence can be in English.

## Travel Visa

Even though Hong Kong is now part of China, there is still a border
boundary between Hong Kong and China. If you are traveling with a U.S.
passport, you do not need a travel visa for Hong Kong. However, if you
are planning to go to Mainland China, you need to apply for a travel
visa into China.

**Legal System**

Hong Kong's legal system is firmly based on the rule of law and the
independence of the judiciary. Hong Kong's legal system is separate from
Mainland China. Also, Hong Kong is a separate customs territory from
China.

**Payment**

Hong Kong importers are willing to pay by letter of credit in the
beginning. When a trading relationship has been established, many of
them prefer to pay by open accounts so as to cut transaction costs.

## General Consumer Tastes and Preferences

-   There has been growing popularity of frozen foodstuffs because many
    working women cannot afford the time to do grocery shopping daily.
    Besides, more and more consumers believe that frozen foods are more
    hygienic. However, Hong Kong consumers in general still prefer fresh
    foodstuffs, particularly fish.

-   Hong Kong's relatively sophisticated shoppers are buying an
    increasing percentage of their groceries in supermarkets, as opposed
    to traditional wet markets. On the other hand, supermarket chains
    are able to offer products at more competitive pricing because they
    have a strong bargaining power at getting supplies and are able to
    reap the merits of economies of scale.

-   According to a recent survey conducted by AC Nielsen, meats and
    produce account for 54 percent and 40 percent respectively of the
    household food expenditure.

-   Since ice-cream is the most popular snack, Hong Kong has witnessed
    the opening of more and more ice-cream specialty shops such as New
    Zealand Natural, Kida Garden, Papagallo, along with the long
    established Ben & Jerry's, Double Rainbow and Haggen Daz.

-   Hong Kong consumers' buying decision is largely based on for value
    money. Generally, consumers are not brand loyal when they are faced
    with discount privileges of another brand or with "out-of-stock"
    situation.

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-   Because of the limited living space in Hong Kong, it is inconvenient
    for Hong Kong consumers to store food products. Therefore, bulk pack
    food products do not sell well in Hong Kong, and small package food
    products are preferred.

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-   There is most potential for growth in the processed/convenience
    sectors of Hong Kong's retail food markets for U.S. high value
    consumer foods such as general grocery items, ingredients for home
    meal replacement, and health food.

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-   Due to the increasing prevalence of dual income families,
    ready-to-cook food has become more popular. The major supermarket
    chains in Hong Kong have been putting more emphasis on convenience
    foods.

-   Hong Kong consumers have become increasingly more aware of food
    safety issues and nutrition values of food products. Clear
    indications of nutritional value on the package are certainly a good
    marketing strategy for health foods. (The Hong Kong government is
    planning to regulate nutrition labeling and health claims. Details
    please refer to report HK5020.)

-   The sales of organic products have been increasing steadily. A
    representative of the Great Supermarket revealed that there were
    only 200 organic items for sale three years ago; the variety has
    greatly expanded to over 2000 items this year. The price discrepancy
    between conventional and organic foods has also narrowed over the
    years. Currently, organic products are priced generally 10% higher.
    The most popular organic products are baby foods.

-   Health foods continue to grow in popularity in Hong Kong because of
    consumers' desire to enhance general health. A Consumer Council
    survey has the following findings on Hong Kong consumers' take on
    health foods.

    -   One-fifth of consumers taking health foods have little or no
        concern over the effectiveness of the products.

    -   An overwhelming majority of consumers apparently in good health
        are taking health foods.

    -   The opinion survey, based on 474 consumers of health foods,
        showed that nearly half of the respondents regularly and
        habitually take health foods.

    -   The findings suggest that satisfaction with health food is not
        necessarily a reflection of the product effectiveness. It might
        be more of a psychological need, regardless of whether or not
        the products possess any health enhancement effect.

    -   Generally, consumers try a new health food because of word of
        mouth from friends or relatives, or/and by the heavy media
        advertising as the next most influential source of information.

    -   Consumer spending on health foods could reach up to US\$465 over
        a six-month period.

-   According to a market survey conducted by the Consumer Council
    between June and August 2004, a variety of 192 health food products
    were found to be commonly available in Hong Kong through retail
    outlets of supermarkets, health food shops, chain pharmacies and
    convenience stores. Among these 192 products were 91 Traditional and
    Complementary Medicines (TCM), and 101 western health foods.
    Examples of TCM include Chinese medicinal fungi such as lingzhi,
    herbal teas and pills, etc. Western health foods are mostly vitamin
    and mineral supplements, shark liver oil and deep-sea oil capsules,
    etc.

-   Consumption of wine is growing in popularity in Hong Kong. The
    number of wine retail stores is steadily expanding.

## General Import and Inspection Procedure

-   Food products can be imported to Hong Kong duty free. As for
    technical import requirements, the basic tenet is that no food
    intended for sale should be unfit for human consumption. Products
    which require import permits/health certificates include meat, milk
    and frozen confections. The Hong Kong government encourages food
    importers to produce health certificates for the importation of
    seafood products to expedite custom clearance. It accepts import
    applications from Hong Kong importers; U.S. exporters are not
    required to apply for import permits. However, U.S. exporters may
    need to supply their agents/importers with necessary documentation
    such as health certificates from the U.S. government.

-   Currently Hong Kong does not have any nutrition labeling
    requirements or guidelines. The government, however, intends to
    implement a mandatory nutrition labeling system for all prepackaged
    foods and aims to introduce the drafted legislation to the
    Legislative Council in 2006. With the grace period allowed, all
    prepackaged food items would have to carry a nutrition label by 2010
    at the earliest. Details refer to Gain Report HK#5020.

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-   For more information on food import regulations, please also refer
    to the "Hong Kong Food and Agricultural Import Regulations and
    Standards, Importation of Food & Agricultural Products to Hong Kong
    2005\". Gain Report #HK5021.

## Labeling of Biotech Foods

The Hong Kong government is considering to adopt voluntary labeling and
pre-market safety assessment for biotech foods but has set no timetable
for implementation.

# Section III. Market Sector Structure and Trends 

Among the three major market sectors of Hong Kong: the retail and HRI
(Hotel, Restaurant and Institutional) sectors present the best
opportunity for U.S. exporters. The Food Processing sector in Hong Kong
is very small and presents less opportunity for market development.

## Food Retail

-   Total retail sales of food and drinks in Hong Kong for 2004 reached
    \$6 billion. For January - July 2005, retail sales of food,
    alcoholic drinks, and tobacco for traditional markets and
    supermarkets, increased 4.9 percent and 5.9 percent respectively,
    compared with the same period last year. The sentiment for spending
    is promising.

-   Retail establishments in 2003 amounted to approximately 15,527,
    which included (1) 99 supermarkets and convenience store
    establishments (including retail outlet branches, estimated at
    about 900) and (2) 15,428 wet market stalls and "mom and pop" shop
    operators. Retail shops in Hong Kong generally are very small in
    size, about 98 percent of which hire less than 10 employees.

-   Traditionally, Hong Kong consumers shop for food daily because of a
    preference for fresh food. Much of the shopping is still done in
    traditional markets including wet markets and mom-and-pop shops.
    However, sales in supermarkets are increasing. The supermarket's
    share in terms of retail sales has risen from 44 percent of total
    sales in 1995 to 53 percent in 2004. Many supermarkets in Hong Kong
    now have successfully tapped the fresh food market by offering fresh
    foods at very competitive prices and providing a comfortable
    shopping environment, which is very different from traditional wet
    markets. In 2000, only \$524 million worth fresh/chilled meat, fish,
    fruit and vegetables and frozen food were sold in supermarkets. The
    sales values of the same category in supermarkets greatly expanded
    to \$629 million in 2004, increasing 20% over 2000.

![](media/image2.wmf)

![](media/image3.wmf)

-   In short, wet markets are strong in fresh foods, while supermarkets
    are strong in processed, high added value, and canned food products.
    The competition between wet markets and supermarkets has intensified
    in recent years. Some wet markets have turned air-conditioned and
    provide free shuttle to nearby residential areas. In the next few
    years, the Hong Kong Government has earmarked over \$77 million to
    improve the environment of wet markets. Meanwhile, more and more
    supermarkets have been renovated to make sales of fresh meats
    possible and to enhance the overall experience of the convenience
    shopping at a supermarket.

### Supermarkets

-   There are two dominant supermarket chains in Hong Kong: The Wellcome
    Co. Ltd. (240 outlets with 21 superstores) and ParknShop (over 215
    with 52 superstores). ParknShop and Wellcome account for about 80
    percent of the supermarket turnover. Both supermarkets are able to
    work closely with real estate developers to open stores in strategic
    locations, thus maintaining their significant market share. The
    other players include: China Resources Supermarket (CRC), Dah Chong
    Hong, Jusco and City Super.

-   In recent years, a \"shopping mall' concept has emerged in the
    operation of some new superstores, i.e., a variety of services are
    provided. For example, a Wellcome superstore, with a floor area of
    54,000 square feet, provides massage service. A doctor specializing
    in Chinese medicine has an office within the store providing
    consultation to patients. The largest ParknShop store in Hong Kong
    has a floor area of 72,000 square feet and sells over 20,000 product
    categories ranging from snacks to electrical household appliances.
    This ParknShop megastore contains a zone in which all goods are
    priced at HK\$8, in a move that could set off a war with existing
    HK\$10 bargain stores. The HK\$8 zone features 1,000 Japanese-style
    items ranging from cooking utensils to skin-care products.

-   ParknShop is also associated with three other supermarkets by the
    name of Great, Taste, and Gourmet. These high-end supermarkets are
    after the more affluent clientele. They are ideal outlets for
    innovative, quality and priced international food products. Great
    adopts a stylish international food hall concept and its flagship
    store offers over 46,000 gourmet items. The first 35,000 square feet
    TASTE food galleria was opened in November 2004, and features more
    than 25,000 quality food items sourced from around the world.
    Gourmet, opened in 2005, occupied 15,000-square-foot store offering
    a selection of over 20,000 products carried across 30 merchandise
    categories of quality and premium foods. The average expenditure per
    customer for Gourmet and Taste is expected to be \$18 and \$13
    respectively. The Gourmet management is expecting 2000 customers
    each day in the first year.

-   Almost all Hong Kong supermarkets require listing fees, that is, a
    fee charged to allow a new product to be put on their shelves. This
    is a one-off fee for a trial period. The listing fees are extremely
    negotiable and vary greatly among different supermarket chains. For
    example, Wellcome and ParknShop, which have many branch stores, have
    expensive listing fees. A product with five SKU categories is
    expected to pay U.S.\$26,000 to U.S.\$39,000. On the other hand,
    Jusco, a supermarket in a Japanese department store, charges
    U.S.\$150 for all its stores. The agent will not bear this cost,
    which is transferred to the principal. In short, all supermarkets
    require listing fees except those belonging to Japanese department
    stores. (Jusco is the only Japanese department store food retailer
    that requires a listing fee.)

-   U.S. exporters should be prepared to encounter numerous trading term
    demands from Hong Kong food retailers, such as promotional discounts
    (number of discount promotions offered each year); back-end income
    (flat rebate per year that a U.S. exporter has to pay to the retail
    chain based on the annual turnover); D.G.A. (Distribution
    allowance - the fee that the supermarkets charge for distributing
    the products from its warehouse to its many branch stores); and
    incentive rebate (a percentage of turnover rebated to the
    supermarkets in case sales exceed the agreed amount). It can be
    expected that the bigger the supermarket, the harsher the trading
    terms. For general reference, about 15 percent of the annual
    turnover has to rebated to the major supermarkets and 8 percent to
    small ones.

-   Different products have different mark-ups. A dried fruit importer
    revealed that an importer usually operates on a mark up of 5% to
    retailers who would then mark up another 30% to 35% to consumers.

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-   There is excellent potential growth in Hong Kong's retail food
    market for U.S. grocery store items, particularly new and different
    items, as food retail outlets continue to increase and diversify.
    Because of established ties and traditional relationships, most of
    Hong Kong's supermarket chains traditionally looked to Britain,
    Australia, New Zealand, and Canada for supplies. In recent years,
    however, buying habits are shifting and many more American items are
    now available on local grocery store shelves. Supermarkets tend to
    use consolidators to help them source new products which are popular
    in the United States.

Report by the Consumer Council

-   According to a report released by the Consumer Council in August
    2003, there are some findings with regard to supermarkets. First,
    prices at the big two supermarkets and CRC over the first half of
    2003 had gone up by an average of 1.5% compared with a year earlier.
    When discounts and promotions were taken into account, average
    prices had dropped by 0.8%. However, government figures show that
    deflation for June 2003 was running at 3.1 percent, year on year.

-   Secondly, in the six years from 1996 to 2001, there has been a
    substantial decline of small supermarket operators by approximately
    41%.

-   Thirdly, from 1993 to 2003, the two major supermarket chains have
    grown 29% by number of retail outlets (31% for Wellcome and 28% for
    ParknShop respectively).

-   The Consumer Council warned that consumers would be deprived of
    choice if the market was monopolized - especially as smaller
    supermarkets and wet markets were phased out. When there is a lack
    of fair competition, supermarket giants may control the variety of
    products available. Therefore, it called for a wide-ranging law on
    fair competition, and a high-powered authority to oversee it.

-   The Hong Kong government responded that there was no sign the two
    dominant supermarket chains engaged in anti-competitive acts or
    abused their market power. The government said it did not see the
    need for a competition law.

Market Entry Approach

-   Through setting up a representative office in Hong Kong: While this
    is the most effective approach, it is very costly.

-   Through U.S. Consolidators: Major supermarkets in Hong Kong work
    with U.S. consolidators for some of their products. However, the
    product quantities requested per shipment are usually small,
    especially when new products are purchased to test the market.

-   Through Hong Kong agents: This is the most popular approach. The
    advantage of having an agent is that it can help with marketing and
    distribution. Some companies may secure a very competitive price
    package with TV/magazine/radio for advertisements. In addition,
    well-established companies have extensive distribution networks not
    limited to one or two supermarkets.

-   Direct to Supermarkets: For branded products to sell direct to
    supermarkets, supermarkets usually require exclusive rights in
    selling the products in Hong Kong through their own outlets only.
    Otherwise, they will not consider any direct imports. In this case,
    expensive listing fees may be waived. For non-branded and large
    turnover products such as fruit, meat, and vegetables, supermarkets
    tend to buy direct from overseas exporters to cut costs.

-   Direct selling to supermarkets is difficult to handle because they
    demand strict on-time delivery and very often will not be able to
    take a whole container. Logistics is the largest problem that U.S.
    exporters have to deal with if they want to sell direct to
    supermarkets. However, they can better test the market if they deal
    directly with retailers.

### Convenience Stores

-   There are around 900 convenience stores in Hong Kong. Two major
    chains dominate the market: 7-Eleven (650 outlets) and Circle K (223
    outlets). They are targeting the customer age group of 15-35.
    Convenience stores are characterized by round-the-clock operation.
    Since only a limited choice of brand names is available and prices
    are generally less competitive, most purchases are "convenience" in
    nature, i.e. goods are normally bought in small quantities for
    immediate consumption. The average store size of a convenience store
    is 1,000 sq. ft. Listing fees are also required for convenience
    stores.

-   Dairy Farm, which owned both Wellcome and 7-Eleven, acquired Daily
    Shop convenience stores in September 2004. The 87 Daily Shop
    convenience stores were converted to 7-Eleven making the total
    number of 7-Eleven stores to 650. These stores are strategically
    located in MTR (subway) and KCR (train) stations, popular shopping
    malls and housing developments throughout Hong Kong. After acquiring
    Daily Shop, 7-Eleven accounted for 73% of all the convenience stores
    at MTR (subway) stations, compared to the 30% market share before
    the taking over.

-   According to a study, Hong Kong can accommodate 1,200 convenience
    stores. Given that there are about 900 stores presently, there is
    still a room for expansion. The primary strategy of convenience
    stores is to increase services providing \"convenience\" to
    consumers and to increase the number of stores so as to reach
    economies of scale. 7-Eleven, operated on a franchise basis, is able
    to expand the number of stores quickly. Circle K is owned by a
    listed company and does not work on franchise basis.

-   A new development in 2003 is that ParknShop expanded into 24-hour
    convenience store operations. The supermarket giant has opened six
    stores under the name ParknShop Express on a trial scheme and may
    expand the network across Hong Kong if the experiment succeeds.
    ParknShop has intrinsic competitive advantages over its rivals
    because it can use the leverage of the group's existing
    infrastructure to offer products at low prices. The stores carry the
    products as other convenience stores such as cooked food, drinks,
    newspapers and magazines. In a bid to lure customers, the 1,000
    products offered by ParknShop Express are priced at the same level
    as those being sold at ParknShop. This is in contrast to other
    convenience store operators charging at a premium of up to 15 per
    cent from those selling at supermarkets.

Market Entry Approach

-   Convenience stores largely buy goods from local importers and
    agents. Therefore, U.S. food exporters have to go through Hong Kong
    importers to have their products sold in convenience stores.

### Traditional Markets

-   Traditional markets include wet markets and mom-and-pop shops. They
    are widespread throughout the territory. Traditional markets used to
    account for the lion's share of food retail. For example, they
    occupied around 54 percent of total retail food sales between 1995
    and 1997. Yet supermarkets sales have exceeded traditional markets
    sales since 1998, and the dominating trend of the former is likely
    to persist and enlarge in the future. Despite the growing
    significance of supermarkets in terms of food retailing, traditional
    markets remain as key food retail outlets, particularly for seafood,
    meat and groceries. Wet markets in Hong Kong have changed gradually
    over the years. The newly built markets are air-conditioned and more
    hygienic and more environmentally pleasant than the old ones. Some,
    but not all, stalls in wet markets have freezers and chilling
    equipment, which is necessary to maintain food quality.

-   Mom-and-pop shops around the housing estates and schools are ideal
    retail outlets for drinks and snack foods. One feature of
    traditional markets is that stalls are small, but the service they
    offer is personal.

-   A traditional mom-and-pop shop which started business in 1990 has
    expanded to 54 stores spreading all over Hong Kong in recent years.
    The stores are called Yu Kee, with floor area ranging around 1,500
    sq. feet each. They sell mainly processed foods and produce. Most of
    the food supplies come from China and South East Asia. They also
    import snack foods and drinks from Europe. However, U.S. foods are
    not yet on their shelves. The stores feature cheap prices and are
    after the mass market.

-   Another chain store worth mentioning is called Magic House. With 100
    retail stores, they operate like \"convenience stores\" except that
    their business hours are only around 10 hours instead of 24 hours.
    They primarily sell snack foods, drinks and ice cream.

Market Entry Approach

-   U.S. exporters must go through local importers/agents that have a
    good distribution networks.

### Trends in Promotional/Marketing Strategies and Tactics

-   Supermarkets expanding store size: The supermarket industry is
    undergoing a face-lift to introduce larger size stores with an
    objective to provide one-stop shopping and convenience for
    customers. In additional to traditional grocery and household
    products, supermarkets are moving towards larger, more modern stores
    with more fresh food.

-   Increasing demand for promotion package and discounts: Hong Kong
    consumers are very price sensitive. Marketing tactics such as
    selling larger economy packs or enclosing complimentary samples are
    usually used to stimulate sales. The most direct and effective
    marketing tool is to offer discounts.

-   Various promotions have varying impact on consumers' purchasing
    decisions. Given below were the findings of a survey by Consumer
    Council. Nearly 75 percent of the respondents opted for "Direct
    Price-Cut" as the most important factor in prompting them to buy the
    goods. This was followed by "Buy One Get One Free" or " Buy Two Get
    One Free" (55.5 percent); "Add \$1 for One More" (42.7 percent);
    "Add-Volume Pack" (39.8 percent); and "Free Gift/Coupon" (19.8
    percent) which had the least impact on bargain hunters.

-   In face of strong competition, major supermarket stores very often
    offer discounts and tend to transfer the cost to suppliers by
    requesting lower prices for supplies. Given supermarkets' strong
    bargaining power as they have many retail outlets, many suppliers
    have to give supermarkets special discounts which ordinary retailers
    do not enjoy.

-   According to a survey by AC Nielsen, Hong Kong consumers are by far
    the most impulsive shoppers in the region with 67% who make
    unplanned purchases. In contrast, other countries with a relatively
    high proportion of non-planners are Thailand (14%) and Singapore
    (14%). As such, in-store promotions seem to be effective to
    introduce new products and to stimulate impulsive purchases.

-   Consumers becoming increasingly health-conscious, and organic
    products picking up in popularity: There has been a gradual change
    in what consumers want in Hong Kong. The importance of meat,
    especially red meat, has declined among some consumers, while other
    food groups, such as fruits and vegetables, are gaining in
    popularity. Consumers increasingly look for freshness, healthiness,
    new varieties and shorter meal-preparation time for food. Consumers
    want foods of higher nutritional value, but also increasingly pay
    attention to food safety and hygiene. In short, the marketing trend
    is to position food products as a healthy, natural, nutritional,
    etc.

-   Organics: The market for organic food, especially fresh vegetables,
    has picked up considerably in the past few years. ParknShop, the
    biggest supermarket chain in Hong Kong, set up a separate organic
    food section in many of their stores. A trader of mainland grown
    organic vegetables has seen his orders steadily increasing. A local
    producer of organic vegetables said his produce has been
    experiencing strong demand, and his farm broke even two years after
    it started operating in 1988.

-   Internet direct sales of food: Major supermarkets like ParknShop,
    Wellcome, and City Super offer grocery shopping over their website.
    The service is however not attracting a lot of interest, due to the
    convenience of shopping in Hong Kong, security concerns and the cost
    of delivery.

-   However, the at-work population in Hong Kong is becoming a coveted
    audience among marketers to leverage the Internet as a medium of
    advertising. The at-work online audience is large and growing - out
    of the total Hong Kong workforce of 3.52 million, about 20 %
    regularly go online at work. These regular Hong Kong internet users
    are a demographically attractive group of individuals who have
    higher than average incomes, educations and tendencies to shop and
    buy online.

-   Growing awareness of U.S. products fit supermarkets' needs to
    diversify product range: With awareness of the high quality and
    variety of U.S. food products increasing among supermarkets, there
    are many opportunities to introduce new U.S. products to the local
    market. ATO Hong Kong selectively invites key supermarket buyers to
    the United States on U.S. buying missions, which are followed by
    in-store promotions highlighting U.S. products. Buyers from Hong
    Kong supermarkets realize the quick-changing consumption temperament
    of local consumers, and many have expressed the need to source new
    products to capture changing tastes. With strong support from
    exporters and state regional trading groups, the ATO continues its
    efforts to promote U.S. products and help supermarkets expand the
    range of U.S. products they carry.

-   To promote U.S. food products, the ATO sponsors the HOFEX trade show
    which will be held May 13 -16, 2007. For health food products, U.S.
    exporters may consider participating in the Natural Products Expo
    Asia 2005 which will take place from November 30 to December 2,
    2005.

-   For further information on the Hong Kong food retail sector, please
    refer to "Retail Food Sector Report 2004\" (Gain Report #HK4025).

## Hotel, Restaurant and Institutional (HRI)

### 

-   A revived economy with bourgeoning tourism, and rising stock and
    property markets have attributed to the good prospects of the
    catering industry for 2005. The HRI business is expected to have
    growth in 2006 with many positive economic indicators.

-   Restaurant businesses in 2004 were greatly recovered from 2003 when
    Hong Kong severely suffered from the SARS impact. In 2004, the value
    of total receipts for the restaurants sector was \$6.8 billion and
    for purchases was \$2.3 billion, representing a rise of 10 percent
    and 11 percent respectively. For the first half-year of 2005, total
    restaurant receipts amounted to \$3.5 billion, representing a rise
    of 5.3 percent over the same period in 2004.

![](media/image4.wmf)

Source : Quarterly Restaurant Receipts and Purchases produced by the
Hong Kong Census & Statistics Department

-   Hong Kong is renowned as the " Culinary Capital of Asia". It has
    approximately 11,094 restaurants and other eating-places, providing
    a wide range of dining options. Eating out is a way of life for many
    locals.

-   Chinese food, in particular Cantonese style foods tend to dominate
    the restaurant sector. This is evident in that Chinese restaurants
    account for nearly 50 percent of the 11,094 restaurants in Hong
    Kong.

+-------------------------------+------------+----------+-------------+
|                               | No. of     | Pe       | Percentage  |
|                               | Esta       | rcentage |             |
|                               | blishments |          | (by         |
|                               |            | (by      | receipts)   |
|                               |            | number)  |             |
+-------------------------------+------------+----------+-------------+
| Chinese restaurants           | 5,491      | 50       | 48          |
+-------------------------------+------------+----------+-------------+
| Restaurants, other than       | 3,590      | 32       | 26          |
| Chinese restaurants           |            |          |             |
+-------------------------------+------------+----------+-------------+
| Fast food shops               | 1,026      | 9        | 19          |
+-------------------------------+------------+----------+-------------+
| Bars                          | 485        | 4        | 4           |
+-------------------------------+------------+----------+-------------+
| Eating and drinking places    | 502        | 5        | 3           |
+-------------------------------+------------+----------+-------------+
| Total                         | 11,094     | 100      | 100         |
+-------------------------------+------------+----------+-------------+

Source: Hong Kong Census & Statistics Department

-   The 30's generation of local Chinese have a greater propensity
    toward western style foods and are more likely to experiment with
    non-traditional styles. The growth of non-Chinese chains in Japanese
    food, fast food, coffee and snack and casual dining establishments
    has been evident.

```{=html}
<!-- -->
```
-   McDonald's, Dominos, Pizza Hut, Kentucky Fried Chicken, Hardee's,
    Oliver, Pret A Manger, Starbucks, Pacific Coffee and others have all
    grown rapidly in numbers over the past years and now have become
    fixtures in the Hong Kong market. California Pizza Kitchen (CPK) was
    opened in Hong Kong in 2003.

-   The fastest developing sector of the market is the fast food
    outlets. According to a survey conducted by AC Nielsen, Hong Kong
    people are the world's most frequent patrons of fast food
    restaurants. The survey revealed that 61 percent of people in the
    territory eat at a fast food restaurant at least once a week. The
    popularity of fast food in Hong Kong was mainly due to convenience.
    The survey showed that the most popular fast food chains in Hong
    Kong are McDonald, Kentucky Fried Chicken and Pizza Hut.

-   As consumers are getting more health conscious, fast food chains
    have provided more health food menu such as salads, premium juice
    drinks, etc.

-   The major fast food operators, Café De Coral, Maxim's and Fairwood
    have innovated their menus by introducing numerous new ingredients
    as consumers become more demanding. These fast food operators are
    also renovating their older restaurants and adding "cyber corners"
    to give them a more upscale look, in order to create more value in
    patrons' minds. The average spending in fast food outlets is
    HK\$33.90 for dinner, HK\$25.50 for HK\$18.20 for breakfast and
    HK\$16.60 for afternoon tea. (U.S.\$1.00 = HK\$7.78)

-   Exporters should note that tastes in food can often differ between
    Chinese and Western consumers. Exporters looking to grow business
    with the HRI trade should focus on U.S. ingredients for Chinese
    dishes offerings.

-   Another key feature of Hong Kong's HRI is the increasingly
    competitive coffee shop market in Hong Kong with new outlets opening
    around the city. In recent years, it is a trend to open upstairs
    cafes in order to cut rental fees. They are largely located in
    commercial areas. While westerners will stand up and drink a coffee,
    Chinese people in the Hong Kong market want to sit down and take
    their time over their sandwich or cup of coffee. Starbucks (50
    stores) and Pacific Coffee (39 stores) are Hong Kong's two largest
    coffee shop chains. Reportedly, the average monthly profit of each
    Pacific Coffee store amounted to US\$2,580. Starbucks is believed to
    have even a higher profit margin. McDonald has also vigorously
    expanded its McCafe in order to take a slice of the market.

Market Entry Approach

-   Because of small individual consumption, local hotels, restaurants
    and most fast food operators usually cannot afford to import
    directly. The distribution of food and beverages to these operators
    is generally through import agents. U.S. exporters should contact
    Hong Kong importers to explore potential business opportunities.

### Trends in Promotional/Marketing Strategies and Tactics

-   Participation in trade shows: ATO will participate in the Restaurant
    and Bar Show which will be held in May 9 --11, 2006. The show
    provides a showcase for U.S. food ingredients, wine and beverages to
    Hong Kong's hotel and restaurant trade. In cooperation with
    cooperators and regional groups, the show will demonstrate the
    versatility and safety of U.S. food products.

-   Menu promotions with major restaurant chains: Menu promotion dollars
    will be maximized if spent on promotion events held with the major
    restaurant chains. With the restaurant chains' announced intention
    to have an image overhaul, this provides for an opportunity to
    introduce new U.S. foods.

-   Inviting restaurant owners/chefs to seminars and/or to the United
    States: ATO Hong Kong/ cooperators organize seminars and trade
    missions to the United States with an intention to introduce U.S.
    products, meet U.S. exporters, and experience U.S. store formats.

-   Setting up of several fast food and takeaway websites: There are
    several meal delivery sites to cater to the home delivery market by
    fax, telephone, or internet. These sites are in cooperation with a
    number of restaurants which will prepare the food which clients
    order.

-   For more information on Hong Kong's HRI sector, please refer to Gain
    report #5006.

## Food Processing 

-   Based on the Chinese mainland and Hong Kong Closer Economic
    Partnership Arrangement (CEPA) which was concluded in June 2003,
    China has applied zero import tariff on 374 product codes for
    products made in Hong Kong. Ice cream and other edible ice is the
    only food item being included in zero tariff product list covered by
    CEPAI. However, under stage two of the agreement, which was signed
    in August 2004, another 713 made-in-Hong Kong product categories are
    allowed entry to China tariffs free. Zero tariff were introduced to
    529 product categories on January 1, 2005, the remaining 184 on
    January 1, 2006. Under CEPAII, a range of food and agricultural
    products, if qualified to have Hong Kong origin, can be exported to
    China tariff free.

-   The CEPAII zero tariff product list includes aqua -- marine products
    (certain live, fresh, chilled or frozen fish, shrimps and prawns,
    crabs), food and beverages, (certain dairy products such as yogurt
    and cheese, certain prepared meats, certain sugar confectioneries
    and cocoa preparations; certain preserved meats and seafood, bread,
    biscuits and cakes; preserved vegetables and fruits, fruit juices;
    sauces, water, etc.) and leather and fur products. The 2005 China
    bound tariff rates under WTO accession of those products range from
    5% to 51%.

-   China's zero import tariff applications for products made in Hong
    Kong certainly encourage food production in Hong Kong. Hong Kong
    brand products have a competitive edge in the Mainland China market.
    The expansion of the local food processing industry will then
    trigger off a demand for raw materials. Such demand provides export
    opportunities for U.S. food ingredients suppliers.

-   A full zero-tariff product list is available at
    <http://www.tid.gov.hk/english/cepa/cepa2.html>

-   The food processing industry in Hong Kong is relatively small
    compared to food retail and HRI sectors. The total output of the
    local food processing industry was US\$2 billion in 2002 and there
    were 717 food processing establishments as of 2004. Major local
    production includes instant noodles, macaroni, spaghetti, biscuits,
    pastries and cakes for both domestic consumption and export. Other
    significant sectors include canning, preserving and processing of
    seafood (such as fish, shrimp, prawns, and crustaceans); manufacture
    of dairy products (fresh milk, yogurt and ice cream); seasoning and
    spirits.

Market Entry Approach

Food ingredients are sourced both through direct import by food
processors and through middleman traders. Hong Kong traders and
end-users tend to stay with suppliers with whom they know well and have
done business with for some time. While exporters would do well
exploring all channels, patience and understanding are required to
establish a relationship of trust before trading can commence.

# SECTION IV. BEST CONSUMER ORIENTED PRODUCT PROSPECTS

+-----------+---------+--------+--------+-------------+------------+
| **        | **2004  | **2004 | 2000   | **Key       | **Market   |
| Product** | Market  | Market | --     | Constraints | Attrac     |
|           | Size**  | Size** | 2004   | Over Market | tiveness** |
| **C       |         |        | A      | De          |            |
| ategory** | *       | **(\$  | verage | velopment** | **For      |
|           | *(MT)** | mil)** | Import |             | USA**      |
|           |         |        | Growth |             |            |
|           |         |        |        |             |            |
|           |         |        | **(in  |             |            |
|           |         |        | va     |             |            |
|           |         |        | lue)** |             |            |
+-----------+---------+--------+--------+-------------+------------+
| Fresh     |   --    | 503    |        | There is    | U.S.       |
| Fruit     | ------- |        |  ----- | strong      | accounted  |
|           |         |        |   -2%  | competition | for 34% of |
|           | 567,089 |        |        | from other  | the market |
|           |         |        |        | countries   | share.     |
|           |   --    |        |  ----- | such as     |            |
|           | ------- |        |        | Australia,  | Consumers  |
|           |         |        |        | South       | have       |
|           |         |        |        | Africa,     | confidence |
|           |         |        |        | Chile and   | in U.S.    |
|           |         |        |        | China for   | fruits'    |
|           |         |        |        | apples,     | quality    |
|           |         |        |        | oranges and | and        |
|           |         |        |        | grapes.     | product    |
|           |         |        |        |             | safety.    |
|           |         |        |        | Also, there |            |
|           |         |        |        | is strong   |            |
|           |         |        |        | competition |            |
|           |         |        |        | coming from |            |
|           |         |        |        | other       |            |
|           |         |        |        | tropical    |            |
|           |         |        |        | fruits      |            |
|           |         |        |        | which are   |            |
|           |         |        |        | supplied by |            |
|           |         |        |        | Thailand.   |            |
+-----------+---------+--------+--------+-------------+------------+
| Poultry   |   --    |        |        | Strong      | U.S.       |
| Meat      | ------- |  ----- |  ----- | competition | accounted  |
|           |         |   404  |   11%  | from Brazil | for 27% of |
|           | 419,814 |        |        | exists and  | the market |
|           |         |        |        | buyers are  | share.     |
|           |   --    |  ----- |  ----- | price       |            |
|           | ------- |        |        | conscious.  | U.S.       |
|           |         |        |        |             | products   |
|           |         |        |        |             | have       |
|           |         |        |        |             | abundant   |
|           |         |        |        |             | supplies   |
|           |         |        |        |             | with a     |
|           |         |        |        |             | variety of |
|           |         |        |        |             | grades.    |
+-----------+---------+--------+--------+-------------+------------+
| Tree Nuts |   -     | 163    | 48%    | 60% of the  | U.S. is    |
|           | ------- |        |        | tree nuts   | the        |
|           |         |        |        | imported to | leading    |
|           |  54,163 |        |        | Hong Kong   | supplier   |
|           |         |        |        | are         | of almonds |
|           |   -     |        |        | pistachios  | and        |
|           | ------- |        |        | and Iran is | hazelnuts  |
|           |         |        |        | the major   | with no    |
|           |         |        |        | supplier.   | major      |
|           |         |        |        |             | c          |
|           |         |        |        |             | ompetitors |
|           |         |        |        |             | at all.    |
+-----------+---------+--------+--------+-------------+------------+
| Processed |   --    | 192    | 1%     | U.S. is     | U.S.       |
| Fruit &   | ------- |        |        | strong in a | accounted  |
| V         |         |        |        | few         | for 27% of |
| egetables | 161,673 |        |        | products    | the total  |
|           |         |        |        | like French | market.    |
|           |   --    |        |        | fries,      |            |
|           | ------- |        |        | canned      | U.S.       |
|           |         |        |        | potato      | French     |
|           |         |        |        | chips and   | fries, and |
|           |         |        |        | processed   | sweet      |
|           |         |        |        | sweet corn. | corns      |
|           |         |        |        |             | hardly     |
|           |         |        |        |             | have any   |
|           |         |        |        |             | s          |
|           |         |        |        |             | ignificant |
|           |         |        |        |             | c          |
|           |         |        |        |             | ompetitors |
|           |         |        |        |             | in the     |
|           |         |        |        |             | Hong Kong  |
|           |         |        |        |             | market.    |
|           |         |        |        |             |            |
|           |         |        |        |             | Hong Kong  |
|           |         |        |        |             | has a      |
|           |         |        |        |             | burgeoning |
|           |         |        |        |             | catering   |
|           |         |        |        |             | industry   |
+-----------+---------+--------+--------+-------------+------------+
| Red       |   --    | 195    | 4%     | China       | U.S.       |
| Meats,    | ------- |        |        | supplies    | accounted  |
| Prepared/ |         |        |        | dominate    | for 15% of |
| Preserved | 103,626 |        |        | the market  | the market |
|           |         |        |        | because     | share.     |
|           |   --    |        |        | there is a  |            |
|           | ------- |        |        | big demand  | U.S. is    |
|           |         |        |        | for price   | the        |
|           |         |        |        | competitive | largest    |
|           |         |        |        | prepare     | supplier   |
|           |         |        |        | d/preserved | of         |
|           |         |        |        | meatballs   | sausages.  |
|           |         |        |        | and other   |            |
|           |         |        |        | products    | U.S.       |
|           |         |        |        | typical in  | products   |
|           |         |        |        | Chinese     | are highly |
|           |         |        |        | dishes in   | regarded   |
|           |         |        |        | Chinese     | for        |
|           |         |        |        | restaurants | quality    |
|           |         |        |        | and         | and food   |
|           |         |        |        | processing  | safety.    |
|           |         |        |        | in China is |            |
|           |         |        |        | cost        |            |
|           |         |        |        | effective.  |            |
|           |         |        |        |             |            |
|           |         |        |        | Note: U.S.  |            |
|           |         |        |        | beef        |            |
|           |         |        |        | products    |            |
|           |         |        |        | are banned  |            |
|           |         |        |        | because of  |            |
|           |         |        |        | BSE.        |            |
+-----------+---------+--------+--------+-------------+------------+
| Molluscs  |   -     | 485    | 6%     | U.S.        | U.S.       |
|           | ------- |        |        | scallops    | accounted  |
|           |         |        |        | and oysters | for 5% of  |
|           |  45,594 |        |        | compete     | the market |
|           |         |        |        | severely    | share.     |
|           |   -     |        |        | with        |            |
|           | ------- |        |        | products    | Demand for |
|           |         |        |        | supplies    | seafood in |
|           |         |        |        | from        | Hong Kong  |
|           |         |        |        | Australia   | is strong. |
|           |         |        |        | and Canada  | U.S.       |
|           |         |        |        | re          | oysters    |
|           |         |        |        | spectively. | and        |
|           |         |        |        |             | scallops   |
|           |         |        |        |             | are highly |
|           |         |        |        |             | regarded   |
|           |         |        |        |             | in the     |
|           |         |        |        |             | market.    |
+-----------+---------+--------+--------+-------------+------------+
| Ginseng   | 1,236   | 86     | -1%    | Canadian    | U.S.       |
|           |         |        |        | ginseng is  | accounted  |
|           |         |        |        | offered at  | for 19% of |
|           |         |        |        | very        | the market |
|           |         |        |        | competitive | share.     |
|           |         |        |        | prices and  |            |
|           |         |        |        | has         | Hong Kong  |
|           |         |        |        | abundant    | Chinese    |
|           |         |        |        | supplies.   | regards    |
|           |         |        |        |             | ginseng as |
|           |         |        |        |             | a healthy  |
|           |         |        |        |             | product    |
|           |         |        |        |             | and is     |
|           |         |        |        |             | widely     |
|           |         |        |        |             | used in    |
|           |         |        |        |             | soups.     |
+-----------+---------+--------+--------+-------------+------------+
| Sauces    | 63,749  | 86     | 5%     | China and   | U.S.       |
|           |         |        |        | Thailand    | accounted  |
|           |         |        |        | are two     | for 19% of |
|           |         |        |        | major       | the market |
|           |         |        |        | c           | share.     |
|           |         |        |        | ompetitors. |            |
|           |         |        |        | The         | Hong Kong  |
|           |         |        |        | oriental    | people are |
|           |         |        |        | flavor of   | receptive  |
|           |         |        |        | sources     | to new     |
|           |         |        |        | from these  | tastes.    |
|           |         |        |        | countries   | The        |
|           |         |        |        | is a        | av         |
|           |         |        |        | distinct    | ailability |
|           |         |        |        | advantage.  | of much    |
|           |         |        |        |             | int        |
|           |         |        |        |             | ernational |
|           |         |        |        |             | cuisine    |
|           |         |        |        |             | offers a   |
|           |         |        |        |             | demand for |
|           |         |        |        |             | U.S.       |
|           |         |        |        |             | sauces.    |
+-----------+---------+--------+--------+-------------+------------+
| Red       | 297,382 | 494    | 3%     | Hong Kong   | U.S.       |
| Meats,    |         |        |        | currently   | accounted  |
| chill     |         |        |        | bans U.S.   | for 16% of |
| ed/frozen |         |        |        | beef        | the        |
|           |         |        |        | imports     | retained   |
|           |         |        |        | because of  | import     |
|           |         |        |        | BSE. The    | share in   |
|           |         |        |        | market      | 2003 when  |
|           |         |        |        | share of    | U.S. beef  |
|           |         |        |        | U.S. beef   | trade with |
|           |         |        |        | has been    | Hong Kong  |
|           |         |        |        | largely     | was        |
|           |         |        |        | taken up by | normal.    |
|           |         |        |        | Canadian    |            |
|           |         |        |        | beef and    | U.S. beef  |
|           |         |        |        | Australian  | is highly  |
|           |         |        |        | beef.       | regarded   |
|           |         |        |        |             | in Hong    |
|           |         |        |        |             | Kong. It   |
|           |         |        |        |             | is always  |
|           |         |        |        |             | the first  |
|           |         |        |        |             | choice for |
|           |         |        |        |             | high-end   |
|           |         |        |        |             | r          |
|           |         |        |        |             | estaurants |
|           |         |        |        |             | and        |
|           |         |        |        |             | sop        |
|           |         |        |        |             | histicated |
|           |         |        |        |             | consumers. |
+-----------+---------+--------+--------+-------------+------------+

#  

#  

# SECTION V. KEY CONTACTS AND FURTHER INFORMATION

Foreign Agricultural Service (FAS)

Home Page: [**http://www.fas.usda.gov**](http://www.fas.usda.gov/)

Agricultural Trade Office

American Consulate General

18^th^ Floor, St. John's Building

33 Garden Road, Hong Kong

Tel: (852) 2841-2350

Fax: (852) 2845-0943

E-Mail: **[ATOHongKong@usda.gov]{.underline}**

Internet Homepage : **[http://www.usconsulate.org.hk]{.underline}**

[**http://www.usfoods-hongkong.net**](http://www.usfoods-hongkong.net/)

Department to implement food safety control policy

Food & Environmental Hygiene Department

43/F., Queensway Govt Offices

66 Queensway

Hong Kong

Tel: 852-2868-0000

Fax: 852-2834-8467

Web site: **[http://www.fehd.gov.hk]{.underline}**

E-mail: [**enquiries@fehd.gov.hk**](mailto:enquiries@fehd.gov.hk)

Department to control the importation of plants & live animals

Agriculture, Fisheries & Conservation Department

5-8/F., Cheung Sha Wan Govt Offices

303, Cheung Sha Wan Rd

Kowloon, Hong Kong

Tel: 852-2708-8885

Fax: 852-2311-3731

Web site: **[http://www.info.gov.hk/afcd]{.underline}**

E-mail: [**mailbox@afcd.gov.hk**](mailto:mailbox@afcd.gov.hk)

Department to issue licence for imported reserved commodities

Trade & Industry Department

18/F., Trade Department Tower

700 Nathan Road

Kowloon, Hong Kong

Tel: 852-2392-2922

Fax : 852-2789-2491

Web site: [**http://www.info.gov.hk/tid**](http://www.info.gov.hk/tid)

Email : [**enquiry@tid.gov.hk**](mailto:enquiry@tid.gov.hk)

Department to register health foods containing medicine ingredients

Department of Health

Pharmaceuticals Registration

Import & Export Control Section

18^th^ Floor, Wu Chung House

213 Queen's Road East, Wanchai

Hong Kong

Tel : 852-2961-8754

Fax : 852-2834-5117

Web site : **[http://www.info.gov.hk/dh/index.htm]{.underline}**

Department to issue licence for imported dutiable commodities

Hong Kong Customs & Excise Department

Office of Dutiable Commodities Administration

6-9th floors, Harbor Building

38 Pier Road

Central

Hong Kong

Tel: 852-2815-7711

Fax: 852-2581-0218

Web site:
[**http://www.info.gov.hk/customs**](http://www.info.gov.hk/customs)

Email: **[customsenquiry@cutsoms.gov.hk]{.underline}**

Department for Trade Mark Registration

Intellectual Property Department

Trade Marks Registry

24th and 25th Floors, Wu Chung House

213 Queen's Road East

Wan Chai

Hong Kong

Tel: 852-2803-5860

Fax: 852-2838-6082

Web site:
[**http://www.info.gov.hk/ipd/eng/index.htm**](http://www.info.gov.hk/ipd/eng/index.htm)

Semi-government Organization Providing Travel Information

Hong Kong Tourist Association

9^th^ - 11^th^ floors, Citicorp Center,

18 Whitfield Road, North Point, Hong Kong

Tel: (852) 2807-6543

Fax: (852) 2806-0303

E-mail: info@hkta.org

Home Page: [**www.hkta.org**](http://www.hkta.org/)

Semi-government Organization Providing Hong Kong Trade Information

Hong Kong Trade Development Council

38^th^ Floor, Office Tower, Convention Plaza

1 Harbor Road, Wan Chai, Hong Kong

Tel: (852) 2584-4188

Fax: (852) 2824-0249

E-mail: [**hktdc@tdc.org.hk**](mailto:hktdc@tdc.org.hk)

Home Page: [**http://www.tdctrade.com**](http://www.tdctrade.com/)

# APPENDIX - STATISTICS 

# 

## Table A. Key Trade & Demographic Information

## 

## Year 2004

# 

  -------------------------------- --------------------------------------
  Agricultural Imports From All    \$7,518 million/ 15%
  Countries (\$Mil) / U.S. Market  
  Share (%)                        

  Consumer Food Imports From All   \$4,944 million/ 16%
  Countries (\$Mil) / U.S. Market  
  Share (%)                        

  Edible Fishery Imports From All  \$1,793 million/ 3%
  Countries (\$Mil) / U.S. Market  
  Share (%)                        

  Total Population (Millions) /    6.88 million /1.2%
  Annual Growth Rate (%)           

  Urban Population (Millions) /    6.88 million/1.2%
  Annual Growth Rate (%)           

  Number of Major Metropolitan     One (Hong Kong as a whole)
  Areas                            

  Size of the Middle Class         2 million
  (Millions)^1/^                   

  Annual Per Capita Gross Domestic \$24,200
  Product (U.S. Dollars)           

  Unemployment Rate (%)            5.7% (May-July 2005)

  Annual Per Capita Food           \$1,870
  Expenditures (U.S. Dollars)      

  Percent of Female Population     51.8%
  Employed                         

  Exchange Rate (U.S.\$1 = HK      HK\$7.75
  currency)                        
  -------------------------------- --------------------------------------

Note : The middle class, about 30 percent of all households, is based on
the expenditure pattern of households which have an average monthly
expenditure of \$2,194 -- \$3,845. The average household size is 3.1
persons.

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

## 

  ------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
  **Hong Kong Imports**     Imports                          Imports                          U.S.                  
                            from the                         from the                         Market                
                            World                            U.S.                             Share                 

  (In Millions of Dollars)  **2002**   **2003**   **2004**   **2002**   **2003**   **2004**   **2002**   **2003**   **2004**

                                                                                                                    

  **CONSUMER-ORIENTED AG    5,048      4,904      4,944      1,077      1,021      805        21         21         16
  TOTAL**                                                                                                           

  Snack Foods (Excl. Nuts)  231        218        245        13         14         15         5          6          6

  Breakfast Cereals &       23         27         29         8          10         6          32         35         20
  Pancake Mix                                                                                                       

  Red Meats,                634        731        743        117        151        41         18         21         6
  Fresh/Chilled/Frozen                                                                                              

  Red Meats,                176        194        220        35         30         32         20         15         14
  Prepared/Preserved                                                                                                

  Poultry Meat              647        639        520        319        264        154        49         41         30

  Dairy Products (Excl.     299        241        264        17         9          7          6          4          3
  Cheese)                                                                                                           

  Cheese                    34         32         45         3          3          4          10         10         9

  Eggs & Products           83         74         79         15         12         13         18         16         16

  Fresh Fruit               796        734        693        231        237        223        29         32         32

  Fresh Vegetables          161        156        158        17         12         11         10         7          7

  Processed Fruit &         260        225        232        75         56         57         29         25         25
  Vegetables                                                                                                        

  Fruit & Vegetable Juices  21         23         23         7          6          8          33         26         35

  Tree Nuts                 191        250        205        64         62         60         34         25         29

  Wine & Beer               141        132        155        15         14         15         11         11         10

  Nursery Products & Cut    56         50         50         1          1          1          2          1          1
  Flowers                                                                                                           

  Pet Foods (Dog & Cat      24         34         40         11         13         16         45         38         41
  Food)                                                                                                             

  Other Consumer-Oriented   1,268      1,146      1,243      128        128        142        10         11         11
  Products                                                                                                          

                                                                                                                    

  **FISH & SEAFOOD          1,763      1,659      1,793      51         52         50         3          3          3
  PRODUCTS**                                                                                                        

  Salmon                    51         50         51         1          1          1          0          0          1

  Surimi                    6          5          6          1          0          0          1          0          0

  Crustaceans               443        329        311        13         8          6          3          2          2

  Groundfish & Flatfish     111        122        157        3          4          6          3          3          4

  Molluscs                  472        474        549        20         25         24         4          5          4

  Other Fishery Products    679        678        720        15         15         13         2          2          2

                                                                                                                    

  **AGRICULTURAL PRODUCTS   7,366      7,321      7,518      1,343      1,354      1,103      18         18         15
  TOTAL**                                                                                                           

  **AG, FISH & FORESTRY     10,252     9,953      10,184     1,521      1,534      1,259      15         15         12
  TOTAL**                                                                                                           

                                                                                                                    

  Source: FAS\' Global                                                                                              
  Agricultural Trade System                                                                                         
  using data from the                                                                                               
  United Nations                                                                                                    
  Statistical Office                                                                                                
  ------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

## Table C: Top 15 Suppliers of Consumer Foods & Edible Fishery Products

  --------------------- ------------ ------------ ------------ -- ------------- ------------ ------------ ------------
  **Reporting: Hong                                                                                       
  Kong - Top 15                                                                                           
  Ranking**                                                                                               

  **CONSUMER-ORIENTED                                             **FISH &                                
  AG TOTAL - 400**                                                SEAFOOD                                 
                                                                  PRODUCTS -                              
                                                                  700**                                   

                                                                                                          

                        **2002**     **2003**     **2004**                      **2002**     **2003**     **2004**

                        **1000\$**   **1000\$**   **1000\$**                    **1000\$**   **1000\$**   **1000\$**

                                                                                                          

  China                 1,390,025    1,363,346    1,479,114       China         288,215      271,133      255,287

  United States         1,076,912    1,020,603    804,667         Japan         189,890      207,519      219,797

  Brazil                260,782      326,744      394,778         Australia     206,088      183,413      186,478

  Australia             245,152      221,828      237,261         South Africa  54,611       38,859       91,629

  Thailand              280,977      253,420      227,202         Indonesia     101,481      86,909       91,003

  Netherlands           173,314      154,984      159,951         Thailand      85,473       78,548       79,116

  Japan                 146,663      133,370      145,333         Canada        74,918       71,309       77,842

  Canada                110,217      113,674      120,204         Vietnam       62,143       51,096       75,002

  France                84,464       88,190       114,074         Spain         36,301       45,427       51,705

  Iran                  82,496       143,203      108,943         United States 50,827       51,861       50,091

  New Zealand           105,202      92,976       106,921         New Zealand   70,393       48,045       48,425

  Germany               97,495       94,199       84,245          Norway        45,494       47,924       46,758

  Taiwan (Estimated)    82,957       81,404       80,986          Singapore     31,702       32,493       45,291

  Singapore             105,359      78,560       79,921          Taiwan        64,098       51,771       41,102
                                                                  (Estimated)                             

  Chile                 67,597       69,885       76,112          Philippines   38,039       40,225       40,347

  Other                 738,109      668,027      723,779         Other         363,737      352,396      393,416

  World                 5,047,733    4,904,424    4,943,503       World         1,763,405    1,658,921    1,793,293

                                                                                                          

  Source: United                                                                                          
  Nations Statistics                                                                                      
  Division                                                                                                
  --------------------- ------------ ------------ ------------ -- ------------- ------------ ------------ ------------