Required Report - public distribution

**Date:** 11/12/2003

**GAIN Report Number:** ID3028

ID3028

**Indonesia**

**Retail Food Sector**

**Report**

**2003**

**Approved by:**

![](media/image1.wmf)Chris Rittgers

US ATO

**Prepared by:**

Fahwani Y. Rangkuti

**Report Highlights:**

Although the traditional sector still dominates the retail food
business, Indonesia's retail industry continues to evolve away from the
traditional market and modest kiosk network to modern hypermarkets and
superstores. At a time when many segments of the economy have stagnated,
the number of supermarkets continues to increase. Big retailers continue
to expand and competition among the major retailers remains fierce. U.S.
apples, grapes, meat products, and frozen potato products continue to
enjoy a dominant position in Indonesia's retail outlets. Further growth
and sophistication of the retail sector will create additional
opportunities for U.S. exporters.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Jakarta ATO \[ID2\]

\[ID\]

***ECONOMIC TRENDS AND OUTLOOK***

In 2003, many components of Indonesia's macro-economy stabilized. The
rupiah strengthened and has held firm, the local stock market has shown
dramatic growth, inflation and interest rates have dropped below 10
percent, and for the third consecutive year, economic growth is expected
to approach 4 percent. Based on these solid macro-economic fundamentals
and relatively firm consumer demand, analysts predict that growth will
top 4 percent in 2004. Nonetheless, growth of at least 6 percent is
still required to absorb the large number of unemployed in Indonesia. An
improved business environment, higher investment rates, further
re-structuring in the banking sector, reform of legal institutions, and
an environment of political stability are often cited as critical
factors for ensuring continued future economic growth in Indonesia. A
smooth and trouble-free 2004 election cycle, when a new parliament and
president will be selected, will also be vital to Indonesia's
medium-term economic prospects.

This nation of around 212 million people, the world's fourth most
populous, has undergone a period of dramatic social, political, and
economic transition since the 1998/99 regional financial crisis and the
end of President Soeharto's more than three decade hold on power. As
stated above, many institutions in Indonesia still need to be
strengthened, but resilient consumer demand remains on of the bright
spots of the economy. With such a large consumer base and the relatively
benign macro-economic backdrop, prospects for continued expansion of the
retail sector in 2004 and beyond remain promising.

***I. MARKET SUMMARY***

***[Retail System]{.underline}***

It is estimated that approximately 72 percent of total food expenditures
occur in traditional markets, 3 percent in mini-markets, and the
remaining 25 percent split roughly equal between super markets and
hyper-markets. Although the traditional sector still dominates the
retail food business, Indonesia's retail industry continues to evolve
away from the traditional market and modest kiosk network to modern
hypermarkets and superstores. As the table below shows, the number of
supermarkets has increased about 20 percent in the last five years. This
growth occurred at a time when many other segments of Indonesia's
broader economy was stagnating. Big retailers continue to expand and
competition among the major retailers remains fierce.

+-------------+----------+------+------+------+-------+-------+-------+
| **Type of   | **Descr  | **19 | **19 | **19 | **2   | **2   | **2   |
| outlet**    | iption** | 97** | 98** | 99** | 000** | 001** | 002** |
+-------------+----------+------+------+------+-------+-------+-------+
| ##          | Outlet   | \-   | 4    | 6    | 7     | 8     | 10    |
| Hypermarket |          |      |      |      |       |       |       |
+-------------+----------+------+------+------+-------+-------+-------+
|             | Growth   | \-   | \-   | 50   | 16.67 | 14.29 | 25    |
|             | (%)      |      |      |      |       |       |       |
+-------------+----------+------+------+------+-------+-------+-------+
| **Su        | Outlet   | 1    | 1    | 1    | 1,210 | 1,255 | 1,297 |
| permarket** |          | ,084 | ,102 | ,173 |       |       |       |
+-------------+----------+------+------+------+-------+-------+-------+
|             | Growth   | \-   | 1.66 | 6.44 | 3.15  | 3.72  | 3.40  |
|             | (%)      |      |      |      |       |       |       |
+-------------+----------+------+------+------+-------+-------+-------+
| **          | Outlet   | 579  | 645  | 725  | 821   | 920   | 1,035 |
| Convenience |          |      |      |      |       |       |       |
| stores**    |          |      |      |      |       |       |       |
+-------------+----------+------+------+------+-------+-------+-------+
|             | Growth   | \-   | 1    | 1    | 13.24 | 12.06 | 12.50 |
|             | (%)      |      | 1.40 | 2.40 |       |       |       |
+-------------+----------+------+------+------+-------+-------+-------+
| **          | Outlet   | 6    | 6    | 7    | 7,500 | 8,037 | 8,720 |
| Independent |          | ,300 | ,610 | ,030 |       |       |       |
| grocers**   |          |      |      |      |       |       |       |
+-------------+----------+------+------+------+-------+-------+-------+
|             | Growth   | \-   | 4.92 | 6.35 | 6.69  | 7.16  | 8.50  |
|             | (%)      |      |      |      |       |       |       |
+-------------+----------+------+------+------+-------+-------+-------+
| **Co-o      | Outlet   | 52   | 59   | 89   | 10    | 11    | 13    |
| peratives** |          | ,206 | ,441 | ,939 | 3,077 | 9,120 | 6,035 |
+-------------+----------+------+------+------+-------+-------+-------+
|             | Growth   | \-   | 1    | 5    | 14.61 | 15.56 | 14.20 |
|             | (%)      |      | 3.86 | 1.31 |       |       |       |
+-------------+----------+------+------+------+-------+-------+-------+

-   Source: Euromonitor

Modern retail stores (supermarkets and hypermarkets), offering a wide
range of food and beverage products, are generally located as anchor
stores in shopping centers. An increasing number of Indonesians are
shopping at these stores, particularly affluent middle and upper income
groups. These retails stores generally also contain in-store bakeries,
café/food service area, and prepared meals. In addition, mini-markets
and other shops, which carry a small range of convenience food items,
are found throughout Indonesia's major urban centers.

Despite the growth in the modern retail sector, the majority of
Indonesians continue to shop at traditional stores conveniently located
to their homes or places of work. These stores sell the commonly
demanded food and beverage products, which are familiar to the majority
of consumers.

The table below gives an indication of the food sector's contribution to
national retail sales.

+----------------------+----------+-----------+-----------+---------+
| **Outlet type**      | **Cont   |           |           |         |
|                      | ribution |           |           |         |
|                      | pe       |           |           |         |
|                      | rcentage |           |           |         |
|                      | to       |           |           |         |
|                      | national |           |           |         |
|                      | retail   |           |           |         |
|                      | sales**  |           |           |         |
|                      |          |           |           |         |
|                      | **(IDR   |           |           |         |
|                      | value)** |           |           |         |
|                      |          |           |           |         |
|                      | **(April |           |           |         |
|                      | to March |           |           |         |
|                      | p        |           |           |         |
|                      | eriod)** |           |           |         |
+----------------------+----------+-----------+-----------+---------+
|                      | **199    | **20      | **20      | **2002  |
|                      | 9-2000** | 00-2001** | 01-2002** | -2003** |
+----------------------+----------+-----------+-----------+---------+
| Sup                  | 16.7     | 20.5      | 20.2      | 21.1    |
| ermarket/hypermarket |          |           |           |         |
+----------------------+----------+-----------+-----------+---------+
| Minimarket           | 3.5      | 4.6       | 4.9       | 5.1     |
+----------------------+----------+-----------+-----------+---------+
| Total                | 20.2     | 25.1      | 25.1      | 26.2    |
+----------------------+----------+-----------+-----------+---------+

Source: A.C. Nielsen

  ----------------------- ------------ ----------- ----------- ---------------
  **USDmillion**          **2000**     **2001**    **2002**    **2005
                                                               (predicted)**

  Total retail Sales      2,800        3,502       3,852       8,400

  Generated by Local      2,059        2,575       2,833       \-
  Retailers                                                    

  Generated by Foreign    741          927         1,019       \-
  Retailers                                                    
  ----------------------- ------------ ----------- ----------- ---------------

Source: Castle Asia

***[Sales of Imported Food]{.underline}***

Total food product imports for 2002 were US\$ 3.3 billion, up from US\$
2.9 billion in 2001. Almost 30% of those products were imported as
Processed Food and Beverages, while the rest were ingredients (including
rice and wheat) used by food processors. Consumption of imported
processed food and beverages has risen to close to pre-crisis levels of
1997.

***[Market Overview]{.underline}***

Growth in the number of large modern retail stores, such as supermarkets
and hypermarkets, is expected to continue. This growth is being driven
mostly by strong domestic consumption, which remains one of the only
engines of overall economic growth in Indonesia.

This growth, driven largely by foreign retailers, has led to fierce
competition in the retail sector. Retailers continue to plan to expand.
While there have been some local calls for limitations on expansion of
large retail outlets, location and size of new establishments remains
largely unregulated. As a result, many large retailers are strategically
located in the heart of Indonesia's big cities and compete directly with
smaller retailers.

Products which have achieved significant growth in annual sales include
the following: infant milk formula (53%), cheese (51%), energy drinks
(50%), snack foods (45%), liquid milk (40%), chocolate (39%), baby foods
(35%), health foods (35%), swetened condensed Milk (35%), and biscuits
(28%).

In terms of negative factors affecting the retail market, in 2003 hikes
in electricity, fuel, and telephone charges lessened retailers' profit
margins, thereby somewhat curbing the drive for expansion. In addition,
specialty stores that carry a high percentage of imported items continue
to face burdensome registration requirements for imported food products,
limiting possibilities for test marketing new products. Furthermore,
non-transparent and unpredictable customs clearance procedures, besides
being costly and administratively cumbersome, create problems when
products of limited shelf-life are held at port. Finally, recent
terrorist events, and predictions for additional occurrences, have led
to a reduction in the number of western expatriates, who had been key
customers for many of the specialty retail outlets. However, this has
occurred in conjunction with an increase in the proportion of Japanese
and Korean customers, who are increasingly buying imported U.S. food
products.

***[Consumer Purchasing Habits]{.underline}***

Consumer-purchasing patterns changed dramatically following the 1998/99
economic crisis and continue to evolve. The following generalizations
can be made about current consumer behavior:

-   purchasing more staple foods, rather than luxury items, and
    minimizing impulse buying.

-   extremely price conscious in their purchases and exhibiting less
    store and brand loyalty.

-   shopping more frequently for food and buying smaller quantities per
    shopping trip.

-   shifting purchases of some staple items to traditional outlets and
    shopping more frequently at discount venues in the modern sector.

-   eating out less often and, and instead, shopping in supermarkets to
    eat at home.

-   buying smaller package sizes and placing less value on the quality
    and appearance of packaging.

-   buying local rather than imported products when satisfactory local
    substitutes are available.

-   consuming more fresh food items.

-   less nutrition-conscious.

-   Increased preference for shopping at the supermarket/modern outlet
    rather than at wet markets due to more comfortable shopping space,
    more complete range of goods, guaranteed quality of products (food
    safety and cleanliness), competitive price, good service, and easier
    accessibility.

These generalizations hold less for consumers in higher income levels.
For example, expatriate and high-income Indonesian consumers continue to
look for branded and imported products (as well as gourmet and fancy
food) regardless of the high rupiah-based price of these items.

Consumers purchase a broad variety of food products from supermarkets,
with meat and fish and staple food the top categories. The table below
present the profile of food and non-food products sold in the typical
supermarket:

  ----------------------------------- -----------------------------------
  **Product category**                **Percentage**

  Meat and fresh fish                 15

  Staple food                         14.7

  Beverage                            10.6

  Vegetable and fresh fruit           10.5

  Dry food                            8.8

  Milk and processed milk             7.0

  Chocolate & candy                   3.6

  Can food                            2.8

  Seasoning                           1.7

  Non food                            25.3
  ----------------------------------- -----------------------------------

In response to evolving consumer preferences, distributors and retailers
have altered marketing practices. Packaging sizes have been reduced to
lower the prices, and more generic brands (especially for staple foods
such as rice and sugar) have been introduced. In addition, promotional
campaigns are more aggressive, with store fliers, seasonal discounts,
in-store activities, and advertising more prevalent.

***[Future Trends]{.underline}***

The recently-developed patterns of consumer behavior described above are
expected to continue. Consumers are adjusting to paying higher prices
for imported and local food products, but will remain very selective in
their product purchases and will be looking for good quality products at
low prices. Promotion will be important as consumers will be more fickle
and impressionable, and there will be opportunities to replace
traditional brands. Value-for-money will remain important to consumers,
but they will also be looking for greater variety in retailers\'
assortments. Brand names should eventually again become important to
consumers and new product introductions will increase. Interest in
nutritional characteristics of food should continue to grow. Offering
additional services, which is already a relatively common practice, will
become even more widespread. These services include, acceptance of
credit/debit cards, ATM services, flower departments, laundry counters,
food courts, bakery corners, home delivery, and cook service. Money-back
or other guarantees are also expected to become more common.

+---+------------------------------------------------------------------+
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+---+------------------------------------------------------------------+
| 1 | Large Consumer Base: Indonesia has a population of over 212      |
|   | million people, with an estimated 15 percent or about 32 million |
|   | people in the upper and middle income groups.                    |
+---+------------------------------------------------------------------+
| 2 | The distribution system is improving, increasing access to the   |
|   | major islands and cities.                                        |
+---+------------------------------------------------------------------+
| 3 | The availability of imported products will be expanded by the    |
|   | rapid growth of the modern supermarket sector and western        |
|   | restaurant chains.                                               |
+---+------------------------------------------------------------------+
| 4 | Many Indonesian consumers like the image associated with         |
|   | American products, as well as the taste (quality reputation is   |
|   | well known).                                                     |
+---+------------------------------------------------------------------+
| 5 | Low Duties: Duties on most food are 5% or less.                  |
+---+------------------------------------------------------------------+
| 6 | More urban women entering the workforce with less time available |
|   | for shopping and cooking; thus, focus is increasingly on         |
|   | convenience.                                                     |
+---+------------------------------------------------------------------+
| 7 | Indonesia has a well-developed tourism industry with many hotel  |
|   | chains and restaurants purchasing imported products through      |
|   | local agents/importers.                                          |
+---+------------------------------------------------------------------+
| 8 | Indonesia is rich in natural resources, with multinational       |
|   | companies involved in the development of oil & gas, mining, and  |
|   | lumber. Some of the well-developed sites have commissary &       |
|   | catering services with significant demand for imported products. |
+---+------------------------------------------------------------------+

+---+------------------------------------------------------------------+
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+---+------------------------------------------------------------------+
| 1 | A degree of uncertainty will prevail in the political situation  |
|   | until after general elections in 2004; this uncertainty could    |
|   | effect consumer demand.                                          |
+---+------------------------------------------------------------------+
| 2 | Import financing remains a constraint.                           |
+---+------------------------------------------------------------------+
| 3 | Prices of imported products are relatively high.                 |
+---+------------------------------------------------------------------+
| 4 | New--to-market U.S. products are not well-known to the majority  |
|   | of consumers.                                                    |
+---+------------------------------------------------------------------+
| 5 | Non-transparent and unpredictable customs clearance procedures   |
|   | exist.                                                           |
+---+------------------------------------------------------------------+
| 6 | Products must be certified "halal" for broad acceptance.         |
+---+------------------------------------------------------------------+
| 7 | Shipments to Indonesia need a shelf life of at least 6 months,   |
|   | may require refrigerated transport and storage, and incur high   |
|   | transport costs.                                                 |
+---+------------------------------------------------------------------+
| 8 | Infrastructure, including ports and cold storage facilities      |
|   | outside of the main island of Java are poorly developed.         |
+---+------------------------------------------------------------------+
| 9 | Sites tend to be in remote areas where transportation and lack   |
|   | of infrastructure presents barriers to cost-efficient            |
|   | distribution of imported food products.                          |
+---+------------------------------------------------------------------+
| 1 | Third-country competition remains strong, especially from        |
| 0 | Australia, New Zealand, Europe, Malaysia, the Philippines,       |
|   | Thailand and China.                                              |
+---+------------------------------------------------------------------+
| 1 | U.S. freight costs are higher relative to competing suppliers.   |
| 1 |                                                                  |
+---+------------------------------------------------------------------+

##### 

##### Labeling

> Requirements for labeling of food products (primarily applicable to
> packaged food for retail sale) are broad in scope. Changes resulting
> from the Food Act 1996, and the Consumer protection Act 1999 went into
> effect in 2000. The newly introduced labeling regulations state that
> labels must be written in the Indonesian language and require GMO
> labeling. However, these regulations are loosely enforced at best, at
> the GMO labeling requirement is not yet enforced at all.

All imported processed food products must be registered with the
National Agency of Drug & Food Control (BPOM) before clearance through
Customs. The process for registration of food is complex, often
non-transparent and time consuming due to the detailed requirement of
supporting documents and should be carried out before shipping. This
will require exporters to establish close business relationships with
local importers/agents.

###### Duties and taxes

> Although import duties applied on most of food and agricultural
> products are 5% or less, imported products are also assessed a VAT of
> 10 percent, and a luxury tax which varies according to the product
> category.

#######  II. ROAD MAP FOR MARKET ENTRY

***[Entry Strategy]{.underline}***

The best way to penetrate the Indonesian market is to appoint an agent.
In general, the volume of imported product sales is small. An agent is
needed to assure the widest distribution for your products as well as to
undertake the marketing efforts necessary to create awareness for your
products among consumers.

In some situations, it may make sense to sell your product directly to
supermarkets and/or to appoint them as the exclusive distributors. This
is primarily the case when your product is a gourmet, upscale product
and not likely to generate sufficient volume to interest an agent in
bringing in container loads. Nevertheless, your initial sales efforts to
Indonesia should include both visits with potential agents as well as
with key retailers.

######## Distribution System

Due to the widespread and diverse nature of the country, involving
hundreds of islands, this system is complex. In many cases, the
infrastructure is insufficient, especially outside big cities and Java
island. The ability to move frozen and refrigerated products is limited.
There are several national distributors, generally subsidiaries of
consumer goods/foods manufactures, who serve the whole country, and
numerous agents/distributors with a more local reach. There are hundreds
of wholesalers and millions of retailers.

![](media/image2.wmf)

> Inadequate port facilities are often cited as the single largest
> constraint in the distribution system. Shallow drafts that only allow
> small ships, inadequate loading and unloading facilities, and frequent
> congestion are some of the problems associated with the ports. Also
> cited by distribution firms are unreliable shipping schedules and
> inadequate number of small ships serving Eastern Indonesia,
> particularly during bad weather periods, which result in frequent
> shortages and leads firms to hold higher than desired inventories.

##### Distribution System for Imported Products

Imported products often move to a distributor or agent, who in turn,
sells directly to modern retail outlets. Delivery of the products may be
direct to stores or to the warehousing facilities of the retailer. Only
a few retailers buy directly from foreign suppliers and assume
responsibility for the logistics function.

Most imported products are sold to the modern sector, including
hypermarkets, supermarkets, wholesaler/retailers, convenience stores,
mini-markets, etc. Products that move to the traditional sector face a
more extensive distribution process. There are about 10 major cities
that serve as distribution hubs in Indonesia. Generally, products move
to the warehousing facilities of distributors in these hubs, then to
sub-distributors and wholesalers for delivery to retailers.

##### Trends in Distribution

The modern retail sector is expanding rapidly, but the traditional
sector is expected to continue to dominate the distribution system for
the foreseeable future. As indicated earlier, still about 72 percent of
purchases are made in traditional markets.

Distribution channels will shorten. Large retailers will increasingly
import (particularly produce) directly from foreign exporters, or
supplied directly by local manufacturer and the assisted group of local
farmer. They will put in place central warehousing and distribution
systems in the big cities, utilizing modern technology and equipment.
They will open more outlets in cities outside of Jakarta to make these
systems efficient. Adequate infrastructure is a major problem on other
islands. For example, a period of 2 weeks often lapses between order
placement and delivery and losses due to security problems are high.

Comparable changes will occur in the traditional sector. National
distributors are setting up central distribution systems to expand
direct delivery to traditional market outlets. More direct delivery by
manufacturers to traditional retail outlets is anticipated.

The success of large retailer/wholesalers and hypermarkets in offering
Indonesian consumers a wide variety of products at lower prices will
stimulate growth. More middle and low-income consumers are beginning to
shop in these outlets. Increasing competition will force existing
supermarkets and other modern retailers to increase the focus and
sophistication of their marketing efforts as well as the efficiency of
the store operation.

The number of mini-markets and other small stores is also predicted to
grow. The greatest expansion is anticipated on the islands of Java and
Bali. More mini-markets are expected to open in residential areas and
cities outside of Jakarta.

##### A. Supermarkets, Hypermarkets, and Warehouse Outlets 

This segment is the most likely to purchase imported products. According
to several importers and distributors, between 5-30 percent (60 percent
for specialty stores) of the food items that are sold by these outlets
are imported. In the near future, smaller quantities of imported
products are expected to be sold, but a greater variety of brands and
items.

Most supermarkets, hypermarkets, and warehouse outlets buy most of their
imported products from distributors or agents. Some are importing direct
from foreign suppliers, particularly perishable products and products
for specialty store.

  --------------------------------- ------------ -------------------------
  **Retailer Name & Market Type**   **No. of     **Locations**
                                    Outlets in   
                                    2003**       

  Alfa-supermarket (PT Alfa         32           Jakarta, Java, Bali,
  Retailindo Tbk\*)                              Medan, Lampung, Makassar

  Alfa Grosir (PT Alfa Retailindo   8            Java, Bali
  Tbk\*\*)                                       

  Carrefour - hypermarket (PT       11           Jakarta, Bandung
  Contimas Utama Indonesia)                      

  Club Store - hypermarket (PT      3            Jakarta, Medan
  Mutiara Ritelinti Wira)                        

  Club Grosir wholesale (PT Mutiara 2            Jakarta
  Ritelinti Wira)                                

  Cosmo Japanese Food Center -      2            Jakarta, Surabaya
  supermarket\* (PT Eka Upaya)                   

  Borma Pasar Swalayan              11           Bandung

  D'Best -- supermarket             4            Jakarta, Makassar

  Gelael -- supermarket             11           Jakarta, Jawa, Bali,
                                                 Sumatera, Sulawesi, Batam

  Giant -- hypermarket (PT Hero     6            Jakarta,Tangerang,
  Supermarket Tbk\*\*)                           Bekasi, Cimanggis,
                                                 Bandung, Surabaya

  Hero (supermarket), included      97           Jakarta, Java, Bali,
  Top's outlet which was acquired                Lombok, Sumatera,
  May 2003                                       Kalimantan, Sulawesi,
                                                 Papua Barat

  Goro - wholesale (PT Goro Batara  5            Jakarta, Solo, Makassar
  Sakti)                                         

  Hari-hari Pasar Swalayan (PT      5            Jakarta
  Sinar Sahabat Inti Makmur)                     

  Indo Grosir -- wholesale (PT      6            Jakarta, Bandung,
  Indomarco Prismatama)                          Yogyakarta, Surabaya

  Kem Chicks --supermarket \* (PT   1            Jakarta
  Boga Catur Rata)                               

  Makro -- wholesale (PT Makro      13           Jakarta, Surabaya, Medan,
  Indonesia)                                     Bandung, Bali, Semarang,
                                                 Solo, Makassar

  Matahari -- supermarket (PT       51           Jakarta, Java, Bali,
  Matahari Putra Prima Tbk\*\*)                  Sumatera, Kalimantan,
                                                 Sulawesi, and Ambon

  Market Place -- supermarket (PT   4            Jakarta, Tangerang,
  Matahari Putra Prima Tbk\*\*)                  Makassar

  Metro -- supermarket (PT Metro    2            Jakarta
  Supermarket Realty, Tbk\*\*)                   

  Naga Pasar Swalayan               7            Jakarta, Bekasi, Depok

  Nina Fair Price --supermarket (PT 5            Surabaya
  Sekar Sentosa Lestarijaya)                     

  Papaya -- supermarket \* (PT      3            Surabaya, Jakarta
  Victory Retailindo)                            

  Pantry - supermarket (PT Nara     5            Jakarta
  Jaya Mandiri)                                  

  Ramayana -supermarket (PT         70           Jakarta, Java, Bali,
  Ramayana Lestari Sentosa,                      Batam, Sumatera,
  Tbk\*\*)                                       Kalimantan, Nusatenggara
                                                 Timur

  99 Ranch Market -supermarket\*    3            Jakarta
  (PT Supra Boga Lestari)                        

  Setiabudhi -supermarket\*         1            Bandung

  Sinar -- supermarket (PT Alika    5            Surabaya
  Eka Putera)                                    

  Sogo - supermarket (PT Panen      4            Jakarta, Surabaya
  Lestari Internusa)                             

  Super Indo -- supermarket (PT     37           Jakarta, Bogor,
  Lion Superindo)                                Tangerang, Banten,
                                                 Bekasi, Bandung,
                                                 Surabaya, Palembang,
                                                 Yogyakarta

  Tiara Dewata                      3            Bali

  Tragia (supermarket)              5            Bali

  Yogya (supermarket)               39           Jakarta, West Java

  Caswell's Mom's \*                1            Jakarta

  Dijon Food Specialities\*         1            Bali

  Gourmet Garage \*                 1            Bali
  --------------------------------- ------------ -------------------------

\* specialty store

\*\* Tbk: means public listed

##### B. Mini-markets and Convenience Stores

Mini-markets are rapidly growing in popularity. This is especially true
in the cities outside of Jakarta. Mini-markets are essentially upgraded
traditional \"mom and pop\" stores. They carry essential staple goods,
some frozen items, and fresh fruits. Low price is one of their selling
points. Many mini-markets are located in housing estates and residential
areas. Most chains of mini-markets have their own distribution
facilities. Central purchasing takes place from importers or
distributors and items are delivered to a central warehouse or directly
to stores.

+------------------------------+-----------+--------------------------+
| **Retailer Name & Market     | **No. of  | **Locations**            |
| Type**                       | Outlets** |                          |
|                              |           |                          |
|                              | **In      |                          |
|                              | 2003**    |                          |
+==============================+===========+==========================+
| Alfa Minimarket (PT Sumber   | 570       | Jakarta, Java            |
| Alfaria Trijaya)             |           |                          |
+------------------------------+-----------+--------------------------+
| AM/PM (convenience) (PT      | 27        | Jakarta                  |
| Sinar Sahabat)               |           |                          |
+------------------------------+-----------+--------------------------+
| Circle K (convenience) (PT   | 63        | Jakarta, Bogor, Bandung, |
| Circle K Indonesia)          |           | Bali, Yogyakarta         |
+------------------------------+-----------+--------------------------+
| 7 Eleven (PT Suryamas Cahaya | 6         | Bandung                  |
| Lestari)                     |           |                          |
+------------------------------+-----------+--------------------------+
| Indomaret (mini-market) (PT  | 800       | Jakarta, Java            |
| Indomarco Prismatam)         |           |                          |
+------------------------------+-----------+--------------------------+
| Markaz Waserda (PT Solar     | 17        | Java                     |
| Sentra Distribusi)           |           |                          |
+------------------------------+-----------+--------------------------+
| Star Mart -- mini market (PT | 39        | Jakarta, Bogor, Bali     |
| Hero Supermarket Tbk0        |           |                          |
+------------------------------+-----------+--------------------------+
| Gos'mart (PT Goro Batara     | 9         | Jakarta                  |
| Sakti)                       |           |                          |
+------------------------------+-----------+--------------------------+
| Tragia Minimarket            | 1         | Bali                     |
+------------------------------+-----------+--------------------------+
| Local mini market            | A lot     | All over Indonesia       |
+------------------------------+-----------+--------------------------+

##### C. Traditional Sector

As indicated earlier, the traditional sector continues to dominate
Indonesian food retailing. This sector includes small \"mom and pop\"
provision shops, some of which are in markets. Distribution channels are
long and complex. Little imported product is carried by these outlets
except for fresh fruit and beef offal. An estimated 60% of imported
fresh fruit goes through traditional markets. US apple (red delicious)
is the most important, followed by oranges from China and US table
grapes. Meanwhile, an estimated 80 percent of beef offals are
distributed in the traditional markets. Offals are source almost
exclusively from Australia and the United States.

***III. COMPETITION***

#### Local companies with a strong position in the food and beverage market

The local industry dominates the markets for wheat flour based food
products (noodles and baked goods), snacks, poultry products, processed
dairy products, canned fish, beverages (soft drinks, beer), tropical
fruit & vegetables, and fresh sea food.

While businesses operating in the fresh produce segments compete on
being able to supply competitively priced locally grown products, the
processed food and beverage businesses compete in markets where brands
are important. There are several multinational companies in this sector,
including: Unilever, Nestle, Kraft, Danone, Cadburry, Heinz, Campbells,
and Nabisco.

***[Competition in the import market]{.underline}***

Primary competing suppliers include Australia, China, Japan, France,
Holland, South Africa, Korea, India, Malaysia, Thailand, and Taiwan.

***[Please see the Appendix A.]{.underline}***

######### IV. BEST PRODUCT PROSPECTS

Most U.S. food items have sales potential in Indonesia. This is
especially true of those for which no local substitutes are available.
The best opportunities exist in modern retail outlets in the major
cities on Java such as Jakarta, Bandung, Surabaya, and Denpasar, Bali
(for tourism consumption), and Sumatra. Significant potential also
exists in areas where oil, coal and mining companies with a high
concentration of expatriates are located, such as Balikpapan, Lombok &
Sumbawa, and Pakanbaru.

The willingness of a supermarket to stock a particular U.S. food will
depend largely on its customer base. In most large cities, there is at
least one supermarket that serves the American and other expatriate
community. This supermarket will buy products that may be unfamiliar in
use and taste to typical Indonesians, such as pickles, olives, and
condiments. In general, the biggest opportunities exist for good
quality, middle or low price range items with well-known brand names.

***[A. Products Present in the Market which have Good Sales
Potential]{.underline}***

Of U.S. products that are already present in the Indonesian market in
significant quantities, fresh fruit continues to have the best sales
prospects. This is especially true of the hardier fruits, such as apples
and grapes. The next most important U.S. sales item in the retail sector
are beef offals, which are generally marketed in traditional outlets.
Canned foods, such as vegetables and beans are also common. Some of the
best selling processed foods include frozen french fries, frozen and
canned vegetables, breakfast cereals, snack food/biscuit/crackers,
popcorn, baby food, dressing, sauces & seasonings, cooking/salad oils,
and beverage.

B. Products Not Present in Substantial Quantities but which have Good
Sales Potential

There are also good opportunities for sales of other American high value
items. Many of these are not yet in the market in significant
quantities. These include frozen foods; such as pizza, frozen meat,
delicatessen items (cream cheese), and juices.

***[C. Products Not Present Because they Face Significant
Barriers]{.underline}***

American products that have not sold well in Indonesia include seafood
and dairy products. Retailers that serve the middle and lower income
segment also reported difficulties in selling American spices, alcoholic
beverages, pasta, olives, pickles, and mustards. Imports of U.S. chicken
parts, which have great potential demand in Indonesia, are banned due to
questions regarding halal certfication.

***[D. Recommendations]{.underline}***

It is a good time to enter the Indonesian market. The retail sector is
growing rapidly despite the ongoing crises and competition remains
limited. There are opportunities to develop a strong brand name and
customer loyalty. However, it is important to have realistic
expectations about market size. There is also a need to be flexible and
make a long-term commitment to the market.

Other recommendations for selling to Indonesia are the following:

-   It is essential to invest in promotion especially for new to market
    product sampling and to create awareness for your products. Your
    distributor should be provided with through training in product
    knowledge.

-   Your product must be price competitive. Your agent should be given a
    reasonable price for your product to avoid undercutting by parallel
    importers.

-   Be prepared to deal with small order quantities and, to the extent
    possible, be flexible with minimum quantities.

-   Offer the market a range of products to give consumers a choice.

-   Limit your sales efforts to products that have at least a 9 month
    shelf life and make sure that the items are clearly marked with
    expiry dates.

-   Find out as much as possible about the market and culture.

-   Work closely with your local agent on a win-win basis. Make sure
    that channels of distribution are closely supervised. To the extent
    possible, protect your agent against parallel imports.

-   Singapore is a showcase and a trans-shipment point for the Southeast
    Asian region. Consequently, a presence there is important as well.

-   Provide the complete documentation required to register the product
    (process ML number).

-   Actively contact retailers directly, not only through importer or
    agent.

***V. POST CONTACT AND FURTHER INFORMATION***

The U.S. Agricultural Trade Office in Jakarta maintains up to date
information covering the food processing industry in Indonesia and would
be pleased to assist in facilitating exports and entry to the Indonesia
market. Questions or comments regarding this report should be directed
to the U.S. ATO in Jakarta at the following address:

U.S. Commercial Center

Wisma Metropolitan II, 3^rd^ Floor

Jalan Jenderal Sudirman Kav.29-31

Jakarta 12920 - Indonesia

Tel: +62215262850

Fax: +62215711251

e-mail: atojkt@cbn.net.id

Homepage: <http://www.usembassyjakarta.org/fas>

Please contact our home page for more information on exporting U.S. food
products to Indonesia, including "Hotel and Restaurant Industry: Bali";
\"Market Brief-Imports of U.S. Fresh Fruit: Indonesia"; "Market Brief -
Indonesian Wine Imports"; "Market Brief - Indonesian Bakery Industry";
Market Brief - Indonesian Beverage Industry"; "Market Brief - Indonesia
Meat Processing Industry"; \"Market Brief - Beef Liver & Chicken Leg
Quarter"; "Market Brief - Furniture Industry"; " Product Brief --
Popcorn "; \"The Exporter Guide 2003\", and \"The Food Processing Sector
Report: Indonesia".

For more information on exporting U.S. agricultural products to other
countries, please visit the Foreign Agricultural Service's Home Page:
[**http://www.fas.usda.gov**]()

**[APPENDIX]() A: REVIEW OF COMPETITION FOR U.S. HIGH-VALUE PRODUCTS IN
INDONESIA**

Best market prospects for imported U.S. food products and competing
suppliers presence, as identified by the Agricultural Trade Office in
Jakarta based on Indonesian Central Bureau Statistics data are as
follows:

  ----------- --------------- ----------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------
  **HS Code**                 **Description**                **2000 (value              **2001 (value              **2002 (value 
                                                             USD)**                     USD)**                     USD)**        

                                                             **World**     **US         **World**     **US         **World**     **US
                                                                           origin**                   origin**                   origin**

  0808                        Apple, pears &                 64,144,492    21,900,314   73,295,303    25,220,211   108,514,279   31,881,174
                              quinces, fresh                                                                                     

  0806                        Grapes, Fresh or               11,685,743    7,064,034    10,495,234    5,472,058    19,567,407    10,258,409
                              Dried                                                                                              

  0206                        Edible Offal of                20,825,785    7,462,676    16,686,262    5,043,782    22,830,634    7,227,814
                              Bovine Animals,                                                                                    
                              Swine, Sheep,                                                                                      
                              Goats, Horses                                                                                      
                              Etc, fresh,                                                                                        
                              Chilled or Frozen                                                                                  

  020621 only                 Tongues of Bovine              3,358         1,049        8,478         456          75,456        7,561
                              Animals, Edible,                                                                                   
                              frozen                                                                                             

  020622 only                 Livers of Bovine               14,877,612    6,694,084    9,140,681     3,898,843    8,173,639     3,486,152
                              Animals, Edible,                                                                                   
                              frozen                                                                                             

  0402                        Milk and Cream,                186,096,719   5,385,713    240,505,492   27,606,331   167,160,281   5,433,934
                              consentrated or                                                                                    
                              containing added                                                                                   
                              sweetening                                                                                         

  0710                         Vegetable                     4,518,888     3,859,048    4,380,869     3,214,950    4,985,873     2,873,532
                              (uncooked or                                                                                       
                              Cooked by steam                                                                                    
                              or boiling                                                                                         
                              water), frozen                                                                                     

  200410                      Potatoes,                      3,792,525     1,908,434    5,311,458     1,325,385    6,177,511     2,257,219
                              Including French                                                                                   
                              Fries, Prepared                                                                                    
                              or Preserved                                                                                       
                              Otherwise than by                                                                                  
                              Vinegar or Acetic                                                                                  
                              Acid, frozen                                                                                       

  0202                         Meat of Bovine                39,575,322    1,333,263    22,791,617    1,324,041    17,864,262    1,228,480
                              Animals, frozen                                                                                    

  0805                        Citrus Fruit,                  41,948,401    2,287,065    40,243,452    1,036,590    51,440,420    1,166,159
                              Frsh or Dried                                                                                      

  0306                        Crustaceans,      11,144,482                 305,009      11,313,011    1,198,827    10,942,637    825,288
                              live, frsh,                                                                                        
                              chilled, frzn                                                                                      
                              etc; Crustaceans,                                                                                  
                              in shell, cookd                                                                                    
                              by stm or bolng                                                                                    
                              watr; flours,                                                                                      
                              meals, pellets of                                                                                  
                              Crustaceans, hum                                                                                   
                              consump                                                                                            

  030623 only Shrimps and                       16,647                     0            1,076         0            182,454       178,629
              Prawns, Live,                                                                                                      
              Fresh, Chilled,                                                                                                    
              Dried, Salted                                                                                                      
              or in brine or                                                                                                     
              cooked by                                                                                                          
              steaming or                                                                                                        
              boiling in                                                                                                         
              water, not                                                                                                         
              frozen                                                                                                             

  2008        Fruit, nuts and                   3,870,146                  547,028      2,714,293     619,697      5,795,050     779,661
              other edible                                                                                                       
              parts of                                                                                                           
              plants,                                                                                                            
              otherwise                                                                                                          
              prepared or                                                                                                        
              preserved,                                                                                                         
              whether or not                                                                                                     
              containing                                                                                                         
              added                                                                                                              
              sweetening or                                                                                                      
              spirit, nesoi                                                                                                      

  0802        Nuts Nesoi                        1,549,559                  1,134,585    1,088,106     671,040      1,168,931     765,279
              Fresh or Dried                                                                                                     

  0406        Cheese & Curd                     11,781,270                 84,917       14,379,406    528,560      15,623,425    719,588

  2103        Sauces and                        7,543,617                  833,817      6,609,724     679,409      10,817,273    638,122
              preparation                                                                                                        
              therefore;                                                                                                         
              mixed                                                                                                              
              condiments and                                                                                                     
              mix seasonings;                                                                                                    
              mustard flour                                                                                                      
              and meal and                                                                                                       
              prepared                                                                                                           
              mustard                                                                                                            

  210320 only Tomato ketchup                    834,866                    260,602      717,539       316,895      783,698       216,049
              and other                                                                                                          
              tomato sauces                                                                                                      

  210390      Sauces and                        5,332,601                  509,726      4,554,403     322,405      7,776,757     379,189
              preparations                                                                                                       
              therefore,                                                                                                         
              nesoi; mixed                                                                                                       
              condiments and                                                                                                     
              mixed                                                                                                              
              seasonings                                                                                                         

  2101        Extract,                          1,049,632                  204,916      2,345,645     626,396      1,954,202     599,163
              Essences &                                                                                                         
              Consentrates of                                                                                                    
              Coffee, Tea or                                                                                                     
              Mate &                                                                                                             
              preparation                                                                                                        
              thereof;                                                                                                           
              Roasted Chicory                                                                                                    
              etc & Extract,                                                                                                     
              Essences &                                                                                                         
              Consentrates                                                                                                       

  1904        Prepared foods                    6,085,644                  640,420      5,038,002     500,552      5,404,919     592,981
              from swelling                                                                                                      
              or roasting                                                                                                        
              cereals or                                                                                                         
              products;                                                                                                          
              cereals (exc.                                                                                                      
              Corn), in grain                                                                                                    
              form flakes or                                                                                                     
              worked grain                                                                                                       
              prepared nesoi                                                                                                     

  1905        Bread, pastry,                    6,213,858                  119,523      5,334,177     95,049       6.098,544     354,221
              cakes, biscuits                                                                                                    
              and other                                                                                                          
              baker's wares;                                                                                                     
              Communion                                                                                                          
              wafers, empty                                                                                                      
              capsules for                                                                                                       
              medicine etc,                                                                                                      
              sealing wafers,                                                                                                    
              rice paper etc                                                                                                     

  190110      Food                              1,604,605                  117,830      2,031,550     161,125      14,365,464    271,172
              preparation for                                                                                                    
              infant use, put                                                                                                    
              up for retail                                                                                                      
              sale, nesoi                                                                                                        

  2009        Fruit juices nt                   4,523,449                  255,304      4,728,805     402,577      4,315,024     267,757
              fortified W Vit                                                                                                    
              or Minls (incl                                                                                                     
              grape must) &                                                                                                      
              vegetable                                                                                                          
              juices,                                                                                                            
              unfermented &                                                                                                      
              nt containing                                                                                                      
              add spirit,                                                                                                        
              whet or nt                                                                                                         
              containing                                                                                                         
              added sweetng                                                                                                      

  200290110   Tomato puree,                     2,630,600                  267,229      2,245,462     247,826      2,637,387     254,333
              tomato paste in                                                                                                    
              airtight                                                                                                           
              containers                                                                                                         

  2104        Soups and                         1,867,406                  405,775      2,029,775     192,841      3,128,030     198,154
              broths and                                                                                                         
              preparations                                                                                                       
              therefor',                                                                                                         
              homogenized                                                                                                        
              composite food                                                                                                     
              preparations                                                                                                       

  2007        Jams, fruit                       1,334,967                  118,066      878,424       88,216       2,352,455     129,150
              jellies,                                                                                                           
              marmalades,                                                                                                        
              fruit or nut                                                                                                       
              pure and fruit                                                                                                     
              or nut pastes,                                                                                                     
              being cooked                                                                                                       
              preparation,                                                                                                       
              whether or not                                                                                                     
              containing                                                                                                         
              added                                                                                                              
              sweetening                                                                                                         

  1602        Prepared or                       2,120,911                  92,463       1,298,685     166,152      1,892,234     111,618
              preserved meat,                                                                                                    
              meat offal or                                                                                                      
              blood, nesoi                                                                                                       

  0307        Molluscs & Oth                    6,260,970                  162,993      5,720,198     257,620      3,640,455     73,487
              aquatic                                                                                                            
              invertebrata                                                                                                       
              nesoi, live,                                                                                                       
              frsh, chilld,                                                                                                      
              frzn, dried,                                                                                                       
              saltd or in                                                                                                        
              brine; flours,                                                                                                     
              meals & pellets                                                                                                    
              of aqua                                                                                                            
              inverteb hum                                                                                                       
              consumptn                                                                                                          

  2203        Beer made from                    207,295                    34,304       95,904        18,901       320,200       70,690
              malt                                                                                                               

  0304        Fish fillets                      2,054,796                  108,191      1,787,853     56,311       1,822,823     58,211
              and other fish                                                                                                     
              meat (whether                                                                                                      
              or not minced),                                                                                                    
              fresh, chilled                                                                                                     
              or frozen                                                                                                          

  2105        Ice cream and                     1,549,208                  603,453      1,624,380     1,298,610    2,231,255     58,087
              other edible                                                                                                       
              ice, whther or                                                                                                     
              not containing                                                                                                     
              cocoa                                                                                                              

  1704        Sugar                             9,557,047                  117,115      10,215,894    205,484      16,110,724    54,400
              convectionary                                                                                                      
              (including                                                                                                         
              white                                                                                                              
              chocolate), not                                                                                                    
              containing                                                                                                         
              cocoa                                                                                                              

  0302        Fish, fresh or                    1,129,578                  12,623       1,191,142     55,234       1,457,472     41,332
              chilled,                                                                                                           
              excluding fish                                                                                                     
              fillet and                                                                                                         
              other fish meat                                                                                                    
              whitout bones;                                                                                                     
              fish livers and                                                                                                    
              roes, fresh or                                                                                                     
              chilled                                                                                                            

  2208        Ethyl alcohol,                    615,939                    14,447       379,910       687          460,482       38,419
              undenatured, of                                                                                                    
              an alcoholic                                                                                                       
              strength by                                                                                                        
              volume of under                                                                                                    
              80% Vol;                                                                                                           
              spirits,                                                                                                           
              liqueurs and                                                                                                       
              other                                                                                                              
              spirituous                                                                                                         
              beverages                                                                                                          
  ----------- --------------- ----------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------

***[Country of origin:]{.underline}***

+--------+-----------------+-------------+-------------+-------------+---+
| **HS   | **Description** | **Major     |             |             |   |
| Code** |                 | Suppliers   |             |             |   |
|        |                 | (value      |             |             |   |
|        |                 | USD)**      |             |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
|        |                 | **2000**    | **2001**    | **2002**    |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 0808   | Apple, pears &  | China (48%) | China (52%) | China (59%) |   |
|        | quinces, fresh  |             |             |             |   |
|        |                 | US (34%)    | US (34%)    | US (29%)    |   |
|        |                 |             |             |             |   |
|        |                 | Others:     | Others:     | Others:     |   |
|        |                 | Australia,  | Australia,  |             |   |
|        |                 | France, New | France, New | Australia,  |   |
|        |                 | Zealand,    | Zealand,    | France, New |   |
|        |                 | Canada,     | Canada,     | Zealand,    |   |
|        |                 | South Korea | South Korea | Canada,     |   |
|        |                 |             |             | South Korea |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 0806   | Grapes, Fresh   | US (60%)    | US (52%)    | US (52%)    |   |
|        | or Dried        |             |             |             |   |
|        |                 | Australia   | Australia   | Australia   |   |
|        |                 | (20%)       | (34%)       | (35%)       |   |
|        |                 |             |             |             |   |
|        |                 | Others:     | Others:     | Others:     |   |
|        |                 | Chile       | Chile,      | China,      |   |
|        |                 |             | South       | South       |   |
|        |                 |             | Africa      | Africa      |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 0206   | Edible Offal of | Australia   | Australia   | Australia   |   |
|        | Bovine Animals, | (9%)        | (48%)       | (47%)       |   |
|        | Swine, Sheep,   |             |             |             |   |
|        | Goats, Horses   | US (36%)    | US (30%)    | US (32%)    |   |
|        | Etc, fresh,     |             |             |             |   |
|        | Chilled or      | New Zealand | New Zealand | New Zealand |   |
|        | Frozen          | (14%)       | (18%)       | (17%)       |   |
|        |                 |             |             |             |   |
|        |                 |             |             | Others:     |   |
|        |                 |             |             | Canada      |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 020621 | Tongues of      | New Zealand | Argentina   | Australia   |   |
| only   | Bovine Animals, | (40%)       | (52%)       | (90%)       |   |
|        | Edible, frozen  |             |             |             |   |
|        |                 | US (31%)    | Australia   | US (10%)    |   |
|        |                 |             | (43%)       |             |   |
|        |                 | Australia   |             |             |   |
|        |                 | (29%)       | US (5%)     |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 020622 | Livers of       | US (45%)    | US (43%)    | Australia   |   |
| only   | Bovine Animals, |             |             | (43%)       |   |
|        | Edible, frozen  | Australia   | Australia   |             |   |
|        |                 | (33%)       | (38%)       | US (41%)    |   |
|        |                 |             |             |             |   |
|        |                 | New Zealand | New Zealand | New Zealand |   |
|        |                 | (12%)       | (15%)       | (14%)       |   |
|        |                 |             |             |             |   |
|        |                 | Ireland     |             |             |   |
|        |                 | (9%)        |             |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 0402   | Milk and Cream, | Australia   | Australia   | Australia   |   |
|        | concentrated or | (13%)       | (17%)       | (28%)       |   |
|        | containing      |             |             |             |   |
|        | added           | NZ (44%)    | NZ (36%)    | NZ (28%)    |   |
|        | sweetening      |             |             |             |   |
|        |                 | Netherlands | Netherlands | Netherlands |   |
|        |                 | (9%)        | (9%)        | (14%)       |   |
|        |                 |             |             |             |   |
|        |                 | Philippines | Philippines | Philippines |   |
|        |                 | (7%)        | (9%)        | (9%)        |   |
|        |                 |             |             |             |   |
|        |                 | US (3%)     | US (11%)    | US (3%)     |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 0710   | Vegetable       | US (85%)    | US (73%)    | US (58%)    |   |
|        | (uncooked or    |             |             |             |   |
|        | Cooked by steam | Australia   | Netherlands | Canada      |   |
|        | or boiling      | (6%)        | (10%)       | (10%)       |   |
|        | water), frozen  |             |             |             |   |
|        |                 |             | Australia   | Singapore   |   |
|        |                 |             | (8%)        | (9%)        |   |
|        |                 |             |             |             |   |
|        |                 |             |             | New Zealand |   |
|        |                 |             |             | (8%)        |   |
|        |                 |             |             |             |   |
|        |                 |             |             | Australia   |   |
|        |                 |             |             | (5%)        |   |
|        |                 |             |             |             |   |
|        |                 |             |             | Netherlands |   |
|        |                 |             |             | (5%)        |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 200410 | Potatoes,       | US (50%)    | US (25%)    | US (37%)    |   |
|        | Including       |             |             |             |   |
|        | French Fries,   | Canada      | Canada      | Canada      |   |
|        | Prepared or     | (38%)       | (50%)       | (34%)       |   |
|        | Preserved       |             |             |             |   |
|        | Otherwise than  |             | Malaysia    | Malaysia    |   |
|        | by Vinegar or   |             | (16%)       | (22%)       |   |
|        | Acetic Acid,    |             |             |             |   |
|        | frozen          |             |             |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 0202   | Meat of Bovine  | Australia   | Australia   | Australia   |   |
|        | Animals, frozen | (44%)       | (43%)       | (66%)       |   |
|        |                 |             |             |             |   |
|        |                 | Ireland     | New Zealand | New Zealand |   |
|        |                 | (30%)       | (30%)       | (27%)       |   |
|        |                 |             |             |             |   |
|        |                 | New Zealand | Ireland     | US (7%)     |   |
|        |                 | (21%)       | (20%)       |             |   |
|        |                 |             |             |             |   |
|        |                 | US (3%)     | US (6%)     |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 0805   | Citrus Fruit,   | China (49%) | Pakistan    | China (41%) |   |
|        | Fresh or Dried  |             | (36%)       |             |   |
|        |                 | Pakistan    |             | Pakistan    |   |
|        |                 | (18%)       | China (35%) | (25%)       |   |
|        |                 |             |             |             |   |
|        |                 | Australia   | Australia   | Australia   |   |
|        |                 | (15%)       | (12%)       | (13%)       |   |
|        |                 |             |             |             |   |
|        |                 | US (5%)     | Brazil (5%) | Brazil (8%) |   |
|        |                 |             |             |             |   |
|        |                 | Egypt (3%)  | Egypt (4%)  | Egypt (3%)  |   |
|        |                 |             |             |             |   |
|        |                 | Brazil (3%) | US (3%)     | South       |   |
|        |                 |             |             | Africa (3%) |   |
|        |                 |             |             |             |   |
|        |                 |             |             | US (2%)     |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 0306   | Crustaceans,    | Vietnam     | India (21%) | Singapore   |   |
|        | live, frsh,     | (20%)       |             | (21%)       |   |
|        | chilled, frzn   |             | Singapore   |             |   |
|        | etc;            | Singapore   | (13%)       | China (19%) |   |
|        | Crustaceans, in | (17%)       |             |             |   |
|        | shell, cookd by |             | Malaysia    | Malaysia    |   |
|        | stm or boilng   | India (17%) | (11%)       | (12%)       |   |
|        | watr; flours,   |             |             |             |   |
|        | meals, pellets  | China (10%) | US (11%)    | India (8%)  |   |
|        | of Crustaceans, |             |             |             |   |
|        | hum consump     | Japan (5%)  | Thailand    | Vietnam     |   |
|        |                 |             | (6%)        | (8%)        |   |
|        |                 | Malaysia    |             |             |   |
|        |                 | (5%)        | Myanmar     | US (8%)     |   |
|        |                 |             | (5%)        |             |   |
|        |                 | US (3%)     |             |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 030623 | Shrimps and     | Japan (84%) | Taiwan      | US (98%)    |   |
| only   | Prawns, Live,   |             | (74%)       |             |   |
|        | Fresh, Chilled, | Taiwan      |             | Norway (2%) |   |
|        | Dried, Salted   | (16%)       | South Korea |             |   |
|        | or in brine or  |             | (17%)       |             |   |
|        | cooked by       |             |             |             |   |
|        | steaming or     |             | Japan (6%)  |             |   |
|        | boiling in      |             |             |             |   |
|        | water, not      |             | US (3%)     |             |   |
|        | frozen          |             |             |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 2008   | Fruit, nuts and | Italy (26%) | China (24%) | China (32%) |   |
|        | other edible    |             |             |             |   |
|        | parts of        | China (19%) | US (23%)    | Malaysia    |   |
|        | plants,         |             |             | (18%)       |   |
|        | otherwise       | US (14%)    | Singapore   |             |   |
|        | prepared or     |             | (14%)       | US (13%)    |   |
|        | preserved,      | Thailand    |             |             |   |
|        | whether or not  | (12%)       | Thailand    | Thailand    |   |
|        | containing      |             | 12%)        | (13%)       |   |
|        | added           | Singapore   |             |             |   |
|        | sweetening or   | (8%)        | Switzerland | Singapore   |   |
|        | spirit, nesoi   |             | (7%)        | (6%)        |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 0802   | Nuts Nesoi      | US (73%)    | US (62%)    | US (65%)    |   |
|        | Fresh or Dried  |             |             |             |   |
|        |                 | Australia   | Australia   | Australia   |   |
|        |                 | (15%)       | (18%)       | (21%)       |   |
|        |                 |             |             |             |   |
|        |                 | China (7%)  | Thailand    | China (6%)  |   |
|        |                 |             | (5%)        |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 0406   | Cheese & Curd   | Australia   | Australia   | Australia   |   |
|        |                 | (62%)       | (57%)       | (59%)       |   |
|        |                 |             |             |             |   |
|        |                 | New Zealand | New Zealand | New Zealand |   |
|        |                 | (31%)       | (33%)       | (28%)       |   |
|        |                 |             |             |             |   |
|        |                 | Netherlands | US (4%)     | US (5%)     |   |
|        |                 | (3%)        |             |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 2103   | Sauces and      | Japan (16%) | Japan (21%) | Japan (18%) |   |
|        | preparation     |             |             |             |   |
|        | therefore;      | Singapore   | Singapore   | Singapore   |   |
|        | mixed           | (19%)       | (16%)       | (17%)       |   |
|        | condiments and  |             |             |             |   |
|        | mix seasonings; | Hongkong    | Hongkong    | Malaysia    |   |
|        | mustard flour   | (14%)       | (15%)       | (13%)       |   |
|        | and meal and    |             |             |             |   |
|        | prepared        | Malaysia    | Malaysia    | Hongkong    |   |
|        | mustard         | (14%)       | (14%) US    | (13%)       |   |
|        |                 |             | (10%)       |             |   |
|        |                 | US (11%)    |             | China (9%)  |   |
|        |                 |             | China (10%) |             |   |
|        |                 | China (9%)  |             | US (6%)     |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 210320 | Tomato ketchup  | US (31%)    | US (44%)    | US (28%)    |   |
| only   | and other       |             |             |             |   |
|        | tomato sauces   | Australia   | Malaysia    | Netherlands |   |
|        |                 | (35%)       | (22%)       | (10%)       |   |
|        |                 |             |             |             |   |
|        |                 | China (12%) | China (7%)  | Singapore   |   |
|        |                 |             |             | (10%)       |   |
|        |                 | Singapore   | Singapore   |             |   |
|        |                 | (8%)        | (6%)        | Japan (9%)  |   |
|        |                 |             |             |             |   |
|        |                 |             |             | Malaysia    |   |
|        |                 |             |             | (9%)        |   |
|        |                 |             |             |             |   |
|        |                 |             |             | Italy (8%)  |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 210390 | Sauces and      | Singapore   | Japan (21%) | Japan (18%) |   |
| only   | preparations    | (23%)       |             |             |   |
|        | therefore,      |             | Ho          | Malaysia    |   |
|        | nesoi; mixed    | Ho          | ngkong(21%) | (17%)       |   |
|        | condiments and  | ngkong(20%) |             |             |   |
|        | mixed           |             | Singapore   | Singapore   |   |
|        | seasonings      | Malaysia    | (21%)       | (17%)       |   |
|        |                 | (19%)       |             |             |   |
|        |                 |             | Malaysia    | Ho          |   |
|        |                 | Japan       | (17%)       | ngkong(17%) |   |
|        |                 | (13.5%)     |             |             |   |
|        |                 |             | US (7%)     | US (5%)     |   |
|        |                 | US (10%)    |             |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 2101   | Extract,        | Malaysia    | US (27%)    | US (31%)    |   |
|        | Essences &      | (40%)       |             |             |   |
|        | Concentrates of |             | Malaysia    | Malaysia    |   |
|        | Coffee, Tea or  | US (20%)    | (21%)       | (22%)       |   |
|        | Mate &          |             |             |             |   |
|        | preparation     | Brazil      | Indonesia   | Brazil      |   |
|        | thereof;        | (14%)       | (19%)       | (12%)       |   |
|        | Roasted Chicory |             |             |             |   |
|        | etc & Extract,  | Netherlands | China (9%)  | Columbia    |   |
|        | Essences &      | (9%)        |             | (7%)        |   |
|        | Concentrates    |             | Netherlands |             |   |
|        |                 | Singapore   | (9%)        | Netherlands |   |
|        |                 | (9%)        |             | (6%)        |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 1904   | Prepared foods  | Malaysia    | Phili       | Phili       |   |
|        | from swelling   | (31%)       | ppines(61%) | ppines(52%) |   |
|        | or roasting     |             |             |             |   |
|        | cereals or      | Phili       | Thailand    | Thailand    |   |
|        | products;       | ppines(24%) | (12%)       | (12%)       |   |
|        | cereals (exc.   |             |             |             |   |
|        | Corn), in grain | Thailand    | US (10%)    | US (11%)    |   |
|        | form flakes or  | (21%)       |             |             |   |
|        | worked grain    |             | Germany     | Malaysia    |   |
|        | prepared nesoi  | US (11%)    | (4%)        | (7%)        |   |
|        |                 |             |             |             |   |
|        |                 | Australia   | Australia   |             |   |
|        |                 | (4%)        | (3%)        |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 1905   | Bread, pastry,  | Malaysia    | Malaysia    | Malaysia    |   |
|        | cakes, biscuits | (53%)       | (56%)       | (39%)       |   |
|        | and other       |             |             |             |   |
|        | baker's wares;  | Thailand    | Thailand    | Thailand    |   |
|        | Communion       | (8%)        | (13%)       | (15%)       |   |
|        | wafers, empty   |             |             |             |   |
|        | capsules for    | Australia   | Australia   | Italy (7%)  |   |
|        | medicine etc,   | (8%)        | (6%)        |             |   |
|        | sealing wafers, |             |             | Australia   |   |
|        | rice paper etc  | Italy (7%)  | China (5%)  | (6%)        |   |
|        |                 |             |             |             |   |
|        |                 | China (7%)  | Singapore   | US (6%)     |   |
|        |                 |             | (4%)        |             |   |
|        |                 | US (2%)     |             | Singapore   |   |
|        |                 |             | US (2%)     | (5%)        |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 190110 | Food            | Phili       | Phili       | Singapore   |   |
|        | preparation for | ppines(59%) | ppines(44%) | (40%)       |   |
|        | infant use, put |             |             |             |   |
|        | up for retail   | Denmark     | Denmark     | Malaysia    |   |
|        | sale, nesoi     | (17%)       | (39%)       | (34%)       |   |
|        |                 |             |             |             |   |
|        |                 | Netherlands | US (8%)     | Ireland     |   |
|        |                 | (9%)        |             | (13%)       |   |
|        |                 |             | Netherlands |             |   |
|        |                 | US (7%)     | (5%)        | Phil        |   |
|        |                 |             |             | ippines(7%) |   |
|        |                 |             |             |             |   |
|        |                 |             |             | Denmark     |   |
|        |                 |             |             | (2%)        |   |
|        |                 |             |             |             |   |
|        |                 |             |             | US (2%)     |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 2009   | Fruit juices nt | Australia   | Australia   | Australia   |   |
|        | fortified W Vit | (33%)       | (40%)       | (44%)       |   |
|        | or Minls (incl  |             |             |             |   |
|        | grape must) &   | Brazil      | Brazil      | Malaysia    |   |
|        | vegetable       | (19%)       | (13%)       | (6%)        |   |
|        | juices,         |             |             |             |   |
|        | unfermented &   | Austria     | US (9%)     | US (6%)     |   |
|        | nt containing   | (11%)       |             |             |   |
|        | add spirit,     |             | Malaysia    | Brazil (6%) |   |
|        | whet or nt      | US (6%)     | (7%)        |             |   |
|        | containing      |             |             | China (5%)  |   |
|        | added sweetng   | Malaysia    | Austria     |             |   |
|        |                 | (5%)        | (5%)        | Japan (4%)  |   |
|        |                 |             |             |             |   |
|        |                 | China (4%)  | China (4%)  |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 200    | Tomato puree,   | China (45%) | China (74%) | China (74%) |   |
| 290110 | tomato paste in |             |             |             |   |
|        | airtight        | Turkey      | Turkey      | Turkey      |   |
|        | containers      | (39%)       | (13%)       | (11%)       |   |
|        |                 |             |             |             |   |
|        |                 | US (10%)    | US (11%)    | US (10%)    |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 2104   | Soups and       | Malaysia    | Malaysia    | Malaysia    |   |
|        | broths and      | (29%)       | (38%)       | (62%)       |   |
|        | preparations    |             |             |             |   |
|        | therefor',      | Japan (25%) | Japan (32%) | Japan (18%) |   |
|        | homogenized     |             |             |             |   |
|        | composite food  | US (22%)    | US (10%)    | US (6%)     |   |
|        | preparations    |             |             |             |   |
|        |                 | Thailand    | Thailand    | China (3%)  |   |
|        |                 | (8%)        | (9%)        |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 2007   | Jams, fruit     | Thailand    | Australia   | Brazil      |   |
|        | jellies,        | (30%)       | (16%)       | (28%)       |   |
|        | marmalades,     |             |             |             |   |
|        | fruit or nut    | China (17%) | Belgium     | Austria     |   |
|        | pure and fruit  |             | (10%)       | (16%)       |   |
|        | or nut pastes,  | Australia   |             |             |   |
|        | being cooked    | (14%)       | US (10%)    | Australia   |   |
|        | preparation,    |             |             | (12%)       |   |
|        | whether or not  | US (9%)     | Netherlands |             |   |
|        | containing      |             | (8%)        | Taiwan (9%) |   |
|        | added           |             |             |             |   |
|        | sweetening      |             | Malaysia    | US (6%)     |   |
|        |                 |             | (7%)        |             |   |
|        |                 |             |             | Belgium     |   |
|        |                 |             | France (7%) | (4%)        |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 1602   | Prepared or     | China (46%) | China (58%) | China (65%) |   |
|        | preserved meat, |             |             |             |   |
|        | meat offal or   | France      | US (13%)    | France      |   |
|        | blood, nesoi    | (41%)       |             | (11%)       |   |
|        |                 |             | France      |             |   |
|        |                 | US (4%)     | (11%)       | US (6%)     |   |
|        |                 |             |             |             |   |
|        |                 | Australia   | Australia   | Australia   |   |
|        |                 | (3%)        | (5%)        | (6%)        |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 0307   | Molluscs & Oth  | Taiwan      | Taiwan      | Taiwan      |   |
|        | aquatic         | (42%)       | (35%)       | (29%)       |   |
|        | invertebrata    |             |             |             |   |
|        | nesoi, live,    | South Korea | China (20%) | Sout        |   |
|        | frsh, chilld,   | (36%)       |             | hKorea(25%) |   |
|        | frzn, dried,    |             | South Korea |             |   |
|        | saltd or in     | China (8%)  | (13%)       | China (18%) |   |
|        | brine; flours,  |             |             |             |   |
|        | meals & pellets | Malaysia    | Japan (11%) | Japan (9%)  |   |
|        | of aqua         | (4%)        |             |             |   |
|        | inverteb hum    |             | Singapore   | India (6%)  |   |
|        | consumptn       | US (3%)     | (9%)        |             |   |
|        |                 |             |             | US (2%)     |   |
|        |                 |             | US (5%)     |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 2203   | Beer made from  | Singapore   | Singapore   | Singapore   |   |
|        | malt            | (57%)       | (39%)       | (51%)       |   |
|        |                 |             |             |             |   |
|        |                 | US (17%)    | Australia   | US (22%)    |   |
|        |                 |             | (25%)       |             |   |
|        |                 | Australia   |             | Mexico (9%) |   |
|        |                 | (16%)       | US (20%)    |             |   |
|        |                 |             |             | Canada (7%) |   |
|        |                 |             |             |             |   |
|        |                 |             |             | Australia   |   |
|        |                 |             |             | (6%)        |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 0304   | Fish fillets    | Japan (20%) | Japan (17%) | Malaysia    |   |
|        | and other fish  |             |             | (16%)       |   |
|        | meat (whether   | Vietnam     | Thailand    |             |   |
|        | or not minced), | (13%)       | (12%)       | Singapore   |   |
|        | fresh, chilled  |             |             | (15%)       |   |
|        | or frozen       | Tanzania    | Malaysia    |             |   |
|        |                 | (7%)        | (8%)        | Japan (14%) |   |
|        |                 |             |             |             |   |
|        |                 | Kenya (7%)  | Singapore   | Norway (7%) |   |
|        |                 |             | (8%)        |             |   |
|        |                 | US (5%)     |             | Vietnam     |   |
|        |                 |             | US (3%)     | (4%)        |   |
|        |                 |             |             |             |   |
|        |                 |             | Kenya (3%)  | US (3%)     |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 2105   | Ice cream and   | US (39%)    | US (80%)    | Canada      |   |
|        | other edible    |             |             | (42%)       |   |
|        | ice, whther or  | Canada      | Australia   |             |   |
|        | not containing  | (20%)       | (6%)        | Japan (30%) |   |
|        | cocoa           |             |             |             |   |
|        |                 | Australia   | Canada (3%) | France      |   |
|        |                 | (11%)       |             | (14%)       |   |
|        |                 |             | France (3%) |             |   |
|        |                 | France (8%) |             | Australia   |   |
|        |                 |             |             | (4%)        |   |
|        |                 | China (7%)  |             |             |   |
|        |                 |             |             | US (3%)     |   |
|        |                 | Hongkong    |             |             |   |
|        |                 | (7%)        |             | New Zealand |   |
|        |                 |             |             | 2%)         |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 1704   | Sugar           | Phili       | Phili       | China (54%) |   |
|        | convectionary   | ppines(30%) | ppines(27%) |             |   |
|        | (including      |             |             | Phili       |   |
|        | white           | Italy (16%) | China (15%) | ppines(15%) |   |
|        | chocolate), not |             |             |             |   |
|        | containing      | Malaysia    | Malaysia    | Switzerland |   |
|        | cocoa           | (9%)        | (10%)       | (5%)        |   |
|        |                 |             |             |             |   |
|        |                 | Swit        | Italy (9%)  | Malaysia    |   |
|        |                 | zerland(7%) |             | (4%)        |   |
|        |                 |             | Australia   |             |   |
|        |                 | China (7%)  | (8%)        | UK (4%)     |   |
|        |                 |             |             |             |   |
|        |                 | Spain (6%)  | Swit        | South       |   |
|        |                 |             | zerland(6%) | Africa (3%) |   |
|        |                 | Thailand    |             |             |   |
|        |                 | (5%)        | UK (6%)     |             |   |
|        |                 |             |             |             |   |
|        |                 | US (1%)     | Thailand    |             |   |
|        |                 |             | (5%)        |             |   |
|        |                 |             |             |             |   |
|        |                 |             | US (2%)     |             |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 0302   | Fish, fresh or  | China (30%) | Norway      | Norway      |   |
|        | chilled,        |             | (26%)       | (36%)       |   |
|        | excluding fish  | Norway      |             |             |   |
|        | fillet and      | (27%)       | Japan (22%) | Japan (26%) |   |
|        | other fish meat |             |             |             |   |
|        | whitout bones;  | Malaysia    | Australia   | China (13%) |   |
|        | fish livers and | (13%)       | (19%)       |             |   |
|        | roes, fresh or  |             |             | Australia   |   |
|        | chilled         | Australia   | Malaysia    | (10%)       |   |
|        |                 | (13%)       | (12%)       |             |   |
|        |                 |             |             | Malaysia    |   |
|        |                 | Taiwan (8%) | China (10%) | (5%)        |   |
|        |                 |             |             |             |   |
|        |                 | US (1%)     | US (5%)     | US (3%)     |   |
+--------+-----------------+-------------+-------------+-------------+---+
| 2208   | Ethyl alcohol,  | Spain (52%) | Singapore   | Australia   |   |
|        | undenatured, of |             | (23%)       | (25%)       |   |
|        | an alcoholic    | Singapore   |             |             |   |
|        | strength by     | (10%)       | Australia   | Singapore   |   |
|        | volume of under |             | (21%)       | (22%)       |   |
|        | 80% Vol;        | France (8%) |             |             |   |
|        | spirits,        |             | Japan (17%) | UK (17%)    |   |
|        | liqueurs and    | Australia   |             |             |   |
|        | other           | (8%)        | Germany     | US (8%)     |   |
|        | spirituous      |             | (10%)       |             |   |
|        | beverages       | Germany     |             | Germany     |   |
|        |                 | (8%)        | UK (8%)     | (8%)        |   |
|        |                 |             |             |             |   |
|        |                 | UK (4%)     | Netherlands | France (6%) |   |
|        |                 |             | (6%)        |             |   |
|        |                 | US (2%)     |             | Denmark     |   |
|        |                 |             | Hungary     | (5%)        |   |
|        |                 |             | (3%)        |             |   |
|        |                 |             |             |             |   |
|        |                 |             | Peru (3%)   |             |   |
+--------+-----------------+-------------+-------------+-------------+---+

**Apendix B: EUROMONITOR DEFINITION**

Hypermarket: A store with a retail sales area of over 2,500 sqm, with at
least 35% of selling space devoted to non-foods. Frequently on
out-of-town sites or as the anchor store in a shopping center

Supermarkets: A store with a selling area of between 400 and 2,500 sqm,
selling at least 70% foodstuufs and everyday commodities. However,
smaller (under 100 sqm) and larger (\>2,500 sqm) supermarket stores
which are common in some ot the countries under review (Asian countires)

Convenience stores : Shop selling a wide range of goods with extended
opening hours and fitting the following characteristics: Opening 7 days
a week. Opening 9am or earlier on 6 or more dys a week. Closing 8pm or
later on 6 or more days of the week. Lunch closing no more than 1 day a
week. Handling 2 or more of the following product categories:
Pre-recorded videos (for sale or rent). Take-away food (ready made
sandwiches, rolls or hot food). Newspapers or magazine. Cut flowers or
pot plants. Greeting cards.

Independent grocers: A retailer owning and operating one or more (but
fewer than ten) retail outlets, but not affiliated to any other
business; mainly family business or partnership, were food accounts for
at least 50% of total retail sales.

Co-operatives: Cooperatives are societies affiliated to the world wide
federation of cooperative, founded in 1895 to promote fair trading. In
each country where cooperatives function there are a number of societies
controlling a series of retail outlets. Usually

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