Voluntary Report - public distribution

**Date:** 11/1/2005

**GAIN Report Number:** KS5062

KS5062

**Korea, Republic of**

**Product Brief**

**Condiments, Sauces and Salad Dressings**

**2005**

**Approved by:**

![](media/image1.wmf)Susan B. Phillips

U.S. Agricultural Trade Office

**Prepared by:**

Kristen Rhodes, Agricultural Intern

**Report Highlights:**

The total size of the Korean imported condiment and salad dressing
market is expected to grow 12 percent in 2005 to an estimated \$100.5
million. Condiments, such as barbeque sauce, hot sauce, fish sauce,
salad dressings, steak sauce and Worcestershire sauce are showing the
greatest signs of growth with an estimated eleven percent increase since
2004. Koreans are looking for high quality products with unique flavors
that are not only convenient, but comes in a package size proportional
to their needs.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Seoul ATO \[KS2\]

\[KS\]

# SECTION I. MARKET OVERVIEW

The total size of the Korean imported condiment and salad dressing
market is expected to grow twelve percent in 2005 to an estimated
\$100.5 million.

Condiments such as BBQ sauce, hot sauce, fish sauce, salad dressings,
steak sauce, and Worcestershire sauce are showing the greatest signs of
growth with an estimated eleven percent increase since 2004. This
increase is most likely the result of a greater consumer demand for
diversity among sauces. However, imported condiments such as pickles
(cucumbers/gherkins), relish and olives are on a decreasing trend.
Consumers demanding products that are healthier and have a Korean flavor
is the cause of this downward trend.

#### 

#### Table 1. Total Imports 2004-2005

#### Unit: US \$1000

+---------+---------+---------+---------+---------+--------+-------+
|         | *       | **2004  | **20    | **      | #### T | ####  |
|         | *2004** | Imports | 05^1^** | 2005^1^ | otal P |       |
|         |         | from    |         | Imports | ercent | ####  |
|         | **Total | the     | **Total | from    |        |  U.S. |
|         | Im      | U.S.**  | Im      | the     | **Ch   |  Perc |
|         | ports** |         | ports** | U.S.**  | ange** | ent C |
|         |         |         |         |         |        | hange |
+---------+---------+---------+---------+---------+--------+-------+
| Sauces  | 63,654  | 8510    | 72,577  | 9490    | 12%    | 10%   |
+---------+---------+---------+---------+---------+--------+-------+
| Salt &  | 10,912  | 427     | 13,896  | 529     | 21%    | 19%   |
| Pepper  |         |         |         |         |        |       |
+---------+---------+---------+---------+---------+--------+-------+
| Pickles | 11,023  | 5727    | 10,730  | 5206    | -3%    | -9%   |
| &       |         |         |         |         |        |       |
| Olives  |         |         |         |         |        |       |
+---------+---------+---------+---------+---------+--------+-------+
| Syrups  | 3422    | 1053    | 3329    | 680     | -3%    | -35%  |
| & Honey |         |         |         |         |        |       |
+---------+---------+---------+---------+---------+--------+-------+
| Total   | 89,011  | 15,717  | 100,532 | 15,905  | 12%    | 1%    |
+---------+---------+---------+---------+---------+--------+-------+

Note: 1. 2005 is an estimate.

Koreans are looking for products that can be differentiated from others.
An exporter interested in the Korean market should research Korean taste
preferences and consider adjusting the quality, taste and/or
functionality of the product to suit their market better. Korean
consumers are looking for a high quality product with a unique flavor
that is not only convenient, but a product that comes in a package size
proportional to their needs. With consumers following the "well-being"
trend in Korea, products that provide a health benefit are preferred.

#### Table 2. 2004 Market Share of Imported Condiments and Salad Dressings

![](media/image2.wmf)

**Table 3. Advantages and Challenges for United States**

  ----------------------------------- -----------------------------------
  **Advantages**                      **Challenges**

  The U.S. has a good reputation for  Korean consumers are more likely to
  producing high quality condiment    purchase domestic brands.
  products.                           

  Korean consumers are familiar with  Imported products may be overlooked
  and have an understanding of U.S.   at the retail level because of
  products.                           their packaging size and
                                      appearance.

  The U.S. produces a large variety   Many imported condiments in the
  of sauces.                          market do not cater to local
                                      tastes.

  There is an increasing demand for   Salad dressings are new to the
  condiments in the Korean market.    retail sector and consumers unaware
                                      of the product diversity available
                                      to them.

  There is a relatively low tariff    Inspection procedures can be
  rate of 8 percent on sauces and     difficult as food additive
  salad dressings.                    restrictions are different than
                                      those in the United States.
  ----------------------------------- -----------------------------------

# 

The retail and HRI sectors in the Korean market are not in direct
competition for the same imports, as both sectors have established
different condiments and salad dressings to import. Korean consumers in
the retail sector are looking for condiments depicting new and trendy
flavors, purchasing products based on quality and functionality.
Condiments that are new to market are preferred as Korean consumers are
eager to try them out.

While consumers in the HRI sector are following the retail sector
trends, many of the condiments are being made domestically in Korea with
fresh ingredients. The purchase of condiments for the HRI sector is very
sensitive to price. With the continual increase in the number of
franchises and institutional restaurants in Korea, the condiment and
salad dressing market is expected to grow. The growth of franchise
restaurants is resulting in increased demand for products with new
tastes, stable pricing, volume capability, added value, and customized
food service specifications, characteristics where U.S. products are
competitive.

#  SECTION II. MARKET SECTOR OPPORTUNITIES AND THREATS

1\. Entry Strategy

The current best strategy to enter the condiment sector of the retail
market is to contact and work with an established importer as few
retailers import directly. This may change in the future, as large
retailers continue to seek direct imports.

In the HRI market, the current best strategy is to work with an
established importer who has an effective sales/marketing and
distribution network focused on target customers. An exporter may also
develop products, including making changes to existing recipes and
specifications, that meet consumer tastes and trends. It is important to
remember to maintain price competitiveness by trading in a large volume
and/or adding value to the product. Another market strategy for the HRI
sector is to provide quick responses to changes in the supply and demand
situation in the market.

Established importers should be able to provide market intelligence,
up-to-date information, guidance on business practices and trade related
regulations, sales contacts with existing and potential buyers, and
market development expertise.

The Korean government maintains very strict regulations on food imports
and requires various documents before import clearance. Therefore, the
exporter must provide the importer with the necessary information to be
submitted to the Korean government. An importer will be able to assist
in this process.

Korean retailers rarely import food products directly, including
condiments. Buying food products from importers and/or wholesalers is
the norm.

#### Table 4. Distribution Supply Channel

2\. Market Size, Structure and Trends

The domestic food industry in Korea offers major competition for U.S.
exporters, producing a variety of quality products and an extensive
processing industry. Since many Koreans have been continually exposed to
these domestic products, there is a distinct marketing advantage over
imported products. The price of these domestic products tend to retail
for less than imports, while the quality is not as high as those that
are imported. Despite being more familiar with domestic products, Korean
consumers seem to prefer the higher quality of imports.

For many Korean consumers, the packaging makes the product. A product,
whether domestic or imported, with an attractive package will sell
better at the retail level than a product that is poorly packaged.
Considerations to account for when choosing packaging for the Korean
market are appearance and size.

The appearance of the product is as important as the product itself.
Many Korean consumers are willing to purchase products in glass
containers with attractive shapes and labels, at a higher cost. These
products are believed to have a better shelf life as well as a higher
quality.

The size of packaging for the Korean consumer is decreasing. As more
Korean families grow smaller and have fewer children, the quantities and
package sizes purchased grow smaller as well. Most Koreans are
purchasing food products for 2-3 people. These consumers are purchasing
products of 250-375 milliliters or grams.

a\. Sauces

The sauce market includes soy sauce, ketchup, prepared mustard,
mayonnaise, BBQ sauce, hot sauces, fish sauce, salad dressings, steak
sauce, and Worcestershire sauce.

In 2004, Korea imported \$8.5 million of sauces from the United States.
This value has continued to increase over the last five years and is
estimated to be \$9.5 million in 2005. The Korean consumers' desire to
purchase new, diverse products has been a major contributor to this
increase.

China and Japan are the major competitors for the United States. Their
ability to produce products that are cheaper and more similar to the
flavor Korean consumers enjoy has allowed them to gain a competitive
advantage over the U.S. Korean consumers are following the trend of
purchasing sauces with unique flavors.

#### Table 5. 2004 Market Share for Imported Sauces

![](media/image3.wmf)

The importation of soy sauce from the United States, although showing
signs of growth, still remains a meager amount compared to that of
Japan. Korean consumers are leaning toward the varieties of flavored soy
sauce that Japan produces. This has caused the market potential for the
United States to remain lower, as many U.S. exporters do not explore
this avenue of different flavored soy sauce.

**Table 6. Imports of Soy Sauce (HS 2103.10.0000)**

#### Unit: Value US \$1000

  ------------- ---------- ---------- ---------- ---------- ---------- ------------- ---------
  **Country**   **2000**   **2001**   **2002**   **2003**   **2004**   **2005^1^**   **2004
                                                                                     Market
                                                                                     Share**

  Japan         1325       1235       1581       1992       2032       2116          75%

  U.S.          164        147        124        152        195        206           7%

  Total         1622       1497       1849       2355       2714       3960          100%
  ------------- ---------- ---------- ---------- ---------- ---------- ------------- ---------

Note: 1. 2005 is an estimate.

The imported tomato ketchup market in Korea is dominated by the United
States and Thailand. In 2004, the U.S. exported \$483 thousand to Korea
while Thailand exported \$248 thousand. It is estimated that 2005
imports from the United States will be \$394 thousand and imports from
Thailand will be \$286 thousand. This shows an 18 percent decrease for
the U.S. and a 13 percent increase for Thailand. The cause of this is
most likely the availability of cheaper Thai products.

**Table 7. 2004 Market Share for Imported Ketchup**

**(HS 2103.20.1000)**

![](media/image4.wmf)

The prepared mustard market in Korea is largely dominated by the United
States with 70 percent of the market share in 2004. Over the past five
years, there has been a steady increase in the growth of prepared
mustard exports from the U.S. It is estimated in 2005 to be an increase
of 3.4 percent. This is due in large part to the variety of prepared
mustards that are being imported by Korea. Korean consumers are looking
for a diverse selection of mustards to choose from.

**Table 8. Imports of Prepared Mustard**

**(HS 2103.30.2000)**

![](media/image5.wmf)

The Korean importation of mayonnaise has been on an up and down trend
for the past few years. The reasoning behind this is the taste of the
Korean consumer. With a product more similar to that of Korean local
flavors, some mayonnaise products are increasing their market potential.
Japan is the largest competitor for American mayonnaise. They have
captured market share by changing the flavor of their product to reflect
consumer demand. It is estimated that in 2005, however, the U.S. will
increase its market share and capture 31 percent. This is a result of
American manufacturers adjusting their product for this market.

**Table 9. Imports of Mayonnaise (HS 2103.90.9010)**

#### Unit: Value US \$1000

  ------------- ---------- ---------- ---------- ---------- ---------- ------------- ---------
  **Country**   **2000**   **2001**   **2002**   **2003**   **2004**   **2005^1^**   **2004
                                                                                     Market
                                                                                     Share**

  Japan         37         24         4          12         360        230           86%

  U.S.          12         27         42         35         36         100           9%

  Total         51         51         46         49         418        326           100%
  ------------- ---------- ---------- ---------- ---------- ---------- ------------- ---------

Note: 1. 2005 is an estimate.

The imports of other sauces and preparations, such as BBQ sauce, hot
sauces, fish sauce, salad dressings, steak sauce, and Worcestershire
sauce are on the rise.

Salad dressings are new to Koreans. Traditionally, Koreans consume
kimchi, a salt-preserved spicy cabbage and not fresh greens such as what
Americans call salads. Consumer tastes are changing; the most popular
salad dressings are italian or mayonnaise-based dressings such as ranch.
Oil and vinegar dressings have become more popular recently because of
the "well being" trend. The diversity of products available is growing
rapidly and the market is changing at a very fast pace. Presently, only
a few varieties of imported dressings are available in the market
because of food additive restrictions.

Sauces such as BBQ, hot sauce, fish sauce, steak sauce, and
Worcestershire sauce are continually increasing as well. Koreans are
looking for new flavors of sauces to add to their traditional palate.
Many of these sauces compliment local flavors.

**Table 10. Imports of Other Sauces and Preparations (HS 2103.90.9090)**

#### Unit: Value US \$1000

+--------+--------+--------+--------+--------+--------+--------+------+
| #      | **     | **     | **     | **     | **     | **200  | **   |
|        | 2000** | 2001** | 2002** | 2003** | 2004** | 5^1^** | 2004 |
| #      |        |        |        |        |        |        | Ma   |
|        |        |        |        |        |        |        | rket |
|        |        |        |        |        |        |        | Sha  |
|        |        |        |        |        |        |        | re** |
+--------+--------+--------+--------+--------+--------+--------+------+
| China  | 16,443 | 21,172 | 24,691 | 32,019 | 35,029 | 42,382 | 62%  |
+--------+--------+--------+--------+--------+--------+--------+------+
| U.S.   | 4586   | 5085   | 5225   | 5270   | 5441   | 6352   | 9%   |
+--------+--------+--------+--------+--------+--------+--------+------+
| Japan  | 3359   | 2959   | 3540   | 4615   | 5258   | 5398   | 9%   |
+--------+--------+--------+--------+--------+--------+--------+------+
| Total  | 29,664 | 35,111 | 39,050 | 46,719 | 56,404 | 64,002 | 100% |
+--------+--------+--------+--------+--------+--------+--------+------+

Note: 1. 2005 is an estimate.

b\. Salt and Pepper

The salt and pepper market in Korea is a small one for the United
States. In 2004, the United States exported \$427 thousand to Korea, a
drop of \$320 thousand from the previous year. A large factor in this
decrease is the comparative advantage that China and Malaysia have in
the pricing of their salt and pepper exports. Malaysia has continued to
increase their market share on a steady basis. In 2005, it is estimated
that the United States, through efforts to increase the quality of
product, will gain a little of the market share back and imports by
Korea will increase to \$529 thousand.

#### Table 11. 2004 Market Share for Imported Salt and Pepper

![](media/image6.wmf)

In 2004, there was a 41 percent increase in the importation of salt by
Korea because of a drop in domestic salt production, as it was
determined that local production could not meet the demand. China
dominated this increase with their market value increasing 43 percent
from the previous year. Imports from China were valued at \$4.3 million
in 2004, while the United States imported \$62 thousand. In 2005, it is
estimated that China will continue to further the gap with a 31 percent
increase and a value of \$6.2 million while the United States increases
their market value by 33 percent to \$93 thousand.

The crushed/ground black pepper market is steadily growing. The United
States has two competitors for this market in Korea: Malaysia and
Singapore. In 2004, the U.S. experienced a decrease in its market share
of 46 percent to a value of \$333 thousand, but it is estimated that in
2005 it will increase 24 percent to a value of \$436 thousand and regain
a larger portion of the market. The market share decrease was a direct
result of U.S. crushed/ground black pepper price being higher than that
of other imported countries. In 2005, it is estimated that the United
States will provide a more price competitive product. While in 2004
Malaysia and Singapore maintained 30 percent and 14 percent of the
market share respectably, it is estimated that in 2005 the market share
for Malaysia will decrease to 12 percent and Singapore's market share
will increase to 18 percent. Quality of crushed/ground black pepper is
the determining factor in this shift of market share.

The market for whole black pepper is dominated by Malaysia, as Koreans
perceive the quality to be higher. In 2004, imports from the United
States represented 1 percent of the market with a value of \$32
thousand, while those from Malaysia represented 68 percent and a value
of \$3.7 million. It is estimated that in 2005 the market share gap will
remain consistent with U.S. imports valued at \$22 thousand and Malaysia
imports valued at \$4.2 million.

c\. Pickles and Olives

The Korean market for pickles and olives remained relatively steady over
the past five years. In 2004, the total market in Korea was \$11
million, while it is estimated to drop to \$10.7 million in 2005.
Imports from the United States have been on a downward slope over the
past five years, and it is estimated that this will continue. These
decreases are due to a number of factors, of which the largest are
changes in consumer taste preferences and an increasing number of
imported products being finished and packaged locally. With a higher
standard of living being adopted among Koreans, consumers are looking
for a pickle that has a different, more distinct flavor than the typical
sweet pickle of the past.

**Table 12. 2004 Market Share for Imported Pickles and Olives**

![](media/image7.wmf)

Many Korean consumers are looking for pickle products with new flavors.
Pickles with dill, sour, and hot flavors are becoming increasingly
popular. Prepared products that are a mixture of vegetables, such as
cucumber, pepper, tomato and onion, are also appealing to the Korean
consumer market.

**Table 13. 2004 Market Share for Imported Pickles**

**(Cucumber/Gherkins) and Relish (HS2001.10.0000)**

![](media/image8.wmf)

The pickle market is separated into two categories of pickles. There are
cucumber/gherkin pickles and relish in one category and hot chili pepper
and jalapeno pepper in the other.

In 2004, Korea imported \$4.7 million of its total \$5.4 million
cucumber/gherkin imports from the United States. It is estimated that
total imports of cucumbers/gherkins are only expected to be \$4.8
million in 2005. The market for these types of pickles is expected to
continue to decrease as Koreans are looking for products that are less
sweet. In addition, imports of prepared cucumbers are increasing. Korean
importers are buying these cucumbers in brine and finishing the product
locally. This allows the consumers to get a product with a unique local
flavor.

#### Table 14. Imports of Pickles (Cucumbers/Gherkins) & Relish 

**(HS 2001.10.0000)**

**Unit: Value US \$1000**

+--------+--------+--------+--------+--------+--------+--------+-------+
| #      | **     | **     | **     | **     | **     | **200  | *     |
|        | 2000** | 2001** | 2002** | 2003** | 2004** | 5^1^** | *2004 |
| #      |        |        |        |        |        |        | M     |
|        |        |        |        |        |        |        | arket |
|        |        |        |        |        |        |        | Sh    |
|        |        |        |        |        |        |        | are** |
+--------+--------+--------+--------+--------+--------+--------+-------+
| U.S.   | 6803   | 6145   | 5671   | 4931   | 4701   | 4235   | 86%   |
+--------+--------+--------+--------+--------+--------+--------+-------+
| Total  | 6980   | 6437   | 5990   | 5616   | 5491   | 4846   | 100%  |
+--------+--------+--------+--------+--------+--------+--------+-------+

Note: 1. 2005 is an estimate.

On the other hand, the hot chili pepper and jalapeno pepper pickle
market is on an upward trend. Last year, Korean total imports were \$3.9
million. The U.S. held a market share of 24 percent. In 2005, it is
estimated that the United States will have a market share of 20 percent.
This decrease is the result of China's ability to produce a cheaper
product with a greater number of flavor varieties.

**Table 15. Imports of Pickles (Hot Chili Pepper and Jalapeno Pepper)**

**(HS 2001.90.9090)**

![](media/image9.wmf)

The olive market in Korea is primarily dominated by Spain controlling 81
percent of the market in 2004 with a value of \$1.3 million. In 2004,
the United States had a market share of 5 percent with a value of \$73
thousand. It is estimated in 2005 that the total market will decrease by
\$261 thousand, however the market shares of both Spain and the U.S.
will remain constant. This decrease of 16 percent is caused by a high
retail price and the availability of many other similar preserved
products on the market.

**Table 16. 2004 Market Share for Imported Preserved Olives**

**(HS 2005.70.0000)**

![](media/image10.wmf)

d\. Syrups and Honey

United States imports of syrup and honey to Korea has increased over the
past five years. In 2004, Korea imported \$1 million from the U.S., 31
percent of the market. The major competitors to the United States are
China and Canada. In 2004, Chinese imports were valued at \$870
thousand, while those from Canada had a value of \$636 thousand. In
2005, it is estimated that both the United States and Canada will lose
market share to China. Imports of syrup and honey from China are
estimated to be \$1.7 million, while imports from the U.S. imports are
estimated at \$680 thousand, and imports from Canada are estimated at
\$453 thousand. This will result in a market share loss of 11 percent
for the United States and a market share loss of 5 percent for Canada.
China is becoming increasingly competitive in the syrup and honey market
because of their ability to produce cheaper products of a similar
quality to that of the United States.

#### Table 17. 2004 Market Share for Imported Syrups and Honey

![](media/image11.wmf)

Although the United States is not a major competitor in the caramel
syrup market as China and Japan together represented 73 percent of the
total market in 2004, the market is growing for the United States. 2004
Korean imports from the U.S. increased 18 percent and it is estimated
that they will increase another 47 percent in 2005. The 2005 estimations
show only an 8 percent growth for China and a decline for Japan. The
ability of the U.S. to produce a price competitive product is likely to
be the reason for China's gain in market share.

**Table 18. Imports of Syrup -- Caramel (HS 1702.90.2000)**

**Unit: Value US \$1000**

  --------- ---------- ---------- ---------- ---------- ---------- ------------- ---------
            **2000**   **2001**   **2002**   **2003**   **2004**   **2005^1^**   **2004
                                                                                 Market
                                                                                 Share**

  China     357        390        429        309        266        289           50%

  Japan     242        186        67         168        123        103           23%

  U.S.      63         13         55         40         49         92            9%

  Germany   0          0          0          17         89         39            17%

  Total     694        630        626        574        535        532           100%
  --------- ---------- ---------- ---------- ---------- ---------- ------------- ---------

Note: 1. 2005 is an estimate.

In 2004, Korea imported a total of \$1 million of maple syrup from the
world. Of that, imports from the U.S. were valued at \$384 thousand, a
59 percent increase from the previous year. The largest competitor for
the U.S. is Canada, and 2004 imports were valued at \$622 thousand, an
increase of 36 percent from the previous year. The trend of "well-being"
and healthy eating is a major cause of this market shift. As Koreans are
eating foods that are less sweet, they will continue to veer away from
these sweet products.

**Table 19. 2004 Market Share for Imported Maple Syrup**

**(HS 1702.20.2000)**

![](media/image12.wmf)

Imports of natural honey to Korea come mostly from China and the United
States. In 2004, U.S. imports were valued at \$620 thousand, an increase
of 44 percent from the previous year, while imports from China were
valued at \$604 thousand, an increase of 37 percent from the previous
year. In 2005, it is estimated that the market shares of both China and
the United States will remain relatively constant to that of 2004. It is
also estimated that in 2005 the U.S. will increase its market value to
\$653 thousand and China will increase its market value to \$632
thousand. The use of honey in Korea as a natural flavoring to foods has
increased the market demand.

#### Table 20. 2004 Market Share for Imported Natural Honey 

**(HS 0409.00.0000)**

![](media/image13.wmf)

# SECTION III. COSTS AND PRICES

1\. Tariffs and Taxes

**Table 21.** **Tariffs for Condiments and Salad Dressings**

  -------------- ---------------------------------------------------- ------------
  **HS Code**    **Condiment/Salad Dressing Description**             **Tariff**

  0409.00.0000   Natural Honey                                        20%

  0904.11.0000   Black Pepper -- Whole                                8%

  0904.12.0000   Black Pepper -- Ground/Crushed                       8%

  1702.20.2000   Syrup -- Maple                                       8%

  1702.90.2000   Syrup -- Caramel                                     8%

  2001.10.0000   Pickles (Cucumber/Gherkins), Relish                  30%

  2001.90.9090   Pickles (Hot Chili Peppers/Jalapeno Peppers)         30%

  2005.70.0000   Prepared or Preserved Olives                         20%

  2103.10.0000   Soy Sauce                                            8%

  2103.20.1000   Ketchup                                              8%

  2103.30.2000   Prepared Mustard                                     8%

  2103.90.9010   Mayonnaise                                           8%

  2103.90.9090   BBQ Sauce, Hot Sauces, Fish Sauce, Salad Dressings,  8%[^1]
                 Steak Sauce, Worcestershire Sauce                    

  2501.00.9010   Edible Salt                                          8%
  -------------- ---------------------------------------------------- ------------

Hot Sauces: tariff rate is 8 percent when product contains less than 20
percent pepper ingredient. Tariff rate is 45 percent when product
contains more than 20 percent pepper ingredient.

Source: Tariff Schedules of Korea 2005 by Korea Customs & Trade
Institute

A Value Added Tax (VAT) is charged on all imported goods and the current
rate is 10 percent of the dutiable value. Dutiable value is CIF value
(Customs value) plus all the other duties and taxes (Customs duty,
Special Excise tax, Liquor Tax, Transportation tax, Tobacco tax,
Education tax and etc).

2\. Costs in Securing Retail Store Shelf Space

The amount of slotting fee that a retail store would charge for a new
product varies depending on the marketing potential of the product.
Local retail stores are eager to add new products to their shelves as
they strive to meet the consumers' demand for new tastes, but at the
same time are very concerned about carrying something new to the market.
That is why local retailers often ask for promotional support instead of
slotting fees for new products. Promotional support includes in-store
advertisement, in-store free sampling, and other point of purchase sales
promotions such as sweepstakes, coupons, and games. Free sampling is the
most common promotion used, as it costs less and is easier to
administer. In-store promotions are highly recommended for launching new
products since consumers make buying decisions based on in-store
education and experience.

3\. Prices and Markups

The following table details retail prices for the major imported
condiments and salad dressings. These prices were obtained from local
Korean supermarkets.

#### Table 22. Retail Prices of Condiments and Salad Dressings

+--------------------------------------------+---------------+---------+
| ## Condiments & Salad Dressings            | **Price --**  | ###     |
|                                            |               |  Weight |
|                                            | **Korean      |         |
|                                            | Won**         | #       |
|                                            |               | ## ml/g |
+--------------------------------------------+---------------+---------+
| BBQ Sauce                                  | 2500-3200     | 250     |
+--------------------------------------------+---------------+---------+
| Black Pepper -- Ground/Crushed             | 1320-2040     | 50-65   |
+--------------------------------------------+---------------+---------+
| Black Pepper -- Whole                      | 20,000        | 250     |
+--------------------------------------------+---------------+---------+
| Edible Salt                                | 4400          | 200     |
+--------------------------------------------+---------------+---------+
| Fish Sauce                                 | 2000-3700     | 255     |
+--------------------------------------------+---------------+---------+
| Hot Sauce                                  | 4580          | 150     |
+--------------------------------------------+---------------+---------+
| Ketchup                                    | 1680-2280     | 740     |
+--------------------------------------------+---------------+---------+
| Mayonnaise                                 | 2400-2800     | 500     |
+--------------------------------------------+---------------+---------+
| Natural Honey                              | 7200-9500     | 500     |
+--------------------------------------------+---------------+---------+
| Pickles (Cucumber/Gherkins)                | 3800-9950     | 710     |
+--------------------------------------------+---------------+---------+
| Pickles (Hot Chili Pepper/Jalapeno Pepper) | 3600-4300     | 473     |
+--------------------------------------------+---------------+---------+
| Prepared Mustard                           | 1550          | 330     |
+--------------------------------------------+---------------+---------+
| Prepared or Preserved Olives -- Green      | 1600          | 300     |
|                                            |               |         |
| Black                                      | 1650          | 385     |
+--------------------------------------------+---------------+---------+
| Relish                                     | 2500          | 375     |
+--------------------------------------------+---------------+---------+
| Salad Dressings -- Vinaigrette             | 9500          | 237     |
+--------------------------------------------+---------------+---------+
| Salad Dressings -- Thousand Island         | 9800          | 236     |
+--------------------------------------------+---------------+---------+
| Salad Dressings -- Italian                 | 4450          | 300     |
+--------------------------------------------+---------------+---------+
| Salad Dressings -- French                  | 9000          | 300     |
+--------------------------------------------+---------------+---------+
| Soy Sauce                                  | 3220-6000     | 1000    |
+--------------------------------------------+---------------+---------+
| Steak Sauce                                | 2500-3200     | 250     |
+--------------------------------------------+---------------+---------+
| Syrup -- Caramel                           | 9900          | 250     |
+--------------------------------------------+---------------+---------+
| Syrup -- Maple                             | 8350          | 250     |
+--------------------------------------------+---------------+---------+
| Worcestershire Sauce                       | 2800          | 355     |
+--------------------------------------------+---------------+---------+

Source: ATO Seoul Department Store/Hypermarket Survey

# 

# SECTION IV. MARKET ACCESS

There are many food standards and regulations. This section describes
only the basic guidelines of Korean import requirements. For details on
Korean import regulation, see the Food and Agricultural Import
Regulations and Standards (FAIRS) Reports (KS5037), dated July 31, 2005,
available on the USDA/Foreign Agricultural Service (FAS) website at
"http://www.fas.usda.gov/scriptsw/attacherep/default.asp"

**Food additive restrictions:**

U.S. exporters should be aware that there are some restrictions on food
additives in products imported to Korea. These restrictions should be
researched thoroughly, as they can prevent products from being allowed
for Korean consumption.

The "Food Additive Code," monitored by the Korea Food and Drug
Administration, guides the use of all additives in foods in Korea. As of
July 2004, Korea had a positive list of 615 approved food additives.
Food additives are grouped into three categories: (a) chemical
synthetics, (b) natural additives, and (c) mixture substances.

Most additives and/or preservatives are approved and tolerance levels
are established on a product-by-product basis in Korea. This creates
difficulties as tolerances can vary from product to product. Getting a
new additive added to the approved list can be time consuming and
troublesome. Even though there may be an established CODEX standard for
a given food additive, if that food additive is not registered in the
Korean Food Additive Code, or even if registered but usage in a certain
food product is not specified, use of that food additive in the given
food product is prohibited. This means that only food additives
registered in the Korean Food Additive Code are allowed for use in food
products, in accordance with the usage standards specified in the Food
Additive Code.

The office responsible for approving food additives in KFDA is as
follows:

**Food Additives Evaluation Department**

Korea Food & Drug Administration

\# 5 Nokbeon-dong, Eunpyung-ku

Seoul, Korea 122-704

Phone: 82-2-380-1687; Fax: 82-2-382-4892

**Label requirements:**

Imported condiments are required by law to have a Korean language label.
Korean language stickers may be applied in lieu of a Korean language
label. The sticker should not be easily removable and shouldn't cover
the original labeling. Labels should have the following inscriptions
printed in letters large enough to be readily legible:

\(1\) Product name. The product name should be identical to the product
name declared to the licensing/inspection authority.

\(2\) Product type. This is mandatory for specially designated products,
such as teas, health supplements, etc.

\(3\) Importer\'s name and address, and the address where products may
be returned or exchanged in the event of defects.

\(4\) Manufacture date (month and year). This is mandatory for specially
designated products, such as lunch boxes, sugar, liquor, and salt. For
liquors, a manufacture number (lot number) or bottling date can
substitute for the manufacture date.

\(5\) Shelf life. Food product labels should indicate the
manufacturer-determined shelf life. If various kinds of products are
packaged together, the shelf life expiration date of the product with
the shortest life should be noted on the label.

\(6\) Contents. Weight, volume or number of pieces should be indicated.
If the number of pieces is shown, the weight or volume must be indicated
in parentheses.

\(7\) Ingredient names and content. Effective September 7, 2006, the
names of all ingredients must be included on food labels. Artificially
added purified water and certain other ingredients, amounting to less
than five percent of the ingredients, will be excluded from the
requirement. Ingredient names should be listed in order of predominance
by weight; that is, the ingredient that weighs the most is listed first,
and the ingredient that weighs the least is listed last. Food additives
must also be listed on the label by full name, abbreviated name, or
purpose (e.g. Ferric Citrate, FECitrate, or nutrient fortified
substance). Food items known to be food allergens must be indicated on
the label even if they are added as part of a mix at minimal levels.
Food items considered as food allergens include eggs, milk, buckwheat,
peanuts, soybeans, wheat, mackerel, crab, pork, peaches and tomatoes.
Any food product containing one or more of the 11 items listed above as
a raw ingredient(s) must indicate so in Korean on the label.

\(8\) Nutrients. Only special nutritional foods, health supplements,
bread, noodles (cooked noodles, fried noodles, gelatinized dry noodles,
and improved cooked noodles), retort foods, products for which
nutritional labels are sought, and products for which a nutrient
emphasis mark is desired are currently subject to nutritional labeling.
However, in accordance with the March 2005 revision, nutritional
labeling requirements will be expanded to foods that children frequently
consume beginning in September 2006.

\(9\) Other items designated by the detailed labeling standards for
food. This includes cautions and standards for use or preservation
(e.g., drained weight for canned products, radiation-processed products,
etc.). The revision, dated July 2000, introduced the principal display
panel-labeling requirement, the labeling criteria for organic products,
etc., and removed the food category-labeling requirement for the
majority of food products. The principal display panel must contain the
product name, product type, and content information. If this is not
feasible, such information must be provided on a Korean language sticker
using a 12-point or larger font size.

Labeling standards, food codes, and import requirements can change
frequently in Korea. Your Korean importer will be the best resource for
current information on these requirements.

# SECTION V. KEY CONTACTS AND FURTHER INFORMATION

# U.S. Agricultural Trade Office

Telephone: (011-82-2) 397-4188

Fax: (011-82-2) 720-7921

Email: <atoseoul@usda.gov>

Website: [www.atoseoul.com](http://www.atoseoul.com/)

U.S. Mailing Address: Korean address:

U.S. Embassy Seoul U.S. Agricultural Trade Office

Unit 15550-ATO Room 303, Leema Bldg

APO, AP 96205-5550 146-1, Susong-dong, Chongro-ku

Seoul 110-755 Korea

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