Required Report - public distribution

**Date:** 9/25/2006

**GAIN Report Number:** AU6025

AU6025

**Austria**

**Exporter Guide**

**Annual**

**2006**

**Approved by:**

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

U.S. Embassy

**Prepared by:**

Dr. Roswitha Krautgartner

**Report Highlights:**

Austria\'s economic growth is estimated at 2.6% for 2006, representing
the highest growth rate since 2000. Austria has profited more than other
Eurozone countries from the accession of new European Union members in
2004, and its retail food sector grew by 7.5% from 2003 to 2006 to total
Euro 11.4 billion (\$ 14.1 billion). Health and wellness, convenience
and flavor diversification remain the main trends in food consumption.
Seafood, dried fruits, nuts, organics, wine, and gourmet foods offer the
best U.S. export opportunities.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Vienna \[AU1\]

\[AU\]

# 

**Table of Contents**

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

[Economic Situation and how it Affects Consumer Spending and Sales of
U.S. Products 3](#economic-situation)

[Key Demographic Developments and their Impact on Consumer Buying Habits
3](#key-demographic-developments)

[Size and Growth Rate for the Consumer Foods and Edible Fishery Product
Markets
3](#size-and-growth-rate-for-the-consumer-foods-and-edible-fishery-product-markets)

[General 3](#general)

[Organic Food 3](#organic-food)

[Packaged Food 3](#packaged-food)

[Ready Meals 3](#ready-meals)

[Sweet and Savory Snacks 3](#sweet-and-savory-snacks)

[Alcoholic Beverages 3](#alcoholic-beverages)

[Pet Food 3](#pet-food)

[Seafood 3](#seafood)

[Advantages and Challenges for U.S. Suppliers on the Austrian Market
3](#advantages-and-challenges-for-u.s.-suppliers-on-the-austrian-market)

[II. Exporter Business Tips 3](#ii.-exporter-business-tips)

[Local Business Customs 3](#local-business-customs)

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

[Food Standards and Regulations 3](#food-standards-and-regulations)

[General Import and Inspection Procedures
3](#general-import-and-inspection-procedures)

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

[Domestic Industry Capacity versus availability of Foreign-Supplied
Products
3](#domestic-industry-capacity-versus-availability-of-foreign-supplied-products)

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

[Trends in Tourism Sales, Holiday Gift Sales, and Internet Sales
3](#trends-in-tourism-sales-holiday-gift-sales-and-internet-sales)

[IV. Best High-Value Product Prospects
3](#iv.-best-high-value-product-prospects)

[V. Key Contacts and Further Information
3](#v.-key-contacts-and-further-information)

[Appendix I 3](#appendix-i)

[Table A. Key Trade and Demographic Information
3](#table-a.-key-trade-and-demographic-information)

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

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

# I. Market Overview

## Economic Situation 

According to the Austrian Institute of Economic Research, Austrian
economic growth is estimated to be 2.6% in 2006, which is the highest
rate since the year 2000. The growth was driven primarily by investment
in equipment and by net exports. Notwithstanding a significant
improvement in the labor market, private consumption failed to
accelerate, despite the boost to net incomes from the tax reform. The
jump in oil prices will barely affect wage increases. This holds back
inflation, but also real income gains. In 2007, effects from Germany
will turn negative, slowing GDP growth in Austria to 2.1%.

Weather related softness of investment in construction in the first
quarter of 2006 was observed, while investment in equipment has now
convincingly overcome the restraint observed in 2005 due to the ending
of the investment subsidy at the end of 2004. Private consumption growth
has remained surprisingly weak so far, but there should be some
acceleration in the second half of 2006 due to the improved labor-market
situation.

Austria's ability to profit more than other Eurozone countries after the
accession of the new European Union members continues to have an
underlying supportive effect on growth. The Euro is expected to trend
higher against the U.S. Dollar over the coming months, which would
obviously be detrimental to Eurozone competitiveness and growth
prospects. Global Insight forecasts the Euro to rise to US\$1.35 by the
end of 2006 and then climb above US\$1.40 in 2007 as the dollar is
pressured by less favorable interest-rate developments.

#### Food Expenditures

In 2003 (latest available statistics), total Austrian consumer
expenditures for food and non-alcoholic beverages amounted to Euro 16.1
billion (\$ 19.96 billion). This was up 1.9 % compared to 2002. In the
same period, total expenditures for alcoholic beverages and tobacco rose
by 2.8% to Euro 3.7 billion (\$ 4.6 billion).

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

[]{.mark}

## Key Demographic Developments 

Austria has a population of 8.2 million. The number of single households
and childless double-working-partnerships is rising. While at the
beginning of the sixties there were not even a half million single
households in Austria, in 2004 there were 1.16 million, which
corresponds to 34 % of all households. The number of larger households
has not risen as strongly. About 2.36 people belonged to an average
household in 2004.

[]{.mark}

The rise in single households boosts demand for convenience products and
for foods eaten outside the home. Singles are not only young urban
working people but also retired persons. The rising number of elderly
people, many of whom have significant disposable income, creates
additional demand for health and dietetic foods. In 2004, 21.9 % of the
total population was over 60 years old.

[]{.mark}

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

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

[]{.mark}

Because of environmental concerns, increasing health awareness, a very
negative perspective of Austrian consumers towards biotech products,
organically produced food is expected to grow steadily. Within the last
three years, the organic market share in retailing increased from 3 % to
5 % in 2005. Among EU member countries, Austria has the highest
percentage of organic farms.

[]{.mark}

[]{.mark}

## Size and Growth Rate for the Consumer Foods and Edible Fishery Product Markets

[]{.mark}

### General

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The retail food sector grew by 7.5% in the 2003 to 2006 period and
totaled Euro 11.4 billion (\$ 14.1 billion), mainly due to the expansion
of discounters like Hofer, Mondo and Lidl. The grocery sector is the
biggest outlet type in the retail sector and is expected to show a
revenue growth of 10.3% in the 2003 to 2008 period.

[]{.mark}

Table 1: Retail Sales in Austria

![](media/image2.wmf)

Source: Euromonitor, 2006 estimate, 2007 and 2008 forecast

Fresh meat is the most heavily consumed food type in Austria, mainly due
to the high volume of pork eaten. This accounted for the bulk of volume
sales throughout the 1999 to 2004 review period, with beef experiencing
some decline in per capita consumption levels. Lamb and other meats only
had a comparatively marginal presence. Consumption of poultry increased
over the review period, echoing global trends, although it remains
overshadowed by pork. Due to cases of bird flu occurring in Europe and
Austria, consumption of poultry declined significantly at the end of
2005 and the beginning of 2006 but has fully recovered by mid-2006.

The increasing popularity of fruit in many developed countries was
similarly evident in Austria, in light of growing health concerns.
However, this did not extend to vegetables, perhaps surprisingly, where
consumption levels fluctuated over the review period. One vegetable type
-- potatoes -- continued to enjoy a major role in the Austrian diet
however, boosting sales of starchy roots accordingly.

Fresh fish and seafood saw little change in consumption levels over the
review period, perhaps the most at odds with the demand for convenience,
which has boosted growth in packaged food. Comparatively high levels of
preparation and cooking time for fish, coupled with limited availability
compared to fresh meat, are expected to continue to restrict demand. In
spite of this, the gradual increase in consumption during the latter
part of the review period is a testament to rising health concerns,
which have partially stimulated demand.

Table 2: Fresh/Unpackaged Food Consumption

![](media/image3.wmf)

Source: Euromonitor

### Organic Food

[]{.mark}

History, consumer acceptance, and government support have worked
together to transform organic foods in Austria from a niche market to a
market segment of considerable importance. Production, imports, and
exports are still growing, and the Austrian government is supporting
programs designed to increase organic consumption. Supermarket chains,
all of which have their own organic labels, dominate the Austrian market
for organic products. In 1994, the REWE Group Austria started with the
organic brand name "ja natuerlich", which is estimated to account for
some two thirds of all organic food sales in Austria. Several
supermarket chains followed this example, in particular Spar, the second
largest grocery retailer, is also expanding its organic "Natur Pur"
range. Perhaps unique to Austria, food retailers focus their marketing
resources on organic foods in an effort to shape the overall image of
the store. Organic foods are promoted in an effort to build consumer
confidence in all of the food products sold by the chain.

[]{.mark}

The importance of organic food continued to increase in 2005. Sales of
organic food experienced a boost in 2002 as discounter Hofer launched
"Natur Aktiv". "Natur Aktiv" continues a trend of private label ranges
being the main movers of the organic market in Austria. Also the
Rewe-owned discounter chain PennyMarkt is introduced its own organic
brand in 2005. Fresh produce, dairy and bakery products are the sectors
with strong organic presence. According to "Bio Austria", which is by
far the largest association representing organic farmers, some 60% of
its production is sold via private labels, some 20% is sold directly at
the farm, and 20% is exported. In 2004, total sales of organic fresh
produce in Austria were estimated at some Euro 159.8 million (\$ 196.3
million). Organic food sales correspond to about 5% of total Austrian
food sales.

[]{.mark}

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

###  

### Packaged Food

Current value growth of packaged food is expected to increase by 2% in
2005, following a 1% increase in 2004. An increase in current value
terms is expected in almost all sectors; meal replacement products will
be the only sector expected to witness a decline, and bakery products
expected to stagnate. In volume terms, meal replacement products are
again expected to see a decline in growth, bakery products are expected
to suffer a slight decline and both canned/preserved food and spreads
are expected to stagnate. In line with the review period, the only
sector expected to enjoy a double-digit percentage growth rate is
noodles. However, noodles will only account for less than 0.1% of
packaged food value sales in 2005.

Bakery products and dairy products are the two largest sectors in terms
of value sales, followed by confectionery. Together, these sectors are
expected to account for just over 59% of value sales in 2005, compared
to 60% in 2004. These three largest sectors are predicted to achieve
lower current value growth rates than the packaged food market as a
whole in 2005, due to saturation and the absence of new trends and
innovations.

Health and wellness, convenience and flavor diversification remain the
three main trends in packaged food, and almost all innovations relate to
one of these factors, or a combination of them. For example, in the area
of health and wellness, a major development in confectionery in 2005 is
expected to be an increase in the share of sugar-free products. Low-fat
products are also expected to make further gains in dairy products, as
well as in other sectors, such as savory snacks and ready meals.

Chilled processed food and ready meals are expected to record the
strongest growth rates in absolute terms in 2005. To a large extent,
this will be due to the fact that both sectors meet the consumer demand
for convenience. In addition, chilled processed food taps into the
growing demand for fresh food, while ready meal products offer consumers
a large choice of different flavors and tastes, including international
dishes that they would not be able to prepare themselves.

Growing consumer demand for a greater choice in flavors is a phenomenon
in almost all sectors, and includes both greater demand for
international flavors as well as regional or local specialties. The
growing number of limited or seasonal editions of existing brands is a
further illustration of this trend.

Industry sources expect a further increase in the share of private label
products in 2005, as consumers remain price-sensitive. In addition,
there is a growing conviction among many consumers that in many cases,
private label products are not inferior in quality to branded products,
which could cement their position even if consumer confidence increases.
As a result, brand building will become more important than ever and
many manufacturers have announced, or are expected to announce, an
increase in their advertising budgets.

Sales of packaged food are expected to amount to more than EUR 6.3
billion in 2005, representing an increase of 2% in current value terms
on 2004. This is slightly above the 1% increase recorded in 2004.

Table 3: Packaged Food Sales

![](media/image4.wmf)

Source: Euromonitor

### Ready Meals

Sales of ready meals saw a healthy growth of almost 6.7 % in current
value in 2005 over the previous year. With volume sales seeing a faster
growth than value, unit prices for ready meals slightly went down. This
development is due to the increasing penetration of private label
products in ready meals.

Ready meals are becoming more popular, as the number of
single-households increases and a higher variety of products are
offered. Frozen and chilled ready meals benefit from their popularity
and a good reputation when it comes to freshness.

Hardly any Austrians, especially single consumers, can spare the time
for the preparation of an extended meal. Therefore, ready meals are an
easy solution for the problem of increasingly hectic lifestyles. Short
preparation time, long storage life, and a high degree of convenience
were the advantages of ready meals named by Austrian consumers during a
survey of the Gallup Institute. However, ready meals are also viewed as
unhealthy and to contain unhealthy preservatives. Also, consumers stated
that ready meals are too expensive for households with more than one or
two people.

Taste is reportedly the most important factor for repurchase. The closer
the quality of ready meals to home-cooked meals, the higher the
likelihood for a repurchase.

Table 4: Retail Sales of Ready Meals

![](media/image5.wmf)

Source: Euromonitor

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### Sweet and Savory Snacks

Although there were some major innovations in 2004 and 2005, these are
expected to result in higher growth rates only after 2006.

The main innovations were a stand-alone \"Party-pack\" and oven-baked
potato chips, which contain 65% less fat than normal potato chips.

These innovations are believed to have helped bring about current value
growth rates of almost 2% in 2004, although current value growth in 2005
is expected to be only just over 1%. The clever innovation and the
marketing activities of the leading players in the last two years are
expected to pay off and to be reflected in growth rates of almost 2%
again in the next two years.

The reason for the slowed impact of innovations is that the sweet and
savory snacks sector is quite saturated and mature, with a small number
of players, the innovations of which have an impact on the whole sector
and are able to influence sales to a high degree.

Innovations like new packaging formats are meant to strengthen brand
awareness among consumers and to draw a clear line between branded and
private label products. The packaging signifies higher quality and the
premium character of the product. According to trade sources, consumers
are willing to pay more and to stick to premium brands if the advantages
of a particular brand are clearly stated on the packaging or via other
promotional tools.

The general wellness trend and the growing consumer interest in
healthier nutrition have finally hit the sweet and savoury snacks sector
and companies therefore now pay additional attention to this.

Table 5: Retail Sales of Sweet and Savory Snacks

![](media/image6.wmf)

Source: Euromonitor

### Alcoholic Beverages

Following a decline in both volume and current value growth in 2004,
alcoholic drinks recorded a slight increase in current value terms in
2005 with value sales reaching EUR 6.5 billion. In contrast, volume
sales of alcoholic drinks dropped slightly to 1.2 billion liters. This
is due to the dramatic decline of spirits-based FABs (Flavored Alcoholic
Beverages) and the saturation of beer. FABs, and in particular
spirits-based FABs, could not reverse the poor performance of 2004 and
in 2005 recorded a further decline of 26% in volume terms.

Spirits showed the most potential in 2005 with current value growth of
2% and volume growth of 1%. The main reason behind this growth was the
decline in spirits-based FABs, which in turn has led to an increase in
growth of spirits. Furthermore, brand extensions like new, flavored
vodkas and marketing activities in spirits affected sales positively.
Vodka, bitters, rum and premium whiskies helped the sector to grow,
whilst growth of brandy and cognac continued to decline. The classic
spirits drink -- vodka -- boosted the sector thanks to its usage in long
drinks and cocktails. Alongside vodka, bitters also performed well due
to the various uses of the product and the wide target group. Brandy and
cognac was unable to reverse its growth decline of the previous year and
recorded a further decline of 2.5% in volume terms. This was mainly due
to a lack of new consumers and an unfashionable image.

The consumption of beer declined slightly to a per capita consumption of
106 liters due to the unsettled summer weather of 2005 and a slump in
the Austrian tourist industry. The majority of Austrian beer -- 96% --
is lager. The remaining 4% are niche products such as dark beer etc. Due
to the demand for variety, niche products show the most potential.
Furthermore, imported beer benefited from this demand as well, although
it represents a marginal volume of less than 43 million liters. As over
the review period, non/low-alcohol beer continued to lose share due to
the low acceptance of the product type and a limited consumer group.

Table 6: Sales of Alcoholic Beverages

![](media/image7.wmf)

Source: Euromonitor

In 2005, consumer expenditure on alcoholic drinks reached EUR 1.4
billion. This expenditure is similar to the off-trade value of EUR 1.6
billion as Statistic Austria covers off-trade expenditure only. In
addition, the off-trade value of EUR 1.6 billion is slightly higher as
direct sellers are difficult to cover and around one third of wine is
sold through this channel.

The per capita consumption of beer (106 liters) and wine (33 liters)
accounts for the majority of consumer expenditure on alcohol, followed
by FABs (4 liters) and spirits (3 liters). In spite of a decrease in the
per capita consumption of beer, FABs and wine, consumer expenditure
increased. This is due to rising prices from emerging premium brands, as
well as continual price increases in the on-trade channel.

[]{.mark}

Table 7: Retail Consumer Expenditure on Alcoholic Dinks

![](media/image8.wmf)

Source: Euromonitor

Following industry lobbying, the Sektsteuer, which was on domestic
products only, as opposed to imported sparkling wines like frizzante,
was temporarily reduced to 0% on May 1, 2005. Apart from VAT there is
currently no other tax on wine, regardless of whether it is still,
fortified or sparkling wine. For the first time in 2005, sekt and
frizzante competed on a similar price level. A huge number of
manufacturers believe that many consumers preferred frizzante in
previous years only because of its lower price.

In spite of the reduction in beer tax in 2003, from EUR 24.96 per
hectoliter to EUR 24.00, Austrian taxation is still two and a half times
higher than that of Germany. Therefore, Austrian brewers have demanded a
further reduction so that the tax is the same as it is in Germany in
order for Austrian brewers to be more competitive.

In Austria the tax on spirits has remained at EUR 10 per liter of 100%
pure alcohol since September 2000. Furthermore VAT at the usual level of
20% has to be added.

[]{.mark}

[]{.mark}

### Pet Food

Sales of pet food and pet care products decreased in current value terms
in 2005, which was not the case in 2004. The main reason for this was
the negative development of large wet cat food. Overall, cat food showed
total value sales going down by 2%, whilst dog food, despite significant
price increases, faced a smaller value decline of 1%. In 2005, dry cat
food was marginally more dynamic in cat food, with the success of
Nestlé's Purina ONE brand being a major contributory factor.

The trend in Europe has included a move from wet dog and cat food to dry
food. Dry dog food continued to grow at the expense of wet, as it is
generally perceived as healthier and more convenient. Convenience was
also the reason behind the major trend of moving from cans to portion
pouch packaging within cat food.

Austrians' spending on their pets is quite high, and the market is
generally mature and saturated. The high penetration of dog food has
pushed manufacturers into dog treats, which accounted for around 34% of
dog food value sales in 2005.

In 2005, value sales of dry dog and cat food increased by 1%, whereas
wet dog and cat food, still accounting for the majority of sales, faced
a decline of over 3% in value. One reason for this performance is the
fact that cheaper private label products are predominately present in
wet dog and cat food.

Table 8: Pet Population

![](media/image9.wmf)

Source: Euromonitor

Table 9: Retail Sales of Pet Food and Pet Care Products

![](media/image10.wmf)

Source: Euromonitor

### Seafood

Sales of frozen and chilled fish and seafood products are predicted to
see growth rates of over 3% in both value and volume and to further
become a part of Austrians' daily eating habits. It is widely known that
fish is a very healthy alternative to meat, as it contains important
vitamins and has a low content of fat and cholesterol. As more Austrians
have to battle with their weight and increased cholesterol levels, fish
and other low-fat food will benefit from this trend toward healthier
nutrition. Overall domestic consumption of fish and seafood products
increased by 11.1 % in 2005 compared to the previous year.

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

### 

### 

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

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

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

  Urban population growing           Reservations towards products with
                                     chemical food additives

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

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

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

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

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

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

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

  Certain fruits, vegetables not     
  produced by domestic agriculture   

  Undeveloped niche market for       
  certain game meats                 

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

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

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# II. Exporter Business Tips

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## Local Business Customs

[]{.mark}

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

## General Consumer Tastes and Preferences 

[]{.mark}

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

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

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

[]{.mark}

[]{.mark}

## Food Standards and Regulations 

[]{.mark}

With regards to foods: See Food and Agricultural Import Regulations and
Standards report AU6019 (this may be found at: )

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

[]{.mark}

## General Import and Inspection Procedures

[]{.mark}

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

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

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

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

# 

# III. Market Sector Structure and Trends

[]{.mark}

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

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

[]{.mark}

[]{.mark}

## Domestic Industry Capacity versus availability of Foreign-Supplied Products

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

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

## Trends in Promotional/Marketing Strategies and Tactics

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

[]{.mark}

## Trends in Tourism Sales, Holiday Gift Sales, and Internet Sales

The tourism and recreational sector is an important is an important
sector to the Austrian economy. In 2005 the direct value added share of
tourism in GDP in Austria amounted to 9.8 %. In 2005, 119 million
overnight stays by tourists were logged. The major share of tourists
comes from Germany (about 52 million), followed by Netherlands (8,5
million). The main tourist areas are the provinces Styria and Salzburg,
followed by Carinthia.

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

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# IV. Best High-Value Product Prospects

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

[]{.mark}

Alaska Salmon

Catfish

Lobster

Shrimp

Pecans (conventional and organic)

Walnuts (conventional and organic)

Pistachios (conventional and organic)

Almonds (conventional and organic)

Dried cranberries (conventional and organic)

Other dried fruits (conventional and organic)

Cranberry juice

Wine

Tobacco

Pet food (conventional and organic)

Beef, non-hormone treated

# V. Key Contacts and Further Information

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American Embassy

Office of Agricultural Affairs

Boltzmanngasse 16

A-1090 Wien

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

Fax: + 43 (1 ) 310 8208

e mail: agvienna@usda.gov

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

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Bundesministerium fuer Wirtschaft und Arbeit

(Federal Ministry for Economic Affairs)

Abteilung II/11

(Division II/11)

Stubenring 1

A-1011 Wien

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

Fax: + 43 (1 ) 715 96 51

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

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Bundesministerium fuer Land- und Forstwirschaft, Umwelt und
Wasserwirtschaft

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

Abteilung III A 2

(Division III A 2)

Stubenring 1

A-1011 Wien

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

Fax: + 43 (1 )71100 2937

Website:http://www.lebensministerium.at

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Agrarmarkt Austria (AMA)

(Agricultural Market Austria)

Dresdnerstr. 70

A-1200 Wien

Phone: + 43 (1 ) 33 151 0

Fax: + 43 (1 ) 33 151 399

Website: http://www.ama.at

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Austrian Economic Chamber

Wiedner Hauptstr. 63

A-1045 Wien

Phone: + 43 (1 ) 501 050

Fax: + 43 (1 ) 502 06 250

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

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Bundesanstalt fuer Lebensmitteluntersuchung und -Forschung

Kinderspitalg. 15

A-1090 Wien, Austria

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

Fax: + 43 (1) 404 90 9278

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

Bundesanstalt fuer Lebensmitteluntersuchung

Burgerstr. 47

A-4020 Linz, Austria

Phone: + 43 (732) 77 90 71

Fax: + 43 (732) 77 90 71 15

Bundesanstalt fuer Lebensmitteluntersuchung

Zweigstelle Salzburg

Innsbrucker Bundesstraße 47

A-5020 Salzburg, Austria

Phone: + 43 (662) 833357 - 0

Fax: + 43 (662) 833357 - 100

Bundesanstalt fuer Lebensmitteluntersuchung

Beethovenstr. 8

A-8010 Graz, Austria

Phone: + 43 (316) 32 75 88

Fax: +43 (316) 32 75 88 396

Bundesanstalt fuer Lebensmitteluntersuchung

Technikerstr. 70

A-6020 Innsbruck, Austria

Phone: + 43 (512) 22 440

Fax: + 43 (512) 22 440 15

Lebensmitteluntersuchungsanstalt der Stadt Wien

Hennebergg. 3

A-1030 Wien, Austria

Phone: + 43 (1) 795 14 97955

Fax: + 43 (1) 79514 99 97955

Oesterreichische Agentur fuer Gesundheit und Ernaehrungssicherheit

Spargelfeldstrasse 191

Postfach 400

A-1226 Wien

Phone: + 43 (1) 73216 -- 0

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

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# Appendix I

## Table A. Key Trade and Demographic Information

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**AUSTRIA**

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

  Agricultural Imports From All Countries (\$Mil)/U.S. 2004       6,629 / 1%
  Market Share (%)                                                

  Consumer Food Imports From All Countries             2004       4,895 / 1%
  (\$Mil)/U.S. Market Share (%)                                   

  Edible Fishery Imports From All Countries            2004       237 / 0.17%
  (\$Mil)/U.S. Market Share (%)                                   

  Total Population (Millions)\*/Annual Growth Rate     2006       8.19 /
  (%)\*                                                           0.09%

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

  Number of Major Metropolitan Areas                   2006       1

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

  Per Capita Gross Domestic Product (U.S. Dollars)\*   2005       \$32,700

  Unemployment Rate (%)\*                              2005       5.2%

  Per Capita Food Expenditures (U.S. Dollars)\*\*      2004       \$2,734.9

  Percent of Female Population Employed\*\*            2004       42.0%

  Exchange Rate (US\$1 = 0.783 Euro)                   9/25/06    0.783
  ---------------------------------------------------- ---------- -----------

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

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

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######### []{.mark}

######### 

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

[]{.mark}

![](media/image11.wmf)

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

[]{.mark}

![](media/image12.wmf)

[]{.mark}

![](media/image13.wmf)

Source: United Nations Statistics Division