Required Report - public distribution

**Date:** 11/10/2004

**GAIN Report Number:** EG4026

EG4026

**Egypt**

**Retail Food Sector**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Asif Chaudhry

US Embassy

**Prepared by:**

Manal El Masry

**Report Highlights:**

Food sales are expected to grow as a result of vast improvements in
packaging, expansion of local supermarkets/hypermarkets, wider choice of
products and greater brand awareness. Large supermarket chains will
continue to expand their distribution network as they penetrate other
cities in Egypt.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Cairo \[EG1\]

\[EG\]

Table of Contents

[I. MARKET SUMMARY 3](#i.-market-summary)

[II. Road Map for Market Entry for U.S. Suppliers
5](#ii.-road-map-to-market-entry-for-u.s.-suppliers)

[A. SUPERMARKETS, HYPERMARKETS, AND DISCOUNTERS
5](#a.-supermarkets-hypermarkets-and-discounters)

[International Supermarkets and Hypermarkets
5](#international-supermarkets-and-hypermarkets)

[Local Supermarkets and Hypermarkets
5](#local-supermarkets-and-hypermarkets)

[Distribution Channels 7](#distribution-channels)

[B. CONVENIENCE STORES, GAS MARTS AND KIOSKS
9](#b.-convenience-stores-gas-marts-and-kiosks)

[C. "MOM AND POP" SMALL INDEPENDENT GROCERY STORES
10](#c.-mom-and-pop-small-independent-grocery-stores)

[III. COMPETITION 10](#iii.-competition)

[IV. BEST PRODUCT PROSPECTS 14](#iv.-best-product-prospects)

[V. POST CONTACT AND FURTHER INFORMATION
14](#v.-post-contact-and-further-information)

# I. MARKET SUMMARY

Retail sales have increased dramatically due to the expansion of
international chains, variety of products on offer, and an increase in
the level of income and brand advertising. The food retail sector in the
Egyptian market continues its rapid development, which began with the
opening of 18 Metro outlets, a local supermarket chain, and the presence
of a number of multi-national firms, such as Shoprite (South Africa),
Carrefour (France) and Monoprix (France) which soon to open.

**a) General Background**

-   Population of Egypt is around 69.2 million; the largest cities are
    Cairo (18 million) and Alexandria (12 million).

-   GDP (US dollars / FY 02/03): 76.6 billion

-   GDP per capita: \$1,470 in 2002

-   Inflation rate: 3.9 percent

-   Total ag. imports (2003): \$2.8 billion

-   Total U.S. ag. imports (2003): \$1.007 billion

-   Total U.S. consumer oriented products: \$41.2 million

-   U.S. ag. market share: 36%

**b) Highlights of recent trends that impact the retail:**

-   The devaluation of the Egyptian pound, which took place on January
    2003, has led to an increase in the price of imported products by 45
    percent and 30 percent for the local products. The devaluation had a
    strong impact on retail sales, however, all sectors began to recover
    by mid-2003 as consumers adjusted their expenditures to the new
    price levels.

-   The opening of City Stars early 2005 will be a dramatic boost to the
    Egyptian retailing industry. This center will be the largest
    shopping mall in the Middle East and North Africa, with a 14,000
    square meter hypermarket, three international hotels, 16-screen
    multiplex cinema, food court, living compound, the largest playing
    center for kids, a medical facility, and a world class business
    center with 70,000 square meters serving multinational and major
    local companies.

-   The introduction of hypermarkets and superstores is helping to
    re-shape the retail industry. Carrefour, which was the first
    international hypermarket to open in Egypt, succeeded in changing
    the way Egyptians shop, making it possible to buy everything under
    one roof with a weekly shopping list rather than visiting a series
    of small groceries, meat and produce vendors on a daily basis. This
    change has prompted some local retailers to reinvent themselves.

-   The Sinai and Red Sea region is currently Egypt's main tourist
    destination. It includes the cities of Hurghada, Sharm El Sheikh,
    Dahab, Soma Bay and Marsa Alam, all of which are heavily populated
    with tourists from all over the world. The influx of tourists in
    such areas has encouraged food retailers to open outlets in Hurghada
    and Sharm El Sheikh.

-   Egyptian consumers are beginning to expect cleanliness, quality, and
    wider variety of products. Consumers are currently asking for
    convenience, and shopping at supermarkets is becoming a leisure
    activity. Consumers depend less on neighborhood

grocery and convenience stores except for last minute, spur of the
moment food needs. In the suburbs and less developed areas of Egypt,
grocery and convenience stores still play an important role in the
retail business.

-   The average consumer spends about \$12 per basket. However, it
    varies from one area to another. Middle and upper-middle income
    shoppers are drawn to supermarket chains.

-   Home delivery service is becoming very popular among the large
    retailers. The objective of the delivery service is to create
    customer loyalty. None of the retailers charge extra fees for the
    delivery.

-   Internet retailing is a new trend that is currently booming. Many
    retailers are currently viewing the internet as the number one media
    for advertising their products. The current IT boom in Egypt is
    attributed to the government's significant achievement in launching
    the Free Internet Model (FIM) in early 2002. As a result, Internet
    access became very affordable for the average citizen. Many websites
    have been launched towards enhancing consumer expenditure, such as
    [www.waffar.com](http://www.waffar.com/) and
    [www.otlob.com](http://www.otlob.com/). Wafar.com displays all
    offers and promotions while otlob.com is the number one online
    source for home delivery.

-   Distribution/retail of alcoholic beverages is limited to a few
    authorized dealers only.

-   The United States of America, France, Germany, Italy, Switzerland,
    Greece, Holland, Denmark, and South Africa are the dominant
    suppliers of consumer-ready food products to Egypt.

-   The following tables illustrate retail sales as a percentage of GDP
    and consumer expenditure and advantages and challenges in this
    market:

###### TABLE 1: RETAIL SALES

  ---------------------------------------- ---------- ---------- ---------- ----------
  **EGYPT**                                **2000**   **2001**   **2002**   **2003**

  Retail sales as % of GDP                 26.1       26.4       26.6       25.9

  Retail sales as % of consumer            33.0       33.2       32.4       31.4
  expenditure                                                               

  **Source: Euromonitor from ONS Retail                                     
  Sales and CAPMAS**                                                        
  ---------------------------------------- ---------- ---------- ---------- ----------

TABLE 2: ADVANTAGES / CHALLENGES IN THE EGYPTIAN MARKET

+--------------------------------+-------------------------------------+
| **ADVANTAGES**                 | **CHALLENGES**                      |
+--------------------------------+-------------------------------------+
| Out of 69 million Egyptians,   | Lack of product availability and    |
| about 12 million can afford to | limited income.                     |
| purchase imported food         |                                     |
| products.                      | Egyptian import regulations and     |
|                                | labeling requirements are too       |
|                                | stringent.                          |
+--------------------------------+-------------------------------------+
| Products perceived as both     | Lack of U.S. supplier interest in   |
| western and new-to-market have | the Egyptian market.                |
| a wide appeal to Egyptians.    |                                     |
|                                | With the EU-Egypt Partnership       |
| U.S. products are perceived as | Agreement, import tariffs on most   |
| \"high quality.\"              | European products will be cut       |
|                                | substantially or eliminated over    |
|                                | the next 12-15 years. The agreement |
|                                | may lead to displacement of some    |
|                                | U.S. agricultural                   |
+--------------------------------+-------------------------------------+
| **ADVANTAGES**                 | **CHALLENGES**                      |
+--------------------------------+-------------------------------------+
|                                | products especially in the          |
|                                | processed food sector unless        |
|                                | positive trade policy changes can   |
|                                | be made between the U.S. and Egypt. |
+--------------------------------+-------------------------------------+
| Expansion of the number of     | With the growing size of            |
| supermarket chains.            | supermarket chains, the desire to   |
| International companies        | introduce a broad array and         |
| interested in the Egyptian     | new-to-market products is           |
| market include, Carrefour,     | strengthening.                      |
| Shoprite and Monoprix (soon to |                                     |
| open).                         |                                     |
+--------------------------------+-------------------------------------+

# II. Road Map to Market Entry for U.S. Suppliers

### A. SUPERMARKETS, HYPERMARKETS, AND DISCOUNTERS 

### International Supermarkets and Hypermarkets

-   Two multi-national food retailers have started to invest in Egypt:

    -   Shoprite a South African chain is currently operating seven
        outlets with a plan to open two more within one year. Their
        strategy is to offer competitive prices to maintain consumers
        and to deal directly with manufacturers and not distributors.
        Shoprite does not compete with retail stores such as, Metro and
        Alfa market, but rather with Egyptian wholesalers. They import
        directly for their supermarket chains from South Africa, Italy,
        Hong Kong and Singapore.

    -   The French chain Carrefour has revolutionized the retail
        industry in Egypt by introducing a new format for hypermarket
        shopping, even with the presence of the local hypermarket Alfa.
        Carrefour opened two hypermarkets; one in Cairo and one in
        Alexandria. The first Carrefour opened in December 2002,
        covering 28,000 sq. meters of retail space. The second opened in
        January 2003, covering 32,000 sq. meters. Their plan is to open
        two more outlets by 2005. Their focus is on middle-income
        families. Carrefour is now reporting an average of 15,000
        visitors per day on weekdays and 38,000 visitors on the
        weekends; an average of 7,000 transactions a day during week
        days and 12,000 daily on weekends. They rely primarily on local
        goods.

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-   The French chain Monoprix, which is expected to open two outlets by
    2005, will feature more international products at lower prices.

### Local Supermarkets and Hypermarkets

-   Metro, Egypt's largest food retailer, is currently operating 20
    outlets in Cairo, Alexandria and Ismailia. Metro plans to expand in
    other governorates, such as Hurghada and Mansoura. This will add to
    the rapidly growing retail sector and services to consumers and
    strengthen Egypt's retail distribution network. Metro carries a
    variety of products including over 16,000 food items and 6,000
    non-food items. Metro applied two recent developments in their
    chains:

    -   Shop & Drop: A new service that revolves around the customer
        doing his own shopping and Metro will deliver to his door.

    -   19619 is a hotline number service designed to enhance the home
        delivery operations.

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-   The only local hypermarket currently operating in Egypt is \"Alfa\"
    Market. Currently, Alfa Market has six outlets. It was the biggest
    market in Cairo before Carrefour. Alfa carries about 70,000 items
    out of which 20,000 are food items. They provide to consumers other
    services, such as laundry service, video rentals, shoe repair
    service. Alfa Market has a strategy of conducting monthly discount
    promotions on various products in the range of 10-20%. Also, Alfa
    created several types of customer loyalty cards, such as "Family
    Cards," offering 3-10% discounts.

```{=html}
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```
-   HyperOne, a second local hypermarket, is scheduled to open early
    2005 on the outskirts of Sixth of October City near Cairo. The
    project will include a 10,000 square meter hypermarket, 20 shops,
    food court and a children's entertainment area.

**Discounters**

-   With the expansion of local supermarkets and international
    supermarkets and hypermarkets, discounters have recently upgraded
    their outlets and services to maintain their presence in the
    Egyptian market.

```{=html}
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```
-   Ragab Sons, El Mahmal and Abou Zekry are leading discounters who
    face fierce competition from supermarket chains. However, Ragab Sons
    implemented a promotion strategy on various products with discounts
    in the range of 10-20%. Also, the chain has extended its operating
    hours to 24-hour in some outlets.

**ENTRY STRATEGY**

## 

### FAS Cairo Upcoming Activities

-   FAS Cairo plans to organize in-store and club promotions in Cairo.
    Promotions will include recipes using American ingredients presented
    by a famous TV dietitian. Live cooking presentations will be
    conducted inside the supermarkets, promoting U.S. brands during the
    recipe campaign.

-   FAS Cairo organizes an Egyptian delegation to attend the FMI show
    every May. The objective is to acquaint Egyptian
    importers/distributors with the high quality of U.S. products. With
    the expansion of the number of supermarket chains and the
    introduction of hypermarkets in the Egyptian market, there is a good
    opportunity to introduce new-to-market products.

**U.S. Suppliers Strategy**

-   U.S. exporters, Egyptian importers, and other traders may
    participate in FAS-sponsored promotions in Cairo and Alexandria.
    Activities will include in-store promotions and sports clubs
    (class A) promotions in Cairo to introduce new products or expand
    sales of U.S. products already available in the Egyptian market.

-   U.S. suppliers should study the market and be prepared to comply
    with Egypt's labeling requirements, entertain orders that are
    smaller than normal, share a shipment with other U.S. exporters or
    mix products in one shipment.

# Distribution Channels

Importers either sell their products to wholesalers who distribute food
products to retail outlets, or sell directly to retailers. There are
three supermarket chains, namely Carrefour, Oscar, and Shoprite that
import food products directly.

Distribution channels for Food, alcoholic beverages and confectionery:

+-------------------------+--------------------------------------------+
| Food                    | -   Hypermarkets and supermarkets          |
|                         |                                            |
|                         | -   Large grocery stores                   |
|                         |                                            |
|                         | -   Medium and small grocery stores        |
|                         |                                            |
|                         | -   Hotels and Restaurants                 |
+-------------------------+--------------------------------------------+
| Alcoholic Beverages     | -   Hotels                                 |
|                         |                                            |
|                         | -   Restaurants with license for alcoholic |
|                         |     beverages                              |
|                         |                                            |
|                         | -   Liquor shops (very limited)            |
+-------------------------+--------------------------------------------+
| Confectionery           | -   Hypermarkets and supermarkets          |
|                         |                                            |
|                         | -   Large grocery stores                   |
|                         |                                            |
|                         | -   Medium and small grocery stores        |
|                         |                                            |
|                         | -   Petro/gas/service stations             |
|                         |                                            |
|                         | -   Kiosks                                 |
|                         |                                            |
|                         | -   Pastry shops                           |
+-------------------------+--------------------------------------------+

**TABLE 3: COMPANY PROFILES (2003 / 2004)**

+--------------+------------+-------------+------------+--------------+
| **Retailer   | **O        | **No. of    | **L        | **Purchasing |
| Name &       | wnership** | Outlets**   | ocations** | Agent Type** |
| Outlet       |            |             |            |              |
| Type**       |            |             | **(City)** |              |
+==============+============+=============+============+==============+
| Metro        | Local      | 20          | Cairo,     | Direct /     |
|              |            |             | A          | Distributor  |
|              |            |             | lexandria, |              |
|              |            |             | Ismailia   |              |
+--------------+------------+-------------+------------+--------------+
| Ragab Sons   | Local      | 13          | Cairo      | Direct /     |
|              |            |             |            | Wholesaler   |
+--------------+------------+-------------+------------+--------------+
| Fathalla     | Local      | 8           | Alexandria | Direct /     |
|              |            |             |            |              |
|              |            |             |            | Importer /   |
|              |            |             |            | wholesaler   |
+--------------+------------+-------------+------------+--------------+
| Zahran       | Local      | 5           | Alexandria | Direct       |
+--------------+------------+-------------+------------+--------------+
| Alfa         | Local      | 5 (4        | Cairo &    | Direct /     |
|              |            | h           | Alexandria | Importer of  |
|              |            | ypermarkets |            | household    |
|              |            | and one     |            | items        |
|              |            | s           |            |              |
|              |            | upermarket) |            |              |
+--------------+------------+-------------+------------+--------------+
| El Hawari    | Local      | 5 (one of   | Cairo      | Wholesaler   |
|              |            | which is a  |            |              |
|              |            | modern      |            |              |
|              |            | s           |            |              |
|              |            | upermarket) |            |              |
|              |            |             |            |              |
|              |            | Plans to    |            |              |
|              |            | open a      |            |              |
|              |            | local hyper |            |              |
|              |            | market in   |            |              |
|              |            | early 2005  |            |              |
+--------------+------------+-------------+------------+--------------+
| Shoprite     | Int        | 7           | Cairo      | Direct /     |
|              | ernational |             |            | Importer     |
|              |            |             |            |              |
|              | Joint      |             |            |              |
|              | Venture    |             |            |              |
+--------------+------------+-------------+------------+--------------+
| Abba         | Local      | 4           | Cairo      | Direct /     |
|              |            |             |            | Wholesaler   |
+--------------+------------+-------------+------------+--------------+
| Seoudi       | Local      | 6           | Cairo      | Direct       |
+--------------+------------+-------------+------------+--------------+
| Oscar        | Local      | 2           | Cairo      | Direct /     |
|              |            |             |            | Agent /      |
|              |            |             |            | Importer     |
+--------------+------------+-------------+------------+--------------+
| Carrefour    | Int        | 2           | Cairo /    | Direct /     |
|              | ernational |             | Alexandria | Importer     |
+--------------+------------+-------------+------------+--------------+

Annual sales range from \$7 - \$100 million.

  --------------- ------------- ------------- ------------- -------------
  ***NO. OF       ***2000***    ***2001***    ***2002***    ***2003***
  OUTLETS***                                                

  Supermarkets    390           437           492           524

  Hypermarkets    2             3             6             7

  Convenience     280           324           368           412
  stores                                                    

  Cooperatives    258           248           241           235

  Discounters     50            58            65            69

  Independent     298           301           305           309
  Groceries                                                 
  --------------- ------------- ------------- ------------- -------------

**Demand and Supply Trends**

-   Mid to upper income consumers are becoming more and more demanding
    and are increasingly perceiving traditional supermarkets in Egypt as
    inadequate. Retailers have begun to become customer driven in their
    approach to staff, cleanliness, product range, and service.

-   Consumption of prepared foods is growing rapidly. The increasing
    number of working women has led to an increase in purchasing power
    and the demand for ready made meals and/or easy to cook meals.

-   The trend for purchasing frozen products is increasing.

-   Choices for dietetic or low calorie food items are very limited.

-   Most importers tend to bring in a wide range of products, but only
    in small quantities. With a few exceptions, wholesalers and
    retailers do not import directly.

## 

### B. CONVENIENCE STORES, GAS MARTS AND KIOSKS 

# 

Convenience stores, kiosks, and gas marts sell imported candy, snacks,
juices and soft drinks. They do not import items, but make their
purchases from local importers/wholesalers and distributors. The most
popular gas marts are Mobil Mart, Esso, Caltex, and Shell. Exxon Mobil,
namely On The Run, has recently introduced a new concept of convenience
stores. They currently operate over 14 stores and have plans to open
25-30 stores within the next couple of years. These stores range in size
from 60-200 sq. meters. They are open 24 hours and sell a variety of
products including ready-made meals.

La Poire, a well-known patisserie and bakery chain, has conquered the
convenience store sector through its chain La Poire Express. The stores
are mainly located in gas stations like Cooperation, and offer a wide
range of food and beverages, such as the chain's famous pastries.

-   The average gas mart outlet is 30 to 50 square meters with a few
    exceptions (some Mobil Mart outlets have 100 square meters).

-   Average sales differ according to the gas mart location; for example
    the medium outlet sales is \$14,000 while the high outlet sales are
    \$60,000 per month.

-   Dealers are in complete control of the outlets.

-   Gas mart profit margins are about 25 percent of sales.

Convenience stores are not suitable for marketing activities or
introducing new-to-market products.

**ENTRY STRATEGY**

-   U.S. suppliers must make sure that products are consistently
    available in the market in order to build product loyalty. Suppliers
    should appoint a reliable distributor to ensure that products are
    available in sales outlets at all times.

## C. MOM AND POP SMALL INDEPENDENT GROCERY STORES

Small grocery stores offer a limited number of imported food products.
It is perceived that the small grocery stores will diminish with the
expansion of large supermarket chains and hypermarkets. Small groceries
still account for the largest share of low-to-middle-income shoppers.

# III. COMPETITION

In 2003, according to the UN Trade Data, total exports to Egypt from the
U.S. for consumer oriented products were \$41.2 million compared to \$42
million in 2002. This decrease is attributed to the current political
situation in the Middle East and the devaluation of the Egyptian pound,
which has lost about 30 percent of its value against the dollar since
January 2003. Major importers are reporting a decrease of 30 percent in
sales as a result of these conditions.

The U.S., South Africa and European countries, mainly France, Spain,
Italy, Germany, Greece, Holland and Denmark, are the dominant suppliers
of consumer-ready products to Egypt.

The following table illustrates the Egyptian imports for the following
productscategories:

**(Jan -Dec. 2003 \$ Mil)**

+----------------+------------+------------+------------+------------+
| **PRODUCT**    | **TOTAL    | **IMPORTS  | **U.S.     | **IMPORT** |
|                | IMPORTS**  | FROM THE   | MARKET**   |            |
|                |            | U.S.**     |            | **TARIFF   |
|                |            |            | **SHARE    | ^\*\*^**   |
|                |            |            | (%)**      |            |
+================+============+============+============+============+
| Fresh          | 1,656,635  | 0          | 0          | 20%        |
| vegetables     |            |            |            |            |
+----------------+------------+------------+------------+------------+
| Dried          | 9,961,372  | 136,818    | 1          | 20%        |
| vegetables     |            |            |            |            |
+----------------+------------+------------+------------+------------+
| Nuts           | 8,820,115  | 2,330,018  | 26         | 12%        |
|                |            |            |            | ^\*\*\*^   |
+----------------+------------+------------+------------+------------+
| Fresh fruit    | 16.329,101 | 2,226,387  | 14         | 30-40%     |
+----------------+------------+------------+------------+------------+
| Apples         | 14,416,939 | 2,193,442  | 15         | 40%        |
+----------------+------------+------------+------------+------------+
| Dried fruit    | 2,173,885  | 36,766     | 20         | 30-40%     |
|                |            |            |            | except for |
|                |            |            |            | dried      |
|                |            |            |            | apricots   |
|                |            |            |            | and plums  |
|                |            |            |            | 22%        |
|                |            |            |            | ^\*\*\*^   |
+----------------+------------+------------+------------+------------+
| Coffee         | 6,306,337  | 65,010     | 1          | 5-30%      |
+----------------+------------+------------+------------+------------+
| Spices         | 6,961,402  | \-\-\-\    | 0          | 20%        |
|                |            | -\-\-\-\-- |            |            |
+----------------+------------+------------+------------+------------+
| Cocoa Paste    | 1,022,183  | \-\-\-\    | 0          | 5%         |
|                |            | -\-\-\-\-- |            | ^\*\*\*^   |
+----------------+------------+------------+------------+------------+
| Cocoa Butter   | 1,022,531  | \-\-\-\    | 0          | 5%         |
|                |            | -\-\-\-\-- |            | ^\*\*\*^   |
+----------------+------------+------------+------------+------------+
| Cocoa Powder   | 3,468,272  | \-\-\-\    | 0          | 5%         |
|                |            | -\-\-\-\-- |            | ^\*\*\*^   |
+----------------+------------+------------+------------+------------+
| Beef canned    | 2,645,581  | 22,143     | 1          | 30-40%     |
| (red meat      |            |            |            |            |
| prepared)      |            |            |            |            |
+----------------+------------+------------+------------+------------+
| Red meat       | 1          | 1,828,521  | 1          | 5%         |
| (fresh,        | 50,453,207 |            |            |            |
| chilled,       |            |            |            |            |
| frozen)        |            |            |            |            |
+----------------+------------+------------+------------+------------+
| Bovine, offals | 35,508,805 | 35,490,316 | 100        | 5-40%      |
| frozen         |            |            |            |            |
+----------------+------------+------------+------------+------------+
| Frozen fish    | 61,164,501 | 2,018      | 0          | 5%         |
+----------------+------------+------------+------------+------------+
| Biscuit        | 2,158,070  | 184,280    | 9          | 40%        |
| s/bread/pastry |            |            |            |            |
+----------------+------------+------------+------------+------------+
| Jams           | 5,458,983  | \-\-\      | \-\-\-\    | 40%        |
|                |            | -\-\-\-\-- | -\-\-\-\-- |            |
+----------------+------------+------------+------------+------------+
| Juices         | 1,215,330  | 31,346     | 3          | 30%        |
+----------------+------------+------------+------------+------------+
| Sauces/mayo    | 599,350    | 201,212    | 34         | 30%        |
| nnaise/ketchup |            |            |            |            |
+----------------+------------+------------+------------+------------+
| Ice cream      | 755,415    | 2,901      | 0          | 30%        |
+----------------+------------+------------+------------+------------+
| Beer           | 0.866      | 0          | 0          | 1200%      |
+----------------+------------+------------+------------+------------+
| Wine           | 116,803    | 78,347     | 67         | 3000%      |
+----------------+------------+------------+------------+------------+
| Pet food       | 1,477,218  | 565,988    | 38         | 30%        |
+----------------+------------+------------+------------+------------+
| Pastas         | 593,339    | 27,736     | 5          | 40%        |
+----------------+------------+------------+------------+------------+
| Cheese         | 7,975,343  | 290,841    | 2          | 22%        |
|                |            |            |            | ^\*\*\*^   |
+----------------+------------+------------+------------+------------+
| Butter         | 57,746,202 | 0          | 0          | 5-15%      |
+----------------+------------+------------+------------+------------+
| Milk powder    | 33,837,190 | 1,600,713  | 5          | 5%         |
|                |            |            |            | ^\*\*\*^   |
+----------------+------------+------------+------------+------------+
| Pasteurized    | 100,129    | 10,032     | 100        | 30%        |
| Eggs           |            |            |            |            |
+----------------+------------+------------+------------+------------+
| **Grand        | **433      | **         | **11**     |            |
| Total**        | ,945,104** | 49,518,277 |            |            |
|                |            | \***       |            |            |
+----------------+------------+------------+------------+------------+
| \* U.S. Trade  |            |            |            |            |
| data for       |            |            |            |            |
| con            |            |            |            |            |
| sumer-oriented |            |            |            |            |
| products for   |            |            |            |            |
| CY 2003        |            |            |            |            |
| totaled \$41.2 |            |            |            |            |
| million        |            |            |            |            |
| compared to    |            |            |            |            |
| \$49.5 million |            |            |            |            |
| from the       |            |            |            |            |
| Egyptian data  |            |            |            |            |
| (CAPMAS). The  |            |            |            |            |
| difference     |            |            |            |            |
| might be       |            |            |            |            |
| attributed to  |            |            |            |            |
| the freight    |            |            |            |            |
| costs.         |            |            |            |            |
|                |            |            |            |            |
| ^\*\*^ Extra   |            |            |            |            |
| fees represent |            |            |            |            |
| service tax,   |            |            |            |            |
| commercial and |            |            |            |            |
| industrial     |            |            |            |            |
| profits,       |            |            |            |            |
| miscellaneous  |            |            |            |            |
| expenses vary  |            |            |            |            |
| from one       |            |            |            |            |
| product to     |            |            |            |            |
| another.       |            |            |            |            |
|                |            |            |            |            |
| ^\*\*\*^       |            |            |            |            |
| Tariff has     |            |            |            |            |
| been reduced.  |            |            |            |            |
|                |            |            |            |            |
| Source: Trade  |            |            |            |            |
| data from the  |            |            |            |            |
| Central Agency |            |            |            |            |
| for Public     |            |            |            |            |
| Mobilization   |            |            |            |            |
| and Statistics |            |            |            |            |
| (CAPMAS),      |            |            |            |            |
| Cairo, Egypt.  |            |            |            |            |
+----------------+------------+------------+------------+------------+
|                |            |            |            |            |
+----------------+------------+------------+------------+------------+

The following table illustrates suppliers of consumer foods and edible
fishery products:

+----------------------+-----------------+--------------+-------------+
| ***SUPPLIERS OF      |                 |              |             |
| CONSUMER FOODS       |                 |              |             |
| AND***               |                 |              |             |
|                      |                 |              |             |
| ***EDIBLE FISHERY    |                 |              |             |
| PRODUCTS***          |                 |              |             |
+======================+=================+==============+=============+
| #########  PRODUCT   | ***LARGEST***   | ###          | ***U.S.     |
|                      |                 | ##### MARKET | MARKET***   |
|                      | ***SUPPLIERS*** |              |             |
|                      |                 | ***SHARE     | ***SHARE    |
|                      |                 | (%)***       | (%)***      |
+----------------------+-----------------+--------------+-------------+
| Fresh Veg.           | China           | 95           | 0           |
+----------------------+-----------------+--------------+-------------+
| Fresh Fruit          | Lebanon         | 41           | 14          |
|                      |                 |              |             |
|                      | Syria           | 16           |             |
+----------------------+-----------------+--------------+-------------+
| Dried Fruit          | Turkey          | 60           | 1           |
|                      |                 |              |             |
|                      | France          | 14           |             |
+----------------------+-----------------+--------------+-------------+
| Nuts                 | Turkey          | 34           | 26          |
|                      |                 |              |             |
|                      | India           | 21           |             |
+----------------------+-----------------+--------------+-------------+
| Coffee               | Indonesia       | 48           | 1           |
|                      |                 |              |             |
|                      | Brazil          | 16           |             |
|                      |                 |              |             |
|                      | China           | 13           |             |
|                      |                 |              |             |
|                      | Italy           | 4            |             |
+----------------------+-----------------+--------------+-------------+
| Spices               | Vietnam         | 43           | 1           |
|                      |                 |              |             |
|                      | Singapore       | 15           |             |
|                      |                 |              |             |
|                      | Sri Lanka       | 11           |             |
+----------------------+-----------------+--------------+-------------+
| Red Meat Prepared    | Brazil          | 93           | 0           |
+----------------------+-----------------+--------------+-------------+
| Red Meat (fresh,     | Brazil          | 71           | 0           |
| chilled, frozen)     |                 |              |             |
+----------------------+-----------------+--------------+-------------+
| Bovine, offals       | \-\-\-\-\-\-    | \-\-\        | 100         |
| frozen               | \-\-\-\-\-\-\-- | -\-\-\-\-\-\ |             |
|                      |                 | -\-\-\-\-\-- |             |
+----------------------+-----------------+--------------+-------------+
| Frozen Fish          | Netherlands     | 46           | 0           |
|                      |                 |              |             |
|                      | Mauritania      | 13           |             |
|                      |                 |              |             |
|                      | Ireland         | 12           |             |
|                      |                 |              |             |
|                      | United Kingdom  | 8            |             |
+----------------------+-----------------+--------------+-------------+

+----------------------+-----------------+---------------+------------+
| ***PRODUCT***        | ***LARGEST***   | ***MARKET***  | ***U.S.    |
|                      |                 |               | MARKET***  |
|                      | ***SUPPLIERS*** | ***SHARE      |            |
|                      |                 | (%)***        | ***SHARE   |
|                      |                 |               | (%)***     |
+----------------------+-----------------+---------------+------------+
| Other Food           | Ireland         | 15            | 18         |
| Preparations         |                 |               |            |
|                      | Turkey          | 11            |            |
|                      |                 |               |            |
|                      | Germany         | 7             |            |
+----------------------+-----------------+---------------+------------+
| Jams                 | Syria           | 84            | 0          |
+----------------------+-----------------+---------------+------------+
| Juices               | Spain           | 59            | 3          |
|                      |                 |               |            |
|                      | Cyprus          | 4             |            |
|                      |                 |               |            |
|                      | Denmark         | 4             |            |
+----------------------+-----------------+---------------+------------+
| Sauces / Mayonnaise  | India           | 19            | 34         |
| / Ketchup            |                 |               |            |
|                      | Oman            | 9             |            |
|                      |                 |               |            |
|                      | Netherlands     | 8             |            |
+----------------------+-----------------+---------------+------------+
| Ice Cream            | France          | 69            | 0          |
|                      |                 |               |            |
|                      | Mexico          | 17            |            |
+----------------------+-----------------+---------------+------------+
| Beer                 | Netherlands     | 100           | 0          |
+----------------------+-----------------+---------------+------------+
| Wine                 | EEC             | 68            | 10         |
|                      |                 |               |            |
|                      | France          | 8             |            |
+----------------------+-----------------+---------------+------------+
| Pet Food             | Germany         | 11            | 38         |
|                      |                 |               |            |
|                      | Australia       | 8             |            |
+----------------------+-----------------+---------------+------------+
| Pastas               | Indonesia       | 33            | 5          |
|                      |                 |               |            |
|                      | Italy           | 28            |            |
+----------------------+-----------------+---------------+------------+
| Cheese               | Netherlands     | 47            | 0          |
|                      |                 |               |            |
|                      | Denmark         | 6             |            |
|                      |                 |               |            |
|                      | New Zealand     | 9             |            |
|                      |                 |               |            |
|                      | France          | 2             |            |
+----------------------+-----------------+---------------+------------+
| Butter               | New Zealand     | 50            | 0          |
|                      |                 |               |            |
|                      | Netherlands     | 16            |            |
|                      |                 |               |            |
|                      | Australia       | 11            |            |
+----------------------+-----------------+---------------+------------+
| Pasteurized Eggs     | Germany         | 56            | 10         |
|                      |                 |               |            |
|                      | Italy           | 17            |            |
+----------------------+-----------------+---------------+------------+

*Source: Central Agency for Public Mobilization and Statistics (CAPMAS)*

# IV. BEST PRODUCT PROSPECTS

**A. Products in the market, which have good sales potential:**

\- Dressings, sauces and seasonings

\- Apples

\- Nuts and dried fruit

\- Juices

\- Salted snacks and potato chips

\- Mexican food items

B. Products not present in significant quantities, but which have good
sales potential:

\- Microwave popcorn

\- Cheese

\- Candies

\- Baking mixes

\- Topping

\- Pudding sauces

\- Canned shrimps (not available at all)

C. Products not present in supermarkets because they face significant
barriers:

\- Wine (high custom tariff rate)

\- Beer (High custom tariff rate)

\- U.S. high quality beef (BSE Ban and a maximum of 7% fat content on
imported beef)

\- Turkey (modest quantities of processed turkey are imported)

# V. POST CONTACT AND FURTHER INFORMATION

####### 

####### Mailing Address

Office of Agricultural Affairs

Unit 64900, Box 22

APO AE 09839-4900

Tel: 011 (202) 797-2388 / 2389

Fax: 011 (202) 796-3989

E-mail: [AgCairo@usda.gov]{.underline}

Web page: www.usembassy.egnet.net

Other References: [www.usda.gov (Country,Egypt,Reports)]{.underline}

\- Trade Policy Monitoring Report / Report no. EG4010

\- Food and Agricultural Import Regulations and Standards (FAIRS 2004)
Report no. EG4017

\- Exporter Guide / Report no. EG4025