Required Report - public distribution

**Date:** 10/8/2003

**GAIN Report Number:** KS3057

KS3057

**Korea, Republic of**

### Exporter Guide

**Annual**

**2003**

**Approved by:**

![](media/image1.wmf)Marcus E. Lower, Director

#### Agricultural Trade Office

**Prepared by:**

Kim Seh Won, Senior Ag. Marketing Specialist

**Report Highlights:**

South Korea is the fourth largest market for U.S. agricultural products.
Imports of agricultural products were \$3.3 billion in 2002 and are
projected to reach \$3.5 billion in 2003. Consumer-Oriented food
products are the fastest growing category and imports of these products
from the U.S. reached a record high of \$1.35 billion in 2002, up 32
percent from 2001, and it is forecast to grow another 15 percent in
2003. This report serves as a general guide to prospective U.S.
agricultural exporters seeking to enter the Korean market. It provides a
market overview, tips on how to do business in Korea, and information on
the market structure and trends.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Seoul ATO \[KS2\]

\[KS\]

***TABLE OF CONTENTS***

***SECTION I. MARKET OVERVIEW*** 3

Table 1: Agricultural Imports by Sector 3

Table 2: Advantages and Challenges for U.S. Consumer-Oriented Food
Products 4

***SECTION II. EXPORTER BUSINESS TIPS*** 4

A.  Where to Start 4

B.  Local Business Customs 5

C.  General Consumer Tastes and Preferences 6

D.  Food Standards and Regulations 6

E.  General Import and Inspection Procedures 7

> Korea Food & Drug Administration (KFDA) Import Procedures 7

F.  Labeling Requirements for Processed Food 8

G.  Food Additive Code (Administered by KFDA) 8

H.  Tariffs 9

I.  Product Certification 9

J.  StarLink-Free Certificaiton 10

K.  Minimum Amount of the Initial Commercial Shipment 11

L.  Copyright and/or Trade Mark Laws 11

M.  U.S. Laboratories Authorized to Inspect on Behalf of the Korean
    Government (KFDA) 11

N.  Documents Generally Required for Customs Clearance and Inspections
    12

######## SECTION III. MARKET SECTOR STRUCTURE AND TRENDS 12

A.  Retail Food Sector 12

Table 3: Size of the Retail Market and Retail Food Sales (2001) 12

B.  Hotel, Restaurant and Institutional (HRI) Industry 13

Table 4: Profiles of Major Western Fast Food Restaurant Chains 14

C.  Domestic Food Processing Sector 14

Table 5: Total Output of the Korean Manufacturing Sector 14

Table 6: Employment Size of Food and Beverage Manufacturers 15

D. Trends in Holiday Sales and Internet Sales 15

***SECTION IV. BEST HIGH-VALUE PRODUCT PROSPECTS*** 16

***SECTION V. KEY CONTACTS AND FURTHER INFORMATION*** 17

Appendix I. Statistics 19

Table A. Key Trade & Demographic Information 19

Table B. Consumer Food & Edible Fishery Product Imports 20

Table C. Top 15 Suppliers of Consumer Foods and Edible Fishery
Products-400 21

Table D. Fish & Seafood Products-700 22

###### SECTION I. MARKET OVERVIEW

The Korean economy slowed significantly in 2003 mainly due to depressed
consumer spending, the North Korean security situation, and the sluggish
U.S. economy. According to the International Monetary Fund (IMF), Korean
gross domestic product (GDP) will likely only reach 2.5 percent this
year, a significant drop from the 6.3 percent achieved in 2002. IMF
forecasts indicate that GDP will rise again in 2004 to 4.7 percent. Per
capita gross national income (GNI) reached \$10,013 in 2002, up from
\$9,000 in 2001. The GNI has grown at an average rate of 7 percent per
year for the last four decades according to a Korea Development
Institute study, but preliminary estimates indicate that it will decline
by 1.8 percent in 2003.

Official foreign currency reserves as of the end of July 2003 stood at
\$133 billion, making Korea the fifth-largest holder of foreign exchange
reserves in the world. This is expected to boost Korean external
credibility and stabilize domestic finance markets.

Korea imports about 70 percent of its agricultural product needs. About
the size of Indiana, the 2003 population of Korea is estimated at 48
million. Of the total population, about 47 percent are concentrated in
the metropolitan Seoul area (Seoul, Inchon and Kyunggi Province).

Korea is the fourth largest market for U.S. agricultural products. Total
Imports of agricultural products were \$12.9 billion in 2002 and are
projected to reach \$13.4 billion in 2003. The fastest growing category
of imports from the U.S., consumer-oriented food products increased by
25 percent to \$3.5 billion in 2002. Consumer-oriented food imports from
the U.S. also reached a record high \$1.35 billion in 2002, up 32
percent from 2001, and they are forecast to grow another 10% in 2003. It
is only in the consumer-oriented food sector that the U.S. market share
is growing. Imports from the U.S. accounted for about 39 percent of
total consumer-oriented food imports in 2002.

**Table 1. Agricultural Imports by Sector**

**From the World and the U.S.**

(Millions of U.S. Dollars, Based on CIF Value)

  ------------------ ----------- ---------- ----------- ---------- ----------- ---------- ----------- ----------
  **Category**       **2000**               **2001**               **2002**               **2003      
                                                                                          (f)**       

                     **World**   **U.S.**   **World**   **U.S.**   **World**   **U.S.**   **World**   **U.S.**

  Cons. Oriented     2,871       1,150      2,772       1,022      3,474       1,346      3,745       1,486
  Foods                                                                                               

  Intermediate Foods 3,215       898        3,396       943        3,142       842        3041        849

  Bulk Foods         2,683       924        2,685       1,061      2,749       772        3032        825

  Fish & Seafood     1,338       138        1,585       149        1,820       165        1,860       155
  Products                                                                                            

  Forest Products    1,491       166        1,487       152        1,718       147        1,699       142

  TOTAL              11,598      3,276      11,926      3,327      12,903      3,272      13,377      3,457
  ------------------ ----------- ---------- ----------- ---------- ----------- ---------- ----------- ----------

Note: (f) is a forecast based on January-July data.

Source: Korea Trade Information Service (KOTIS)

Changes in Korean lifestyle and dietary culture, along with remarkable
development in socio-economic environment, have resulted in
significantly expanded demand for processed food and beverage products.
Increasing affluence, more women in the workforce, and a well-traveled
younger generation looking for foods with an international flavor are
promoting the rise in popularity of convenience stores, bulk retail
outlets, and western-style and family restaurants. The demand for
products, such as frozen vegetables, sauce preparations, chilled beef
and confectionery items is growing and the domestic processing industry
lacks the capability to supply these items. Additionally, local
agricultural output currently does not meet the demand of the local
processing industry.

**Table 2: Advantages and Challenges for U.S. Consumer-O**riented Food
Products

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

  Equal or superior quality to        The vast variety of products that
  domestic products                   are unknown

  Increasing affluence of Koreans     Importers lack knowledge of product
                                      sources

  Diminishing resistance to imported  High marketing costs
  foods                               

  Confidence in U.S. foods            Food safety concerns and biotech
                                      issues

  Low tariffs for processed products  Frequent changes in food
                                      regulations

  Almost all food products are        Onerous inspection/customs
  importable                          clearance procedures
  ----------------------------------- -----------------------------------

***SECTION II. EXPORTER BUSINESS TIPS***

**A. Where to Start**

When considering the Korean market, exporters should conduct preliminary
research to determine if the market is appropriate for the product.
Possible sources of market information include Korean importers, US
state departments of agriculture, the USATO website and the US
Department of Commerce, lists of Korean importers, by product, can be
obtained from the U.S. Agricultural Trade Office, or through the Foreign
Agricultural Service in Washington, D.C. The next step might include
sending catalogues, brochures, product samples, and price lists to
prospective importers as a way of introducing the company and products.

Once contact is established, it is advisable to visit the importer(s) in
person, which will increase the sellers credibility with the Korean
importer and give an opportunity to see the Korean market first hand. In
Korea the cliches about \"seeing is believing\" and \"one visit is worth
a 1,000 faxes\" are especially true. There is no substitute for
face-to-face meetings. The supplier or exporter should bring samples as
well as product and company brochures including price lists, shipping
dates, available quantities, and any other information needed for
negotiating a contract. While information in English is acceptable,
having it in Korean is helpful. A general overview of the firm in Korean
is a good plan to start.

Another way of finding potential importers is to participate in local
food shows to showcase your products to a larger audience. Many Korean
importers attending these shows are looking to establish reliable
long-term trading relationships. Show participation enhances initial
contacts with importers, agents, wholesalers, distributors, retailers
and others in the food and beverage industry.

The Food & Hotel Korea 2004 will be held in Seoul at the aT Center,
March 3-5, 2004. It presents an excellent opportunity to explore
possible market opportunities in Korea. This show is a [trade
only]{.underline} show and targets importers, wholesalers, distributors,
retailers, hotels, restaurants, food processors, media, etc. It is
currently the only USDA-supported food show in Korea.

American companies should be sensitive to the uniqueness of the Korean
market. An approach or a product that was successful in another market
does not mean it will be applicable to Korea. It will be necessary to
renew the product design, packaging and market approach for the Korean
situation, requirements and tastes. A well-developed relationship with a
Korean importer is an asset when determining how best market a product.

For exporters of high-value niche market products, the Mid-America
International Agri-Trade Council (MIATCO) offers a Distributor
Development Service (DDS), which provides a series of cost-effective
services designed to assist U.S. suppliers with specific information on
whether and how to approach the Korean market. It will also assist U.S.
food companies in establishing and solidifying contacts in the Korean
import, distribution, retail, food service, or food processing sectors
through trade servicing and in-market assistance. For information on the
MIATCO DDS, see contact information in Section V of this report.

Finally in the Korean market, never take anything for granted. Be ready
for the unexpected. Just because the first container cleared customs
does not mean the second one will. Be open for new information,
attentive and patient.

######### B. Local Business Customs

Korea is a country of tradition. While importers understand
international business, noting the cultural nuances will facilitate
building a business relationship. The following are some of business
tips U.S. suppliers should keep in mind when dealing with Korean
businessmen.

1.  Obtaining Information: To obtain information from a Korean importer,
    it is best to ask directly and explain why information is important.
    Koreans may require more of an explanation than Americans are used
    to providing. A lengthy discussion about the seller and the firm\'s
    history may be needed. If you don not receive a successful reply,
    there is nothing wrong with politely asking again. In Korea, it is
    often seen as a sign of seriousness to continue presenting your
    request. Additionally, Koreans will rarely say, \"no\" directly.
    Instead they will say something is \"very difficult.\"

2.  Initial Communications: Koreans prefer to deal face-to-face. As
    such, cold calling (or cold e-mailing) is very difficult in Korea.
    When corresponding through written communication, start with words
    of appreciation, clearly mark the recipient's name, title, and
    division (as many Koreans have the same last name), avoid using long
    complex sentence and slang, indicate a reasonable time frame for a
    response, and close with additional words of appreciation.

3.  Relationships: Personal relationships are very important. Koreans
    like to maintain long-term relationships and are often very loyal.
    Developing a relationship with a potential Korean partner is vital
    to establishing your credibility. If a seller has already entered
    this market, the established contacts can help to build trust with
    the new one.

4.  Introductions: It is very helpful to have a formal introduction to
    the person or company with whom the seller wants to do business in
    Korea. Meeting the right person in a Korean company is almost always
    dependent on having the right introduction.

5.  Evening Gatherings: The office may not be the best place to discuss
    business matters or propose new ideas, especially when dealing with
    the older generation. It is helpful to get together in the evening
    for a less formal, but no less important, meeting. Korean
    businessmen often gather after work to see friends over drinks.
    There many of the hierarchical traditions slacken. The rules of
    society weigh heavily on Korean behavior, and drinking is one of the
    few times they can be themselves. Although Koreans are wary of
    people who refuse to drink or who drink moderately, foreigners are
    given a little more flexibility especially if you can offer an
    excuse of health or religion. A useful, cultural point to note in
    this situation is that it is impolite to pour one\'s own drink. So,
    if you want a drink, do not be bashful about pouring a drink for
    others.

6.  Name Cards and Address: The exchange of name cards is usually the
    first item of business. In Korea people seldom call others by their
    first names. Instead, they use surnames (such as Mr. Hong) or title
    and surname together (such as President Hong). Never use a first
    name unless the person specifically asks to be called by their first
    name. Surnames are often written first on a Korean business card,
    for example Hong, Gil Dong would be referred to as Mr. Hong. For
    Westerners, it is difficult to know from the given names if the
    contact is a man or a woman.

7.  Meetings: Small talk is a good way to break the ice at the beginning
    of a meeting, and a short, orderly meeting with an agenda provided
    in advance will go along way towards the completion of a successful
    meeting. It is very likely that the meeting will be with a senior
    staff member whose English may not very good. At times, a junior
    staff member might translate but, if not, be prepared to provide all
    materials and/or requests in writing. Pay attention to seating
    arrangement, usually the senior staff member will sit at the head of
    the table. Decisions are usually made from the top down in Korea.
    When making initial visits, hiring a translator can be a valuable
    investment. Take time to educate the translator before hand so terms
    and some familiarity can be worked out.

8.  Dress: It is recommended to wear a business suit and tie when
    meeting or visiting Korean importers for the first time. First
    impressions are important.

9.  Face-to-face Communications: One idiosyncrasy of the Korean language
    is that Koreans say "yes" when they might mean "no" or vice versa.
    For instance, in Korean, "Wouldn't you like to go home?" if answered
    with a "yes" means 'that's right, I would not like to go home\". To
    avoid confusion, reply with a full sentence, "yes, I would like to
    go home."

10. Resolving Conflicts: Koreans do not like to appear to have \"lost
    face.\" It is important to always try to give something even if you
    think you are in the right. It will help the conflict resolve more
    quickly. Visible anger is not useful in a confrontation. Instead,
    silence is a more effective method of conveying displeasure.
    Apologizing can also be useful and does not always mean you feel you
    were wrong. Lastly, never direct your criticism directly at one
    specific person, but at an entire group.

#### C. General Consumer Tastes and Preferences

Traditionally, Korean dishes require a lot of preparation time. Small
restaurants specializing in only a few dishes are still common. Home
preparation, however, is becoming increasingly rare. It is not unusual
for working members of the household to have business dinners five
nights a week, which is one reason restaurant consumption has continued
to grow despite the lackluster economic situation. For home consumption,
busy consumers can purchase ready-made local-style food items such as
kimchi or bulgogi at local grocery or convenience stores.

There is a general preference for national brand products and/or
products that have long been recognized in the market. Never the less,
the younger generation has had a lot of exposure to Western- style
foods, especially American food. Approximately 40,000 Korean elementary
and middle school students study in the United States and, thus, they
are somewhat accustomed to US brands and to the taste of American
products.

Korean consumers also like natural, fresh food products, such as health
foods, functional foods and diet foods. As a result, the organic market
is a segment that has been developing rapidly. Koreans have always
looked to their food to provide a functional or health benefit and foods
made without the use of pesticides or insecticides are very appealing.

It is also important to note that Korean consumers are very sensitive to
food safety issues. They tend to get their information through the media
and trust it in spite of the often misleading information. Once a "food
scare" rumor gets publicity, that food is affected and its reputation is
quickly damaged.

#### D. Food Standards and Regulations

Food standards and regulations are subject to frequent change. U.S.
exporters need to ensure that all necessary customs clearance
requirements have been verified with local authorities through the
Korean importer before the sale conditions are finalized. Final import
approval of any product is always subject to the standards and
regulations as interpreted by the Korean official at the time of product
entry.

There are many food standards and regulations. This report describes
only the basic guidelines of Korea's import requirements. For details on
Korean import regulation, see the Food and Agricultural Import
Regulations and Standards (FAIRS) Reports -- KS3041 dated July 30, 2003.

**E. General Import and Inspection Procedures**

Korea Customs Service (KCS), the Korean Food and Drug Administration
(KFDA), the National Quarantine Office (for ports that do not have KFDA
regional offices), the National Veterinary Research & Quarantine Service
(NVRQS) and the National Plant Quarantine Service (NPQS) are the
agencies involved in the import clearance process. Imports of
agricultural products generally must receive clearance from several
organizations and are thus more likely to encounter port delays than
other imported products. In addition, other organizations may be
involved in regulating imports through the administration of licenses
or, in some cases, quotas for agricultural products.

KCS is responsible for ensuring that all necessary documentation is in
place before the product is finally released from the bonded area. KCS
operates an Electronic Data Interchange System (EDI) and KFDA operates
the imported food network system through their regional offices and
national quarantine offices. The KFDA network system is connected to the
EDI system, which permits KFDA inspection results to be transmitted more
quickly which shortens the KCS clearance time. Products subject to plant
or animal quarantine inspection must be cleared by the appropriate
quarantine inspection authority before KCS will provide clearance.

## Korea Food & Drug Administration (KFDA) Import Procedures

1.  The importer or the importer's representative submits the "Import
    Declaration for Food and other required documents"

2.  The type of inspection to be conducted is determined in accordance
    with the guidelines for inspection of imported food products. The
    types of inspection for a given food product include: Document
    Inspection, Visible Inspection, Laboratory Inspection, and Random
    Sampling Examination.

3.  If a product is subject to visible inspection, laboratory inspection
    and/or random sampling, the KFDA inspector will conduct a field
    examination and take samples for the laboratory test.

4.  KFDA conducts the conformity assessment from the information
    collected, using such items as test results, document inspection
    results, etc.

5.  If a product complies with the Korean standards, KFDA issues a
    certificate for import. The importer can then clear the product with
    the KFDA import certificate.

6.  If a product does not comply with the Korean standards, KFDA will
    notify the applicant and the regional customs office on the nature
    of the violation. The importer decides whether to destroy or return
    shipments to the exporting country or use it for inedible purposes.
    If the violation can be corrected, as with labels, the importer can
    reapply for the inspection after making the corrections.

7.  For perishable agricultural products, such as fresh vegetables,
    fruits, etc., an importer can clear the products prior to completion
    of the laboratory test with a pre-certificate for an import report
    issued by KFDA. However, in this case, the importer should be able
    to track down the distribution of the given product so it can be
    recalled, in case the laboratory test indicates a violation.

8.  If products are subject to an animal or plant quarantine inspection,
    in addition to the KFDA certificate, the animal or plant quarantine
    certificate issued by NVRQS or NPQS is required for product
    clearance, Inspection by NPQS or NVRQS can take place simultaneously
    with the KFDA inspection.

9.  Starting March 1, 2001, mandatory labeling went into effect for
    three unprocessed biotech commodities - soybean, bean sprout, and
    corn, if 3 percent or more of the shipment contains biotech-enhanced
    ingredients. In March 2002, Ministry of Agriculture and Forestry
    (MAF) extended its labeling requirement to include unprocessed
    biotech potato.

10. Starting August 18, 2003, mandatory annual testing requirements went
    into effect for fresh agricultural food imports. This test for
    chemical residues costs approximately \$2000.

Processed food products are required to have tests conducted every three
years provided the same company, same product rule is followed. Which
tests are done depend on the food category the product falls under.
Typical tests might include those for food moisture levels, microbials,
heavy metals and/or acidity levels. The cost depends on how many tests
are conducted. These tests can be done by KFDA or by a KFDA recognized
laboratory.

**F**. **Labeling Requirements for Processed Food**

There are many labeling requirements, such as nutritional labeling
requirements, organic labeling requirements, labeling standards for
livestock products, labeling regulations for non-processed biotech
products, labeling standards for recombinant foods, liquor labeling
requirements, and country of origin labeling requirements. For details
on these specific labeling requirements please refer to the Food and
Agricultural Import Regulations and Standards (FAIRS) Reports -- KS3041
dated July 30, 2003.

**Korean Language Label:** This is a requirement. Korean language
stickers may be applied in lieu of Korean language label. The sticker
should not be easily removable and should not cover the original
labeling. (Please note: the principal display panel must contain the
product name, product type and content information. If this is not
feasible, such information shall be provided in a Korean language
sticker using a 12-point or larger font pitch size.

1.  **Product Name:** The label should state the name of the product.
    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 supplementary foods, etc.

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

4.  **Manufacturing date, month, and year:** This is mandatory for
    specially designated products such as \"lunch box\", sugar, liquor
    and salts. For liquors a manufacturing number (lot number) or
    bottling date can substitute for the manufacturing date.

5.  **Shelf life:** Food products should identify the
    manufacturer-determined shelf life. If various kinds of products are
    packaged together, the shelf life date of the product with the
    shortest life should be applied on the label.

6.  **Contents:** Weight, volume or number of pieces (if the number of
    pieces is shown, the weight or volume must be indicated in
    parentheses).

7.  **Ingredient(s) or raw material(s) and a percent content of the
    ingredient(s):** The name of the major ingredient must be included
    on the label as well as the names of at least the next four
    principle ingredients. These should be listed with the highest
    percentage first followed by the others. Artificially added purified
    water does not count as one of the five major ingredients.

8.  **Nutrients:** Only special nutritional foods, health supplementary
    foods, products wishing to carry nutritional labels and products
    wishing to carry a nutrient emphasis mark are subject to nutritional
    labeling.

9.  **Other items designated by the detailed labeling standards for food
    et al.:** This includes cautions and standards for use or
    preservation (e.g., drained weight for canned products,
    radiation-processed products, etc.).

10. **Country of origin labeling** is required on food products.

The latest revision of the principal display panel regulation, dated May
23, 2003 included mandatory labeling of ten food items considered food
allergens. These food items are eggs, milk, buckwheat, peanuts,
soybeans, wheat, mackerel, crab, pork, peaches and tomatoes. Any food
product that contains one or more of the above ten items as a raw
ingredient must indicate the item on the Korean language label. This
revision also extended a mandatory nutritional labeling requirement to
bread and bread loaf, noodles (cooked noodle, fried noodle and improved
cooked noodle only), and retort foods. KFDA will provide a one-year
grace period for allergen labeling and nutritional labeling requirements
from May 23, 2003.

**G. Food Additive Code (Administered by KFDA)**

The "Food Additive Code" regulates the use of all food additives in
Korea. As of July 2003, Korea had a positive list of 605 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. Getting a new additive
added to the approved list can be time consuming. 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 the food additives that are registered in the Korean Food
Additive Code are allowed for use in specific food products, in
accordance with the usage standards specified in the Food Additive Code.

**H. Tariffs**

Tariffs vary considerably from product to product. In general, tariff
rates are higher for products that are produced domestically. Processed
products generally have lower tariffs. Exporters can contact the ATO for
specific information on tariff rates.

**I. Product Certification**

Plant and meat quarantine inspections are very strict in Korea. No plant
and meat products will clear Korean Customs without the necessary
certificates and required information.

1.  **Red Meat Products:** Red meat products must be accompanied by the
    following FSIS certificates:

    a.  FSIS Form 9060-5, Meat and Poultry Export Certificate of
        Wholesomeness

    b.  FSIS Form 9305-4, Certificate for Export of Meat to the Republic
        of Korea

> Note: Form 9305-4 is a new certificate replacing Form 9305-3. It will
> be required starting October 1, 2003. This form was changed in
> response to the BSE outbreak in Canada.

2.  **Processed Meat Products:** Processed meat products such as
    sausages, hamburger patties and ground meat do not need to indicate
    slaughter information on the FSIS Form 9305-3. These products are
    required to indicate only processing information. Starting December
    1, 2003, the new Form 9305-4 will also be required for these
    products.

3.  **Livestock or Dairy Products:** To get an exemption from quarantine
    inspection for livestock or dairy products that comply with a
    pasteurization or sterilization process specified by KFDA, one of
    following documents shall be furnished:

    a.  Health certificate issued by exporting government

    b.  Manufacturing process verified by exporting government

    c.  Notarized verification document issued by manufacturer

> In response to the BSE issues, Korea has currently banned all ruminant
> animals and their products originating from 30 European nations,
> Japan, Israel, and Canada. Korea now requires certification that the
> imported ruminant or ruminant product did not originate from the
> countries listed by the Korean government as BSE outbreak nations.
>
> Certification of a US product from \"non-BSE origin countries\" can be
> a statement issued by the U.S. government, or by a private entity that
> is notarized by a government agency, relevant organization or local
> Chamber of Commerce.

4.  **Poultry Products:** Poultry products must be accompanied by the
    following two certificates:

    a.  FSIS Form 9060-5, Meat and Poultry Export Certificate of
        Wholesomeness

    b.  FSIS form 9305-2A, Certificate for Export of Poultry Meat to the
        Republic of Korea

5.  **Fresh Products:** Fresh fruits, vegetables and nuts (except
    walnuts) must be accompanied by:

    a.  Phytosanitary Certificate, PPQ Form 577, issued by USDA/APHIS
        (Animal & Plant Health Inspection Service)

    b.  Some fresh products are prohibited and others require additional
        documentation besides Form 577. NPQS should be consulted about
        specific documentation for each particular product.

The issuance date of the phytosanitary certificate shall be prior to the
departure date listed on the Bill of Lading. In order to prevent
unnecessary delays at the port of entry, it is further suggested that
the certificate issuance date be prior to the departure date of
shipments. In any case, the inspection date on a certificate must be
prior to the departure date.

6.  **Frozen Fruits and Vegetables** must be accompanied by either one
    of the following:

    a.  Certificate of Quality and Condition, Form FV-146CS issued by
        USDA/AMS (Agricultural Marketing Service)

    b.  Export Certificate PPQ Form 578, issued by USDA/APHIS

7.  **Vacuum Packed Shelled Walnuts** must be accompanied by a
    Phytosanitary Certificate, PPQ Form 577, issued by USDA/APHIS

**J. StarLink-Free Certification**

In December 2000, after KFDA detected StarLink protein in U.S. corn
shipments, imported food-grade corn and corn-based food products were
required to arrive with a StarLink-free certification issued by the
exporting country. For bulk corn shipments, such certification should be
issued by GIPSA(Grain Inspection and Stockyards Administration)/USDA or
an accredited lab to minimize potential problems during inspection
clearance. For processed food products containing corn as one of its
ingredients, certification can be met with a letter, statement or
certificate issued by the manufacturer or the exporter stating the raw
corn ingredient was \"StarLink-free.\" All US origin food grade corn and
corn-based products must be accompanied by a StarLink-free certification
at port of entry.

**K. Minimum Amount of the Initial Commercial Shipment**

On May 15, 2000, KFDA issued a revision to the \"Guideline for
Inspection of Imported Food Products.\" In the revision, KFDA added a
clause limiting the minimum amount of the initial commercial shipment
which it would inspect directly. When the quantity of the imported food
is less than 100 kg, the imported food is required to be inspected by a
KFDA-recognized inspection organization other than regional KFDA office
or National Quarantine Services. Importers shall be responsible for
charges associated with import inspection. Detailed information is
available from the KFDA's English website -
[http://www.kfda.go.kr.]{.underline}

**L. Copyright and/or Trademark Laws**

The Korea Industrial Property Office is responsible for registration of
trademarks and for review of petitions related to trademark
registration. In accordance with the Trademark Law, the trademark
registration system in Korea is based on "first-to-file." A person who
registers a trademark first has a preferential right to that trademark
and the person who has a right over the trademark is protected by the
Law. In order to prevent any trademark dispute, U.S. companies wishing
or planning to conduct business in Korea are strongly recommended to
register trademarks first.

**M. U.S. Laboratories Authorized to Inspect on Behalf of the Korean
Government (KFDA)**

KFDA operates a program that recognizes foreign laboratories as official
testing laboratories. This program aims to enhance the efficiency of
conducting the inspection of imported food. KFDA approves foreign
laboratories and recognizes inspection certificates or certificates of
laboratory test results issued by these approved laboratories. As of
now, there are two U.S. laboratories that have been approved as
authorized foreign laboratories by KFDA. They are:

1.  **Oregon Department of Agriculture's Export Service Center**

The Oregon Department of Agriculture's Export Service Center (ESC) is a
one-stop technical assistance center for U.S. food manufacturers and
exporters. It is designed to reduce obstacles for exporting products.
The ESC has been certified by the KFDA to do food related testing, such
as residue and microbiological testing on food and beverage products,
and food package testing bound for Korea. The ESC offers a range of
technical services, including product evaluation and certification. For
more information on the services which the Export Service Center
provides contact:

**Oregon Department of Agriculture**

**Export Service Center**

1200 N.W. Naito Parkway, Suite 204

Portland, Oregon 97209-2835

Tel: 503-872-6644 Fax: 503-872-6615

E-mail: [esc-food@oda.state.or.us]{.underline}

Website: www.oda.state.or.us

2.  **Omic USA** **Inc.**

> Omic USA is the second U.S. laboratory to be recognized by the Korea
> Food & Drug Administration as an official foreign testing laboratory.
> Omic USA conducts the same function as ESC mentioned above.
>
> **Omic USA Inc.**
>
> Mr. Ryuichi Kurosawa, President
>
> 1200 N.W. Naito Parkway
>
> Portland, Oregon 97209
>
> Tel: 503-224-5929 Fax: 503-223-9436
>
> E-mail: <info@omicusa.com>
>
> Website: www.omicnet.com/omicusa

**N. Documents Generally Required for Customs Clearance and
Inspections**

1.  Invoice

2.  Bill of Lading, or Airway Bill

3.  Packing List

4.  Certificate of Origin (not required if there is \"Made in USA\" on
    the label.)

5.  Ingredient List

6.  Processing Method

7.  Certificate of Production Date

8.  Packing Material (not required for bottles, cans and paper packages)

9.  Non-biotech (certification (for corn, soybeans and potatoes)

10. Sanitary certificate (for meat, fruit, nuts, vegetables, plants,
    grains, etc.)

######## 

######## SECTION III. MARKET SECTOR STRUCTURE AND TRENDS

##### **A. Retail Food Sector** 

The liberalization of mass retail business ownership in 1996 to enable
foreign participation, and the restructuring of the retail sector after
the 1997 IMF crisis, resulted in a rapid growth of hypermarkets,
convenience stores and chain supermarkets at the expense of the
traditional wet markets and the \"mom and pop\" grocery stores. The size
of the overall retail market in Korea is estimated at ~~W~~153 trillion
(approximately \$128 billion) in 2001.

Table 3: Size of the Retail Market and Retail Food Sales (2001)

  -------------- -------------- -------------- -------------- --------------
  **Segment**    **Total Retail                **Food Retail  
                 Sales**                       Sales**        

                 **Amount**     **Share**      **Amount**     **Share**

  Dept. Stores   ~~W~~15.8      10.3%          ~~W~~2.9       6.1
                 trillion                      trillion       

  Hypermarkets   ~~W~~13.8      9.0%           ~~W~~7.5       15.8
                 trillion                      trillion       

  Supermarkets   ~~W~~4.9       3.2%           ~~W~~3.9       8.2
                 trillion                      trillion       

  Convenience    ~~W~~1.7       1.1%           ~~W~~1.0       2.1
                 trillion                      trillion       

  Direct Sales   ~~W~~5.3       3.5%           ~~W~~0.5       1.1
                 trillion                      trillion       

  Traditional    ~~W~~11.5      73.0%          ~~W~~31.8      66.7
  Mrkts          trillion                      trillion       

  TOTAL          ~~W~~153       100.0%         ~~W~~47.5      100
                 trillion                      trillion       
  -------------- -------------- -------------- -------------- --------------

There are several types of retail sectors that handle foods and
agricultural products. They are: general market place (conventional open
air markets), periodic market places in rural areas (normally open once
every 5 days), department stores/shopping centers, supermarkets (super
chain companies and several thousand independent small supermarkets and
outlets), convenience stores, mom and pop stores, National Agricultural,
Fishery and Livestock Cooperative Federation Stores and discount stores
or membership warehouse type stores. Most retailers purchase imported
food products from importers and/or wholesalers. Few retailers import
food products directly. U.S. exporters should contact distributors and
importers, along with retailers.

Currently, the customs clearance process is so cumbersome and costly
that it is generally not cost effective to bring in mixed container
loads. Instead distributors bring in full containers of a particular
product, storing it in country or distribute it to retailers or other
distributors. Retailers are not likely to import directly unless they
have a warehouse facility. This situation is not expected to change in
the near future.

1.  Department Stores/Shopping Centers. According to the Korea Chamber
    of Commerce and Industry (KCCI), the average annual sales per store
    of 86 department stores/shopping centers surveyed increased by 12.9
    percent to \$176.4 million in 2002. In those sales food and beverage
    accounted for 15.1 percent in 2002. The three department stores in
    Korea: Lotte (15 stores), Hyundai (12 stores) and Shinsegae (7
    stores) which dominated account for 71 percent of the total market.
    This type of retail outlet is expected to grow about 10 percent per
    year.

2.  Supermarkets. The average annual sales of the 1,140 supermarkets in
    seven major cities surveyed by the KCCI also increased by 10.5
    percent to \$2.2 million in 2002. Of the average annual sales per
    outlet, food sales accounted for 79.7 percent The major players in
    this market are LG Supermarket, Hanhwa Store and Haitai Supermarket.
    This type of outlet is expected to grow about 5-10 percent per year.

3.  Convenience Stores. According to the KCCI report, there were 5,491
    outlets belonging to seven largest convenience store companies in
    2002, up from 3,753 stores in 2001. The total sales of those seven
    companies were \$2.2 billion in 2002, up from \$1.46 billion in
    2001, and the average annual sales per store was \$370,500 in 2002.
    Of the total sales, food and beverage sales accounted for 58.6
    percent in 2002, compared to 59.5 percent in 2001. This sector is
    expected to grow about 20 percent per year over the next few years
    as the number of outlets increases.

4.  Discount Stores. This is one of the fastest growing segments in the
    retail sector. The average annual sales of the 233 discount stores
    surveyed by the KCCI in 2002 amounted to \$70.2 million, up from
    \$66.3 million in 2001. Of the average annual sales per store, food
    and beverage products accounted for 49.7 percent. Imported goods,
    including food, accounted for 10.7 percent in 2002, compared to 10.4
    percent in 2001. Of imported goods, imported food accounted for 55.8
    percent. This sector sales are expected to grow significantly, about
    20 percent per year over the next couple of years, as the number of
    outlets increases.

For further detailed information on the retail food sector in Korea,
please refer to the Retail Sector Report KS3006 dated February 5, 2003.

##### **B. Hotel, Restaurant and Institutional (HRI) Industry**

The expansion of incorporated restaurant chains and consumers increasing
demand for new and international tastes, quick service and quality foods
have a fueled a rapid growth and diversification of the food service
sector in recent years.

The monthly average amount spent on eating outside the home has
continued a steady rise. In 2002, it on average reached ~~W~~201,500 per
household (\$161, up 38 percent from ~~W~~146,400 won (\$123) in 1999.
Each Korean household spent 44% of its total food expenditure eating
outside of the home in 2002. Although the total food expenditure has
gradually been declining relative to total consumer spending, eating out
has consistently increased in share of both food expenditure and total
spending over the past decade.

The food service sector garnered approximately ~~W~~35.8 trillion in
sales in 2000, up 6.5 percent from ~~W~~33.6 trillion in 1999. While
industry data is not available, contacts estimate that the sector
continues to grow 4‑5 percent annually. The number of food service
businesses increased, reaching 570,576 in 2000 with total 1.43 million
employees. However, 95.3 percent of the businesses in the sector are
family‑owned, mom‑and‑pop restaurants that hire less than 5 employees.
In addition, about 65 percent of the sector earned less than ~~W~~49.5
million in annual sales.

**Table 4 - Profiles of Major Western Fast Food Restaurant Chains**

+--------------------+-------------+-------------+-------------------+
| Year - 2002        | Brand       | Sales       | Number of Outlets |
|                    |             |             |                   |
| Name of Company    |             |             |                   |
+--------------------+-------------+-------------+-------------------+
| Lotte              | Lotteria    | \$425       | 850               |
|                    |             | Million     |                   |
+--------------------+-------------+-------------+-------------------+
| Shinmac & Mackim   | McDonald's  | \$224       | 361               |
|                    |             | Million     |                   |
+--------------------+-------------+-------------+-------------------+
| Genesis            | BBQ         | \$248       | 1,350             |
|                    |             | Million     |                   |
+--------------------+-------------+-------------+-------------------+
| Doosan             | KFC         | \$200       | 226               |
|                    |             | Million     |                   |
+--------------------+-------------+-------------+-------------------+
|                    | Burger King | \$74        | 114               |
|                    |             | Million     |                   |
+--------------------+-------------+-------------+-------------------+
| TS Haemaro         | Popeye's    | \$104       | 211               |
|                    |             | Million     |                   |
+--------------------+-------------+-------------+-------------------+
| Sejin Food System  | Hardies     | \$12        | 21                |
|                    |             | Million     |                   |
+--------------------+-------------+-------------+-------------------+

Source: Korea Food Distribution Yearbook 2003

The growth of the food service sector in recent years has been mainly
driven by the expansion of incorporated businesses operating chain
restaurants of various formats, including family restaurants, fast food
restaurants, bars and institutional restaurants. In addition, the sector
has diversified rapidly with a variety of new‑to‑market cuisines and
recipes

The outlook for U.S. food exports to this sector is excellent,
especially for beef, pork, poultry, seafood, vegetables and fruits
(frozen, dehydrated and canned), dairies, alcoholic beverages, sauces
and spices, bakery ingredients, prepared foods and organic foods.

For further detailed information on the hotel, restaurant and
institutional industry in Korea, please refer to the HRI Food Service
Sector Market Brief - KS2041 dated September 5, 2002.

##### **C. Domestic Food Processing Sector**

The Korean food and beverage manufacturing and processing industry is a
major consumer of imported raw materials, intermediate products,
ingredients and additives. Imports are necessary to support the
processing industry because local production cannot meet the demand.
Except for rice and certain dairy products, of which there is a large
surplus, Korea imports almost all types of agricultural products for
processing. Corn, soybeans, wheat, essential oils, frozen concentrated
orange juice, turkey meat, duck meat, almonds, walnuts, powdered milk,
whey powder and beef tallow are good examples of the raw materials or
ingredients imported into Korea for use in food processing. U.S.
suppliers have a strong opportunity to export raw materials or
ingredients for use in food processing in Korea.

**Table 5: Total Output of the Korean Manufacturing Sector (2001)**

  ------------------------------- -------------------- -------------------
  **Processing Sectors**                               

  Grain, Starch, Feed             23.2%                \$7.2 billion

  Dairy                           10.3                 \$3.2 billion

  Livestock, Fruit, Vegetable and 23.2%                \$7.2 billion
  Fat                                                  

  Beverage and Alcohol            14.9%                \$4.6 billion

  Other including Bakery and      28.4%                \$8.8 billion
  Candy                                                
  ------------------------------- -------------------- -------------------

Source: Report on Mining and Manufacturing Survey, Dec. 2002

Most Korean food and beverage manufacturers are small-scale companies.
As of the end of 2001, there were 6,985 food, livestock, dairy and
beverage manufacturing plants with five or more employees. Of these,
there are only 23 manufacturers with 500 employees or more as shown on
the following table. Only 4.2 percent (291 manufacturers) have 100 or
more employees.

**Table 6: Employment Size of Food and Beverage Manufacturers (2001**)

+---------------------------+-----------------------+-----------------+
| ##                        | **Number of           | **Percent**     |
| ##### Number of Employees | Manufacturers**       |                 |
+---------------------------+-----------------------+-----------------+
| 5 ‑ 9                     | 3,413                 | 48.9%           |
+---------------------------+-----------------------+-----------------+
| 10‑ 19                    | 1,653                 | 23.7%           |
+---------------------------+-----------------------+-----------------+
| 20‑ 49                    | 1,189                 | 17.0%           |
+---------------------------+-----------------------+-----------------+
| 50‑ 99                    | 439                   | 6.3%            |
+---------------------------+-----------------------+-----------------+
| 100‑199                   | 174                   | 2.5%            |
+---------------------------+-----------------------+-----------------+
| 200-299                   | 63                    | 0.9%            |
+---------------------------+-----------------------+-----------------+
| 300-499                   | 31                    | 0.4%            |
+---------------------------+-----------------------+-----------------+
| 500 and over              | 23                    | 0.3%            |
+---------------------------+-----------------------+-----------------+
| Total                     | 6,985                 | 100%            |
+---------------------------+-----------------------+-----------------+

**D. Trends in Holiday Sales and Internet Sales**

There are two major sales holidays in Korea when sales dramatically
increase: the three-day Lunar New Year Holiday will take place on
January 21, 22 and 23, 2004, and the three-day Chusok (Korean
Thanksgiving) holiday will take place on September 27, 28 and 29, 2004.
During these holidays, many Koreans give gifts to their relatives,
friends and business associates. Beef ribs, fruits and other high value
food products are popular during these holidays.

TV home shopping and Internet sales are becoming popular and increasing
rapidly. The Food Distribution Yearbook 2003 (Food Journal) indicates
that total home shopping sales reached \$4.48 billion and Internet sales
reached \$5.75 billion in 2002. Of these sales, food products made up
17.8 percent for TV home shopping and 13.5 percent for Internet
shopping.

***SECTION IV. BEST HIGH-VALUE PRODUCT PROSPECTS***

+------+--------+--------+--------+----------+---------+-------------+
| *    | **2002 | **2002 | **5    | **Import | **Key   | **Market    |
| *Pro | Market | Imp    | Yr.    | Tariff   | Cons    | Att         |
| duct | Size** | orts** | Avg.   | Rate**   | traints | ractiveness |
| Ca   |        |        | Annual |          | over    | for U.S.**  |
| tego | **     | **Vol  | Import |          | Market  |             |
| ry** | (1,000 | ume:** | Gr     |          | Develo  |             |
|      | mt)**  |        | owth** |          | pment** |             |
|      |        | **     |        |          |         |             |
|      |        | (1,000 | **To   |          |         |             |
|      |        | mt)**  | tal:** |          |         |             |
|      |        |        |        |          |         |             |
|      |        | **Va   | **U    |          |         |             |
|      |        | lue:** | .S.:** |          |         |             |
|      |        |        |        |          |         |             |
|      |        | **(\$  |        |          |         |             |
|      |        | Mill   |        |          |         |             |
|      |        | ion)** |        |          |         |             |
+------+--------+--------+--------+----------+---------+-------------+
| Red  | 1,359  | 109    | 34.8%  | Beef:    | Co      | U.S. strong |
| meat |        |        |        | 40.5%    | nsumers | in          |
|      |        | \      | 44.8%  |          | state   | supplying   |
|      |        | $1,054 |        | Chilled  | they    | all types   |
|      |        |        |        | Pork:    | prefer  | of cuts due |
|      |        |        |        | 23.2%    | do      | to price    |
|      |        |        |        |          | mestic. | and quality |
|      |        |        |        | Frozen   |         | compe       |
|      |        |        |        | Pork:    |         | titiveness. |
|      |        |        |        | 26.1%    |         |             |
+------+--------+--------+--------+----------+---------+-------------+
| Pou  | 386    | 439    | 44.3%  | \*18     | Not     | Price-      |
| ltry |        |        |        | .6-21.5% | m       | competitive |
| Meat |        | \$101  | 51.3%  |          | anually | in case of  |
|      |        |        |        |          | t       | chicken     |
|      |        |        |        |          | rimmed. | legs        |
+------+--------+--------+--------+----------+---------+-------------+
| Ci   | 880    | 109    | 36.5%  | Orange:  | High    | Tariff for  |
| trus |        |        |        | 54.9%    | tariff  | oranges     |
|      |        | \$95   | 35.7%  |          | rates   | will        |
|      |        |        |        | Gra      | and     | decline in  |
|      |        |        |        | pefruit: | quality | 2004 from   |
|      |        |        |        | 32%      | va      | 54.9% to    |
|      |        |        |        |          | riable. | 50%. U.S.   |
|      |        |        |        | Lemon:   |         | is the      |
|      |        |        |        | 32%      |         | predominant |
|      |        |        |        |          |         | supplier.   |
+------+--------+--------+--------+----------+---------+-------------+
| Of   | NA     | 69     | 44.3%  | Offals:  | Not     | Product not |
| fals |        |        |        |          | easy to | consumed    |
| &    |        | \$137  | 47%    | 18       | meet    | d           |
| Guts |        |        |        | .2-18.6% | local   | omestically |
|      |        |        |        |          | impo    | in the      |
|      |        |        |        | Guts:    | rters\' | U.S., but   |
|      |        |        |        | 27.9%    | specifi | demand in   |
|      |        |        |        |          | cations | Korea for   |
|      |        |        |        |          |         | food use is |
|      |        |        |        |          |         | quite high  |
|      |        |        |        |          |         | and steady. |
+------+--------+--------+--------+----------+---------+-------------+
| Hay  | NA     | 576    | 53.5%  | Alfalfa: | Tariff  | U.S.        |
| &    |        |        |        | 1%       | quotas  | product is  |
| Fo   |        | \$103  | 71.3%  |          | apply   | considered  |
| dder |        |        |        | Others:  | except  | high        |
|      |        |        |        |          | for     | quality     |
|      |        |        |        | 5-101.6% | alfalfa |             |
+------+--------+--------+--------+----------+---------+-------------+
| C    | \$293  | 31     | 19.5%  | 8%       | Low     | Competitive |
| hoco | mil    |        |        |          | image   | in prices   |
| late |        | \$93   | 22.4%  |          | for     | and design  |
|      |        |        |        |          | design  | for medium  |
|      |        |        |        |          | and     | quality     |
|      |        |        |        |          | quality | products    |
|      |        |        |        |          | for     |             |
|      |        |        |        |          | high    |             |
|      |        |        |        |          | quality |             |
|      |        |        |        |          | product |             |
+------+--------+--------+--------+----------+---------+-------------+
| Fr   | NA     | 151    | 14.3%  | \*8-30%  | High    | U.S.        |
| ozen |        |        |        |          | prices  | product is  |
| and  |        | \$121  | 30.8%  |          | c       | considered  |
| Pro  |        |        |        |          | ompared | high        |
| cess |        |        |        |          | to      | quality     |
| edVe |        |        |        |          | comp    |             |
| geta |        |        |        |          | etitors |             |
| bles |        |        |        |          |         |             |
+------+--------+--------+--------+----------+---------+-------------+
| Wine | NA     | 12     | 52%    | 15%      | Fewer   | Consumption |
|      |        |        |        |          | va      | is growing  |
|      |        | \$29   | 60.8%  |          | rieties | rapidly     |
|      |        |        |        |          | than    |             |
|      |        |        |        |          | French; |             |
|      |        |        |        |          | higher  |             |
|      |        |        |        |          | prices  |             |
|      |        |        |        |          | than    |             |
|      |        |        |        |          | Chilean |             |
|      |        |        |        |          | and     |             |
|      |        |        |        |          | Aus     |             |
|      |        |        |        |          | tralian |             |
|      |        |        |        |          | wines   |             |
+------+--------+--------+--------+----------+---------+-------------+
| Fish | 3,212  | 1,110  | 40%    | \*10-20% | US      | Good        |
| and  |        |        |        |          | prices  | quality     |
| Sea  |        | \      | 21.9%  |          | are     |             |
| food |        | $1,820 |        |          | higher  |             |
|      |        |        |        |          | than    |             |
|      |        |        |        |          | those   |             |
|      |        |        |        |          | of      |             |
|      |        |        |        |          | comp    |             |
|      |        |        |        |          | etitors |             |
+------+--------+--------+--------+----------+---------+-------------+
| Alm  | 5      | 5      | 8.3%   | 8%       | Demand  | High        |
| onds |        |        |        |          | is      | profile and |
|      |        | \$17   | 7.7%   |          | limited | high        |
|      |        |        |        |          |         | quality     |
+------+--------+--------+--------+----------+---------+-------------+
| Sa   | NA     | 54     | 21.9%  | 8%       | US      | High        |
| uces |        |        |        |          | bottles | quality     |
|      |        | \$74   | 13.4%  |          | are a   |             |
|      |        |        |        |          | little  |             |
|      |        |        |        |          | too big |             |
|      |        |        |        |          | for     |             |
|      |        |        |        |          | con     |             |
|      |        |        |        |          | sumers. |             |
+------+--------+--------+--------+----------+---------+-------------+
| Pet  | 405    | 28     | 44.6%  | 5%       | High    | Demand      |
| Food |        |        |        |          | prices  | increasing  |
|      |        | \$36   | 24%    |          |         |             |
+------+--------+--------+--------+----------+---------+-------------+
| Ho   | NA     | 638    | 55.8%  | 8%       | Market  | Korean will |
| rses |        | heads  |        |          | is      | open        |
|      |        |        | 424.6% |          | still   | another     |
|      |        | \$7    |        |          | small.  | race track  |
|      |        |        |        |          |         | in 2004     |
|      |        |        |        |          |         | expanding   |
|      |        |        |        |          |         | the market. |
+------+--------+--------+--------+----------+---------+-------------+

\*The tariff rates are different depending upon the product, and for
some fish there are adjustment tariffs which are a lot higher than the
above. For accurate tariff rates, please contact ATO Seoul.

***SECTION V. KEY CONTACTS AND FURTHER INFORMATION***

**For further information about the Korean agricultural market, please
contact:**

U.S. Agricultural Trade Office

Korean Address: Room 303, Leema Building, 146-1, Susong-dong,
Chongro-ku, Seoul, Korea

U.S. Mailing Address: US Embassy Seoul, Unit 15550-ATO, APO, AP
96205-5550

Telephone: 82-2 397-4188 Fax: 82-2 720-7921

E-mail: <atoseoul@fas.usda.gov>

Website: [www.atoseoul.com]{.underline}

Agricultural Affairs Office

Korean Address: U.S. Embassy, 82, Sejong-ro, Chongro-ku, Seoul, Korea

U.S. Mailing Address: US Embassy Seoul, Unit 15550-AgAff, APO, AP
96205-5550

Telephone: 82-2 397-4297 Fax: 82-2 738-7147

E-mail: <agseoul@usda.gov>

**For more information on how you can register for USDA/FAS's Supplier
List:**

The United States Department of Agriculture's Foreign Agricultural
Service (USDA/FAS) offers information and services that can be
beneficial to both new and experienced exporters. For example, the U.S.
Suppliers Service is a searchable database of over 5,000 U.S. exporters
and their products, which is used by USDA/FAS to help facilitate
connecting potential buyers with U.S. suppliers. This database is used
by more than 85 USDA FAS Overseas offices, such as the ATO in Seoul,
Korea to help export agents, trading companies, importers and foreign
market buyers locate U.S. suppliers. It is also used to recruit U.S.
exporters to participate in market development activities sponsored by
USDA and federal export programs.

You can register online for this service at
**[http://www.fas.usda.gov/agexport/exporter.html]{.underline}**

AgConnections Team

AgExport Services Division, Foreign Agricultural Service, Washington, DC

Phone: 202-690-4172 Fax: 202-205-2963

E-mail: <joyce.estep@fas.usda.gov>

Website: www.fas.usda.gov/agx/agx.html

**For further information about sanitary and phytosanitary requirements,
please contact:**

U.S. Animal Plant and Health Inspection Service

Room 303, Leema Building, 146-1, Susong-dong, Chongro-ku, Seoul, Korea

Telephone: 82-2 725-5495 Fax: 82-2 725-5496

E-mail: aphis@kornet.net

Website: www.aphis.usda.gov

**For information about activities by Strategic Trade Regional Groups,
please contact:**

Mid-America International Agri-Trade Council (MIATCO)

400 West Erie Street, Suite 100, Chicago, Illinois 60610

Telephone: 312-944-3030 Fax: 312 944-1144

E-mail: eriggs@miatoco.org

Website: [www.miatco.org](http://www.miatco.org/)

Western United States Agricultural Trade Association

2500 Main Street, Suite 110, Vancouver, WA 98660-2697, USA

Phone: 360-693-3373 Fax: 360-693-3464

E-mail: <bruce@wusata.org>

Website: [www.wusata.org](http://www.wusata.org/)

Eastern United States Agricultural & Food Export Council

150 S. Independence Mall West, 1036 Public Ledger Building,
Philadelphia, PA 19106, USA

Phone: 215-829-9111 Fax: 215-829-9777

E-mail: <jcanono@foodexportusa.org>

Website: [www.foodexportusa.org](http://www.foodexportusa.org/)

Southern United States Agricultural Trade Association

2 Canal Street Suitge 2515, New Orleans, LA 70130, USA

Phone: 504-568-5986 Fax: 504-568-6010

E-mail: <jim@susta.org>

Website: [www.susta.org](http://www.susta.org/)

**For information on the commercial and industrial products in Korea,
please contact:**

Foreign Commercial Service

Korean Address: U.S. Embassy, 82, Sejong-ro, Chongro-ku, Seoul, Korea

U.S. Mailing Address: US Embassy Seoul, Unit 15550-FCS, APO, AP
96205-5550

Telephone: 82-2 397-4535 Fax: 82-2 739-1628

E-mail: <Seoul.office.box@mail.doc.gov> Homepage: www.buyusa.gov/korea

**APPENDIX I. STATISTICS**

####### Table A. KEY TRADE & DEMOGRAPHIC INFORMATION

  ----------------------------------------------------------- -------------
  Agricultural Imports From All Countries (\$Mil) / U.S.      12,903/25.4
  Market Share (%) 1/                                         

  Consumer Food Imports From All Countries (\$Mil) / U.S.     3,474/38.8
  Market Share (%) 1/                                         

  Edible Fishery Imports From All Countries (\$Mil) / U.S.    1,820/9
  Market Share (%) 1/                                         

  Total Population (Millions) / Annual Growth Rae (%)         48/ 0.6

  Urban Population (Millions) / Annual Growth Rate (%) 2/     36.8/1

  Number of Major Metropolitan Areas 3/                       7

  Size of the Middle Class (Millions) / Growth Rate (%) 4/    N/A

  Per Capita Gross Domestic Product (U.S. Dollars) 5/         \$10,013

  Unemployment Rate (%)                                       3.1%

  Per Capita Food Expenditures (U.S. Dollars) 6/              \$384

  Percent of Female Population Employed 7/                    48.4

  Exchange Rate (US\$ = Korean won) 8/                        1,251.2
  ----------------------------------------------------------- -------------

All data are for 2002 unless otherwise noted.

Foot Notes

1/ Korea Trade Information Service (KOTIS)

2/ Urban population in 2000 and average annual growth rate between 1995
and 2000

3/ Population in excess of 1,000,000

4/ Official data is not available

5/ Per capita Gross National Income-preliminary, GDP is not available

6/ Average monthly household expenditures in cities on food and beverage

7/ Percent of women employed against total number of women (15 years old
or above)

8/ Average annual exchange rate of won against the U.S. dollar in 2002

####### Table B. CONSUMER FOOD & EDIBLE FISHERY PRODUCT IMPORTS

<table style="width:100%;">
<colgroup>
<col style="width: 33%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
</colgroup>
<tbody>
<tr class="odd">
<td rowspan="2"><h1 id="imports">Imports</h1>
<p><strong>(In Millions of Dollars)</strong></p></td>
<td colspan="3"><strong>Imports from the World</strong></td>
<td colspan="3"><strong>Imports from the U.S.</strong></td>
<td colspan="3"><strong>U.S. Market Share</strong></td>
</tr>
<tr class="even">
<td><strong>2000</strong></td>
<td><strong>2001</strong></td>
<td><strong>2002</strong></td>
<td><strong>2000</strong></td>
<td><strong>2001</strong></td>
<td><strong>2002</strong></td>
<td><strong>2000</strong></td>
<td><strong>2001</strong></td>
<td><strong>2002</strong></td>
</tr>
<tr class="odd">
<td>CONSUMER-ORIENTED AGRICULTURAL PRODUCT TOTAL</td>
<td>2708</td>
<td>2607</td>
<td>NA</td>
<td>1087</td>
<td>976</td>
<td>NA</td>
<td>40%</td>
<td>37%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Snack Foods (Excl. Nuts)</td>
<td>106</td>
<td>117</td>
<td>NA</td>
<td>30</td>
<td>27</td>
<td>NA</td>
<td>28%</td>
<td>23%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Breakfast Cereals &amp; Pancake Mix</td>
<td>6</td>
<td>5</td>
<td>NA</td>
<td>1</td>
<td>1</td>
<td>NA</td>
<td>17%</td>
<td>20%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Red Meats, Fresh/Chilled/Frozen</td>
<td>1054</td>
<td>734</td>
<td>NA</td>
<td>549</td>
<td>375</td>
<td>NA</td>
<td>52%</td>
<td>51%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Red Meats, Prepared/Preserved</td>
<td>35</td>
<td>42</td>
<td>NA</td>
<td>18</td>
<td>18</td>
<td>NA</td>
<td>51%</td>
<td>43%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Poultry Meat</td>
<td>74</td>
<td>100</td>
<td>NA</td>
<td>47</td>
<td>48</td>
<td>NA</td>
<td>64%</td>
<td>48%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Dairy Products (Excl. Cheese)</td>
<td>97</td>
<td>109</td>
<td>NA</td>
<td>18</td>
<td>19</td>
<td>NA</td>
<td>19%</td>
<td>17%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Cheese</td>
<td>71</td>
<td>88</td>
<td>NA</td>
<td>12</td>
<td>14</td>
<td>NA</td>
<td>17%</td>
<td>16%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Eggs &amp; Products</td>
<td>14</td>
<td>18</td>
<td>NA</td>
<td>6</td>
<td>8</td>
<td>NA</td>
<td>43%</td>
<td>44%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Fresh Fruit</td>
<td>181</td>
<td>188</td>
<td>NA</td>
<td>71</td>
<td>84</td>
<td>NA</td>
<td>39%</td>
<td>45%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Fresh Vegetables</td>
<td>29</td>
<td>35</td>
<td>NA</td>
<td>1</td>
<td>1</td>
<td>NA</td>
<td>3%</td>
<td>3%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Processed Fruit &amp; Vegetables</td>
<td>301</td>
<td>309</td>
<td>NA</td>
<td>98</td>
<td>99</td>
<td>NA</td>
<td>33%</td>
<td>32%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Fruit &amp; Vegetable Juices</td>
<td>95</td>
<td>87</td>
<td>NA</td>
<td>26</td>
<td>28</td>
<td>NA</td>
<td>27%</td>
<td>32%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Tree Nuts</td>
<td>21</td>
<td>28</td>
<td>NA</td>
<td>18</td>
<td>23</td>
<td>NA</td>
<td>86%</td>
<td>82%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Wine &amp; Beer</td>
<td>25</td>
<td>35</td>
<td>NA</td>
<td>5</td>
<td>8</td>
<td>NA</td>
<td>20%</td>
<td>23%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Nursery Products &amp; Cut Flowers</td>
<td>29</td>
<td>30</td>
<td>NA</td>
<td>1</td>
<td>1</td>
<td>NA</td>
<td>3%</td>
<td>3%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Pet Foods (Dog &amp; Cat Food)</td>
<td>14</td>
<td>20</td>
<td>NA</td>
<td>9</td>
<td>12</td>
<td>NA</td>
<td>64%</td>
<td>60%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Other Consumer-Oriented Products</td>
<td>557</td>
<td>663</td>
<td>NA</td>
<td>178</td>
<td>211</td>
<td>NA</td>
<td>32%</td>
<td>32%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>FISH &amp; SEAFOOD PRODUCT TOTAL</td>
<td>1338</td>
<td>1585</td>
<td>NA</td>
<td>138</td>
<td>149</td>
<td>NA</td>
<td>10%</td>
<td>9%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Salmon</td>
<td>23</td>
<td>20</td>
<td>NA</td>
<td>1</td>
<td>2</td>
<td>NA</td>
<td>4%</td>
<td>10%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Surimi</td>
<td>96</td>
<td>112</td>
<td>NA</td>
<td>52</td>
<td>63</td>
<td>NA</td>
<td>54%</td>
<td>56%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Crustaceans</td>
<td>220</td>
<td>253</td>
<td>NA</td>
<td>7</td>
<td>9</td>
<td>NA</td>
<td>3%</td>
<td>4%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Groundfish &amp; Flatfish</td>
<td>481</td>
<td>593</td>
<td>NA</td>
<td>60</td>
<td>57</td>
<td>NA</td>
<td>12%</td>
<td>10%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Molluscs</td>
<td>121</td>
<td>156</td>
<td>NA</td>
<td>1</td>
<td>1</td>
<td>NA</td>
<td>1%</td>
<td>1%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Other Fishery Products</td>
<td>395</td>
<td>451</td>
<td>NA</td>
<td>17</td>
<td>17</td>
<td>NA</td>
<td>4%</td>
<td>4%</td>
<td>NA</td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td>　</td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td>AGRICULTURAL PRODUCTS TOTAL</td>
<td>8064</td>
<td>8038</td>
<td>NA</td>
<td>2814</td>
<td>2891</td>
<td>NA</td>
<td>35%</td>
<td>36%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>AGRICULTURAL, FISH &amp; FORESTRY TOTAL</td>
<td>10970</td>
<td>11195</td>
<td>NA</td>
<td>3123</td>
<td>3197</td>
<td>NA</td>
<td>28%</td>
<td>29%</td>
<td>NA</td>
</tr>
</tbody>
</table>

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

**Table C. TOP 15 SUPPLIERS OF CONSUMER FOODS AND EDIBLE FISHERY
PRODUCTS**

#### CONSUMER-ORIENTED AGRICULTURAL TOTAL - 400

  ------------------------------------- ------------ ------------ ------------
  **Reporting Country:\                 **Import**                
  Korea, Republic of\                                             
  Top 15 Ranking**                                                

                                        **2000**     **2001**     **2002**

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

  **United States**                     1,087,106    976,328      NA

  **China (Peoples Republic of)**       266,090      309,578      NA

  **Australia**                         235,467      229,599      NA

  **New Zealand**                       97,632       112,934      NA

  **Philippines**                       105,959      103,257      NA

  **Thailand**                          45,864       90,060       NA

  **Japan**                             81,534       84,466       NA

  **Canada**                            111,376      73,591       NA

  **Netherlands**                       96,260       72,616       NA

  **France**                            92,885       71,075       NA

  **Belgium**                           14,562       58,413       NA

  **Denmark**                           89,832       57,887       NA

  **Brazil**                            44,443       37,863       NA

  **Taiwan (Estimated)**                29,329       37,553       NA

  **Germany**                           31,505       34,750       NA

  **Other**                             278,348      257,357      0

  **World**                             2,708,198    2,607,343    0
  ------------------------------------- ------------ ------------ ------------

+-----------------------------------------------------------------------+
| > NA - Data not available (not reported) Data: Harmonized Tariff      |
| > Schedule (HS 6 Digit)                                               |
+-----------------------------------------------------------------------+
| > Source: FAS\' Global Agricultural Trade System using data from the  |
| > United Nations Statistical Office                                   |
+-----------------------------------------------------------------------+

#### Table D. FISH & SEAFOOD PRODUCTS - 700

  ------------------------------------- ------------ ------------ ------------
  **Reporting Country:\                 **Import**                
  Korea, Republic of\                                             
  Top 15 Ranking**                                                

                                        **2000**     **2001**     **2002**

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

  **China (Peoples Republic of)**       478,813      628,631      NA

  **Russian Federation**                122,063      152,419      NA

  **United States**                     138,188      148,513      NA

  **Japan**                             165,675      132,630      NA

  **Vietnam**                           71,957       101,443      NA

  **Thailand**                          66,986       82,993       NA

  **Taiwan (Estimated)**                31,173       45,600       NA

  **Norway**                            17,792       24,957       NA

  **Canada**                            18,461       24,511       NA

  **Indonesia**                         27,052       24,133       NA

  **Mexico**                            23,686       16,513       NA

  **United Kingdom**                    13,836       16,298       NA

  **India**                             11,314       16,226       NA

  **New Zealand**                       15,640       15,687       NA

  **Philippines**                       13,309       14,748       NA

  **Other**                             121,653      139,932      0

  **World**                             1,337,596    1,585,246    0
  ------------------------------------- ------------ ------------ ------------

  -----------------------------------------------------------------------
  NA - Data not available (not reported) Data: Harmonized Tariff Schedule
  (HS 6 Digit)

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