Required Report - public distribution

**Date:** 10/2/2006

**GAIN Report Number:** KS6103

KS6103

**Korea, Republic of**

**Exporter Guide**

**Annual**

**2006**

**Approved by:**

![](media/image1.wmf)Stan Phillips, ATO Director

ATO U.S. Embassy

**Prepared by:**

Seh Won KIM, Ag. Marketing Specialist

**Report Highlights:**

South Korea is the fifth largest market for U.S. agricultural products.
Korea's 49 million citizens reside in an area slightly larger than
Indiana. Accordingly, imported food comprises 60-70 percent of overall
food consumption in Korea. Total imports of agricultural products
amounted to \$15.5 billion in 2005 and are estimated to reach \$16.4
billion in 2006. U.S. food exports to Korea account for nearly 20
percent of the overall market. Free trade agreement negotiations between
the United States and Korea are currently underway boding well for
future bilateral trade prospects.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Seoul ATO \[KS2\]

\[KS\]

Table of Contents

[**SECTION I. MARKET OVERVIEW 3**](#section-i.-market-overview)

[Table 1. Agricultural Imports by Sector
3](#table-1.-agricultural-imports-by-sector)

[Table 2. Advantages and Challenges for U.S. Consumer-Oriented Foods
4](#table-2.-advantages-and-challenges-for-u.s.-consumer-oriented-foods)

[SECTION II. EXPORTER BUSINESS TIPS
4](#section-ii.-exporter-business-tips)

[A. Where to Start 4](#a.-where-to-start)

[B. Local Business Customs 5](#b.-local-business-customs)

[C. General Consumer Tastes and Preferences
6](#c.-general-consumer-tastes-and-preferences)

[D. Food Standards and Regulations
7](#d.-food-standards-and-regulations)

[E. General Import and Inspection Procedures
7](#e.-general-import-and-inspection-procedures)

[Chart 1: Korea Food & Drug Administration (KFDA) Import Procedures
8](#chart-1-korea-food-drug-administration-kfda-import-procedures)

[F. Labeling Requirements for Processed Food
9](#f.-labeling-requirements-for-processed-food)

[G. Food Code and Food Additive Code (Administered by KFDA)
11](#g.-food-code-and-food-additive-code-administered-by-kfda)

[H. Tariffs 12](#h.-tariffs)

[I. Sanitary and Phytosanitary Certification Requirements -- Animals,
Meat & Plant
12](#i.-sanitary-and-phytosanitary-certification-requirements-animals-meat-plant)

[J. Product Certification Forms 12](#j.-product-certification-forms)

[Eligible product 12](#eligible-product)

[Ineligible product 13](#ineligible-product)

[Certification Forms 13](#certification-forms)

[K. Bt 10 Free Certification 14](#k.-bt-10-free-certification)

[L. Sample Shipments 14](#l.-sample-shipments)

[M. Minimum Amount of the Initial Commercial Shipment
14](#m.-minimum-amount-of-the-initial-commercial-shipment)

[N. Laboratory Testing and Its Fee
15](#n.-laboratory-testing-and-its-fee)

[O. Copyright and/or Trademark Laws
15](#o.-copyright-andor-trademark-laws)

[P. Packaging & Container Requirements
15](#p.-packaging-container-requirements)

[Q. U.S. Laboratories Authorized to Inspect on Behalf of the Korean
Government
16](#q.-u.s.-laboratories-authorized-to-inspect-on-behalf-of-the-korean-government)

[R. Documents Generally Required when food is imported
16](#r.-documents-generally-required-when-food-is-imported)

[SECTION III. MARKET SECTOR STRUCTURE AND TRENDS
17](#section-iii.-market-sector-structure-and-trends)

[A. Retail Food Sector 17](#a.-retail-food-sector)

[Table 3. Food and Non-food Retail Market Sales in Korea
17](#table-3.-food-and-non-food-retail-market-sales-in-korea)

[Table 4. Reciepts from Food Sales for Each Retail Format
18](#table-4.-reciepts-from-food-sales-for-each-retail-format)

[B. Hotel, Restaurant and Institutional (HRI) Industry
19](#b.-hotel-restaurant-and-institutional-hri-industry)

[Table 5. Average Monthly Expenditures on Food Items
19](#table-5.-average-monthly-expenditures-on-food-items)

[per Household in cities in 2005 19](#per-household-in-cities-in-2005)

[Chart 2: Growth of the Korean Food Service Sector
20](#chart-2-growth-of-the-korean-food-service-sector)

[Table 6. Profile of Major Quick Service Western Restaurant Chains (Year
2005)
20](#table-6.-profile-of-major-quick-service-western-restaurant-chains-year-2005)

[Table 7. Profile of Major Family Restaurant Chains (Year 2005)
21](#table-7.-profile-of-major-family-restaurant-chains-year-2005)

[Table 8. Profile of Major Pizza Restaurant Chains (Year 2005)
21](#table-8.-profile-of-major-pizza-restaurant-chains-year-2005)

[Table 9. Profile of Major Coffee Shop Chains (Year 2005)
21](#table-9.-profile-of-major-coffee-shop-chains-year-2005)

[Table 10. Profile of Major Institutional Food Service Companies (Year
2005)
22](#table-10.-profile-of-major-institutional-food-service-companies-year-2005)

[C. Domestic Food Processing Sector
22](#c.-domestic-food-processing-sector)

[Table 11. Output of Food Processing by Sector: 2004
23](#table-11.-output-of-food-processing-by-sector-2004)

[D. Trends in Holiday Sales 23](#d.-trends-in-holiday-sales)

[E. E-Commerce 23](#e.-e-commerce)

[SECTION IV. BEST HIGH-VALUE PRODUCT PROSPECTS
25](#section-iv.-best-high-value-product-prospects)

[SECTION V. KEY CONTACTS AND FURTHER INFORMATION
26](#section-v.-key-contacts-and-further-information)

[APPENDIX. STATISTICS 28](#appendix.-statistics)

[Table A. KEY TRADE & DEMOGRAPHIC INFORMATION
28](#table-a.-key-trade-demographic-information)

[Table B. KOREAN CONSUMER FOOD & EDIBLE FISHERY PRODUCT IMPORTS
29](#table-b.-korean-consumer-food-edible-fishery-product-imports)

[Table C: TOP 15 SUPPLIERS OF CONSUMER FOODS & EDIBLE FISHERY PRODUCTS
30](#table-c-top-15-suppliers-of-consumer-foods-edible-fishery-products)

[Table C-1: CONSUMER-ORIENTED AGRICULTURAL TOTAL - 400
30](#table-c-1-consumer-oriented-agricultural-total---400)

[Table C-2: FISH & SEAFOOD PRODUCTS
31](#table-c-2-fish-seafood-products)

# SECTION I. MARKET OVERVIEW

Korea was the world's 12^th^ largest economy in 2005 with a GDP of
\$787.5 billion in 2005. Per capita GDP in Korea was estimated by the
OECD at \$20,400 in 2005 on a purchasing power parity basis. As such,
the demands of Korean consumers are converging with the demands of
consumers in other developed economies including the United States.
Korean consumers place value on high quality, low cost, healthiness and
convenience in the course of making food purchasing decisions.
Increasing affluence, more women in the workforce, and a well-traveled
younger generation looking for goods with an international flavor are
promoting the rise of convenience stores, bulk retail outlets and
western style family restaurants. The demand for products, such as
frozen vegetables, sauce preparations, and confectionery items is
growing and the domestic processing industry lacks the capacity to
supply these items.

Traditionally, Korea has imported large amounts of bulk and intermediate
products, such as hides and cotton. The market for these types of
products is fairly flat as industries such as tanning and textile
increasingly shift their processing facilities to lower-cost locations.
Total imports of bulk products from January to August 2006 have declined
by 3.7 percent, whereas imports of consumer ready products have
increased by 13.3 percent. Imports of U.S. poultry, pork, pastries,
mineral water, confectionery products, processed meats and nuts are all
showing significant growth in 2006.

The Samsung Economic Research Institute forecasts Korea\'s GDP growth in
2006 at 4.8 percent and 4.3 percent in 2007. The overall performance of
the Korean economy will depend greatly on external conditions including
the international price of oil to the strength of the Korean won.

Korea has a very high population density. Seoul, the nation's capital,
has grown into a global metropolis. Currently 23 million people live in
Seoul, Incheon and Kyunggi Province, about 48 percent of the total
population. Also, the metropolitan area around Seoul currently houses
about 84 percent of government bodies and institutes, 88 percent of
Korea's 30 largest companies and 65 percent of the 20-most popular
universities in the nation.

This concentration in Seoul along with its efficient distribution system
allows U.S. suppliers to realize promotional benefits from their efforts
very quickly. Other marketing opportunities such as on-line selling,
home shopping channels and home delivery of groceries work well in Seoul
whereas in other countries the costs of promoting through these types of
retail sales outlets are much higher.

### Table 1. Agricultural Imports by Sector

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

  --------------- ----------- ---------- ----------- ---------- ----------- ----------
  **Category**    **2004**               **2005**               **2006      
                                                                (f)**       

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

  Consumer        3,494       785        4,187       819        4,644       993

  Intermediate    3,689       729        3,986       765        4,306       809

  Bulk            3,614       1,678      3,156       1,031      3,036       1,373

  Fish & Seafood  2,189       129        2,301       144        2,458       132

  Forest Products 1,774       163        1,845       171        1,978       170

  TOTAL           14,759      3,482      15,475      2,927      16,422      3,447
  --------------- ----------- ---------- ----------- ---------- ----------- ----------

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

Source: Korea Trade Information Service (KOTIS), compiled by ATO Seoul

Total imports of agricultural products from the United States are
estimated at \$3.5 billion in 2006, up from the previous year due to the
significant increase in corn imports.

### Table 2. Advantages and Challenges for U.S. Consumer-Oriented Foods

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

  Equal or superior quality to        Frequent changes in food
  domestic products                   regulations compounded by language
                                      barrier

  Increasing affluence of Koreans     Importers lack knowledge of product
                                      sources

  Diminishing resistance to imported  Food safety concerns and biotech
  foods                               issues

  Strong appreciation of Korean       High marketing costs
  currency                            

  Korean officials publicly state     Onerous inspection/customs
  intentions to follow international  clearance procedures
  guidelines for beef trade           

  Ongoing FTA negotiations with the   Tolerances of
  United States                       additives/preservatives are
                                      different from the United States
  ----------------------------------- -----------------------------------

# 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 their product. It
may not be possible to market the exact same product in Korea as in the
United States. Korean consumers may have different demands.

Information freely provided on the U.S. Agricultural Trade Office
website may be a good place to start. In addition, information from
Korean importers, U.S. state departments of agriculture and the U.S.
Department of Commerce (for non-agricultural products) could be helpful.
Lists of Korean importers, by product, can also be obtained from the
U.S. Agricultural Trade Office (see Section V.).

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 with an importer is
established, it is advisable to visit the importer(s) in person, which
will increase the seller\'s credibility with the Korean importer and
give an opportunity to see the Korean market first hand. In Korea the
clichés 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 your firm in Korean is a good
plan to start.

Another way of finding potential importers is to participate in a local
food show 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.

Currently, the only USDA-supported food show in Korea is "Seoul Food &
Hotel 2007", which will be held in Ilsan in the suburbs of Seoul, April
24-27, 2007. The show presents an excellent chance 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 the only "trade
only" show in Korea. All other shows cater mostly to consumers. See
<http://www.allworldexhibitions.com/food/> for more information.

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 necessarily ensure the same tactic 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 to market a product.

For exporters of high-value niche market products, Food Export
Association of the Midwest USA 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 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 business tips
U.S. suppliers should keep in mind when dealing with Korean businessmen.

Obtaining Information: To obtain information from a Korean importer, it
is best to ask directly and explain why the 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 do 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.\"

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
sentences and slang, indicate a reasonable time frame for a response,
and close with additional words of appreciation.

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.

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. For U.S. exporters that are new to the
Korean market, ATO Seoul may be able to provide an introduction.

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. Although Koreans are wary of people who
refuse to drink or who drink moderately, foreigners are given a little
more flexibility especially if you explain that you have health or
religious reasons for abstaining. 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.

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.

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 a long 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 be 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 the 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 some familiarity with
terms can be worked out.

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.

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.

Special Note: 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."

## 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. For home consumption, busy consumers can purchase ready-made
local-style food items such as kimchi or bulgogi (barbecue) 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. However, the
younger generation has had a lot of exposure to Western style foods,
especially American food. Over 80,000 Korean students study in the
United States every year and, thus, they are somewhat accustomed to U.S.
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. Koreans perceive organic
products as healthy products. 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. One caveat in
this area is that importers sometimes request full disclosure of the
ingredient percentages for processed food products. However, Korean
regulations only require discloser of the percentage content of main
ingredients. 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 -- KS6080 dated July 28, 2006.

## E. General Import and Inspection Procedures

The 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 inspections must clear by the appropriate
quarantine inspection authority before KCS provides clearance.

### Chart 1: Korea Food & Drug Administration (KFDA) Import Procedures

![](media/image2.wmf)

\(1\) The importer or the importer's representative submits the form
called "Import Declaration for Food\" along with any other 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 that a given food product may be subject to include:
Document Inspection, Visual Inspection, Laboratory Inspection, and
Random Sampling Examination.

KFDA Inspection Duration

  ----------------------------------- -----------------------------------
  Document Inspection                 2 days

  Visual Inspection                   3 days

  Laboratory Inspection               10 days

  Incubation Test                     14 days

  Random Inspection                   5 days
  ----------------------------------- -----------------------------------

\(3\) If a product is subject to visual inspection, laboratory
inspection and random sampling examination, 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. An importer can clear products 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 about the nature of
the violation. The importer decides whether to destroy the product,
return the shipment to the exporting country, or use it for non-edible
purposes. If the violation can be corrected, as with labels, the
importer can reapply for inspection after making the corrections.

For perishable agricultural products, such as fresh vegetable, fruits,
etc., an importer can clear the products prior to completion of the
laboratory test with a pre-certification authorization from KFDA. In
this instance, however, the importer needs to be able to track down the
distribution of the given product so the products can be recalled should
the laboratory test indicates a violation.

If products are subject to animal quarantine inspection or plant
quarantine inspection, in addition to a food inspection by KFDA, the
animal quarantine certificate or plant quarantine certificate issued by
the National Veterinary Research & Quarantine Service (NVRQS) or the
National Plant Quarantine Service (NPQS) is required for product
clearance, in addition to the KFDA certificate. Inspection by NPQS or
NVRQS can take place simultaneously with the KFDA inspection.

## F. Labeling Requirements for Processed Food 

Korean language labeling is a requirement. The requirements change
frequently and importers must keep abreast of changing regulations. In
addition to the requirements listed below, country of origin labeling is
required on food products. Korean language stickers can be applied at
the port of entry. Korean importers will inform the U.S. exporters of
the Korean labeling requirements before they import any products. Many
food importers put Korean language label stickers on the packages in the
bonded warehouses before products clear Customs House when they import
in small quantities from the United States.

In June 1998, KFDA was legally delegated authority for food labeling
standards. The KFDA Food Safety Policy Team is responsible for
establishing labeling standards for food products. KFDA regional offices
enforce labeling standards. Provincial government health officials also
have the authority to enforce labeling standards.

With the exception of 102 meat, eggs, and dairy products, which are
regulated by the MAF, all imported food products are required to be
labeled with the necessary information in Korean. Stickers may be used
instead of manufacturer-printed Korean language labels for general food
products. The sticker should not be easily removable and should not
cover the original labeling. For functional food items, however,
stickers are not permitted. Manufacturer-printed Korean language labels
must be used on such products.

There are many labeling requirements, such as nutritional labeling
requirements, high caffeine content labeling requirements, use of
emphatic terms in nutrient content labeling, functional food labeling
requirements, organic labeling requirements for processed products,
organic labeling requirements, labeling standards for livestock
products, labeling regulations for unprocessed GMO products, labeling
standards for recombinant foods, liquor labeling requirements, country
of origin labeling requirements, etc. For details on these specific
labeling requirements please again refer to the Food and Agricultural
Import Regulations and Standards (FAIRS) Reports -- KS6080 dated July
28, 2006.

Labels should have the following inscriptions printed in letters large
enough to be readily legible:

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

**(2) Product type.** This is mandatory for specially designated
products, such as teas, health 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) Manufacture date (month, and year).** This is mandatory for
specially designated products, such as boxed lunches, sugar, liquor, and
salts. For liquors, a manufacture number (lot number) or bottling date
can substitute for the manufacture date.

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

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

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

**(8) Nutrients.** Only special nutritional foods, health supplement
foods, breads, noodles, retort foods, products for which nutritional
labels are sought, and products for which a nutrient emphasis mark is
desired are currently subject to nutritional labeling. However, in
accordance with the March 2005 revision, beginning in September 2006,
nutritional labeling requirements will be expanded to include foods
frequently consumed by children such as chocolate, candy, snacks,
cookies, chips, doughnuts, cakes, jams, beverages, etc. Details are
provided in the "Nutritional Labeling Requirements" in the Food and
Agricultural Import Regulations and Standards (FAIRS) Reports. KFDA
issued a draft revision of Labeling Standards for Food et al. on June
27, 2006. The draft revision proposes to introduce serving sizes and to
require listing of sugar, trans fat, cholesterol, etc. on the
nutritional label.

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

The revision, dated July 2000, introduced the principal display panel
labeling requirement, the labeling criteria for organic products, etc.,
and removed the food category labeling requirement for the majority of
food products.

The principal display panel must contain the product name and content
information. If this is not feasible, such information must be provided
on a Korean language sticker using a 12-point or larger font size.

**[Categories exempt from labeling requirements]{.underline}**

1\. Agricultural products such as grains; fishery items, such as whole
frozen fish; and fruits, that are not contained in a container or
package, etc.

2\. Foods, etc., to be used for manufacturing for a company's own use.
(Documents that show such intent need to be provided.) In this case, the
name of the product, the name of the manufacturer, and manufacture date
or shelf life shall be indicated on the original package.

3\. Products imported for the purpose of acquisition of foreign
currency, under the provisions of Article 34 of the Ministerial
Ordinance to the Foreign Trade Act.

## G. Food Code and Food Additive Code (Administered by KFDA)

**1. Food Code**

The Food Code stipulates standards and specifications for manufacturing,
processing, usage, cooking, storage of food and equipment, containers
and packaging for food products. It specifies the standards for maximum
residue levels of agricultural chemicals, antibiotics, synthetic
antibiotics, hormones, radioactive ray standards, testing methods, etc.
The Food Code contains general standards and specifications governing
food products and individual standards and specifications for 126 food
categories, delineated into 19 groups. A revision made on May 24, 2004
expanded the list of food products for which irradiation is permitted
under the Food Code. Revision issued on April 8, 2005 and April 20, 2006
established new Maximum Residue Limits (MRLs) and modified existing MRLs
and MRLs for veterinary drugs. The Food Code was last updated April 20,
2006.

**2. Food Additive Code**

The Food Additive Code defines standard specifications for individual
food additives and usage standards. As of July 2006, the Food Additive
Code lists standards for 424 types of chemical synthetics, 196 types of
natural food additives, and 7 types of mixed food additives. Korea
utilizes a "positive list" system for food additives meaning the only
approved food additives are those that are approved for a specific use
in the Additive Code. The latest revision, issued in December 2005,
introduced a positive list for 1,834 synthetic flavorings.

## H. Tariffs 

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

## I. Sanitary and Phytosanitary Certification Requirements -- Animals, Meat & Plant 

Sanitary and phytosanitary certificates issued by the exporting
country's inspection authority are required for live animals, plants and
meat products, such as beef, pork, poultry, etc. This requirement is in
accordance with the Livestock Epidemics Prevention & Control Act, the
Plant Protection Act, and the Livestock Processing Control Act. This
section 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 -- KS6080
dated July 28, 2006.

For the United States, the U.S. Department of Agriculture (USDA), Animal
& Plant Health Inspection Service (APHIS), issues sanitary and
phytosanitary certificates for live animals and plants, while the USDA,
Food Safety & Inspection Service (FSIS), issues health certificates for
meat products. The USDA, Agricultural Marketing Service (AMS) is
responsible for the Beef Export Verification (BEV) program for the
export of beef products to Korea.

Korea requires pre-approval of meat facilities, including slaughter
plants, processors, warehouses, etc., prior to the export of product to
the Korean market. Pre-approval is facilitated by registration with FSIS
and being listed in the FSIS Meat, Poultry Inspection Directory and
AMS's website under the BEV program. Further, it is advised that U.S.
companies wanting to export meat products to Korea first verify that the
supplying U.S. facilities are approved by Korea.

The "issuance date" of both health and phytosanitary certificates shall
be prior to the "on-board date" listed on the Bill of Lading. The
"inspection date" on a certificate must be prior to the departure date.
To prevent unnecessary delay at the port of entry, the certificate
"issuance date" should be prior to the departure date of shipments.

Current information on which U.S. livestock and poultry products are
eligible for export to the Korean market can be found on the website of
the USDA, FSIS at [http://www.fsis.usda.gov/Regulations
&\_Policies/Republic
of_Korea_Requirements/index.asp](../%20http://www.fsis.usda.gov/Regulations%20&_Policies/Republic%20of_Korea_Requirements/index.asp).
This website also provides guidance regarding what documents must
accompany livestock product shipments destined for Korea.

## J. Product Certification Forms

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.

##### Eligible product 

1\. Boneless beef derived from animals that were born and raised in the
U.S. or legally imported from Mexico and resident in the U.S. for at
least 100 days prior to slaughter. Boneless beef must be derived from
animals less than 30 months of age that were slaughtered on or after
September 11, 2006. Cheek meat, diaphragm, trimmings, tongue, ground
meat, advanced meat recovery products, all offals and variety meats, and
processed products are excluded. Eligible boneless beef must be produced
under an approved AMS Export Verification (EV) program for beef to
Korea. Information about the EV program for Korea and a list of EV
approved establishments can be obtained from the following website:
<http://www.ams.usda.gov/lsg/arc/bev.htm>.

2\. Poultry and poultry products.

3\. Pork products

4\. Nongravid pork uteri from gilts and unscalded stomachs and
intestines may be exported as edible product.

5\. Pork Casings

6\. Pork Bones

**Note:** Exporters should work closely with importers to assure that
bones comply with any classification requirements of Korean Customs.

7\. Protein-free tallow (see Documentation Requirements below).

##### Ineligible product 

1\. All ruminant and ruminant products, including meat, viscera and
their products (except for boneless beef meeting the requirements
indicated above and protein-free tallow).

2\. Imported meat and poultry and meat and poultry products are not
eligible for direct re-export or for re-export after processing in the
U.S.

3\. Equine meat.

##### Certification Forms

1\. Certificates for Boneless Beef

> a\. FSIS Form 9060-5 (July 19, 2001), Meat and Poultry Export
> Certificate of
>
> Wholesomeness
>
> b\. FSIS Form 9305-4 (June 7, 2006), Certificate for Export of Meat to
> the Republic of
>
> Korea

2\. Certificates for Pork and Pork Products

> a\. FSIS Form 9060-5 (May 6, 1999), Meat and Poultry Certificate of
> Wholesomeness
>
> b\. FSIS Form 93-5-5 (January 12, 2004), Certificate for the Export of
> Pork Meat to
>
> the Republic of Korea

3\. Poultry Products

> a\. FSIS Form 9060-5 (May 6, 1999)
>
> b\. FSIS Form 9305-2A (April 28, 2005)

4\. Pork Casings

> a\. FSIS Form 9060-7
>
> b\. FSIS Form 9305-5 (January 12, 2004)

5\. Protein-Free Tallow

> a\. FSIS Form 9060-5

6\. Fresh Products**:** Fresh fruits, vegetables and nuts 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. Also, the inspection date
on a certificate must be prior to the departure date.

7\. 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

8\. Vacuum Packed Shelled Walnuts must be fumigated according to the
schedules agreed between USA and Korea and accompanied by a
Phytosanitary certificate, PPQ Form 577, issued by USDA/APHIS

## K. Bt 10 Free Certification

On March 25, 2005, KFDA announced that unprocessed U.S. food corn
shipments loaded after March 25, 2005 must be tested and certified as
free from Bt10 and Bt11 corn prior to export to Korea. Subsequently,
KFDA changed import measures imposed on U.S. food corn shipments with
regards to Bt 10 as follows:

Effective June 15, 2005, a Bt 10 free certificate issued by GeneScan is
required for U.S. food corn shipments (kernel corn). Besides a Bt 10
free certificate, Bt 10 testing is required for the first shipments of
U.S. origin food corn accompanied by a Bt 10 free certificate and will
be conducted for each discharging vessel. After passing Bt 10 testing,
subsequent shipments of the same product from the same supplier (and
from the same loading facilities) will be tested only when they become
subject to random inspection or laboratory spot inspection if necessary.
A Bt 10 test certificate is required for subsequent shipments although
they are exempt from Bt 10 testing by KFDA. White corn, sweet corn, waxy
corn, and popcorn are exempt from all Bt 10 related requirements.

## L. Sample Shipments

For sample shipments, Bill of Lading/Airway Bill, Packing List, and
Invoice are usually required if the market value of sample products are
considered as samples. However, a phytosanitary certificate and a meat
export certificate are required for products subject to quarantine
inspection even if they are shipped as samples. It is recommended that
\"Sample Shipment\" be written on the related sample documents.

## M. Minimum Amount of the Initial Commercial Shipment 

On May 15, 2000, KFDA issued a revision to the Guideline for Inspection
of Imported Food Products adding a clause setting limits on the minimum
amount of the initial commercial shipment that it would inspect
directly. When the quantity of the imported food is less than 100 kg,
the imported food will 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}

## N. Laboratory Testing and Its Fee

On August 18, 2003, MHW issued a revision of the Ministerial Ordinance
of the Food Sanitation Act that required laboratory testing for
agricultural products every year and for processed products every three
years, notified to the WTO under SPS 123. In response to concerns
expressed by several WTO members including the United States, the Korean
government reduced the number of chemicals to be tested for and lowered
the testing fee on May 21, 2004. On July 27, 2005, MHW announced the
revision of the Ministerial Ordinance to the Food Sanitation Act to
address WTO members' concern with regard to SPS 123. The revision
included changes to Korea's import inspection procedures for
agricultural and processed food products, returning to practices in
place before Korea's January 2003 notification that imposed stricter
import procedures notified as SPS 123.

In addition, on August 5, 2005, KFDA announced a revision of the Import
Inspection Guidelines. The revision lists agriculture and food products
that are exempt from mandatory laboratory testing on the grounds that
the listed products have not had any violations for the past five years.
Food products with no record of violations resulting from past lab
tests, and recognized by the KFDA Commissioner as safe, became subject
to a document inspection only. The U.S. origin products covered under
the regulations include: oranges, lemons, wheat, cherries, grapefruit,
table grapes, frozen cod, frozen cod roe, frozen and chilled monkfish,
biscuits, roasted coffee, and vegetable cream. The revisions also
reduced the fees for chemical residue testing for agricultural products
from about \$2,000 to \$500.

## O. 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 a "first-to-file" principle. A
person who registers a trademark first has a preferential right to that
trademark and Korean law protects the person who has the right over the
trademark. To prevent trademark disputes, U.S. companies considering
conducting business in Korea are encouraged to register their trademarks
prior to beginning their business operations.

## P. Packaging & Container Requirements

"Standards & Specifications for Equipment and Container/Packaging"
established by KFDA and printed in Chapter 6 of the Korean Food Code,
includes general standards for equipment, container and packaging for
food products and specifications for individual packaging materials.

The Ministry of Environment announced regulations in 1999 covering PVC
shrink wrap packaging, which went into effect January 1, 2001.

Containers or packages that can be recycled must carry a "separation and
discharge" sign. In accordance with the Act on the Promotion of Saving
and Recycling of Resources, containers or packages that are made using
paper, metal, glass, and plastic materials shall be marked with a
"separation and discharge" sign. The sign is to facilitate the recycling
of wastes. The sign should indicate the type of material the package is
composed of, for example, PET, HDPE, LDPE, PP, PS, or PVC. \"Other\"
should be used for containers or packaging made of plastic materials.
For metals, either iron or aluminum should be indicated. Either a
printed label or a sticker label is acceptable. This requirement has
been in place since January 1, 2003.

## Q. U.S. Laboratories Authorized to Inspect on Behalf of the Korean Government 

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

**1. [Oregon Department of Agriculture's Export Service
Center]{.underline}**

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 Korean Food & Drug Administration to
do food-related testing, such as residue and microbiological testing on
food and beverages and food package testing, for products bound for
Korea. A certificate of inspection from this lab usually expedites
clearance inspections at Korean Customs. The ESC offers a range of
technical services, including product evaluation and certification. It
will evaluate products for foreign country requirements and issue a
certificate that minimizes the chances of product rejection. 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

**2. [Omic USA]{.underline}** **[Inc.]{.underline}**

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 has been certified to conduct testing on agricultural products,
processed food products including health functional food, which are
bound for Korea. The contact information follows:

**Omic USA Inc.**

Mr. Ryuichi Kurosawa, President

1200 N.W. Naito Parkway

Portland, Oregon 97209

Tel: 503-224-5929; Fax: 503-223-9436

## R. Documents Generally Required when food is imported

Invoice

Bill of Lading, or Airway Bill

Packing List

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

Names of all ingredients with percentage of major ingredients

Processing Method

Certificate of Production Date

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

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

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

# SECTION III. MARKET SECTOR STRUCTURE AND TRENDS

Local eating habits have changed dramatically in recent years. A diet
that has long been based on rice has become progressively more centered
on wheat and protein. For instance, per capita rice consumption has
decreased from 130 kilograms in 1984 by about 40 percent to 82 kilograms
in 2004 over the past 20 years. At the same time, consumers are seeking
more diversity and are becoming more quality oriented. Consumption of
fish, fruits and vegetables has also increased. Consumer preferences are
shifting toward foods that are convenient to cook rather than those that
require lengthy preparation. At the same time, demand for greater
quality in terms of flavor and nutrition has increased. Consumers are
becoming more health and safety conscious in their food buying habits,
as ingredients, packaging, shelf life and toxicity are becoming
important determinants of purchasing behavior. Spending habits are also
becoming more diversified, as individual preferences and a wider variety
of foods are available to meet consumer demands. These shifts toward
quality, variety, convenience, safety and health have resulted not only
in increased consumption of processed food, but have also stimulated the
growth of the domestic food processing industry.

## A. Retail Food Sector 

Food sales through all retail market channels except traditional markets
grew in 2005. Sales through traditional markets contracted by 8.4
percent. Retail market food sales are expected to show substantial
growth in 2006 except for traditional markets. On-line sales constitute
a rapidly growing segment of retail food sales. Korea's high level of
internet connectivity and increasing focus on convenience and variety
bodes well for future development of on-line sales. Products purchased
on-line are also becoming more diverse from cosmetics to electronics to
health foods. Most of the leading off-line mass retailers now operate
Internet stores and offer home-delivery to compete in the segment.

### Table 3. Food and Non-food Retail Market Sales in Korea 

+-----------------+--------------------+---------------------+--------+
| **Segment**     | **2004 Sales**     | **2005 Sales**      | **Gr   |
|                 |                    |                     | owth** |
|                 |                    |                     |        |
|                 |                    |                     | **%**  |
+-----------------+--------------------+---------------------+--------+
| Hypermarkets    | \$22.4 billion     | \$24.5 billion      | 9.4%   |
+-----------------+--------------------+---------------------+--------+
| Traditional     | \$37.1 billion     | \$34.0 billion      | -8.4%  |
| Market          |                    |                     |        |
+-----------------+--------------------+---------------------+--------+
| Department      | \$17.2 billion     | \$17.9 billion      | 4.0%   |
| Stores          |                    |                     |        |
+-----------------+--------------------+---------------------+--------+
| On-line         | \$13.2 billion     | \$15.9 billion      | 20.5%  |
| Shopping        |                    |                     |        |
+-----------------+--------------------+---------------------+--------+
| Convenience     | \$4.3 billion      | \$4.8 billion       | 11.6%  |
| Stores^1^       |                    |                     |        |
+-----------------+--------------------+---------------------+--------+
| Supermarkets^2^ | \$2.1 billion      | \$2.3 billion       | 9.5%   |
+-----------------+--------------------+---------------------+--------+

Exchange rate: \$1 = 960 Korean won

^1^/ Total sales of the eight largest convenience store chain companies
only.

^2^/ Total sales of the 11 largest supermarket chain companies only.

Sources: The Yearbook of Retail Industry 2006

### Table 4. Reciepts from Food Sales for Each Retail Format

  ------------------------------------ ----------------------------------
  **Year 2005**                        **Percent of Food Sales**

  Department Stores                    11.1%

  Hypermarkets                         53.3%

  Supermarkets                         82.0%

  Convenience Stores                   48.8%

  On-line Shopping                     7.7%
  ------------------------------------ ----------------------------------

Source: Distribution Industry Yearbook 2006

There are several types of outlets that handle food and agricultural
products. They include general market places (e.g., conventional open
air markets), periodic market places in rural areas (normally open once
every 5 days), department stores, hypermarkets, shopping centers, and
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
(NACF) stores and discount stores or membership-type warehouse 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 to
market their products.

Currently, the customs clearance process is cumbersome and costly and
generally not cost effective to bringing in mixed container loads.
Instead importers bring in full containers of a particular product,
store in-country or distribute to retailers or other distributors. Very
few Korean retailers import food products directly, rather they buy
these products from importers.

1\. Department Stores/Shopping Centers. According to the Korea Super
Chain Association (KOSCA), the total sales of department stores and
shopping centers amounted to \$17.9 billion in 2005. Daily sales for an
typical department store averaged \$559,375 with 15,957 average daily
customers in 2005. Food and beverage sales accounted for 11.1 percent of
department store receipts in 2005. The three main department stores in
Korea are Lotte, Shinsegae and Hyundai. Future prospects for department
stores sales are not bright because of competition with hypermarkets and
discount stores. This industry grew about 4 percent growth in 2005 over
the previous year.

2\. Supermarkets. The total sales of supermarkets amounted to \$2.3
billion in 2005. Average daily sales of the supermarkets surveyed by
KOSCA were \$20,313 per store with 1,367 average daily customers per
store in 2005. Of the average sales per outlet, food sales accounted for
82 percent of all receipts. The major players in this market are GS
Supermarket, Lotte Supermarket and Top Mart. This industry enjoyed about
9 percent growth in 2005 over the previous year.

3\. Convenience Stores. According to the KOSCA report, there were 9,085
outlets in 2005, up from 8,247 outlet. The total sales of the 8
convenience store companies surveyed by KOSCA were \$4.8 billion in
2005, a 12.4 percent increase from \$4.3 billion in 2004. The average
daily sales per store was \$1,605 with 525 average daily customers in
2005. Of total sales, food and beverage sales accounted for 48.8 percent
in 2005, compared to 52.7 percent in 2004. This sector is expected to
grow about 10 percent per year over the next few years as the number of
outlets increases rapidly.

4\. Hypermarkets/Discount Stores. This is one of the fastest growing
segments in the retail sector. Total sales of hypermarkets were \$24.5
billion in 2005, up from \$22.4 billion in 2004. The three big players
in this sector (E-Mart, Home Plus and Lotte Mart) accounted for 67
percent of the sector's total sales in 2005. Average daily sales of the
307 discount stores surveyed by KOSCA in 2005 amounted to \$296,875 with
6,557 average daily customers per store. Of the average sales per store,
food and beverage products accounted for 53.3 percent. In 2005 there
were big changes in the discount store industry. Walmart Korea sold its
16 stores to Shinsegae for \$882 million. Carrefour sold its 32 stores
to E-land for \$1.82 billion. Media reports speculate that difficulties
in adapting to Korean retail sector characteristics contributed to
Walmart and Carrefour's decisions to liquidate investments in Korea.
Sales for this sector are expected to grow over 10 percent every year
over the next couple of years, as the number of outlets continues to
increase.

For further detailed information on the retail food sector in Korea,
please refer to the Retail Sector Report; KS4009 dated February 23,
2004.

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

The Monthly Statistics of Korea (August 2006 Issue) shows that the
average monthly expenditures on food and beverages per household in
cities in 2005 amounted to \$574, accounting for 22.4 percent of a
typical household\'s total expenditures. Expenditures on restaurant
meals have been increasing rapidly and accounted for 46.4 percent of the
total expenditures Koreans made on food and beverages in 2005.

### Table 5. Average Monthly Expenditures on Food Items 

### per Household in cities in 2005

  --------------------------------- ----------------- --------------------
  **Food Items**                    **US\$**          **Percent**

  Cereals and bread                 47.71             8.30%

  Meat                              44.17             7.69%

  Vegetables & seaweeds             42.19             7.34%

  Fruits                            35.52             6.18%

  Fish and shellfish                33.85             5.89%

  Bakery & confectioneries          24.06             4.19%

  Dairy products                    23.65             4.12%

  Tea, soft drinks & Alcoholic      23.44             4.08%
  beverages                                           

  Oils, fats & seasonings           18.44             3.21%

  Other foods                       14.9              2.59%

  Restaurant meals                  266.56            46.40%

  Total Expenditure                 574.49            100.00%
  --------------------------------- ----------------- --------------------

\$ = 960 won

Source: Monthly Statistics of Korea, August 2006

The Korean food service sector garnered \$50.4 billion of cash register
sales in 2004. The total number of restaurants was estimated at 600,234
providing employment for 1.56 million employees. However, over 90
percent of restaurants were small family-owned businesses that hired
less than five employees. Average annual sales per restaurant amounted
to \$84,000 in 2005.

### Chart 2: Growth of the Korean Food Service Sector

![](media/image3.wmf)

\* Note: Annual cash register sales in ~~W~~100 million

Source: Korean government statistics (Jan. 2006)

1\. Hotel Segment. The hotel sector, especially five and four star
hotels that operate in-house, premium restaurants, has played a leading
role for the entry of new-to-market food products and recipes. It also
has served as an efficient venue for promotional activities, including
menu promotions, product launchings and product seminars. Currently,
food and beverage sales are estimated to comprise 40-50 percent of total
sales in five and four star hotels. Some leading hotels, including the
Shilla and the Westin Chosun, have greatly expanded their food service
businesses and currently operate stand-alone food outlets of various
formats outside of the hotel, including microbrew pubs, food courts,
coffee shops, bakery shops and premium gourmet restaurants. Although the
role played by hotels in the food service market is on a gradual decline
due to the growth of restaurants on the street, it is likely that the
sector will remain the leading distribution channel for premium,
high-quality imported food and beverage items in the near future.

2\. Restaurant Segment. Although declining in number due to the rapid
growth of restaurants serving international cuisines, traditional Korean
food restaurants are still the most numerous. It is, however, becoming
more difficult to distinguish Korean menus from foreign ones, as more
diverse recipe ideas and food styles are introduced, fusing traditional
menus with new-to-market recipes and ingredients. At the same time,
foreign dishes served in restaurants in Korea are somewhat 'Koreanized'
in terms of the taste, ingredient, and cooking style. In particular,
local consumers prefer less salt, fat and oil, while eating more hot
spices, vegetables, seafood and soup.

### Table 6. Profile of Major Quick Service Western Restaurant Chains (Year 2005)

  ---------------- ------------- ------------- ------------- -------------
  **Company**      **Brand**     **Annual      **No. of      **Change in
                                 Sales**       Outlets**     2005**

  Genesis          BBQ           542 Million   1800          +100

  Lotteria         Lotteria      \$396 million 800           -39

  Shinmac          McDonald's    \$291         305           -23
                                 million/1                   

  SRS Korea        KFC           \$167 million 179           -16

                   Burger King   \$73 million  94            +3

  TS Haemaro       Popeye's      \$104         160           -20
                                 million/2                   
  ---------------- ------------- ------------- ------------- -------------

Exchange rate: \$1 = 960 Korean won

^1^/ Total sales in 2002

^2^/ Total sales in 2004. They refused to expose their sales.

Source: Korea Food Distribution Yearbook 2006

### Table 7. Profile of Major Family Restaurant Chains (Year 2005)

  ---------------- ------------- ------------- ------------- -------------
  **Company**      **Brand**     **Annual      **No. of      **Change in
                                 Sales**       Outlets**     2005**

  Ojijung          Outback Steak \$229 million 70            +20

  CJ Foodvill      VIPS          \$135 million 41            +19

  Lotte            TGIF          \$115 million 39            +6

  Rise On          Bennigan's    \$103 million 26            +6

  Amoje            Marché        \$31 million  9             0

  Barons           Sizzler       \$21 million  7             +1

  Sunat Food       Tony Romas    \$16 million  7             0
  ---------------- ------------- ------------- ------------- -------------

Exchange rate: \$1 = 960 Korean won

Source: Korea Food Distribution Yearbook 2006

### Table 8. Profile of Major Pizza Restaurant Chains (Year 2005)

  ---------------- ------------- ------------- ------------- -------------
  **Company**      **Brand**     **Annual      **No. of      **Change in
                                 Sales**       Outlets**     2005**

  Pizza Hut Korea. Pizza Hut     \$417 million 340           0

  DPK              Domino's      \$208 million 280           +33
  International    Pizza                                     

  Mister Pizza     Mister Pizza  \$188 million 250           +30
  Korea                                                      

  Pizza Ethang     Ethang        \$83 million  270           +108

  PJI Korea        Papa Johns    \$12 million  39            0
  ---------------- ------------- ------------- ------------- -------------

Exchange rate: \$1 = 960 Korean won

Source: Korea Food Distribution Yearbook 2006

### Table 9. Profile of Major Coffee Shop Chains (Year 2005)

  ---------------- ------------- ------------- ------------- -------------
  **Company**      **Brand**     **Annual      **No. of      **Change in
                                 Sales**       Outlets**     2005**

  Starbuck's Korea Starbuck's    \$96 million  148           +39

  Coffee Bean      Coffee Bean   \$48 million  43            +9
  Korea                                                      

  Lotteria         Java Coffee   \$38 million  303           +36

  Hollys Coffee    Hollys        \$18 million  56            +17
  ---------------- ------------- ------------- ------------- -------------

Source: Korea Food Distribution Yearbook 2006

3\. Institutional Food Service Segment. Institutional food service
restaurants are growing, as more office workers and students, seeking
cheaper meal options, are switching to in-house contract feeding
restaurants for their lunches and dinners. The cash register sales for
2005 were estimated at \$6.3 billion, about 50 percent of which was
taken in by third-party commercial institutional food service providers.
Another half of the market was taken by restaurants directly operated by
the company or school. Commercial institutional food service providers
are expected to further increase their market shares in the coming
years, as more organizations seek cheaper and more efficient way to
provide quality meals for their employees and students.

### Table 10. Profile of Major Institutional Food Service Companies (Year 2005)

  ------------------- -------------- ------------ ---------- -------------
  **Name of Company** **Annual       **No. of     **Change   **No. of
                      Sales**        Outlets**    in 2005**  Meals Serving
                                                             Daily**

  Our Home            \$604 million  580          -20        690,000

  Samsung Everland    \$569 million  500          +20        600,000

  CJ Food System      \$646 million  580          -15        500,000

  G-Net (Hyundai)     \$281 million  320          -60        300,000

  Shinsegae Food      \$249 million  400          +80        300,000
  System                                                     

  Arakor              \$104 million  360          +40        250,000

  ECMD                \$107 million  300          +20        200,000

  Foodist             \$98 million   218          +15        180,000
  ------------------- -------------- ------------ ---------- -------------

Source: Korea Food Distribution Yearbook 2006

For further detailed information on the hotel, restaurant and
institutional industry in Korea, please refer to the HRI Food Service
Sector Semi-Annual Report -- KS5009 dated February 14, 2005.

## 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, 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 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. The total
production of food, foodstuffs and beverages is estimated at \$49.8
billion in Korea in 2004.

### Table 11. Output of Food Processing by Sector: 2004

  ------------------------------ --------------------- ------------------
  **Food Processing Sector**     **Gross output        **Share (%)**
                                 (\$million)**         

  Meat processing                5,678                 11.4%

  Grain processing               5,398                 10.8%

  Dairy & Ice cream              5,298                 10.6%

  Feed processing                5,115                 10.3%

  Alcoholic beverages            4,467                 9.0%

  Non-alcoholic beverages        3,662                 7.4%

  Coffee, tea, soup & other      3,363                 6.8%
  foods                                                

  Fish and seafood processing    3,158                 6.3%

  Seasonings, spices & Food      2,670                 5.4%
  additives                                            

  Bread & Grain preparations     2,622                 5.3%

  Noodles and similar products   2,068                 4.2%

  Cocoa & sugar confectionery    1,510                 3.0%

  Fats & Oils manufacturing      1,478                 3.0%

  Fruit & Vegetable Processing   1,441                 2.9%

  Starch & Sweeteners            950                   1.9%
  manufacturing                                        

  Sugar manufacturing            880                   1.8%

  Total                          49,758                100.0%
  ------------------------------ --------------------- ------------------

Source: Report on Mining and Manufacturing Survey, Dec. 2005

Most Korean food and beverage manufacturers are small-scale companies.
As of the end of 2004, there were 8,051 food, livestock, dairy and
beverage manufacturing plants with five or more employees. Of these,
there are only 19 manufacturers with 500 employees or more. Less than 4
percent (308 manufacturers) have 100 or more employees.

For further detailed information on the Korean food processing industry,
please refer to the Food Processing Ingredients Sector Report -- KS4011
dated February 27, 2004.

## D. Trends in Holiday Sales 

There are two major holidays in Korea when sales dramatically increase:
In 2007, the three-day Lunar New Year Holiday will take place on
February 17, 18 & 19, 2007 and the three-day Chusok (Korean
Thanksgiving) holiday will take place on September 24, 25 and 26, 2007.
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. Retailers conduct
special promotions to market holiday food gifts.

## E. E-Commerce

E-Commerce sales in Korea include TV home shopping, internet shopping
and mobile phone shopping. The popularity of e-commerce marketing
channels is bolstered by the high level of internet connectivity and
mobile phone use in Korea. There are five TV home shopping companies in
Korea, approved by the government, which sell their products in a
variety of ways including catalogs, internet sales, and television sales
programming. The total e-commerce sales amounted to about \$15.9 billion
in 2005, a 20 percent increase from \$13.2 billion in 2004. Receipts
attributable to food sales accounted for about 7.7 percent of all
e-commerce receipts in 2005. For more information about food sales
through e-commerce marketing channels see ATO Seoul's report on "Home
Shopping \-- KS6085 available under Attaché Reports at:
http://www.fas.usda.gov/

# SECTION IV. BEST HIGH-VALUE PRODUCT PROSPECTS

+-------+-------+-------+------+-------+--------------+--------------+
| **Pr  | *     | *     | **5  | **I   | **Key        | **Market     |
| oduct | *2005 | *2005 | Yr.  | mport | Constraints  | At           |
| Categ | M     | Imp   | Avg. | T     | over Market  | tractiveness |
| ory** | arket | orts: | An   | ariff | D            | for U.S.**   |
|       | S     | (\$   | nual | R     | evelopment** |              |
|       | ize** | M     | Im   | ate** |              |              |
|       |       | il)** | port |       |              |              |
|       | **(   |       | Grow |       |              |              |
|       | 1,000 | **Tot | th** |       |              |              |
|       | MT)** | al:** |      |       |              |              |
|       |       |       |      |       |              |              |
|       |       | **U   |      |       |              |              |
|       |       | SA:** |      |       |              |              |
+-------+-------+-------+------+-------+--------------+--------------+
| Beef  | 317   | 670   | 1    | Beef: | Bone-free    | Korea was    |
|       |       |       | 4.3% | 40%   | requirement  | the 3^rd^    |
|       |       | 0     |      |       | for U.S.     | largest U.S. |
|       |       |       |      |       | beef. .      | beef market  |
|       |       |       |      |       |              | prior to BSE |
|       |       |       |      |       |              | ban.         |
+-------+-------+-------+------+-------+--------------+--------------+
| Pork  | 838   | 591   | 2    | 22.   | High tariff. | Strong       |
|       |       |       | 7.2% | 5-25% |              | demand as a  |
|       |       | 133   |      |       |              | substitute   |
|       |       |       |      |       |              | for beef.    |
+-------+-------+-------+------+-------+--------------+--------------+
| Po    | 385   | 87    | 3.3% | \*1   | Not manually | Selected     |
| ultry |       |       |      | 8-27% | trimmed.     | U.S. cuts    |
| Meat  |       | 33    |      |       | Imports      | (legs, etc.) |
|       |       |       |      |       | other than   | are          |
|       |       |       |      |       | legs are     | price-       |
|       |       |       |      |       | small.       | competitive. |
+-------+-------+-------+------+-------+--------------+--------------+
| C     | 790   | 128   | 1    | Or    | High tariff  | The U.S. is  |
| itrus |       |       | 6.8% | ange: | rates.       | the          |
|       |       | 123   |      | 50%   |              | predominant  |
|       |       |       |      |       |              | supplier.    |
|       |       |       |      | G     |              |              |
|       |       |       |      | rapef |              |              |
|       |       |       |      | ruit: |              |              |
|       |       |       |      | 30%   |              |              |
|       |       |       |      |       |              |              |
|       |       |       |      | L     |              |              |
|       |       |       |      | emon: |              |              |
|       |       |       |      | 30%   |              |              |
+-------+-------+-------+------+-------+--------------+--------------+
| Hay & | NA    | 305   | 1    | Alf   | Tariff rate  | U.S. product |
| F     |       |       | 3.1% | alfa: | quotas       | is           |
| odder |       | 113   |      | 1%    | apply.       | considered   |
|       |       |       |      |       |              | high         |
|       |       |       |      | Ot    |              | quality.     |
|       |       |       |      | hers: |              |              |
|       |       |       |      |       |              |              |
|       |       |       |      | 2-1   |              |              |
|       |       |       |      | 00.5% |              |              |
+-------+-------+-------+------+-------+--------------+--------------+
| Choc  | NA    | 120   | 1    | 8%    | High quality | Competitive  |
| olate |       |       | 3.4% |       | products are | in prices    |
|       |       | 39    |      |       | not well     | and design   |
|       |       |       |      |       | known in     | for medium   |
|       |       |       |      |       | Korea.       | quality      |
|       |       |       |      |       |              | products.    |
+-------+-------+-------+------+-------+--------------+--------------+
| Whey  | NA    | 87    | 1    | 20-   | Prices are   | Good         |
|       |       |       | 1.2% | 49.5% | fluctuating. | quality,     |
|       |       | 23    |      |       |              | competitive  |
|       |       |       |      |       |              | prices and   |
|       |       |       |      |       |              | local        |
|       |       |       |      |       |              | production   |
|       |       |       |      |       |              | is limited.  |
+-------+-------+-------+------+-------+--------------+--------------+
| Wine  | NA    | 68    | 4    | 15%   | Fewer        | Consumption  |
|       |       |       | 8.3% |       | varieties    | is growing   |
|       |       | 9     |      |       | than French. | rapidly      |
|       |       |       |      |       | Chilean wine |              |
|       |       |       |      |       | subject to   |              |
|       |       |       |      |       | lower        |              |
|       |       |       |      |       | tariffs as a |              |
|       |       |       |      |       | result of    |              |
|       |       |       |      |       | FTA.         |              |
+-------+-------+-------+------+-------+--------------+--------------+
| Fish  | 3,885 | 2,300 | 1    | \*1   | Tr           | Good quality |
| and   |       |       | 4.4% | 0-20% | ansportation |              |
| Se    |       | 144   |      |       | costs can    |              |
| afood |       |       |      |       | make U.S.    |              |
|       |       |       |      |       | prices       |              |
|       |       |       |      |       | higher than  |              |
|       |       |       |      |       | those of     |              |
|       |       |       |      |       | competitors. |              |
+-------+-------+-------+------+-------+--------------+--------------+
| B     | NA    | 96    | 2    | 8%    | Higher       | Good quality |
| read, |       |       | 5.5% |       | prices.      |              |
| c     |       | 26    |      |       |              |              |
| akes, |       |       |      |       |              |              |
| pa    |       |       |      |       |              |              |
| stry, |       |       |      |       |              |              |
| etc.  |       |       |      |       |              |              |
+-------+-------+-------+------+-------+--------------+--------------+
| Nuts  | NA    | 62    | 4    | Al    | Tariffs are  | U.S. is a    |
|       |       |       | 1.3% | mond: | high for     | dominant     |
|       |       | 54    |      | 8%    | pistachios & | supplier.    |
|       |       |       |      |       | walnuts.     |              |
|       |       |       |      | Pista | Ph           |              |
|       |       |       |      | chio: | yto-sanitary |              |
|       |       |       |      | 30%   | requirements |              |
|       |       |       |      |       | for in-shell |              |
|       |       |       |      | Wa    | walnuts are  |              |
|       |       |       |      | lnut: | onerous.     |              |
|       |       |       |      | 30%   |              |              |
+-------+-------+-------+------+-------+--------------+--------------+

\*The tariff rates differ widely depending upon the product. For
specific tariff rates, please contact ATO Seoul.

# SECTION V. KEY CONTACTS AND FURTHER INFORMATION

**KEY FAS/USDA 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: U.S. Embassy Seoul, Unit 15550-ATO, APO, AP
96205-5550

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

E-mail: <atoseoul@usda.gov>

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

**Agricultural Affairs Office**

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

U.S. Mailing Address: U.S. 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' 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 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**

AgConnections Team

AgExport Services Division, Foreign Agricultural Service, Washington,
D.C.

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

E-mail: <joyce.estep@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 (APHIS)**

Korean Address: Room 303, Leema Building

146-1, Susong-dong, Chongro-ku, Seoul, Korea

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

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

E-mail: yunhee.kim@aphis.usda.gov

Website: www.aphis.usda.gov

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

**Food Export Association of the Midwest USA**

309 W. Washington St., Suite 600

Illinois 60606

Telephone: 312-334-9200 Fax: 312 334-9230

E-mail: thamilton@foodexport.org

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

**Western United States Agricultural Trade Association (WUSATA)**

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

Telephone: 360-693-3373 Fax: 360-693-3464

E-mail: <bruce@wusata.org>

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

**Food Export USA - Northeast Region of the United States**

150 S. Independence Mall West, 1036 Public Ledger Building

Philadelphia, PA 19106, USA

Telephone: 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 (SUSTA)**

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

Telephone: 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:**

**U.S. Commercial Service**

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

U.S. Mailing Address: U.S. Embassy Seoul, Unit 15550-USCS, 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](http://www.buyusa.gov/korea)

# APPENDIX. STATISTICS

## Table A. KEY TRADE & DEMOGRAPHIC INFORMATION

  ---------------------------------------------------------- -------------
  Agricultural Imports From All Countries (\$Mil) / U.S.     15,475/18.9
  Market Share (%) ^1^                                       

  Consumer Food Imports From All Countries (\$Mil)/U.S.      4,187/19.6
  Market Share (%) ^1^                                       

  Edible Fishery Imports From All Countries (\$Mil) / U.S.   2,301/6.2
  Market Share (%) ^1^                                       

  Total Population (Millions) / Annual Growth Rate (%)       48.3/ 0.44

  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^       \$20,400

  Unemployment Rate (%)                                      3.7

  Per Capita Food Expenditures (U.S. Dollars) ^6^            \$575

  Percent of Female Population Employed ^7^                  48.4

  Exchange Rate (US\$ = Korean won) ^8^                      1,013
  ---------------------------------------------------------- -------------

All data are for 2005 unless otherwise noted.

Foot Notes

^1^/ Korea Trade Information Service (KOTIS), compiled by ATO Seoul

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

^3^/ Population in excess of million people in 2000

^4^/ Official data is not available

^5^/ Purchasing power parity basis estimate. Source:
[https://www.cia.gov](https://www.cia.gov/)

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

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

^8^/ Year-end exchange rate of Korean won against the U.S. dollar in
2005.

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

<table>
<colgroup>
<col style="width: 34%" />
<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"><p><strong>Imports</strong></p>
<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>2003</strong></td>
<td><strong>2004</strong></td>
<td><strong>2005</strong></td>
<td><strong>2003</strong></td>
<td><strong>2004</strong></td>
<td><strong>2005</strong></td>
<td><strong>2003</strong></td>
<td><strong>2004</strong></td>
<td><strong>2005</strong></td>
</tr>
<tr class="odd">
<td><strong>CONSUMER-ORIENTED TOTAL</strong></td>
<td><strong>3,564</strong></td>
<td><strong>3,480</strong></td>
<td><strong>NA</strong></td>
<td><strong>1,551</strong></td>
<td><strong>1,551</strong></td>
<td><strong>NA</strong></td>
<td><strong>44%</strong></td>
<td><strong>23%</strong></td>
<td><strong>NA</strong></td>
</tr>
<tr class="even">
<td>Snack Foods (Excl. Nuts)</td>
<td>154</td>
<td>157</td>
<td>NA</td>
<td>39</td>
<td>39</td>
<td>NA</td>
<td>25%</td>
<td>25%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Breakfast Cereals &amp; Pancake Mix</td>
<td>6</td>
<td>9</td>
<td>NA</td>
<td>2</td>
<td>2</td>
<td>NA</td>
<td>25%</td>
<td>30%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Red Meats, Fresh/Chilled/Frozen</td>
<td>1,370</td>
<td>950</td>
<td>NA</td>
<td>901</td>
<td>901</td>
<td>NA</td>
<td>66%</td>
<td>15%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Red Meats, Prepared/Preserved</td>
<td>47</td>
<td>41</td>
<td>NA</td>
<td>21</td>
<td>21</td>
<td>NA</td>
<td>44%</td>
<td>26%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Poultry Meat</td>
<td>96</td>
<td>52</td>
<td>NA</td>
<td>35</td>
<td>35</td>
<td>NA</td>
<td>37%</td>
<td>9%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Dairy Products (Excl. Cheese)</td>
<td>86</td>
<td>144</td>
<td>NA</td>
<td>14</td>
<td>14</td>
<td>NA</td>
<td>16%</td>
<td>10%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Cheese</td>
<td>94</td>
<td>120</td>
<td>NA</td>
<td>17</td>
<td>17</td>
<td>NA</td>
<td>18%</td>
<td>17%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Eggs &amp; Products</td>
<td>16</td>
<td>16</td>
<td>NA</td>
<td>6</td>
<td>6</td>
<td>NA</td>
<td>34%</td>
<td>33%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Fresh Fruit</td>
<td>278</td>
<td>336</td>
<td>NA</td>
<td>126</td>
<td>126</td>
<td>NA</td>
<td>45%</td>
<td>45%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Fresh Vegetables</td>
<td>76</td>
<td>92</td>
<td>NA</td>
<td>11</td>
<td>11</td>
<td>NA</td>
<td>14%</td>
<td>13%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Processed Fruit &amp; Vegetables</td>
<td>388</td>
<td>481</td>
<td>NA</td>
<td>98</td>
<td>98</td>
<td>NA</td>
<td>25%</td>
<td>25%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Fruit &amp; Vegetable Juices</td>
<td>105</td>
<td>99</td>
<td>NA</td>
<td>42</td>
<td>42</td>
<td>NA</td>
<td>40%</td>
<td>33%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Tree Nuts</td>
<td>37</td>
<td>49</td>
<td>NA</td>
<td>32</td>
<td>32</td>
<td>NA</td>
<td>86%</td>
<td>85%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Wine &amp; Beer</td>
<td>60</td>
<td>73</td>
<td>NA</td>
<td>11</td>
<td>11</td>
<td>NA</td>
<td>18%</td>
<td>16%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Nursery Products &amp; Cut Flowers</td>
<td>32</td>
<td>41</td>
<td>NA</td>
<td>1</td>
<td>1</td>
<td>NA</td>
<td>0.81%</td>
<td>1%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Pet Foods (Dog &amp; Cat Food)</td>
<td>51</td>
<td>52</td>
<td>NA</td>
<td>28</td>
<td>28</td>
<td>NA</td>
<td>54%</td>
<td>45%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Other Consumer-Oriented Products</td>
<td>667</td>
<td>767</td>
<td>NA</td>
<td>169</td>
<td>169</td>
<td>NA</td>
<td>25%</td>
<td>23%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td><strong>SEAFOOD PRODUCTS TOTAL</strong></td>
<td><strong>1,823</strong></td>
<td><strong>2,088</strong></td>
<td><strong>NA</strong></td>
<td><strong>143</strong></td>
<td><strong>128</strong></td>
<td><strong>NA</strong></td>
<td><strong>8%</strong></td>
<td><strong>6%</strong></td>
<td><strong>NA</strong></td>
</tr>
<tr class="odd">
<td>Salmon</td>
<td>19</td>
<td>27</td>
<td>NA</td>
<td>1</td>
<td>1</td>
<td>NA</td>
<td>7%</td>
<td>0.63%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Surimi</td>
<td>120</td>
<td>112</td>
<td>NA</td>
<td>53</td>
<td>51</td>
<td>NA</td>
<td>44%</td>
<td>46%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Crustaceans</td>
<td>310</td>
<td>412</td>
<td>NA</td>
<td>7</td>
<td>7</td>
<td>NA</td>
<td>2%</td>
<td>2%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Ground fish &amp; Flatfish</td>
<td>711</td>
<td>708</td>
<td>NA</td>
<td>64</td>
<td>53</td>
<td>NA</td>
<td>9%</td>
<td>8%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>Mollusks</td>
<td>202</td>
<td>239</td>
<td>NA</td>
<td>1</td>
<td>1</td>
<td>NA</td>
<td>0.37%</td>
<td>0.58%</td>
<td>NA</td>
</tr>
<tr class="even">
<td>Other Fishery Products</td>
<td>461</td>
<td>590</td>
<td>NA</td>
<td>17</td>
<td>14</td>
<td>NA</td>
<td>4%</td>
<td>2%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td>　</td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td><strong>CONSUMER &amp; FISHERY TOTAL</strong></td>
<td><strong>5,387</strong></td>
<td><strong>5,568</strong></td>
<td><strong>NA</strong></td>
<td><strong>1,694</strong></td>
<td><strong>1,679</strong></td>
<td><strong>NA</strong></td>
<td><strong>31%</strong></td>
<td><strong>30%</strong></td>
<td><strong>NA</strong></td>
</tr>
</tbody>
</table>

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

Statistical Office

NA - Data not available (not reported)

## Table C: TOP 15 SUPPLIERS OF CONSUMER FOODS & EDIBLE FISHERY PRODUCTS

###  Table C-1: CONSUMER-ORIENTED AGRICULTURAL TOTAL - 400

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

                                       **2003**     **2004**     **2005**

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

  **United States**                    1,550,617    809,716      NA

  **China (Peoples Republic of)**      416,435      501,918      NA

  **Australia**                        304,980      487,858      NA

  **New Zealand**                      163,958      280,987      NA

  **Philippines**                      143,927      139,185      NA

  **France**                           90,667       134,830      NA

  **Japan**                            104,184      125,644      NA

  **Netherlands**                      67,137       107,896      NA

  **Denmark**                          51,670       91,741       NA

  **Thailand**                         115,684      85,853       NA

  **Chile**                            50,006       80,641       NA

  **Canada**                           71,874       79,725       NA

  **Belgium**                          54,747       77,054       NA

  **Germany**                          40,612       57,562       NA

  **Brazil**                           47,481       48,987       NA

  **Other**                            290,003      370,618      NA

  **World**                            3,564,017    3,480,242    NA
  ------------------------------------ ------------ ------------ ------------

> Source: FAS\' Global Agricultural Trade System using data from
>
> the United Nations Statistical Office
>
> NA - Data not available (not reported)

###  Table C-2: FISH & SEAFOOD PRODUCTS

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

                                       **2003**     **2004**     **2005**

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

  **China (Peoples Republic of)**      693,934      877,270      NA

  **Russian Federation**               297,958      276,425      NA

  **Japan**                            143,545      175,118      NA

  **Vietnam**                          127,882      140,773      NA

  **United States**                    142,858      127,761      NA

  **Thailand**                         93,364       104,417      NA

  **Taiwan (Estimated)**               42,565       61,552       NA

  **Canada**                           49,675       43,350       NA

  **Norway**                           24,621       34,280       NA

  **Indonesia**                        23,190       25,333       NA

  **India**                            17,404       23,975       NA

  **Philippines**                      19,690       20,980       NA

  **Chile**                            16,816       18,083       NA

  **Hong Kong**                        3,686        12,273       NA

  **Peru**                             6,355        10,295       NA

  **Other**                            119,480      136,269      NA

  **World**                            1,823,015    2,088,164    NA
  ------------------------------------ ------------ ------------ ------------

> NA - Data not available (not reported)
>
> Source: FAS\' Global Agricultural Trade System using data from
>
> the United Nations Statistical Office