""""

Voluntary Report - public distribution

**Date:** 7/28/2003

**GAIN Report Number:** MX3315

MX3315

**Mexico**

**Product Brief**

**Candy and Confections Products Report**

**2003**

**Approved by:**

![](media/image1.wmf)Bruce Zanin

#### ATO Mexico City

**Prepared by:**

Rosa Ma. Rivera - Pablo Orozco

**Report Highlights:**

The Mexican import market for candy and confections has continued to
grow an average of 30 percent annually in recent years. U.S. producers
have distinct technological advantages over the majority of local
producers, and Mexican consumers associate U.S. brands with high quality
and value.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Mexico \[MX2\]

\[MX\]

######## SECTION I. MARKET OVERVIEW

This report is for informational purposes only; to assist exporters of
US food and agricultural products in their sales and promotional efforts
in Mexico. The data in this report were collected from local trade and
government sources and are not necessarily official US Department of
Agriculture (USDA) data. While every effort has been made to provide an
accurate list of contacts, telephone and fax numbers change frequently
in Mexico. Also, there may be other qualified firms in Mexico and the
United States, and their exclusion from any lists or directories is
unintentional. Neither the US Agricultural Trade Office nor the USDA
endorses any firm contained herein. US exporters should take normal
commercial cautions when dealing with any potential importer, including
checking credit references.

With a population is 102.3 million, Mexico is the eleventh largest
country in the world. The sheer size of this market allows for excellent
opportunities for U.S. candy and confections exporters. There is a wide
range of products focused toward different market sectors, among which
children make up a key consumer group.

+-----------------------------------+----------------------------------+
| ####### Advantages                | ####### Challenges               |
+-----------------------------------+----------------------------------+
| Due to proximity to the U.S.      | Mexico is traditionally a price  |
| market, Mexican consumers         | driven market, particularly in   |
| recognize most U.S. brands and    | food purchasing decisions. Many  |
| associate U.S.-made products with | lower-income consumers tend to   |
| high quality and value.           | purchase artisan fruit candy     |
+-----------------------------------+----------------------------------+
| U.S. producers implement advanced | Products must be adapted to the  |
| technology, use quality           | market. For example, the Mexican |
| ingredients and offer product     | palate prefers a strong          |
| variety in attractive packaging.  | sweet-sour combination.          |
+-----------------------------------+----------------------------------+
| Increasing trend towards          |                                  |
| supermarket purchasing make entry |                                  |
| into distribution channels more   |                                  |
| accessible.                       |                                  |
+-----------------------------------+----------------------------------+
| The country's high population of  |                                  |
| children and youths allows for a  |                                  |
| large potential target market.    |                                  |
+-----------------------------------+----------------------------------+

######## SECTION II. MARKET SECTOR OPPORTUNITIES AND CHALLENGES

**[a. Domestic Production]{.underline}**

There are approximately 1,500 registered producers of candy and
confections of all sizes in Mexico. Mexican candy manufacturers range in
size from one-family micro companies to multi-national, internationally
recognized corporations. These micro companies represent around 80-90
percent of the number of companies, but account for less than 40 percent
of the total production value.

Local producers are the principal suppliers to this market and the main
competitor to the United States. Driven by competition from imported
candy products, Mexican companies have improved their technology in
recent years. For example, many good quality, domestically processed
food products are available in retail outlets at competitive and, in
some cases, lower prices than those of comparative U.S. products. U.S.
exporters should remember that Mexico is traditionally a price driven
market, especially in food purchasing decisions.

Local competition is strong, but high transportation and finance costs,
as well as a general reliance by food processors on imported equipment
for the manufacture of their products, represents a weakness in the
overall competitiveness of the industry; 80 to 90 percent of raw
materials in this industry are sourced domestically, while 30 to 40
percent of production machinery and control equipment is imported from
the United States and Europe.

With 60 percent of the market, Jalisco is one of the most active states
in candy production. Based on official Mexican figures, the production
of candy and confections increased 32 percent in volume in 1999, and 34
percent in 2000. In 2001 there was a two percent decrease from the
previous year. Categories of these production figures include: candy and
sweets; uncoated chewing gum, coated chewing gum and chocolate-based
sweets.[^1]

**Table 1: Mexican Production of Candy and Confections, 1999-2001**

(Tons)

  ----------------- ----------------- ----------------- -----------------
                    **1999**          **2000**          **2001**

  ----------------- ----------------- ----------------- -----------------

+-----------------+----------------+----------------+----------------+
| ###             | **124,424**    | **131,476**    | **125,170**    |
| #### Production |                |                |                |
+-----------------+----------------+----------------+----------------+

Source: (National Association of Producers of Chocolates, Candy and
Similar Foods)

**[b. Imports and Foreign Competition]{.underline}**

Mexican imports of candy and confections increased from \$151.6 million
in 1999 to \$155 million in 2002.

**Table 2: Mexican Imports of Candy and Confections, 1999-2002**

(U.S. Million Dollars)

  ------------------------------- ----------- ----------- ----------- ------------
  **Tariff Code Categories**      **1999**    **2000**    **2001**    **2002\***

  17.04- Sugar Confectionery      140.5       152.3       138.6       141.2
  (including white chocolate)                                         

  18.06- Chocolate and other food 11.1        15.0        13.6        13.9
  preparations containing cocoa                                       

  **Total**                       **151.6**   **167.3**   **152.2**   **155.1**
  ------------------------------- ----------- ----------- ----------- ------------

Source: Banco Nacional de Comercio Exterior-BANCOMEXT (National Bank of
Foreign Trade), Departamento de Economía (Department of Economy). \*
Estimated

**[U.S. Exports To Mexico]{.underline}**

Mexican imports of candy and confections from the United States
increased 10 percent in 2001 and 39 percent in 2002.

**Table 3: U.S. Candy and Confections Exports to Mexico, 1999-2002**

(U.S. Million Dollars)

  ------------------------------------------ ---------- ---------- ---------- ------------
  **Import Code Numbers**                    **1999**   **2000**   **2001**   **2002\***

  1704.1001-Chewing gum, whether or not      3.5        7.2        11.7       16.3
  sugar coated                                                                

  1704.9099-Other sugar confectionery        25.2       28.7       31.6       35.6
  without cocoa                                                               

  1806.3101-Other chocolate preparations, in 18.3       26.1       26.0       28.7
  blocks slabs or bars, filled                                                

  1806.3201-Other chocolate preparations, in 12.3       13.5       14.0       20.0
  blocks, slabs or bars, not filled                                           

  **Total**                                  **59.3**   **75.5**   **83.3**   **100.7**
  ------------------------------------------ ---------- ---------- ---------- ------------

> Source: Banco Nacional de Comercio Exterior-BANCOMEXT (National Bank
> of Foreign Trade), Departamento de Economía (Department of Economy).
> \* Estimated

**[Other Foreign Competitors]{.underline}**

Official Mexican import statistics listed 48 other countries as
exporting candy and confections to Mexico. Export sales, by principal
countries, and their respective market shares are listed below.

**Table 4: Mexico Total Chewing Gum Imports, 1999-2002**

(U.S. Thousands Dollars)

+--------+--------+--------+--------+--------+------------+---------+
| *      | **     | **     | **     | **20   | **Average  | *       |
| *Count | 1999** | 2000** | 2001** | 02\*** | Annual %   | *Market |
| ries** |        |        |        |        | Increase** | Share** |
|        |        |        |        |        |            |         |
|        |        |        |        |        | *          | **%     |
|        |        |        |        |        | *(99-02)** | (9      |
|        |        |        |        |        |            | 9-02)** |
+--------+--------+--------+--------+--------+------------+---------+
| United | 3,5    | 7,1    | 11,6   | 16,3   | 69.06      | 76.24   |
| States | 01,004 | 63,194 | 56,971 | 01,685 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| Chile  | 1      | 4      | 3      | 17,663 | 12.94      | 2.79    |
|        | 82,606 | 51,537 | 93,130 |        |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| Gua    | 1      | 2      | 2      | 5      | 67.34      | 2.34    |
| temala | 29,451 | 10,926 | 62,165 | 63,154 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| South  | 1      | 1      | 79,598 | 98,228 | 5.54       | 1.41    |
| Korea  | 28,109 | 95,327 |        |        |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| Brazil | 532    | 66,873 | 3      | 4      | 4299.73    | 1.28    |
|        |        |        | 28,822 | 51,730 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| Canada | 1      | 8,241  | 57,263 | 2      | 306.20     | 1.00    |
|        | 01,494 |        |        | 95,269 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| Others | 7      | 1,9    | 1,5    | 3,0    | 81.13      | 14.90   |
|        | 25,285 | 15,238 | 21,750 | 41,473 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| **T    | *      | **     | **     | **     | **66.00**  | **100** |
| otal** | *4,768 | 10,011 | 14,299 | 20,769 |            |         |
|        | ,481** | ,336** | ,699** | ,202** |            |         |
+--------+--------+--------+--------+--------+------------+---------+

> Source: Banco Nacional de Comercio Exterior-BANCOMEXT (National Bank
> of Foreign Trade), Departamento de Economía (Department of Economy).
> \* Estimated

**Table 5: Mexico Candy Imports, 1999-2002**

**(U.S. Thousands Dollars)**

+--------+--------+--------+--------+--------+------------+---------+
| *      | **     | **     | **     | **20   | Average    | Market  |
| *Count | 1999** | 2000** | 2001** | 02\*** | Annual %   | Share   |
| ries** |        |        |        |        | Increase   |         |
|        |        |        |        |        |            | \%      |
|        |        |        |        |        | (99-02)    | (99-02) |
+--------+--------+--------+--------+--------+------------+---------+
| United | 25,1   | 28,6   | 31,6   | 35,6   | 12.31      | 58.87   |
| States | 91,236 | 94,812 | 00,276 | 78,768 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| Spain  | 2,4    | 3,3    | 3,4    | 4,8    | 26.38      | 6.76    |
|        | 95,217 | 39,536 | 47,656 | 98,186 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| Co     | 7      | 3,0    | 3,7    | 3,0    | 104.44     | 4.88    |
| lombia | 45,805 | 47,721 | 34,343 | 67,888 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| E      | 1,8    | 2,5    | 2,4    | 3,6    | 28.47      | 5.01    |
| cuador | 24,022 | 82,782 | 39,684 | 43,783 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| South  | 1,9    | 1,1    | 2,8    | 4,3    | 51.66      | 4.77    |
| Korea  | 99,922 | 64,372 | 17,161 | 61,564 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| Costa  | 2,5    | 1,5    | 8      | 4      | -44.12     | 3.05    |
| Rica   | 90,619 | 15,768 | 90,285 | 48,454 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| Chile  | 2      | 1,0    | 1,4    | 1,3    | 146.73     | 1.82    |
|        | 07,384 | 65,378 | 35,091 | 17,088 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| Others | 3,5    | 3,7    | 14,4   | 11,6   | 89.52      | 14.81   |
|        | 74,018 | 84,248 | 72,015 | 15,053 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| **T    | **     | **     | **     | **     | **19.50**  | **100** |
| otal** | 38,628 | 45,194 | 60,836 | 65,030 |            |         |
|        | ,223** | ,617** | ,511** | ,777** |            |         |
+--------+--------+--------+--------+--------+------------+---------+

> Source: Banco Nacional de Comercio Exterior-BANCOMEXT (National Bank
> of Foreign Trade), Departamento de Economía (Department of Economy).
> \* Estimated

**Table 6: Mexico Filled Chocolate Imports, 1999-2002**

(U.S. Thousands Dollars)

+--------+--------+--------+--------+--------+------------+---------+
| *      | **     | **     | **     | **20   | **Average  | *       |
| *Count | 1999** | 2000** | 2001** | 02\*** | Annual     | *Market |
| ries** |        |        |        |        | Increase** | Share** |
|        |        |        |        |        |            |         |
|        |        |        |        |        | *          | **%     |
|        |        |        |        |        | *(99-02)** | (9      |
|        |        |        |        |        |            | 9-02)** |
+--------+--------+--------+--------+--------+------------+---------+
| United | 18,3   | 26,0   | 25,9   | 28,6   | 17.47      | 70.46   |
| States | 23,186 | 80,207 | 56,443 | 94,825 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| Canada | 3,5    | 4,0    | 2,8    | 3,4    | 2.33       | 10.30   |
|        | 40,189 | 96,551 | 73,372 | 80,603 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| Italy  | 1,1    | 1,6    | 3,3    | 3,6    | 50.40      | 6.66    |
|        | 89,203 | 05,842 | 45,833 | 07,681 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| Brazil | 4      | 8      | 1,1    | 6      | 28.07      | 2.10    |
|        | 24,925 | 24,876 | 23,869 | 05,244 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| G      | 2      | 3      | 5      | 1,0    | 61.72      | 1.55    |
| ermany | 61,908 | 63,472 | 92,251 | 86,518 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| B      | 1      | 3      | 5      | 7      | 104.42     | 1.10    |
| elgium | 03,913 | 33,975 | 23,562 | 07,310 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| A      | 13     | 48,672 | 8      | 80,466 | 125,312.22 | 0.68    |
| ustria |        |        | 89,537 |        |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| Others | 1,4    | 3,1    | 1,8    | 3,9    | 66.73      | 7.12    |
|        | 02,529 | 95,289 | 19,706 | 20,352 |            |         |
+--------+--------+--------+--------+--------+------------+---------+
| **T    | **     | **     | **     | **     | **19.99**  | **100** |
| otal** | 25,245 | 36,548 | 37,124 | 42,182 |            |         |
|        | ,866** | ,884** | ,573** | ,999** |            |         |
+--------+--------+--------+--------+--------+------------+---------+

> Source: Banco Nacional de Comercio Exterior-BANCOMEXT (National Bank
> of Foreign Trade), Departamento de Economía (Department of Economy).
> \* Estimated

**Table 7: Mexico Total Chocolate Imports (Not Filled), 1999-2002**

(U.S. Thousands Dollars)

+--------+--------+--------+--------+--------+-----------+----------+
| *      | **     | **     | **     | **20   | **Average | **Market |
| *Count | 1999** | 2000** | 2001** | 02\*** | Annual    | Share**  |
| ries** |        |        |        |        | I         |          |
|        |        |        |        |        | ncrease** | **%      |
|        |        |        |        |        |           | (        |
|        |        |        |        |        | **        | 99-02)** |
|        |        |        |        |        | (99-02)** |          |
+--------+--------+--------+--------+--------+-----------+----------+
| United | 12,3   | 13,5   | 13,9   | 20,0   | 18.79     | 62.62    |
| States | 15,782 | 37,859 | 67,262 | 15,414 |           |          |
+--------+--------+--------+--------+--------+-----------+----------+
| Chile  | 1,4    | 3,1    | 4,6    | 4,3    | 54.42     | 13.69    |
|        | 16,267 | 29,169 | 56,576 | 55,043 |           |          |
+--------+--------+--------+--------+--------+-----------+----------+
| Canada | 1,7    | 2,6    | 2,6    | 2,9    | 21.36     | 10.50    |
|        | 36,146 | 21,580 | 83,691 | 71,314 |           |          |
+--------+--------+--------+--------+--------+-----------+----------+
| Switz  | 3      | 6      | 9      | 7      | 30.79     | 2.85     |
| erland | 95,678 | 63,640 | 03,446 | 99,879 |           |          |
+--------+--------+--------+--------+--------+-----------+----------+
| Arg    | 2      | 1      | 5      | 1      | 109.74    | 1.20     |
| entina | 69,020 | 05,832 | 96,773 | 55,148 |           |          |
+--------+--------+--------+--------+--------+-----------+----------+
| A      | 4,544  | 23,950 | 5      | 32     | 773.65    | 0.53     |
| ustria |        |        | 01,483 |        |           |          |
+--------+--------+--------+--------+--------+-----------+----------+
| Others | 1,9    | 8      | 1,9    | 3,7    | 53.37     | 8.57     |
|        | 29,837 | 71,197 | 93,571 | 11,126 |           |          |
+--------+--------+--------+--------+--------+-----------+----------+
| **T    | **     | **     | **     | **     | **21.07** | **100**  |
| otal** | 18,067 | 20,953 | 25,302 | 32,007 |           |          |
|        | ,274** | ,227** | ,802** | ,956** |           |          |
+--------+--------+--------+--------+--------+-----------+----------+

> Source: Banco Nacional de Comercio Exterior-BANCOMEXT (National Bank
> of Foreign Trade), Departamento de Economía (Department of Economy).
> \* Estimated

**[Domestic Consumption]{.underline}**

Price is an important factor in candy and chocolate purchasing
decisions; the higher income brackets account for most candy and
chocolate consumption. But, as in the U. S., children and youths, being
the biggest consumers, are the key segment across income brackets.

####### 

####### Table 8: Population Age Groups

  ----------------------------------- -----------------------------------
  **Age Groups Age Groups**           **Population**

  0 -- 9                              21,850,480

  10-19                               20,728,628

  20-29                               17,228,877

  30-39                               13,489,061

  40-49                               9,266,924
  ----------------------------------- -----------------------------------

> Source: Instituto Nacional de Estadística, Geografía e
> Informática-INEGI (National Institute of Statistics, Geography and
> Informatics).

Some important Mexican holidays that U.S. Exporters should keep in mind
when marketing their products: January 6 (Día de Reyes), February 14
(Valentine's Day), April 30 (Children's Day), November 2 (Day of the
Dead) and December 24 (Christmas Eve). It is customary to give presents,
chocolates and candy on these days, as well as for children's birthday
parties, where piñatas are filled with sweet treats. U.S. chocolates are
preferred over candy. Mexican consumers prefer sweet and spicy taste
combinations.

**[Market Structure]{.underline}**

The Mexican retail sector is the most significant buyer of candy and
confectionary products in Mexico. Roughly 55 to 60 percent of all candy
and confection sales are made through major retail chains, and 35-40
percent are sold through the *Central de Abasto* /mom and pop store
(*abarrotes*) stores. The remaining five percent is sold via hotels and
restaurants. The organized part of this sector is represented by the
large retail chains and convenience stores, which for the most part, are
well organized, use modern retailing and marketing techniques and face
fierce domestic competition. These retail chains and stores account for
about 50 to 55 of total retail sales in Mexico. The leading retail
companies are members of the Asociación Nacional de Tiendas de
Autoservicio y Departamentales-ANTAD (National Association of Retail and
Department Stores), except for the Wal-Mart companies. Mom and pop
stores represent the traditional retail system and are a viable
distribution channel for candy and confections, accounting for
approximately 50 to 45 percent of total retail sales.

In a random store check conducted in the Mexico City Metropolitan Area,
the following candy and confections brands/suppliers from the United
States were identified:

**Chocolate:**

MM/Mars: (M&Ms, Snickers, Milky Way, The Estee Co.

3 Musketeers, Twix) Murray Sugar Free Candies

Nestle: (Crunch, Butterfinger) Brack & Brock: (Butterscotch disks)

Hershey Chocolate USA: (Almond Joy) Mars: (Starburst, Skittles)

Brown & Haley: (Almond Rocks) Harvest: (Sour Gummy Bears)

Elmer Candy Corp.: (Assorted chocolates)

**Candy:**

Hershey Chocolate USA: Jolly Rancher

Nabisco Inc.: (Gummi Savers)

Golightly Candy Co.: (Eda, Golightly)

Cumberland Packing Corp.: (Sweet\'n Low Candies)

**SECTION III. Entry Strategy**

**[a. Business Culture]{.underline}**

The best way to understand the Mexican market is visiting the country
and talking to buyers, retailers, distributors and other players in
order to prepare a more effective entry strategy. U.S. exporters must do
their research not only in terms of typical market research, but also
finding appropriate business contacts and thoroughly reviewing Mexican
import regulations in order to successfully seize market opportunities
and overcome market challenges. An affordable way to investigate the
market is to participate in and/or attend Mexican trade shows,
particularly U.S. Pavilions organized by the Agricultural Trade Office
(ATO) at selected shows. A show can serve as a way to contact local
distributors/sales agents, buyers and businessmen, and to become
familiarized with local competition. In the case of new-to-market
companies, be prepared to provide support for in-store and media
promotions to familiarize consumers with your products.

Several important points should be recognized in order to have success
in the market:

-   *Business is generally conducted in Spanish.* Though many educated
    Mexicans speak English, many professional business people (potential
    key contacts) do not. Assume business and communication will be
    conducted in Spanish and have a translator, or better yet, a person
    working for you that speaks Spanish.

-   *Personal face-to-face communication is critical.* Personal contact
    with buyers is essential to initiate business relations in Mexico; a
    fax or an email is not considered reliable or appropriate for
    initial communication and will often be completely ignored. A
    business that is serious about sales will need to visit the market
    in person to explore the opportunities for their product and develop
    personal contacts. Follow-up by email or fax is appropriate, but
    having an in-country representative or making periodic personal
    visits is also important.

-   *Importers/distributors are a key component to export sales in
    Mexico.* Finding a good importer/distributor in Mexico is a critical
    part of success in exporting to Mexico. A good distributor should
    promote sales and make sure that the imported products are available
    at points of sale. Importers/distributors serve as a link to buyers
    and in-country representatives, have the expertise to handle
    complicated regulations and can trouble-shoot problems that imports
    can face at the border. Avoiding these key links in the distribution
    process to save money will almost always result in a loss of
    resources.

**[b. Trade Services Available and Events]{.underline}**

U.S. firms should consider using a variety of marketing tools to
effectively distribute their products in Mexico. These promotional
activities could include:

-   Participating in trade shows,

-   Advertising in media such as billboards, radio and TV,

-   Using in-store promotions, free samples, recipe cards and other
    forms of direct merchandising for new-to-market products

-   Preparing brochures and promotional materials in Spanish,

-   Obtaining a local sales representative, and

-   Hosting technical seminars to inform end users, distributors and
    retailers of new technologies, innovations and product advantages.

The Agricultural Trade Offices in Mexico, Mexico City and Monterrey,
provide services to help you access the market. In addition to
sponsoring U.S. Pavilions (see below) the office can provide information
about local distributors and contacts, and can arrange services from a
contractor who can set up individual in-country meetings for you for a
fee. These contractors, referred to as Ag Aides, can provide a link to
distributors and retailers of candy and confections in Mexico. For more
information on available services, or to connect with our Ag Aides,
please contact our office in Mexico City or Monterrey (See contact
information in Section V).

**[Trade Events]{.underline}**

**Confitexpo 2003**

When: July 29 to August 1, 2003

Where: Expo Guadalajara Convention Center, Guadalajara, Mexico

Contact: Rosa Maria Rivera, U.S. Agricultural Trade Office (ATO)-Mexico
City

Tel: (011-5255) 5280-5291; Fax: (011-5255) 5281-6093

Email: rosa.rivera@usda.gov

**Show Type:** Annual event directed to promoters, wholesalers and
retailers of candy products organized jointly by Grupo Gefec, S.A. de
C.V. and the publication "*Dulcelandia*."

**Expo Golosinas 2004**

**When:** January 21-23, 2004

**Where:** The Polyforum, León, Guanajuato, Mexico

**Contact:** Graciela Diaz or Jose Maria Herrera

**Tel:** (011-5255) 5574-5696; **Fax:** (011-5255) 5564-0329, 5262-7029

**Show Type:** Annual trade event for promoters, wholesalers and
retailers of candies, snacks, delicacies, cookies and similar goods
organized by Grupo Gefec S.A. de C.V. and the publication "*Mayoreo y
Distribución*."

######## ANTAD 2004

**When:** March 12-14, 2004

**Where:** Expo Guadalajara Convention Center, Guadalajara, Mexico

**Contact:** Carlos Zertuche, U.S. Agricultural Trade Office
(ATO)-Mexico City

**Tel:** (011-5255) 5280-5291; **Fax:** (011-5255) 5281-6093

**Email:** carlos.zertuche@usda.gov

**Show Type:** Mexico's largest retail and supermarket show

######### Trade Publications:

Some of the leading trade magazines and general business publications in
Mexico are:

-   "***Dulcelandia,"*** a monthly publication on the Mexican candy and
    confections sector published by Producciones Manila, S.A. de C.V.,
    contact: Ms. Graciela Diaz, Tel: (011525) 5574-5696; Fax: (011525)
    5564-0329, 5262-7029.

-   ***"Mayoreo y Distribucion,"*** a publication focused for retailers
    and wholesalers of candy, confections and snacks published monthly
    by Producciones Manila, S.A. de C.V.; contact: Ms. Graciela Diaz,
    Tel: (011525) 5574-5696; Fax: (011525) 5564-0329, (011525)
    5262-7029.

-   **\"Business Mexico,\"** published monthly in English by the
    American Chamber of Commerce of Mexico-Tel: (011-5255) 5724-3800
    ext. 3335, Fax: (011-5255) 5703-2911, contact: Diane Hemelberg de
    Hernandez, Editor or Cristina Bustos, Advertising Dept.

-   **\"MB,\"** published monthly in English by Hemisphere Publishers
    Group Inc., contact: Lorena Jimenez, Advertising Director, Tel:
    (011-5255) 5540-7977 and Fax: (011-5255) 5202-8478.

-   ***"El Asesor,"*** a business weekly for Mexico City and Monterrey
    published in Spanish published by Crain Communications, S. de R.L.
    de C.V., contact: Sales Dept., Tel: (011-5255) 5563-0341 X103 and
    Fax: (011-5255) 5611-3829

# 

# SECTION IV. IMPORT REQUIREMENTS[^2] 

**[a. Tariffs and Taxes]{.underline}**

All import tariffs for the following candy and confection products are
zero as of January 1, 2003

1704.1001 -Chewing gum, whether or not sugar coated

1704.9099 -Other sugar confectionery without cocoa

> 1805.3101 -Other chocolate preparations, in blocks slabs or bars,
> filled
>
> 1805.3201 -Other chocolate preparations, in blocks, slabs or bars, not
> filled

1806.9099 -Other chocolate and food preparations containing cocoa

Mexico has a 15 percent value-added tax (VAT, or IVA in Spanish).
Mexican Customs collects the VAT on foreign transactions upon entry of
the merchandise into the country. Customs brokers use the total figure
to calculate their fees, which are usually 0.5 percent, on average, plus
any storage and handling fees.

**[b. Import and Health Certificates and Non-Tariff
Requirements]{.underline}**

Under NAFTA, Mexican imports of candy and confections do not require
special import permits. The basic Mexican import document is the
Pedimento de Importación (customs entry document), which should be
presented to Mexican Customs together with the commercial invoice in
Spanish, a bill of lading and the Sanitary Import Notice. Products
qualifying as \"North American\" must use the NAFTA certificate of
origin to receive preferential treatment. This form is available from
the U.S. Customs Service, freight forwarders, local U.S. Chambers or
State Departments of Agriculture, and does not have to be validated or
formalized. Mexican Customs Law is very strict regarding proper
submission and preparation of customs documentation. Errors in paperwork
can result in fines and even confiscation of merchandise as contraband.
Exporters are advised to employ competent, reputable Mexican importers
or custom brokers.

######### 

######### c. Labeling

Imported products to be sold at retail must be labeled according to
Mexican government specifications. Labeling is subject to a national
regulatory requirement termed a "NOM." The principal NOM for candy and
confections labeling, both from local production and foreign sources, is
NOM-051-SCFI-1994. Some U.S. suppliers choose to develop special
packaging for the Mexican market. At a minimum, a label must be affixed
to each package of the imported product prior to entering the country.
All the information on the label must be in Spanish and must include the
following data:[^3]

> -Country of origin -Ingredients
>
> (i.e., Producto de EE.UU.) -Producer\'s name and address
>
> -Importer\'s name, address -Product description in Spanish
>
> and RFC number (taxation number) -Preparation and handling
> instructions
>
> -Commercial/brand name -Date of expiration
>
> -Exporter\'s name and address -Special warnings
>
> -Product description in English -Net weight in metric units

**[d. Cargo Unloading, Transport and Storage Fees]{.underline}**

Cargo unloading fees vary depending on the weight, number of pieces,
type of merchandise and location. These fees are usually charged
according to pre-established tables. However, whenever possible,
shippers should compare prices between service providers. In general,
cargo-unloading fees in Mexico are slightly higher than those in the
United States for comparable services.

Trucks are the most reliable method of delivery within Mexico,
accounting for approximately 60 percent of cargo volume. Trucking
companies cannot bring merchandise directly from the United States to
Mexico. A U.S. trucking company drives the shipment to the border and
transfers its trailer to a Mexican rig. The best way to ship by truck is
to use an internationally bonded carrier that has relationships with
Mexican carriers. Mexican trucking companies generally determine their
fees by mileage or distance, weight and type of merchandise. Practically
all transport companies/freight forwarders offer a basic insurance plan
which covers transport and handling of cargo. When selecting a
transporter it is recommended to check their claim history and
complaints they might have received. While shippers will find that truck
transportation is more expensive than \"Container in Flat Car\" (COFC)
or \"Trailer Flat Car\" (TOFC), in general, transport fees are lower in
Mexico by as much as 10 percent.

Warehousing costs vary depending on the space required and any specific
product needs. Warehousing fees follow general market trends of supply
and demand; however, it is advisable to compare prices, facilities and
reputation, and negotiate before contracting. Average warehouse rental
fees in Mexico City are around \$3.60 m2, per month; \$3.00 in the
Guadalajara area and approximately \$3.20 per m2 in Monterrey and
surrounding areas. In bond storage facilities are a popular storage
method used by exporters by which duties are paid on the items stored
until they are released from the facility for distribution in the
market. Any merchandise placed in a warehouse should be insured. A basic
insurance policy can be secured from the warehouse administrator or a
more comprehensive policy from a private insurance company.

# SECTION V. KEY CONTACTS AND FURTHER INFORMATION 

**U.S. Agricultural Trade Office, Mexico City, Mexico**

Bruce Zanin, Director

Jaime Balmes No. 8-201

Col. Los Morales Polanco

11510 México, DF

Tel: (011-5255) 5280-5291

Fax: (011-5255)-5281-6093

E-mail: atomexico@usda.gov

http://www.fas-la.com/mexico

**U.S. Agricultural Trade Office, Monterrey, México**

Daniel Martínez, Director

Oficinas en el Parque Torrell

Blvd. Díaz Ordaz No. 140, Piso 7

Col. Santa María

64650 Monterrey, Nuevo León

Tel: (011-5281) 8333-5289

E-mail: atomonterrey@usda.gov

**Secretaria de Salud (Health Secretariat)**

Sanitary Qualification Office

Donceles 39-PB

06010 Mexico, D.F.

Tel: (011-5255) 518-2692; http://www.ssa.gob.mx/nom/index.html

Contact: Dr. Jose Meljem Moctezuma, Director

Office of the Health Secretariat that regulates specific NOMS on health
related issues.

**Secretaria de Comercio y Fomento Industrial-SECOFI Direccion de
Normas**

(Secretariat of Commerce and Industrial Promotion, Norms Office)

Puente de Tecamachalco 6; Lomas de Tecamachalco

53950 Edo. Mexico

Tel: (011-5255) 229-6100-X4158; http://www.secofi.gob.mx

Contact: Lic. Jorge Hernandez, Direccion de Normas.

The Secretariat of Commerce and Industrial Development (SECOFI) is
charged with a wide range of duties including: registration of all
licensing agreements; granting import licenses and controlling foreign
trade; general investment incentive policies; authorization for plant
construction; regulating consumer product labeling and advertising; and
examinations necessary for patent and trademark grants. This office of
SECOFI issues the norms on quality and labeling.

## Secretaría de Comercio y Fomento Industrial-SECOFI

Informacion Comercio Internacional

(Secretariat of Commerce and Industrial Promotion, Foreign Trade
Information)

Alfonso Reyes 30-PB; Col. Hipodromo Condesa,

06710 Mexico, D.F.

Tel: (011-5255) 229-6100-X3395 & 4949; http://www.secofi.gob.mx

Contact: Rocio Ruiz Chavez, Director

Office of SECOFI that provides general information related to NAFTA.

## American Chamber of Commerce-AMCHAM

Lucerna 78 -- 4

Col. Juarez

06600 Mexico, D.F.

Tel: (011-5255) 141 3800; Fax: (011-5255) 703-2911

e-mail: gdaeaton@amcham.com.mx

Contact: Gary Deaton, Director, International Trade and Investment
Consulting

A non-profit organization, which groups U.S., companies in their
business activities in Mexico.

**Asociacion Nacional de Fabricantes de Chocolates, Dulces y Similares,
A.C. (National** Association of Producers of Chocolates, Candy and
Similar Foods)

Manuel Ma. Contreras 133-301

06500 Mexico D.F.

Contact: Lic. Noe Lecona, Manager

Tel: (011-5255) 546 - 0974, 5546-1259;

Fax: (011-5255) 592-2497

#### E-mail: **asocchoco@infosel.net.mx**

Web page: aschoco.org.mx

**Camara Nacional de la Industria de Transformacion CANACINTRA-Seccion
de Dulces, Chicles y** Chocolates

(National chamber of Processing Industries--Candy Manufacturers Section)

San Antonio 256

###### Col. Ampliación Nápoles

###### 03849 Mexico, D.F. 

Tel: (011-5255) 563 3400

Contact: Lic. Nelida Silva, General Manager

This chamber groups candy producers of Mexico City Only. They have a
database of Mexican candy producers at the national level which they
sell.

**Asociacion Nacional de Tiendas de Autoservicio y Departamentales-ANTAD
(National** Association of Retail and Department Stores)

Horacio 1855-6; Col. Polanco

11560 Mexico D.F.

Tel: (011-5255) 580-1772, (011-5255) 580-0641, Fax (011-5255) 395-2610

www.antad.org.mx

Contact: Patricia Uranga

[^1]: All dollar values used in reporting Mexican data were calculated
    according to the average exchange rate of the peso against the
    dollar for each year: 9.7, 9.6, 9.2 and 9.7 pesos per one U.S.
    dollar for 1999, 2000, 2001 and 2002 respectively.

[^2]: For a detailed study of Mexican Regulations for Exporting/Border
    Crossing, the Mexico Exporter Guide and Guide to Service Providers
    in Mexico see reports MX1205, MX2137 and MX2121 on FAS-USDA site:
    http://www.fas.usda.gov/scriptsw/attacherep/default.asp.

[^3]: For additional information on labeling NOMS, interested exporters
    can see Labeling Regulations report MX1223 on FAS-USDA site:
    http://www.fas.usda.gov/scriptsw/attacherep/default.asp; or they can
    directly review NOMS: 002-SCFI (Prepackaged products; net content;
    tolerances and verification methods), 008-SCFI (General system of
    measurement units) and 030-SCFI (Commercial information-quantity
    statements and specifications in labels) in the Ministry of
    Economy's Internet site: http://www.economia-noms.gob.mx.