The Philippines Market for Imported Meat and Poultry: A Guide for Canadian Exporters

CompetitiveIndustryReporton
thePhilippinesMarketfor
ImportedMeatandPoultry
AGuideforCanadianExporters
*Abbreviated
Preparedfor:
TheEmbassyofCanadainThePhilippines
&
OfficeofSoutheastAsiaRegionalAgriFoodTradeCommissioner
AgricultureandAgriFoodCanada
Preparedby:
Stanton,Emms&Sia
80RafflesPlace,Level3601
UOBPlaza1,
Singapore048624
Tel:+6563347030
Fax:+6562232010
Email:emmsia@pacific.net.sg
Website:http://stantonemmsandsia.foodandbeverage.biz
March2010
ThisreportcontainsmarketinformationcollectedbyStanton,Emms&Sia.
TheGovernmentofCanadaassumesnoliabilityfortheaccuracyandreliabilityofthemarketinformationand
intelligenceprovidedherein.
*Forthecompletereport,CanadiansareinvitedtocontactMs.YvetteBuendiaattheEmbassyofCanadainthe
Philippines:yvette.buendia@international.gc.ca
ThePhilippinesMarketforImportedMeatandPoultry
1.
Introduction
This guide for Canadian exporters is prepared by Stanton, Emms & Sia for the Embassy of
CanadainthePhilippinesandtheASEANAgriFoodTradeCommissioner,AgricultureandAgri
FoodCanada.ItcoversthePhilippinemarketsfor:
fresh/chilledbeef;
frozenbeef;
freshchilledpork;
frozenpork;
frozenpigsoffal;and,
frozenchickenparts.
ItwasresearchedinFebruaryandMarch2010.ThereportwaspreparedtoprovideCanadas
ASEAN based Agrifood Team of Trade Commissioners and Canadian producers and exporters
withanuptodateunderstandingofthetargetmarketandopportunitiesinthePhilippinesfor
selectedCanadianmeatandpoultryproducts.
The main focus of the study is on the size and development trends of the markets for the
selected products mentioned above, the basis of demand, the competitors and the basis of
competition,andfutureprospectsandopportunitiesforCanadianexporters.
Itshouldbenotedthatatthetimeoftheresearch(March2010),therewasnoPhilippinedata
availableonmeatandpoultryimportsforthewholeof2009.
2.
Marketsize,natureofsupplyanddevelopmenttrends
2.1 Overviewofdomesticsupplies
There are currently two datasets available on livestock production in the Philippines. One
shows the industry producing around 3.6 million tonnes of meat and poultry and being
relatively stagnant. The other, that production is around 2.7 million tonnes and has been
growingataround2.7%perannumoverthepast5years(seeChartbelow).
1
Stanton,Emms&Sia(March2010)
ProductionofMeatandPoultryinthePhilippines2003to2008
Source:GovernmentofthePhilippines
Thebulkofmeatandpoultryproductioninvolvesporkandchicken(seeChartbelow).
MeatandPoultryProductioninthePhilippinesbyProductTypein2008
Source:GovernmentofthePhilippines
LocallyproducedmeatandpoultryisanimportantpartofthePhilippineseconomy,bothatthe
levelofruralSMEproducersandbigbusinesses,whichhaveaverystrongcompetitiveposition
inthemarket.Thereareindustryreportsofaslumpinmeatandpoultryproductionin2008,
althoughthisisnotreflectedinthedatasetsthatareavailable.
2
TradesourcescommentthatthereisnowgrowthindemandforhalalmeatsinthePhilippines
becausetheMuslimpopulation,whichaccountsfor5%oftotalpopulation,isgrowinginsize
andalsoexperiencinghigherincomes.
One of the countrys largest meat processors, Swift Foods (RFM Foods Corporation), has
recently converted all of its sausage manufacturing to halal certified status. The rationale
behindthisconversionalsoincludestheASEANFreeTradeArea(AFTA)andhalalmeatexport
marketsinMalaysia,Singapore,BruneiDarussalamandIndonesiaskeycities.TheMiddleEast
is also regarded as a very important target market, and Swift Foods has already launched its
productsinsomecountriesinthisregion.
According to the government, local meat andpoultry products comprise around 94% of total
consumption.Tradesourcescommentthat2009wasamorepositiveyearforlocalproducers
because the price of inputs, e.g. animal feed, was lower due to the collapse of global
commodityprices.
2.2 Overviewofimportedsuppliesofmeatandpoultry
ThePhilippineshasalargemarketforimportedmeatandpoultryproducts.In2008,itimported
about294,000tonnesofmeatandpoultryproductsvaluedatC$354million,upfrom213,000
tonnesvaluedatC$229millionin2004(seeChartbelow).
TrendsinthePhilippinesImportsofMeatandPoultry2004to2008(AllProducts)
Source:PhilippinesExternalTradeStatisticsforImports
3
Overtheperiodbetween2004and2008,importvolumesgrewatanaverageofabout7.5%per
annum,drivenbybuoyanteconomicconditions,strongerendconsumerdemandformeatand
poultry,shortfallsinlocalsuppliesofsomeproductsduetodiseaseoutbreaks,andimproved
marketaccessarisingfromtradeliberalisationbythegovernment.
These trends have taken place against a background where local meat and poultry products,
especially those of the larger businesses and localised SME suppliers, are competitive within
localmarketscenarios.
The state of local competition is reflected in the profile of imports, because imports are
generallyhigherinsegmentswherelocalproducersarechallengedtomeetlocaldemand,e.g.
lowercostbeefandoffal(seeChartbelow)
PhilippineImportsofMeatandPoultryProductsin2008293,734Tonnes
ThePhilippinesisimportingmeatandpoultryproductsfromaround30differentcountriesand
territories(seeChartbelow).
4
MainOriginsofthePhilippinesImportsofMeatandPoultryin2008293,734Tonnes
OriginsvaryfromDevelopingWorldcountries,e.g.India,BrazilandChina,tovariousDeveloped
Worldcountries,withCanadaasthemainplayeramongstthemin2008.
2.3 Reviewofmarketsforthespecificproductscoveredbythestudy
2.3.1 Overviewofimports
ThePhilippinesimportsofthespecificproductscoveredbythisstudywerevaluedatatotalof
C$312millionin2008,upfromaboutC$197millionin2004(seeTablebelow).
OverviewofTrendsintheValueofImportsoftheProductsCoveredbythisStudy
Product
2004
2005
2006
2007
2008
C$000
C$000
C$000
C$000
C$000
Fresh/chilledbeef
226
434
402
99
59
Frozenbeef
155,151
142,616
134,679
148,348
219,798
Fresh/chilledpork
10
15
59
Frozenpork
10,506
8,241
4,052
8,863
28,784
Pigsoffal
15,172
15,398
18,064
23,365
33,168
Frozenchickenparts
15,621
20,277
23,456
25,166
29,744
Total
196,686
186,966
180,668
205,900
311,553
Source:Philippineexternaltradestatistics(Officialclassifications)
5
Four of the markets covered by this study are large, one very large and all, except the
fresh/chilledmarkets,havebeengrowingoverthepast5years.
Themarketsforfresh/chilledmeatsareverydifficulttodevelopbecauseof:
general price sensitivity in the meat and poultry markets and, for imports, related
weaknessesinthePeso,thelocalcurrency;
strongcompetitionfrommajorbusinessesthatcontrolthemarketforfresh/chilledmeats;
and,
regulatorybarriersandconstraints,especiallyforproductswithTariffRateQuotasinplace.
2.3.2 Fresh/chilledbeef
The Philippines has a very small market for imported fresh/chilled beef. Imports of such
productsamountedtojust29tonnesvaluedatC$59,000in2008,downsubstantiallyfrom206
tonnesvaluedataboutC$226,000in2004(seeTablebelow).
Total
%change
PhilippineImportsofFresh/ChilledBeef2004to2008
2004
2005
2006
2007
Tonnes
Tonnes
Tonnes
Tonnes
206
307
250
31
49.0%
(18.6%)
(87.6%)
2008
Tonnes
29
(6.5%)
Source:Philippinesexternaltradestatistics
Imports of fresh/chilled beef have a minuscule share of the Philippines beef market, which
involved consumption of around 292,000 tonnes in 2008. Trade sources comment that this
demandscenarioishighlyunlikelytochangeintheforeseeablefuture.Thekeyreasonsbeing:
the structure of the Tariff Rate Quota for beef and its operational aspects, which make it
more viable for an importer to bring in frozen beef. More information on the TRQ is
providedinafollowingchapterofthisbriefing;and,
pricesensitivity,sohigherpricedimportedfresh/chilledbeefonlyhaslimitedopportunities.
6
Challenges also exist because the Philippines cool chain distribution system has weaknesses,
includinginMetroManila,whichstillmakeimportsoffresh/chilledmeatquiterisky.
TherealityoftheimportedbeefmarkettodayisthatthePhilippinesisprincipallyamarketfor
frozenbeef.
Itshouldbenotedthatimportedbeefisbeingretailedaschilledbeef,alongsidelocalbeefin
thehigherendretailersinMetroManila.Itisnotknownwhetherthisisimportedfresh/chilled
beefordefrostedfrozenbeef.TheTablebelowprovidesasampleofsomeindicativepricesof
someofthebeefcutsavailableinFebruary2010.
IndicativeRetailPricesofChilledBeefinFebruary2010
Product
CountryofOriginand
PesoPerKilogram
C$PerKilogram
Brand
Tenderloin
Local(FarmFresh)
775
17.37
Porterhouse
Local(FarmFresh)
500
11.20
TBone
Local(FarmFresh)
450
10.08
Ribeye
Local(FarmFresh)
435
9.75
Sirloin
Local(Nobrand)
290
6.50
Sirloin
Australia*
378
8.47
Brisket
Local(Nobrand)
212
4.75
Brisket
Australia*
254
5.69
Shank
Local(Nobrand)
200
4.48
Shank
Australia*
264
5.92
Leanbeefcubes
Local(Nobrand)
218
4.88
Leanbeefcubes
Australia*
265
5.94
Mincedbeef**
Local(Nobrand)
169or187
3.79or4.19
Mincedbeef**
Australia*
189or205
4.23or4.59
Striploin,boneless
Australia*
675
15.12
Striploin,boneless
Local(Nobrand)
405
9.07
Shin,bonein
Australia*
340
7.62
Yakinikubeef
USA
229
5.13
*:TheseproductsarenotbeingmarketedusinganAustralianbrandaswouldbethecaseinotherASEANmarkets,
e.g.Singapore(Australiancorporatebrands)orMalaysia(theAussieBeefbrand).
**:Thehigherpriceisforleanmincedbeef.
Source:SupermarketsandhypermarketsinMetroManila
As can be seen from the above, imported beef generally retails at a premium to the price of
local beef, unless the local product is subjected to strong local branding. Trade sources
comment that this situation is possible because there is a perception amongst Filipinos that
foreignbeefisofbetterqualitythanlocalbeef.
7
2.3.3 Frozenbeef
Frozenbeefhasthehighestdemandamongstimportsofmeatandpoultry.Thissituationexists
becausetherearemajorconstraintsovertheproductionofbeefinthePhilippines,inamarket
environmentwherethereisalsohighleveldemandfortheproduct.
ThePhilippinesimportsoffrozenbeefamountedto112,066tonnesvaluedatC$219.8million
in 2008, down slightly in an erratic manner from 113,730 tonnes valued at about C$ 155.2
millionin2004(seeTablebelow).
Boneless
Bonein
Carcass or half
carcass
Total
%change
PhilippineImportsofFrozenBeef2004to2008
2004
2005
2006
2007
Tonnes
Tonnes
Tonnes
Tonnes
113,123
95,975
94,075
106,197
588
770
625
1,329
19
113,730
144
96,745
94,844
(14.9)
(2.0)
348
107,874
13.7
2008
Tonnes
109,281
2,468
317
112,066
3.9
Bonelessbeefaccountsforcloseto100%ofimportsinmostyears.
ThePhilippinesisimportingfrozenbeeffromupto18countries,althoughthebulkofimports
come from 6 countries. India is the market leader (see Tables below for market shares and
importtrends).
8
ImportsofFrozenBeefbyKeySupplyCountryin2008
112,066Tonnes
Source:PhilippinesExternalTradeStatistics(Allcuts)
TrendsinImportsofFrozenBonelessBeeffromKeySupplyCountries
2004to2008InTonnes
Source:PhilippinesExternalTradeStatistics
Indiahaslongledthemarketbecauseitisthelowestcostsupplierofbeefthatisacceptableto
usersinthePhilippinemeatprocessingindustry,whichhasveryhighvolumedemandforfrozen
beef.
9
Trade sources comment that Indian beef (Carabeef) supply fell into shortfalls in 2008, mainly
becauseofboomingdemandfromtheIslamicWorld.Thistippedtheequilibriuminitsmarket
andledtohigherpricesforIndianbeef(seeTablebelow).
India
Australia
Brazil
Canada
NewZealand
USA
Allimports
Tonnes
PhilippineImportsofFrozenBonelessBeef:
ReviewofLandedCostPerTonneandMarketShare2006to2008
2006
2007
2008
C$Per
%Market
C$Per
%Market
C$Per %Market
Tonne
Share
Tonne
Share
Tonne
Share
1,368
65.4
1,365
59.6
2,182
59.0
1,974
2.7
1,952
3.0
1,790
12.3
1,486
28.8
1,327
33.9
1,617
12.0
1,731
0.1
1,127
0.3
1,647
7.4
1,137
1.6
1,071
1.7
1,382
6.2
1,595
0.8
2,118
1.0
2,013
2.5
1,418
100.0
1,370
100.0
1,970
100.0
94,844
107,874
112,066
Source:DerivedfromthePhilippinesExternalTradeStatistics
The market has been growing despite the fact that landed costs of frozen beef from most
countries,includingthemarketleader,India,increasedin2008.Thisgrowthisunderpinnedby
continuedhighdemandfromthemeatprocessorsformanufacturingbeefforuseinlowercost
processedmeatproducts,e.g.cornedbeef,sausagesandburgerpatties.
The demand for Indian beef remained strong because of supply chain inertia and strong
relationships. This prevented a major switch away from Indian beef to other products. The
higherpriceofBrazilianbeefandfreightcostsalsotendedtosupportdemandforIndianbeefin
2008.
ThemainstreamretailchannelsinthePhilippinesurbanareasarenotmajorchannelsforfrozen
beef. The main focus of the meat retailers in these channels is on marketing higher margin
chilledbeef,whichmayincludedefrostedimportedfrozenbeef.
10
2.3.4 Fresh/chilledpork
ThePhilippinesmarketforimportedfresh/chilledporkisminusculeandisinherentlyunstable
in its development trends. The countrys official import data indicates that no fresh/chilled
porkwasimportedin2008(seeTablebelow).
Total
PhilippineImportsofFresh/ChilledPork2004to2008
2004
2005
2006
2007
Tonnes
Tonnes
Tonnes
Tonnes
21
11
77
2008
Tonnes
Thismarketishighlyundevelopedbecauseofthewayinwhichporkimportsare:
managed by the government under the Philippines WTO commitments, which include a
TariffRateQuota(TRQ)andMinimumAccessVolumes(MAV);and,
strategisedforbyimportersofmeatimportsundertheTRQsandMAVs.
MoreinformationontheTRQsandMAVsareprovidedinafollowingchapterofthisbriefing.
The other issue that severely undermines the market for imported fresh/chilled pork is the
strength of the local pork producers in their local market and supply chain. As highlighted
earlier,thePhilippinepigindustryproducesinexcessof1.6milliontonnesofporkperannum.
FreshlocalporkisverywidelyavailableinthePhilippinesandthereisabroadbasedperception
ingovernmentandtheindustrythatimportedporkisnotneeded,unlessthereareshortfallsin
supplywhichneedtobefilledtomeetdemand.
Such demand is only filled by frozen pork and offal. Trade sources comment that imported
fresh/chilled pork is not attractive because of its high price (pork is a basic staplemeat), and
complicationsindistributingitundertheconditionsthatprevailinthePhilippinechannels.
TheTablebelowprovidessomeindicativepricesforlocalfreshpork,asretailedinmainstream
supermarketsinFebruary2010.
11
RetailPriceofFresh/ChilledPorkinFebruary2010
Product
PesoPerKilogram
C$PerKilogram
Belly
175
3.92
Steak
189to200
4.23to4.48
Chop
168to180
3.76to4.03
Mincedpork
160to175
3.59to3.92
Frontleg(Hock)
147
3.29
Ribs
199to225
4.46to5.04
Source:LeadingsupermarketsinMetroManila
2.3.5 Frozenpork
Philippineimportsoffrozenporkamountedto29,817tonnesvaluedatC$28.8millionin2008,
upinanerraticmannerfrom11,092tonnesvaluedataboutC$10.5millionin2004(seeTable
below).
Boneless
Bonein
Carcassorhalf
carcass
Total
%change
PhilippineImportsofFrozenPork2004to2008
2004
2005
2006
2007
Tonnes
Tonnes
Tonnes
Tonnes
6,912
5,348
3,797
8,419
4,106
1,349
365
1,093
74
11,092
189
6,886
4,162
(37.9%)
(39.6)
55
9,567
129.9
2008
Tonnes
22,980
6,588
249
29,817
211.7
N:negligible.
Trade sources comment that the surge in frozen pork imports since the low point of 2006
resultedfromadiseaseoutbreak,e.g.PRRS.Diseaseisakeydriverinthefrozenporkmarket.
Government officials comment that disease has created a situation where local pork supply
remainedconstrainedin2009andwilllikelybetightinto2011.Whilethisisthecase,imports
willbeindeclinebecausepiginventorieswerealreadyincreasingin2009.
12
As can be seen from the data in the Table above, the Philippines demand for frozen pork is
mainly oriented around cuts other than hams, shoulders and other bonein cuts or and
carcassesorhalfcarcasses.Thebulkofdemandisforbonelesscuts,andmainlyvarietymeats.
ThePhilippinesisimportingfrozenporkfromupto18countries,althoughthebulkofimports
come4countries(seeTablesbelowformarketsharesandimporttrends).
ImportsofFrozenPorkbyKeySupplyCountryin2008
29,817Tonnes
Source:PhilippinesExternalTradeStatistics(Allcuts,excludespigsoffal)
TrendsinImportsofFrozenBonelessPorkfromKeySupplyCountries
2004to2008InTonnes
Source:PhilippinesExternalTradeStatistics(excludespigsoffal)
13
As can be seen in the Chart above, the 20072008 period saw a surge in imports of frozen
bonelessporkfrom4supplycountries,namelytheUSA,Canada,FranceandGermany.
USA
Canada
France
Germany
Belgium
Spain
Denmark
Netherlands
Allimports
PhilippineImportsofFrozenBonelessPork:
2006
2007
2008
C$Per
%Market
C$Per
%Market
C$Per %Market
Tonne
Share
Tonne
Share
Tonne
Share
1,094
11.1
917
11.9
981
44.8
560
18.0
1,013
21.8
956
20.7
1,655
21.8
1,017
30.7
962
16.7
705
22.3
732
24.7
910
10.0
541
3.8
533
1.3
888
2.0
640
3.2
1,071
1.1
787
2.0
1,346
4.3
1,096
4.2
767
8.1
426
8.0
649
2.6
692
0.8
984
100.0
932
100.0
966
100.0
3,797
8,419
22,980
Source:DerivedfromthePhilippinesExternalTradeStatistics(Excludespigsoffal)
Trade sources comment that North America was able to deal with the boom in demand for
productsin2008becauseofitslargesupplybase,inparticulartheavailabilityofvarietymeats.
ItalsobenefitedfromitsclosetradinglinkswiththePhilippines.TheUSAdominatedthetrade
becauseofitsavailabilityofsupplyandalsoresponsetomeetingdemand.
The market for imported frozen bonein pork saw a similar surge in the 20072008 period,
althoughonlyinvolvingproductsfromtheUSAandCanada(seeChartbelow).
14
TrendsinImportsofFrozenBoneinPorkfromKeySupplyCountries
2004to2008(InTonnes)
Source:PhilippinesExternalTradeStatistics(excludespigsoffal)
Thepointsmadeaboveaboutfrozenbonelessporkarealsorelevanttoboneinpork,e.g.pork
ribimports.TheyarethereasonwhyNorthAmericawasabletomaximiseonitsopportunities.
USA
Canada
France
SouthKorea
China
Germany
Denmark
Allimports
PhilippineImportsofFrozenBoneinPork:
2006
2007
2008
C$Per
%Market
C$Per
%Market
C$Per %Market
Tonne
Share
Tonne
Share
Tonne
Share
$920
42.1
866
13.8
968
68.0
$528
13.7
887
79.6
946
27.8
740
2.4
906
1.1
N
1,096
1.1
1,061
0.4
$416
10.4
451
1.5
$1,169
22.6
$860
100.0
871
100.0
966
100.0
N:Negligible.
Source:DerivedfromthePhilippinesExternalTradeStatistics(Excludespigsoffal)
The reality of the market situation in the Philippines is that frozen pork, in particular variety
meats,operateinamarketwherelocalporkdominatesandimportsonlycomeintodealwith
shortages.
15
TherewasnofrozenimportedporkcarriedinPhilippinesupermarketsorhypermarketsatthe
timeofmarketobservationsinFebruary2010.
2.3.6 Pigsoffal,frozen
Philippineimportsoffrozenpigsoffalamountedto56,388tonnesvaluedatC$33.2millionin
2008,upfrom24,709tonnesvaluedataboutC$15.2millionin2004(seeTablebelow).
Pigsoffal,not
liver
Pigsliver
Total
%change
PhilippineImportsofPigsOffal2004to2008
2004
2005
2006
Tonnes
Tonnes
Tonnes
19,805
20,657
27,364
4,904
5,160
5,444
24,709
25,817
32,808
4.5
27.1
2007
Tonnes
38,589
6,124
44,713
36.3
2008
Tonnes
49,978
6,410
56,388
26.1
Pigs offal, whether local or imported, is in big demand from households, the food service
industryandthemeatprocessingindustry.
Themarketforimportedfrozenoffalexistsbecausecompetitionforlocalpigsoffalfromthe
abovementioned demand bases causes shortages in supply to exist on a permanent basis.
Importshavegrownbecauseoflargershortagescausedbydiseaseoutbreaksandaconsequent
reductioninthepiginventory.
Frozenpigsoffalisimportedfromalargenumberofsupplycountrieseachyear.Thissituation
existsbecausebuyersinthePhilippinessearchtheworldforthelowestcostproducts.
16
ImportsofFrozenPigsOffalbyKeySupplyCountryin2008
56,388Tonnes
Source:PhilippinesExternalTradeStatistics(Alltypesofoffal)
TrendsinImportsofFrozenPigsOffalandVarietyMeats,NotLiver
fromKeySupplyCountries2004to2008(InTonnes)
17
TrendsinImportsofFrozenPigsLiverfromKeySupplyCountries
Demand has been resilient to increased prices. Imports have grown because pigs offal is a
necessitytokeepthePhilippinesmeatprocessingindustryoperatingathighcapacity.
Canada
USA
France
Germany
Belgium
SouthKorea
Spain
Denmark
Netherlands
Australia
Ireland
Allimports
PhilippineImportsofFrozenPigsOffalandVarietyMeats,NotLiver
2006
2007
2008
C$Per
%Market
C$Per
%Market
C$Per %Market
Tonne
Share
Tonne
Share
Tonne
Share
537
25.6
530
22.0
620
23.4
574
12.8
509
16.0
572
19.8
547
9.9
531
12.0
585
10.1
587
10.7
530
9.7
547
8.8
506
11.6
473
12.6
487
8.8
529
13.5
485
9.1
518
8.3
518
5.4
517
6.8
571
5.9
667
2.5
527
3.9
610
5.8
460
2.6
528
3.1
675
4.6
518
2.6
531
2.0
671
2.0
535
1.0
532
1.3
584
1.5
543
100.0
513
100.0
582
100.0
18
Canada
USA
SouthKorea
Australia
Spain
Allimports
PhilippineImportsofFrozenPigsLiver:
2006
2007
2008
C$Per
%Market
C$Per
%Market
C$Per %Market
Tonne
Share
Tonne
Share
Tonne
Share
571
47.4
547
52.5
603
46.2
641
19.3
692
17.3
768
27.2
580
21.7
590
18.4
573
17.0
604
9.7
551
10.7
548
5.5
509
2.5
590
100.0
580
100.0
639
100.0
ThereisnoimportedpigsoffalcarriedinanyPhilippinesupermarkettoday.Localfresh/chilled
pigsliverisretailedataroundPeso115(C$2.58)perkilogram.
2.3.7 Frozenchickenpartsandoffal
ThePhilippinesimportsoffrozenchickenpartsandoffalamountedto44,617tonnesvaluedat
C$29.7millionin2008,upinaconsistentmannerfrom21,206tonnesvaluedataboutC$15.6
millionin2004(seeTablebelow).
Total
%change
PhilippineImportsofFrozenChickenPartsandOffal2004to2008
2004
2005
2006
2007
Tonnes
Tonnes
Tonnes
Tonnes
21,206
25,903
34,262
39,296
22.1
32.2
14.7
2008
Tonnes
44,617
13.5
19
Importsoffrozenchickenpartsandoffalcomefromasizeablenumberofcountries,although
only4countriesarethedominantsuppliers(seeChartsbelow).
ImportsofFrozenChickenPartsandOffalbyKeySupplyCountryin2008
44,617Tonnes
TrendsinImportsofChickenPartsandOffalfromKeySupplyCountries
20
Themarketforfrozenchickenpartsandoffalisunderpinnedbyahighlevelofpricesensitivity.
Theproductsbeingimportedaredeemed:
lowcoststaples(chickenwings),orvalueformoneymeatitems(chickenlegsandthighs);
or,
lowcostfillerstoprocessedmeats(manufacturingchickenmeatandchickenoffal)targeted
atthePhilippinemassmarket,whicharemainlylowerincomegroupconsumers.
Canada
USA
Brazil
Australia
France
Ireland
Denmark
Allimports
PhilippineImportsFrozenChickenPartsandOffal:
2006
2007
2008
C$Per
%Market
C$Per
%Market
C$Per %Market
Tonne
Share
Tonne
Share
Tonne
Share
662
26.2
623
27.0
647
32.7
753
54.1
747
44.9
710
30.0
553
7.9
506
13.1
700
19.6
510
9.5
447
13.0
546
13.1
443
0.1
701
1.8
817
1.4
518
0.3
553
0.6
573
0.3
685
100.0
597
100.0
667
100.0
TherearenoimportedfrozenchickenpartsbeingretailedinthePhilippinesretailchannels.All
chicken sold in supermarkets and hypermarkets are local fresh/chilled products or local fresh
productsthathavebeenfrozenbytheretailer.
The only imported poultry available in supermarkets in Metro Manila are frozen turkey (U.S.
origin)andfrozenduck(U.S.origin).
AsampleofthepricesoflocalfreshchickenpartsandoffalareprovidedintheTablebelow.
21
RetailPricesofFresh/ChilledChickeninFebruary2010
Product
PesoPerKilogram C$PerKilogram
Chickendrumstick,fresh/chilled
125to146
2.80to3.27
Chickenthigh,fresh/chilled
120to140
2.69to3.14
Chickenwings,fresh/chilled
146
3.27
Chickenbreast,fresh/chilled
138
3.09
Chickenlivers
128
2.87
Source:SampleofsupermarketsinMetroManila
3.
ThePhilippinesmeatandpoultrydistributionchannels
3.1 Theretailchannels
ThePhilippineshashighlyfragmentedchannelsformeatandpoultry,whichinclude:
thetraditionalchannel,i.e.localisedmeatmarkets;and,
the modern trade, which includes supermarkets, hypermarkets and some cash and carry
stores,e.g.Rustans,SMMart,Robinsons,Landmark,andsomesmalleroperators.
Imported meat and poultry does not pass through the traditional channel. Such products are
niche products in supermarkets, with the key identifiable product being beef. There was no
evidenceofanyimportedfresh/chilledpork,chickenpartsoroffalintheretailmarketatthe
timeofthestudy,i.e.February2010.
Itshouldbenotedthat:
market observations conducted in February 2010 found no evidence of any type of

importedporkorchickeninthemoderntradechannels,incontrasttobeef;
the meat channels in the modern trade are generally oligopolistic in nature. Some key
pointstonoteareasfollows:
o thereiscontroloverthemeattradeinmostofthePhilippinesmodernretailchannels.
This control includes access to shoppers. This is underpinned by the activities of the
localmeatindustryassociation;
22
o theretailchannelsaresharedamongstthemainmeatandpoultrycompaniesbecause
ofacooperationagreementbetweenthemasassociationmembers;
o theassociationmembersdonotreallycompeteagainsteachother.Infact,theytryto
avoidcompetingonaheadtoheadbasiswitheachother;
o thissituationkeepsthecurrentretailersoutofthemeattrade.Thebulkoffreshmeat
and poultry (including fresh processed meat) sales are made through Philippine
corporatebrandspecificdelistylepointsofsale,whicharecontrolledbythekeymeat
andpoultrycompanies;
o the association is also a very strong lobby with the government over meat market,
industry,supplychainpolicyandimports;and,
o some of the companies that run meat points of sale in the supermarkets do sell
AustralianandU.Sbeefundertheirownbrandname,ratherthanusingaforeignbrand
nametomarkettheproducts.
Thissituationmakesitverydifficultforforeignbrandstobreakintotheretailmarket,orto
run effective country specific marketing activities in retail channels. The situation in the
PhilippinesisthereforeverydifferenttothatexistinginmostoftheotherASEANmarkets.
Incontrasttothesituationinthefreshmeatchannels,theretaildisplaysoffrozenprocessed
meatsaregenerallymoregenericinvolvinganumberofdifferentPhilippinebrands.
3.2 Thefoodserviceindustry
Thefoodserviceindustryhasverystrongdemandatmassurbanmarketlevel.Thekeychannels
at this level in the market are the fast food and casual dining restaurants, most of which
operateinchains.
Thekeyfastfoodchainsoperateonanationwidebasisandinclude:
JollibeeFoodsCorp,withover600outlets(Annualsales:C$505millionin2008);
McDonalds,whichistheMcDonaldsgroupslargestchaininASEANwithabout300outlets
(Annualsales:C$187million);
KFC,with166outlets;and,
23
Somesmallerfastfoodchains,includingWendys(around40outlets)andBurgerKingbrand
(22outlets).
Theseoutletsusearangeofmeatandpoultryitemsontheirmenus.Tradesourcescomment
thattheyareakeydemandbaseforimportedbeefandchickenparts.
The other restaurants that use imported meat and poultry are based in hotels, operate as
chains of outlets, or are single site specialty restaurants, e.g. European, North and South
AmericanandMexicanoutlets.Somekeypointstonoteareasfollows:
accordingtoDepartmentofTourism,thePhilippineshas21DeluxeClass(5star)hotelsand
15FirstClass(4Star)hotels.Allofthesehavesomeformofdemandforimportedmeatand
chicken, especially steaks, including those sourced from the USA, Canada, Australia and
NewZealand.ThesehotelsareusedbytheUSAandAustraliaforpromotionalactivitiesthat
docovermeats,especiallybeef;and
thecasualdiningchainsthatoperateinthePhilippinesincludePancakeHouse(68outlets),
KennyRodgersRoasters(35outlets)andDelifranceBistro(26outlets).Thereareasizeable
number of Americanstyle outlets, e.g. Tony Romas and Racks, that have demand for
steaks,ribsandchicken.
Someotherkeypointstonoteareasfollows:
fresh/chilled beef has its market in high end restaurants, including 4 and 5 star hotels,
foreignbrandedrestaurantchainsandsinglesitehighendrestaurants,e.g.Europeanand
Japanesefoodoutlets.ThisisthemarketthatisbeingtargetedbytheUSA;
there is currently no evidence of fresh/chilled pork or frozen pork in the food service
market.TradesourcesadvisethatU.S.porkhasbeenpromotedinsomeofthehigherend
restaurants,includinghotels,inthepast;
food service buyers are generally price sensitive because of the state of the consumer
market, which is highly price sensitive. Trade sources comment that buyers in the food
serviceindustrywillshiftfromonesourcetoanotheriftheycan,whenpricingchangesand
impactsnegativelyontheprofitabilityoftheirmenu;
24
food service companies do not wish to tie themselves to country of origin because this
makes their buyers very inflexible when attempting to buy the lowest priced acceptable
meatorpoultryforuseintheirmenuitems;and,
fastfoodcompanieshavebigdemandforchickendrumsticksofconsistentquality,which
cannotbesatisfiedinsufficientquantitiesbylocalproducers.
3.3 Themeatandmeatprocessingindustry
3.3.1 Thecattle,pigandpoultryindustry
ThePhilippinescattle,pigandpoultryindustryhastwobroadsectorswithinit:
thecommercialsector,whichisrelativelyconcentratedaroundmediumtolargecompanies
withanationalorregional(islandspecific)orientation.
Many of the businesses in this segment are integrated operators and have significant
industrialpowerbasesinthePhilippines,e.g.thegiantSanMiguelCorporation,andsohave
verystrongbargainingpowerinthelocalmarketanddistributionchannels;and,
the backyard sector, which is highly fragmented and localised, and revolves around small
andmicrosizedfamilyownedbusinesses.
The backyard sector rarely interacts with imported meat and poultry because its products
mainlyoperateinthetraditionalmeatmarkets,andnotsupermarketsorhypermarkets.
3.3.2 Themeatandpoultryprocessingindustry
Keyplayersinthemeatandpoultryproductionindustryareintegratedalongthesupplychain
fromfarmstoretailing.
Tradesourcescommentthatthemostimportantdemandbaseforimportedmeatandpoultry
isthePhilippinesprocessedmeatindustry.Somekeypointstonoteareasfollows:
theindustryproduces:
o cannedmeatsandpoultry:cornedbeef,sausages(Viennatype),meatloaf,localready
mealsincans,luncheonmeatandliverspread(apattypeproduct);
25
o frozen processed meat and poultry: sausages, chicken nuggets, burger patties and
bacon;and
o fresh/chilledprocessedmeats:sausages,bacon,hamandcornedbeef;
thesausageindustryisusingmixedmeatsinitsproducts,e.g.porkandchicken;
porkskinisusedbysnackproducers,e.g.porkcrackling(friedrind)snacks.Thisindustryis
highlypricesensitivebecauseofitstargetmarket,themassmarketonanationwidebasis;
Bovine variety meats and offal are in big demand due to large shortfalls in local supply.
There is also sizeable demand for pork variety meats and offal, and chicken offal. This
demandcoversawiderangeofmeats,offcuts,byproducts(fats)andoffalsthatarenotin
highvolumedemandinCanada;
corned beef is a massive user of imported beef, offal and fat. It is a captive market for
foreignbovineinputsbecauseitsdemandfaroutstripslocalsupply,andwillcontinuetodo
soinfuture.Liverspreadisabiguserofbeefandporkliverandothervarietymeats.
Traditionally,thereisveryhighdemandforIndianbuffalomeat,butduetohigherpricesof
thisproduct,cornedbeefmanufacturersareusingmorevarietymeatsintheircornedbeef,
e.g.frozencattlehearts.ThisshiftininputshasbeenfacilitatedbyUSMEFanditsmarketing
programs;
chickenoffal(hearts,liversandgizzard)andMDMchickenisindemandaslowpricedinputs
bythemeatprocessingindustry.Latentdemandfortheseproductsisreportedtobevery
big,ifthepriceisright;
asidefrompigskin,mentionedabove,thePhilippinesmeatprocessingindustryhasdemand
formeatfrompigheadsandfeet,pigtails,fat,andthefullrangeofedibleoffals;and
asmentionedearlier,onesausagemanufacturerhasrecentlyalteredstrategysothatitwill
only produce Halal sausages. This is not a new strategy because most, if not all, canned
cornedbeefmadeinthePhilippinesishalalcertified.
SometradesourcesbelievethathalalwillbecomeevenmoreimportantasthePhilippines
meat companies start to interact more with the ASEAN Free Trade Area opportunities.
ExportsofPhilippinecannedprocessedmeatsarealreadyaccessingMalaysiansupermarket
channels.
26
4.
ThePhilippinesregulatoryenvironmentforimportedmeatandpoultryinoverview
ThePhilippineshasacomplexandprotectionistregulatoryenvironmentformeatandpoultry.
ThiswasestablishedbyitsGATTUruguayRoundcommitments,whichestablishedtodaysWTO
compliant Tariff Rate Quotas and related tariff structures, Minimum Access Volumes and
SpecialSafeguardsonarangeofsensitiveproducts,includingmeatandpoultry.
TheTablebelowprovidesanoverviewofthePhilippinesMFNtariffsandtheimportdutiesthat
will apply under the recently ratified ASEANAustraliaNew Zealand Free Trade Agreement
(AANZFTA).
HSCode
Description
020110
Carcassesorhalf
carcassesofbovine
animals,freshorchilled
Freshorchilledbovine
cuts,withbonein(excl.
carcassesand1/2
carcasses)
Freshorchilledbovine
meat,boneless
Frozenbovinecarcasses
andhalfcarcasses
Frozenbovinecuts,with
bonein(excl.carcasses
andhalfcarcasses)
Frozen,bonelessmeatof
bovineanimals
Freshorchilledcarcasses
andhalfcarcassesof
swine
Freshorchilledhams,
shouldersandcuts
thereofofswine,with
bonein
Freshorchilledmeatof
swine(excl.carcasses
andhalfcarcasses,and
hams,shouldersandcuts
thereof,withbonein)
020120
020130
020210
020220
020230
020311
020312
020319
TariffRate
Applied
%
10
Active
Quota
TariffRate
OutofQuota
%
ASEANAustralia
NewZealandFTA
%
0%(2012)
10
0%(2012)
10
0%(2012)
10
0%(2012)
10
0%(2012)
10
0%(2012)
30or35
Yes
40
30or35
Yes
40
20%in2012,
phasingdownto
0%in2020.
20%in2012,
phasingdownto
0%in2020.
30or35
Yes
40
Forinquota30%
until2019,then
24%from2020.
Foroutofquota,
40%until2019,
then32%from
2020.
27
HSCode
Description
TariffRate
Applied
30or35
Active
Quota
Yes
TariffRate
OutofQuota
40
020321
Frozencarcassesand
halfcarcassesofswine
020322
Frozenhams,shoulders
andcutsthereofof
swine,boneless
30or35
Yes
40
020329
Frozenmeatofswine
(excl.carcassesandhalf
carcasses,andhams,
shouldersandcuts
thereof,boneless)
30or35
Yes
40
020641
Frozenedibleliversof
swine
5or7
020649
Edibleoffalofswine,
frozen(excl.livers)
Frozencutsandedible
offaloffowlsofthe
speciesGallus
domesticus
10
40or5
Yes
40
020714
ASEANAustralia
NewZealandFTA
Forinquota30%
until2019,then
24%from2020.
Foroutofquota,
40%until2019,
then32%from
2020.
Forinquota30%
until2019,then
24%from2020.
Foroutofquota,
40%until2019,
then32%from
2020.
Forinquota30%
until2019,then
24%from2020.
Foroutofquota,
40%until2019,
then32%from
2020.
5%until2014,
then4%into
perpetuity.
0%from2012
ForChickenLivers:
10%in2010,
phasingdownto
0%in2015.
ForWings,Thighs
andOtherOffal:
40%until2019,
then32%from
2020.
Source:PhilippineGovernmentcommitmentstotheWTOandAANZFTA.
Itshouldbenotedthat:
theASEANFreeTradeAreaisnowinfullforce.In2011,themarketwillbefullyopen,i.e.
0% import duty and no nontariff restrictions, to ASEANcontent meat, poultry and
processedmeatsfromalloftheASEANmemberstates.
28
There are two different viewpoints about the ASEAN Free Trade Area (AFTA) within the
meatandpoultryindustry:
o onenegative,whichissupportedbyahighdegreeofangeratsuccessivegovernments
foropeningupthemeatandpoultrymarketstoanyformofcompetition;and,
o theotherpositive,withmeatproducersforeseeingnewopportunitiesfortheirproducts
intheotherASEANmemberstates.
Whilethisisthecase,mostPhilippinemeatandpoultryproducershavenotyetstartedto
considertheimplicationsofAFTAontheirindustryortheircompany.Thecompaniesthat
do have AFTA in their strategies are San Miguel Corporation and RFM Corporation/Swift
Foods.
TheTablebelowprovidesanoverviewofthecurrentMinimumAccessVolumesthatstillapply
totheproductsthataredeemedsensitivebythePhilippinegovernment.
MinimumAccessVolumes(MAV)forBeef,PorkandPoultryinthePhilippines
HSGroup
MetricTonnes
0201
Meatofbovineanimals,freshorchilled
5,570
0202
Meatofbovineanimals,frozen
158,502
0203
Meatofswine,fresh,chilledorfrozen
54,210
0207
Meatandedibleoffalofthepoultryof
23,490
headingNo.01.05,fresh,chilledorfrozen
Note:MAVsalsoexistforgoatmeat(notwithinthescopeofthisstudy).
Source:DepartmentofAgriculture,Philippines(February2010)
It should be noted that the Special Safeguards (SSGs) are well entrenched in Philippine
governmentpolicy.TheSSGswouldalmostcertainlybeimplementedifimportsweredeemed
tohaveanegativeimpactofthePhilippinemeatandlivestockindustry.
TradesourcescommentthattheabovereferencedTRQandMAVsmakethemeatandpoultry
marketsthatareaffectedbythemirrationalintermsofthenormalinteractionbetweensupply
anddemandforces.TheMAVallocations,whichenjoythereducedtariffrates,areallocatedto
Philippinecompaniesonanannualbasis.
29
Accordingtosometradesources,theallocationsarestillnotwhollytransparentandthereare
occasionswhereitisdifficulttoknowexactlyhowmuchoftheMAVhasbeenused.
It should be noted that the Philippines government has just started a process of a detailed
review of its tariff regime in consultation with its local industries. This exercise, started in
February 2010, and is expected to continue for the next 12 to 18 months, depending on the
levelofdebatewithplayersinthemoresensitiveindustries,e.g.meatandpoultry.
AscanbeseenfromtheaboveTableoftariffs,therearedifferenttariffsarisingfromtheTRQ,
whichalsoapplyundertheAANZFTA.TheAANZFTAdoes,however,providearangeofbenefits
toAustraliaandNewZealand,versusthesituationforCanada.Forexample,by2012,beeffrom
thesetwocountrieswillenjoy0%marketaccess,whencomparedtotheMFNof10%thatwill
applytoCanadianbeef.
Theotherregulatoryprovisionsformeatandpoultryimportedfromcountries,suchasCanada,
arereportedtobequitestraightforward:
the Department of Agricultures Bureau of Animal Industry (BAI) is responsible for

regulatingtheflowofdomesticandimportedanimalsandanimalproductsinthecountry;
anotherDepartmentofAgricultureagency,knownastheNationalMeatInspectionService
(NMIS),isrequiredtoensurethatimportedmeatandmeatproductsareproducedunder
acceptable conditions and systems. This agency liaises with overseas agencies on
permissionsfortheircountrysabattoirs/exporterstotradeinmeat,poultryandoffalwith
thePhilippines;
onlyPhilippineregisteredcompaniesthatareaccreditedbytheDepartmentofAgriculture
as meat importers are permitted to import meat and poultry into the Philippines. These
companieshavetooperatewithintheconfinesoftherelevantTRQandMAVs;and,
an import license is required for all imports of meat, poultry and offal to the Philippines.
ThislicenseispartofthePhilippinesfoodhealthandsafetyproceduresforsuchproducts,
which come into effective operation in the case of animal disease outbreaks in foreign
countries,e.g.atthetimeoftheBSEoutbreakinNorthAmerica.
The accredited importer is required to obtain a Veterinary Quarantine Clearance (VQC)

certificate prior to the importation of meat and meat products into the Philippines. This
clearanceisreportedtoactastheimportlicense.
30
5.
Keysuppliersandtheirmarketshares
5.1 Thescenariointhemeatandpoultrymarketanditsimpactoncountryoforigin
Throughoutthisreport,ithasbeenmentionedthatPhilippinebuyerstendtosearchtheworld
forthelowestcostandbestproductfortheirrequirements.Priceisveryimportantbecausethe
Philippinesonlyhasasmallmiddleandupperincomesegmentwithinits86millionpersons,i.e.
around10millionpersons.
Today,demandformeatandpoultryishighlysegmentedandincorporatesarangeofdifferent
productsfromdifferentcountriesoforigin.Thissituationprovidesopportunitiesfor:
premium and better quality, higher priced meats and poultry from the Developed World;
and
lower costalternativemeats andpoultry from the Developing World, e.g. India, and, to a
lesserextent,BrazilandChina.Indiaisthelargestsupplieroftheproductscoveredbythis
studybecauseofthelargervolumesofbeefthatitisexportingtothePhilippines.
5.2 OverviewoftheinvolvementofCanadaanditsmaincompetitors
AscanbeseenfromtheinformationintheTablebelow,Canadaisdoingwellasasupplierof
the meat and poultry products covered by this study. As highlighted earlier in this report,
Canadasupplied20%ofallimportedmeatandpoultryproductsin2008.
ReviewoftheCompetitivePositionofCanadasDirectCompetitorsin2008
Product
Imports
Developing Developed
Top3DevelopedWorldSupplyCountries
World
World*
andTheirMarketShares**
Tonnes
%Share
%Share
Leader***
No2
No3
Beef,fresh
29
The market for fresh/chilled beef is serviced by local suppliers, which
chilled
includesomeverypowerfulandlargelocallyownedmeatcompanies.
70%
30%
Australia
Canada(7%) NewZealand
Beef,frozen
112,066
(13%)
(7%)
31
Pork,
fresh/chilled
Pork,frozen
Nil
Themarketforfresh/chilledporkisservicedbylocalsuppliers,which
includesomeverypowerfulandlargelocallyownedmeatcompanies.
29,817
0.4%
99.6%
USA(50%)
Pigsoffal,
56,388
frozen
Chicken
44,617
partsand
offal,frozen
0.5%
99.5%
20%
80%
Canada
(26%)
Canada
(33%)
Canada
(22%)
USA(21%)
France(13%)
USA(30%)
Australia
(13%)
France(9%)
*:OECDcountries.
**:Shareoftotalimports.
***:AmongsttheDevelopedWorldcountries.
Itshouldbenotedthatthemainalternative(DevelopingCountry)suppliersarebasedin:
India,forfrozenbeef;and,
Indian beef is supported by its lower price, functionality as a valueformoney meat

manufacturing input, and relationships between exporters and importers, which are
longstanding.Theotherfactorthatisimportantisthehalalstatusofitsmeat,whichisnow
requiredforcornedbeefmanufacturebecauseallcannedcornedbeefproductsmadeinthe
Philippinesarehalalcertified;and,
Brazilforfrozenchickenpartsandoffal.
Thesetwocountries,andChina(stillaminorplayertoday),haveadisruptiveinfluenceinthe
market. Trade sources comment that their products are viewed as OK, although there are
someconcernsaboutthem,whicharenotgenerallyspokenabout.Thekeysellingpointisprice
andacceptablequality.
32
6.
ConclusionforCanadaanditsexporters
6.1 Growthforecastsandscenariosforimportedmeatandpoultry
Producersofmeatandpoultryaregenerallypositiveaboutthedemandfortheirproductsover
thenext3to5years.Atpresent,therearesomeshortertermconcernsabout:
therealimpactoftheglobaleconomiccrisisonthePhilippinesintothelongerterm.
Tradesourcescommentthatthishasnotbeenrevealedyet,especiallytheimpactofChinas
economicpositionandpoweronthePhilippinesindustry,jobs,exportearningsandinward
investments;and,
theoutcomeofthe2010Philippinepresidentialelectiononfuturegovernmentpoliciesand
developmentoftheeconomy.
There are some mixed opinions on this issue, although the main concern is that change
could undermine the positive changes that have been seen in the broader economy over
thepast5years.ThishasbeenaperiodwhenthePhilippinesexperiencedthefastestrates
ofeconomicgrowthinitsrecenthistory.
Themeatandpoultryprocessors,foodserviceandretailersgenerallybelievethatthenext3to
5 years will be positive for their businesses, albeit under conditions of continuing high price
sensitivity.
Themaingrowthdriversarecitedas:
naturalpopulationgrowth,whichwillbeveryimportantforlowerpricedcutsandproducts;
and
economicgrowthbasedoncurrentforecasts,whichsuggestthatthePhilippineswillgrowat
ratesofbetween3%and5%perannumoverthenext3years,subjecttotheoutcomeof
the Presidential election and situation regarding periodic major natural disasters, e.g.
typhoons,earthquakes,etc.
33
Meatimportersbelievethattherewillcontinuetobeshortfallsinlocalsupplyofbeef(major
shortfall),porkvarietymeatsandpigsoffal,andchickenpartsandoffal.This,combinedwith
theabovedrivers,andthenewFTAs,willprovidesolidsupportforhighervolumesofimports.
Whilethegovernmentispromotingtheproductionofmoremeatandpoultry,andinvestments
are going into new inventories, demand will outstrip supply, especially for inputs to the
processed meats that are consumed by the mass market, i.e. the C and D socio economic
groups(asreferencedearlierinthisreport).
WhiletheASEANFreeTradeAreaanditsnextstagedevelopment,namelytheASEANEconomic
Community, could start to alter competitive scenarios in some segments of the Philippines
foodindustry,itisunknownwhethertheseFTAswillhavemajorshortormediumtermimpacts
onthePhilippinesmeatandpoultryindustry,i.e.asademandbaseforimportedmanufacturing
meats.
Changemaycomefaster,iftheretailindustryisliberalisedandnewforeigninvestmententers
it. Foreign retailers would almost certainly seek new sourcing opportunities arising from the
FTAs.
Theexistingindustryappearstohavesufficientpowertodefenditselfagainstlargeimportsof
meat and poultry from the other ASEAN countries. Additionally, there are weaknesses in the
ASEAN pig and cattle industries that undermine a major reorientation towards exports on an
ASEANregionalbasis.
Having stated this, it is, however, possible that some AFTA threats might develop for the
Philippineschickenindustryfromthestrong,wellorganisedandindustrialisedpoultryindustry
inThailand,althoughatthepresenttimethisindustryisstillfocusedelsewhere.
DemandformeatandpoultryinthebroaderPhilippinesmarketisforecastbytradesourcesto
growatbetween3%and7%perannumoverthenext3to5years,dependingonthestateof
economicgrowthoverthisperiod.
The TRQ and MAV is likely to continue in place for nonASEAN content meat, e.g. Canadian
products,overthenext3to5years,unlessthenewPresidentdecidestochangetoplinepolicy.
This will still impact negatively on the ability of Canadian exporters to initiate supply push
marketingactivitiesinthePhilippines.
Whilethisisthecase,demandwillstillexistfromimporterswhorequireproductsfor:
34
inputstotheirprocessingplants;and,
itemsforthefoodserviceindustry.
Canadianproducerswithotherproductsrelatedtoopportunitiesinthemarketsprofiledinthis
report,andwho would like moremarket information or contacts, maycontact the AgriFood
Trade Commissioner at the Embassy of Canada in the Philippines at: infocentre
manila@international.gc.ca.
35

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