Теги: вихід на ринок Канади
What Surprises Ukrainian Food Exporters to Canada Should Be Prepared for?

The Canada-Ukraine Free Trade Agreement (CUFTA), which entered into force in summer of 2017, may potentially open a wide range of opportunities for Ukrainian exports. Now, there is just a little left to do – to take advantage of these opportunities.

Taking into account the fact that Canada, as well as Ukraine, is an export-oriented country, the issue of veterinary and phytosanitary control of imports is a serious challenge.

Canadians strictly control agricultural products crossing their borders, since the importation of a product contaminated by plant pests or pathogens compromises Canada’s own export potential and undermines safety of its citizens.

The Way to Canada

Safety guarantee of the imported goods in Canada has to be supported by:

1) phytosanitary certificate (for products of plant origin that are subject to quarantine);

2) veterinary certificate (for products of animal origin) issued by the competent authority of the exporting country.

The central authority that establishes veterinary and phytosanitary regulations for Canadian manufacturers and importers at the federal level is the Canadian Food Inspection Agency. This is essentially an equivalent of the Ukrainian State Service for Food Safety and Consumer Protection (SSUFSCP).

How does it work in practice? For instance, Ukrainian beef producer sees good prospects for selling its products in Canada. But for the importation to the Canadian territory the Canada Border Services Agency (CBSA) requires that the products have veterinary certificates.

The producer itself or together with the representatives of the respective association of producers approaches the SSUFSCP asking it to initiate the procedure for the approval of veterinary certificates for beef with the Canadian regulatory authority.

In line with the current Canadian official procedure, the Ukrainian party has to provide comprehensive information (questionnaire responses) regarding the legal framework, the competent authority network, the existing state control system and procedures, statistics in Ukraine, etc. Once the Canadian party has processed the information provided to it, the SSUFSCP and the concerned exporters undergo an audit by the Canadian regulatory authority.

Only upon the receipt of positive audit findings and approval of the veterinary certificate form for a specific product category, the SSUFSCP will be given permission to export the appropriate type of product.

It is worth noting that this procedure will not occur automatically, but should be initiated by the concerned Ukrainian producers.

It should also be understood that elimination of these barriers takes time, sometimes years.

Phytosanitary and Veterinary Certificates Approval Procedures

  1. Producer or association of producers sees good prospects for its products in the Canadian market and approaches the SSUFSCP.

  2. The SSUFSCP approaches the appropriate Canadian regulatory authorities and initiates the procedure of certificate approval.

  3. The Ukrainian party provides the Canadian party with all appropriate information on the product safety control in Ukraine.

  4. The Canadian regulatory authority conducts audits of the SSUFSCP and the concerned exporters.

  5. If the audit has been successfully passed, the SSUFSCP is entitled to issue appropriate certificates that are recognized in Canada.

The procedure for recognizing the control system as described above is applicable to both Ukrainian exports to Canada and Canadian imports to Ukraine. Presently, competent Ukrainian and Canadian authorities have approved 15 international veterinary certificates for importing to Ukraine.

Who is Next

However, Ukraine’s trade potential with Canada is much higher. In Ukraine, there is a strong interest in exports of poultry, packages of bees (i.e. live bees) and confectionery and other products to the Canadian market.

Efforts to open the Canadian market for Ukrainian chicken meat continue. In October 2016, the SSUFSCP submitted to the Canadian Food Inspection Agency under the Canadian Ministry of Agriculture and Food three requests for the accreditation of Ukraine to export poultry and poultry products to Canada. While in April 2017, an additional request was sent for the assessment of Ukraine’s status with regard to the export of bee packages to Canada. So far, the only response including additional questions and clarifications that has been received is the one related to the poultry meat. It is currently being processed by the SSUFSCP experts.

The Ukrainian dairy product producers’ will benefit from learning more about the Supply Management System that operates in Canada. This system is based on monitoring the dairy product consumption and a milk quota system for the Canadian farmers.

Canadians strive to satisfy the demand by the local dairy products to the extent possible. Insufficient amounts of these products are compensated through import quotas. Thus, even regardless of sanitary restrictions, market opportunities for dairy products in Canada are very limited.

Communication with the Canadian Food Inspection Agency has revealed that, currently, a ban has been put on the Ukrainian cereals imports to Canada. This is due to the fact that a few years ago, pests were found in one of the lots of imported Ukrainian cereals, although appropriate phytosanitary certificate had been provided.

The lifting of the ban requires additional communication between the relevant authorities of both countries. It is worth noting that the SSUFSCP has not received any requests to resolve this issue from Ukrainian exporters.

Things You Need to Know

Systematically organized information on the documents required to import food products to Canada can be found in the Automated Import Reference System (AIRS) at the Canadian Food Inspection Agency’s website.

It is important to remember that in Canada it is the importer who is responsible for the compliance of the imported products with the local legislation. To this end, a Market Access Secretariat has been established under the Canadian Ministry of Agriculture and Food, which through an ‘open window’ service operating as a publicly accessible e-mail server processes inquiries from Canadian businesses and provides recommendations on ways to access both the domestic and foreign markets.

It is also important that in the second half of 2018 legislative changes will come into effect in Canada that will change the approach to food safety control. These will be based on the risk analysis principle and the need for importers to obtain import licenses for the controlled shipments in the future.

Ukrainian exporters already now need to pay attention to the new Canadian preventive food safety controls.

The implementation of the Free Trade Agreement requires a systematic cooperation between Ukrainian and Canadian government authorities, which has become more active now. In November 2017, with the support of the Canada-Ukraine Trade and Investment Support Project the SSUFSCP delegation visited Canada and established important contacts with local regulatory authorities.

We are sure that in 2018 our joint efforts will make the Canadian market closer to Ukrainian food exporters.

Authors:

Boris Kobal, Director, Food Safety and Veterinary Service Department, State Service of Ukraine for Food Safety and Consumer Protection

Olena Kuryata, Chief of Unit for Foreign Relations and European Integration Deputy Chief of Directorate for International Cooperation State Service of Ukraine on Food Safety and Consumer Protection

Source: European Pravda

Standards in Canada: How to Overcome Barriers and Take Advantage of the Free Trade Agreement

It will soon be six months since the free trade regime came into force between Ukraine and Canada. How can Ukrainian exporters leverage the regime to get the highest possible advantage?

It is not a secret that after the abolition of tariff barriers, it is the non-tariff requirements that are sometimes rather difficult to overcome. Accordingly, the compliance of Ukrainian products with the regulatory requirements of the Canadian market becomes the key issue for exporters.

It is known that requirements for goods are usually issued in the form of standards and technical regulations. The former is voluntary, while the latter is mandatory to comply with. However, in Canada, one will not find such a clear division.

The standards in Canada can be conventionally divided into:

  1. Standards developed by standardization bodies;
  2. National standards;
  3. “Obligatory” standards. Right, don’t be surprised, I mean the obligatory standards.

Now, let’s take a detailed look. In Canada, nine organizations have an accreditation of the Standards Council of Canada to develop standards.

It is important that the Standards Council of Canada does not develop any standards. It accredits standardization organizations and compliance assessment bodies. However, the Council has the right to approve the standards as national standards of Canada (which, however, remain voluntary). There are currently around 3 thousand of such national standards.

Although the standardization organizations in Canada compete with each other, they have a certain specialization. 

For example, Canadian General Standards Board (CGSB) is traditionally specialized in developing standards for public procurement, organic products, office equipment, fireproofing of textile products, etc. It was CGSB that developed the standard for Canada’s national flag.

This organization, by the way, has existed since 1934, and works based on the principles of self-sustainability without receiving any state funding.

Importantly, it is currently the only one of the nine Canadian standardization organizations whose standards can be obtained for free.

Canadian Standardization Association (CSA Group) is another influential Canadian standardization organization specializing in products like electrical appliances, construction materials, vehicles, etc. For example, CSA is the author of the Canadian Electrical Code – a collective name for the standards that set requirements for underground and terrestrial electricity distribution networks, street lighting, household appliances, etc.”

Standards become obligatory when they are referenced in Regulations of Canada.

The Regulations of Canada are somewhat similar in nature to by-laws in Ukraine – they detail and supplement the provisions of Laws (in Canada – Acts). For example, in addition to the Consumer Product Safety Act, about 35 Regulations were adopted.

Public authorities in Canada increasingly use standards when drafting Regulations – the standards (or their parts) are incorporated into Regulations and thus become mandatory.

According to recent estimates, there are references to approximately 1,000 standards in the Regulations at the federal level. Hundreds of standards are referenced in provincial-level Regulations.

As for the compliance assessment bodies, there are more than 400 of them in Canada. They are also accredited by the Standards Council of Canada.

What does this mean for a Ukrainian exporter in practice?

The key question is “How to find out what requirements are put forward to your product?” The best way is to get in touch with a regulatory authority in Canada. Believe it or not, but this recommendation came from the Canadian regulatory authorities themselves. Our experience shows that requests are taken seriously and responses are sent by the authority within one to two weeks (depending on complexity of the request).

For example, medical equipment, toys, pesticides, pharmaceuticals, radiation equipment are managed by Health Canada. Innovation, Science and Economic Development Canada is engaged in management of telecommunication equipment, and Transport Canada deals with vehicles and tires.

In addition, attention should also be paid to provincial-level requirements that may differ from those of the federal level.

For example, the requirements for electrical appliances are contained in the Canadian Electrical Code developed by the CSA and adopted at the federal and provincial levels (in ten provinces and three territories of Canada). However, there are additional requirements in Ontario (so-called “deviations”) outlined in the Ontario Electrical Safety Code.

Taking into account the existence of the Free Trade Agreement between Ukraine and Canada, many producers consider Canada as a hub for exports to North America or as a starting point for exports to the United States. In terms of technical regulation, this approach may be fully justified as many US and Canadian standards are harmonized or developed jointly.

Thus, CSA has the accreditation of the American National Standards Institute, and the Air-Conditioning, Heating and Refrigeration Institute (AHRI) is accredited by the Standards Council of Canada.

Finally, it is worth remembering the famous phrase: where there is a will there is a way.

There are many more ways to export to Canada than reasons to be afraid of the Canadian standards. So, feel free to contact Canadian regulatory authorities, bring your products to the level of Canadian standards and expand your business horizons.

Author: Oleksandra Brovko, CUTIS Senior Trade and Investment policy expert

Source: European Pravda

Ukrainian Products: Paving the Way to Canadian Supermarkets

The Ukrainian food producers who consider placing their products on the shelves of Canadian supermarkets have a long and thorny way ahead. It is like running a marathon. You gear up, have trainings, and make a step-by-step try: a 10-kilometre distance, then a semi-marathon, and only after that you are prepared to run the whole distance. Provided that you have enough energy, willingness and understand the purpose.

Let us analyze the key stages of the cross-Atlantic marathon and barriers on the way to the Canadian retail chains. To begin with, we will concentrate on the questions “what should you sell?” and “whom to?”

Analyzing the demand for your products and consumer preferences in Canada

Your potential Canadian buyers are numerous (over 35 million) and diverse. Canada is a multicultural country; over 20% of its residents were born outside Canada. Consequently, the customs and preferences of Canadian consumers and partners are dissimilar. I would recommend that you start doing your homework by searching for information using the following resources:

  • Canadian Importer Database, which provides lists of companies importing goods into Canada, with breakdown by product, by city, and by country of origin.
  • Canadian Company Capabilities Directory offers more complete company information. In addition, this tool enables searching by industry. The database includes predominantly Canadian producers, and sometimes distributors.
  • Trade Data Online is another convenient tool to get information on importing goods to Canada, in general and by country.

You may get some information from these resources for free.


Source: Flickr

Studying the demand and the products offered by your competitors is more efficient when you do so on site, that is in Canada, by engaging other people, for example from the Ukrainian diaspora. It is critical that a company may invest into such study. Let us consider some potential market analysis scenarios.

Do-it-yourself market analysis. You, as a producer, go to Canada and – having drafted a plan of visits to certain supermarkets, grocery stores, and points of sale – study the products of a particular group, the prices and the available range. It is an efficient method enabling to understand the proper place and manner of presenting your goods. In addition (a real-world example), if you demonstrate a strong interest and a maximum insistence, you may get contacts of a person active in purchasing for a grocery store or a supermarket suitable for your goods.

Analysis by an agency or an agent. On the one hand, it is a plain vanilla: you contract an agency to conduct the study and, within a specified period, get the report. On the other hand, the agency is not a producer; it will demonstrate its enthusiasm solely within the limits specified in the contract. You cannot exclude that the agent you choose has his own views on the potential of your goods. Among the agents, you may find the representatives of the Ukrainian diaspora living in Canada for years. Often they see the specific nature of the Ukrainian producers, market requirements and demand from the eyes of Canadians. However, I would not recommend you accept a common conception that it is easier to make a deal with a fellow countryman; sometimes it proves unjustified. Your countrymen residing in Canada mind their business interests rather than nationality.

Market analysis by an organization. The main difference between organizations and agencies is that, in addition to studying the demand and providing you with information, organizations may offer you additional services related to the “ongoing promotion” of your company in Canada: participation in exhibitions, educatory touring, etc. Usually, the membership fee they charge is rather moderate; however, you do not get immediate results or “the first aid”. Promoting takes time and requires ‘adoption’ by the Canadian market.

Players of the Canadian food market: who they are and how they work

Supermarkets are the main players; 64% of food products are displayed on their shelves. A supermarket is a full-function and self-service retail market that sells food, with the annual sales of 2 million Canadian Dollars or more.

The 2015 retail sales by Canadian supermarkets and grocery stores are estimated at about 79 million Canadian Dollars.

The top five Canadian supermarkets by annual sales are: Loblaw Cos. Ltd., Sobeys Inc., Metro Inc., Costco Canada Inc. и Walmart Canada Corp.

When choosing and buying food at supermarkets, a Canadian buyer is guided by the following criteria, in descending order of priority: price, taste/freshness, quality, nutritional value/health benefit, safety.

By offering several brands of grocery stores – depending on the pricing policy – some supermarket chains encourage buyers to make more buys. Thirty-three per cent of Canadian buyers opt for specialized stores according to the principle of lower prices.

Winning in the ethnic buyers sector remains a top priority for chain supermarkets in Canada. For Ukrainian producers it means that representatives of ethnic groups (like Ukrainian or Arab diaspora) may trigger interest to certain food product groups. A proactive analysis will help the producer to identify the most wanted products.

In Canada, a typical distributor interacts with the chains of supermarkets and small grocery stores. Customarily, the distributor operates its warehouses in multiple provinces of Canada, which enable prompt product deliveries to multiple stores all over Canada. Commonly, a distributor is active in the markets of both Canada and the US; this may be useful to expand oversea sales geographically.


Source: Flickr

A distributor may operate a separate chain of small ethnic stores of the same brand. In addition, it may offer products under a private label.

For Ukrainian exporters it is important to know that distributors often show interest to food products matching the tastes of ethnic client groups. They opt for goods with the packaging and formula that remind the consumers about their preferences.

However, you should not narrow your offering excessively.

The partner is not interested in niche goods (e.g., gluten-free snacks) and orients at the goods that are popular among Canadian consumers: from confectionary to species.

An advantage of engaging a distributor is a potentially prompt transaction, which is critical for your entry into the Canadian market. If the goods meet the partner’s price, packaging and labelling requirements, the distributor may deliver them to the supermarket chains within 2 months.

What do the Canadian distributors normally expect from a potential supplier? Firstly, a proposal specifying, among others, the best sellers. Secondly, a list of products, including the product description, packaging options according to the consumers’ requirements and/or preferences, letters of references from serious partners. In addition, the supplier should provide a price list, a potential delivery schedule, and specify whether the products are certified.

Author: Olga Vergeles, Project Manager, Canada-Ukraine Trade and Investment Support Project (CUTIS)

Source: Delo.ua