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Vietnamese companies urged to study EU export regulations

Sunday, April 27, 2014
Vietnamese exporters need to better understand the EU's distribution processes, import regulatory requirements and demand of the 28-member market, an industry official said at a workshop in HCM City yesterday.

Nguyen Duc Thuong, deputy head of the European Market Department under the Ministry of Industry and Trade, said that despite the global economic downturn, bilateral trade between Viet Nam and the EU had increased strongly.

Consumers shop at BigC Thang Long Supermarket. Domestic firms were urged to study consumer segments and identify the best distribution channels for marketing their products

Since 2012, the EU has surpassed the US to become Viet Nam's largest export market, Thuong told workshop organised by the department and the European Trade Policy and Investment Support Project (EU-MUTRAP).

Last year, bilateral trade between the EU and Viet Nam reached more than US$33.7 billion, a year-on-year increase of 16 per cent, of which Viet Nam's export revenue accounted for $24.3 billion, he said.

"However, in reality, the majority of the export revenue came from the foreign-invested sector, while the ability to approach the EU market of local companies was still limited," he said.

Tran Anh Hoang, director of Linh Anh Joint Stock Company, as well as other firms, said the market imposed many import criteria, coupled with strict regulations, making it hard for companies, especially small- and medium-sized ones.

Claudio Dordi, the technical assistance team leader of EU-MUTRAP, said the distribution sectors of the EU-member states were similar, but the main differences among EU members were consumer habits, product specialisation and regulations affecting large retailers.

The food market is highly regulated in the EU, and if Vietnamese firms want to export their products to the bloc, their products must meet general requirements under the EU Food Law, including food labeling, packaging and container requirements, and food additive, pesticide and contaminant regulations.

In addition, "they must comply with private standards, which may differ from country to country," he added.

Nguyen Cam Nhung, EU-MUTRAP expert, said besides food safety and legal requirements, the EU distributors also have additional requirements to show compliance with consumers' preference for high environmental and social standards.

Nhung said the wholesale distribution sector was one of the largest sectors within the EU, and that retail trade was divided roughly evenly into grocery trade (primarily food and certain household items) and non-grocery trade (clothing and footwear, household furnishings and electronic goods).

"From the perspective of most Vietnamese exporters to the EU, grocery retailers could provide opportunities for access through their global purchases," she said.

In Viet Nam, the French Casino Group, owner of the Big C supermarket chain, and the German Metro group have their purchasing units here, and local producers could work with them to take their products to other countries.

She advised domestic firms to study consumer segments and indentify the best distribution channel for marketing their products.

"By selecting the right partner for the right product, Vietnamese exporters can maximize trade," she said, adding that companies should consider participating in trade shows to explore global marketing opportunities.

Valentin Tran, director of global sourcing for Big C, said businesses should take into consideration that consumers have become more aware of environmentally safe products and ethical business standards.

Viet Nam's key exports to the EU include agricultural and fishery goods, clothing, footwear, furniture and wooden home products.
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