Great opportunity for shrimp products in Northern Europe

According to the EVFTA, there are about 220 tax lines on aquatic products with a base tax rate of 0-22%, the remaining tax lines will be reduced to 0% according to the roadmap from 3-7 years, contributing to Vietnamese products increase their price competitiveness compared to similar products in other countries.

After the COVID-19 vaccination campaign and economic stimulus package from the beginning of 2021, seafood demand in the EU market has recovered markedly, along with the tariff advantage from the EVFTA Agreement is an opportunity to boost exports. most of Vietnamese seafood products to this market.

Statistics show that in the first 3 months of 2022, seafood export turnover reached 2.4 billion USD, an increase of 40% compared to 2021. Particularly for the EU market, after 2 consecutive years, exports decreased, in the first 2 months of the year. In 2022, pangasius exports to the EU reached $28 million, up nearly 76%, shrimp exports reached $159 million, up 66% over the same period in 2021. Among them, single exports to three main markets are: The Netherlands, Germany, and Belgium increased by 77%, 59% and 82% respectively.

Notably, the demand for shrimp imports into the EU usually increases in the summer and autumn. Therefore, importers in this market have carefully prepared orders from the beginning of the year.

The demand for shrimp imports into the EU usually increases in the summer and autumn

The Vietnam Trade Office in Sweden noted that, for retail, for many years, black tiger shrimp has gradually lost market share in large retail chains. With consumers becoming more price-oriented and demand for certified sustainability increasing, retailers have chosen Pacific vannamei shrimp instead.

Since Europe has a large ethnic community, there are also specialized ethnic retailers that sell a wide variety of foods, including seafood. Usually, they offer a variety of products that are different from mainstream retail. Shrimp is the leading frozen seafood item in this channel. Furthermore, ethnic supermarkets are likely to sell black tiger shrimp directly to consumers, as certification requirements are unnecessary.

"In regular retail, frozen peeled black tiger shrimp is mainly sold in bags of 250g to 1kg. Occasionally, IQF or Semi-IQF HOSO black tiger shrimp will also be offered in 250g to 1kg bags or in cartons of 500g to 1kg. Most of the larger retail organizations sell frozen shrimp under their own label, but there are also a number of other brands.

However, direct supply to the Nordic supermarket channel is only possible if the exporter has certified its farms, factories and processing facilities with sustainable or organic certification, or may actually do so in the short or medium term. Without these certifications, it is better to focus on finding customers in the wholesale market or ethnic retail channel, where these certification requirements are less common. However, the disadvantage is that supply, demand and prices in ethnic wholesale and retail channels are always volatile and harder to predict than in supermarkets.

For wholesale, there are two final markets: general wholesalers (including ethnic wholesalers) and specialized seafood wholesalers. General wholesalers are less likely to supply black tiger shrimp in bulk, as fish and seafood are just one of their many product categories. In addition, they offer a growing supply of Pacific white shrimp, as well as other premium species, such as the Argentine red shrimp. The volume offered by general wholesalers is relatively large, as they operate many stores across the country or even in different countries. These wholesalers also offer a delivery service, where supplies are delivered straight to the restaurant kitchen.

The ethnic black tiger shrimp wholesale market mainly consists of Asian wholesalers supplying Asian restaurants. Shrimp is a standard dish on Asian menus, whether Chinese, Japanese or Vietnamese. Traditionally, the Asian market would buy more black tiger shrimp, but now, with Pacific vannamei prices falling, some wholesalers are changing their product assortment towards selling more vannamei products. white foot more pacific.

Specialized seafood wholesalers typically sell a wider range of products in their catalog and cater to the upscale market. This means that they are not price oriented but focused on quality and offer a wider range of sizes and types. To enter this market, exporters must provide products of the highest quality.

General wholesalers mainly work with importers, while specialized wholesalers often import directly. For the general wholesaler, shrimp is just one of many items; For specialized wholesalers, shrimp is one of the main products. If the volume is large enough, direct sourcing can be worthwhile with the additional costs and risks.

Local agents play an important role

According to the Vietnam Trade Office in Sweden, local agents play an important role in the black tiger shrimp trade to assist buyers in ensuring that quality requirements are met and ensuring the best price.

Some of the larger importers have established representative offices or local purchasing offices in countries such as Vietnam, where they have local staff to ensure the quality of products destined for the European market and Assist in price negotiations with potential suppliers. In such cases, agents are no longer needed. For example, the Private Office in the exporting country will be responsible for coordinating all purchasing, quality control and logistics activities for the company.

Some businesses import frozen black tiger shrimp, then defrost the product, further process it, pack it in bulk for industry or pack it for consumption in supermarkets, and then distribute the products. The facilities required for processing and logistics are enormous, and only a few groups are able to invest in this type of investment.

If a retailer or wholesaler buys directly from the source, chances are they have a strong logistics partner who takes care of all the logistics, usually with the responsible importer or supplier. separate import division in Europe.

“Importers need to try to reduce their dependence on agents, wholesalers and retailers try to be less dependent on importers to reduce costs. However, shrimp is still considered a risky commodity by many people, so very few wholesalers and retailers import shrimp directly. If they do so, they often use a strong service provider or a centralized purchasing organization to take on some of the responsibility from the end buyer.