Bar­ri­ers and break­throughs

In­done­sia has tra­di­tion­ally been a tough nut to crack for Kiwi F&BB ex­porters.e ex­porters. But, as Nada Young re­ports, there has been some re­cent progress ma made.ade.


Ac­cess to In­done­sia for New Zealand’s food and bev­er­age ex­porters is a tricky beast.

Most of New Zealand’s F&B goods ben­e­fit from duty free ac­cess un­der the ASEAN-Aus­tralia-New Zealand Free Trade Agree­ment (AANZFTA). This FTA is a huge ad­van­tage when it comes to com­pet­i­tive­ness in a price sen­si­tive mar­ket, like In­done­sia.

Un­for­tu­nately, few F&B ex­porters have been able to take ad­van­tage of the FTA due to the myr­iad of non-tar­iff bar­ri­ers that must be over­come in or­der to gain ac­cess and dis­tri­bu­tion.

Re­stric­tions in the form of im­port quo­tas on sen­si­tive cat­e­gories such as wine, dairy and beef are par­tic­u­lar nui­sances.

In­done­sia’s trade bar­ri­ers to­wards New Zealand beef im­ports were at the top of the agenda dur­ing Prime Min­is­ter John Key’s visit to the ar­chi­pel­ago in July. Hap­pily, it would seem Key achieved a break­through with this is­sue dur­ing his high pro­file meet­ing with In­done­sia’s Pres­i­dent Joko Wi­dodo “Jokowi” on 18 July and we can ex­pect to see ac­cess to this lu­cra­tive sec­tor open up once again.

There is ob­vi­ous de­mand for im­ported F&B goods from In­done­sian con­sumers. Hav­ing lived and worked in In­done­sia for the past five years I have seen the F&B sec­tor blos­som, par­tic­u­larly in the food ser­vice chan­nel where a plethora of new restau­rants and cafés are thriv­ing in Jakarta and Bali. It’s com­mon to find Western-style dishes on the menu at such es­tab­lish­ments and this is a big fac­tor in the ris­ing de­mand for im­ported prod­ucts.

How­ever, on the re­tail side, progress is a lit­tle slower.

Reg­u­la­tory com­pli­ance for im­ported re­tail prod­ucts is far more oner­ous than their food ser­vice equiv­a­lents. More im­por­tantly, price sen­si­tiv­ity means that mar­ket pen­e­tra­tion for ex­pen­sive im­ported prod­ucts (which de­notes much of New Zealand’s F&B ex­ports) is cur­rently lim­ited to a small net­work of 200 to 300 pre­mium re­tail stores.

To put this into per­spec­tive, there are 183 Count­down su­per­mar­kets in New Zealand ca­ter­ing to a tiny pop­u­la­tion of 4.5 mil­lion peo­ple. By con­trast the pop­u­la­tion of In­done­sia is about 250 mil­lion and the lo­cal con­ve­nience store chan­nel alone amounts to some 22,000 stores.

Find­ing a dis­trib­u­tor

To achieve dis­tri­bu­tion of any kind in In­done­sia, F&B ex­porters must first iden­tify and ap­point a lo­cal dis­tri­bu­tion part­ner. This is not as easy as it sounds. The top dis­trib­u­tors are of­ten so frus­trated by the reg­u­la­tory en­vi­ron­ment gov­ern­ing the F&B sec­tor that they are loathe to take on new prod­ucts un­less they are very con­fi­dent that the prod­uct will be a suc­cess.

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