Category Archives: Blog

March 1, 2021 – Reminder – Importing food into Canada with a Safe Food for Canadians licence

As of March 15, 2021, food import transactions will automatically be rejected unless a valid Safe Food for Canadians (SFC) licence is entered in the Integrated Import Declaration (IID). If a transaction is rejected, the SFC licence holder may experience delays and have their related food shipment(s) held at the border until the error is addressed and the import transaction is resubmitted.

You must obtain your SFC licence to import before presenting your shipment at the border. You will not be able to obtain an SFC licence at the border. If you currently hold a licence, review your licence profile in My CFIA to ensure that your licence has been issued for the activity of “Importing” and for the food commodity or commodities you intend to import.

Please be aware that an SFC licence application or amendment request may take up to 15 business days to process, and can take longer if a pre-licence inspection is required.

For more information on food commodities, including examples of foods included in each sub-commodity, refer to Annex A of What to consider before applying for a Safe Food for Canadians licence.

For more information on transaction rejections, please refer to: Importing food into Canada with a Safe Food for Canadians licence.


As of March 15, 2021, food import transactions will automatically be rejected unless a valid Safe Food for Canadians (SFC) licence is entered in the Integrated Import Declaration (IID). If a transaction is rejected, the SFC licence holder may experience delays and have their related food shipment(s) held at the border until the error is addressed and the import transaction is resubmitted.

You must obtain your SFC licence to import before presenting your shipment at the border. You will not be able to obtain an SFC licence at the border. If you currently hold a licence, review your licence profile in My CFIA to ensure that your licence has been issued for the activity of “Importing” and for the food commodity or commodities you intend to import. An SFC licence application, as well as certain licence amendments, may take up to 15 business days to process, but can take longer if a pre-licence inspection is required.

For more information on food commodities, including examples of foods included in each sub-commodity, refer to Annex A of What to consider before applying for a Safe Food for Canadians licence.

For more information on transaction rejections, please refer to: Importing food into Canada with a Safe Food for Canadians licence.

China is one of Canada’s largest export markets for agri-food products which saw a 10% growth in 2020 versus the prior year. This growth is attributed to China re-opening its market early in 2020 after COVID, it’s large population base, the continued growth in its middle class with rising disposable income. Chinese consumers are also very sophisticated and enjoy sourcing products internationally.

For companies looking to do business in this market they need to be aware that it is diverse and complex with several regions and both domestic and import competition is fierce. To be successful the exporter must be committed to spending a lot of time and resources and should research the market prior to making any final market entry decisions.

Tips:

  • Contact the CFEA – reach out to us (info@cfea.com or 416-445-3747) for advice.
  • Develop a Business Plan – create a business plan. Free template is available through BDC.
  • Research Market Opportunities – free market reports are available to CFEA members in the members only area.
  • Research Regulatory Aspects – free regulatory reports are available to CFEA members in the members only area.
  • Product Modifications – in addition to labeling and package modifications a full review of permitted ingredients should be undertaken both for legality and taste preferences.
  • Trademark Registration – protecting your brand is essential. Learn how at Government of Canada.
  • Contact the Trade Commissioner Service –TCS can recommend partners and provide guidance. Contact info at this link.
  • Market Visit – it is important to visit the market (when travel advisories are removed) to meet potential contacts, perform in market research and to attend trade shows and missions. CFEA organizes participation at SIAL China, ProWine China and China Food and Drink Fair. Keep an eye on our calendar of events for invite postings.

 

Sources: Agriculture & Agri-Food Canada; USDA.

We came across this article posted on NutraIngredients, which highlights the importance of being part of a trade association:

In this guest article, Steve Mister, president and CEO of the Council for Responsible Nutrition (CRN), discusses the importance of joining a trade association to support the industry and your company’s growth potential.

Your trade association membership is like paying your insurance premiums. You wouldn’t cancel your property insurance or allow your medical insurance to lapse; what would happen if a disaster struck? The sam thinking should apply to your association membership. Your trade association is what you maintain – day in and day out – so that when burdensome regulations are threatened, or onerous legislation arises, you have a first line of defense. Imagine the effects of a single law that restricts your customer’s access to your products or raises your cost of doing business. The proactive work your trade association does is your insurance policy against a host of regulatory and legislative crises.

Read the full article at NutraIngredients website at this link.

November 23, 2020 IMPORTANT: Front-of-Package Changes for Products Exported to Mexico (NOM-051)

Further to the previous update of October 8, 2020 below,  Mexico’s Ministry of Economy (ECONOMIA) has confirmed the procedures that Mexican importers and customs brokers must now follow in order to exempt imported agri-food products not for retail sale (bulk, raw materials/ingredients for further processing, inputs for food service/restaurants) from Mexican labelling requirements for pre-packaged foods and non-alcoholic beverages for retail sale (NOM-051).

Background:

In our previous update, we informed you that as of October 1, 2020, ECONOMIA is no longer allowing Mexican companies importing food products not for retail sale to present a letter under oath (an exemption letter) to customs authorities in order to exempt these imported food products from the labelling requirements of NOM-051.

We also reported that Mexican importers and customs brokers had reported using alternative measures to exempt imported food products not for retail sale from the requirements of NOM-051, including special coding for the “PEDIMENTO” – an official document that is presented at Mexican Customs for importing a shipment.

Current Status:

On October 26, 2020, ECONOMIA published official criteria confirming that food products in bulk or for processing, wholesale and/or foodservice purposes are exempt from the labelling provisions of NOM-051 as these products are not destined for retail sale and therefore outside the scope of the NOM-051 labelling requirements.

These official documents from ECONOMIA also confirm that Mexican importers of agri-food products not for retail sale now have to include an identification code in the PEDIMENTO to indicated that these imported products are not subject to NOM-051. (Mexican customs brokers should help importers to include the correct code when filling out the PEDIMENTO.)

Further details are available in the official documents published by ECONOMIA (in Spanish only.) You will find hyperlinks to these documents in the table below:

economia

Recommended Actions by Canadian Exporters:

We would encourage all Canadian exporters of non-retail sale food shipments to Mexico to share these documents with their Mexican importers or customs brokers to ensure that they are aware of the new procedures for requesting exemptions for these imported food products from the labeling requirements of NOM-051. While the onus is on the Mexican importer to conduct these procedures, it is in the best interest of Canadian exporters to ensure their Mexican partners are aware of these documents to avoid potential issues with shipments.

Canadian exporters experiencing challenges related to this or other matters are encouraged to contact the Canadian Embassy in Mexico. (The names and contact information of key agri-food contacts at the Canadian Embassy are included in our October 8 message below.)


October 8, 2020 – Relevant changes related to the exemption from complying with the Mexican labelling standard: NOM-051 for products imported in bulk or for processing/foodservice and not intended for retail sale:

This message is to inform you that as of  1 October 2020, the Mexican Ministry of Economy is no longer allowing the use of “exemption letters” to request that food products imported in bulk or for processing, wholesale or foodservice purposes (i.e. not for retail sale) be exempted from compliance with Mexican Official Standard NOM-051, which is related to labelling of pre-packaged foods and non-alcoholic beverages for retail sale.

This change, which caught the Mexican industry by surprise, stems from modifications published by the Mexican Ministry of Economy to its General Rules and Criteria for Foreign Trade Operations. As part of the changes, the Ministry of Economy removed the provision that allowed Mexican companies importing food products in bulk or for processing/foodservice/wholesale purposes to present a letter under oath requesting that the products be exempted from compliance with the Mexican Official Standard NOM-051, since the products are not intended for retail sale directly to consumers.  We understand that this change was implemented following what was considered as abuses in the use of these exemption letters when importing products that were not complying with NOM-051, but were in reality being sold at retail once imported.

While the use of “exemption letters” is no longer permitted, the Ministry of Economy indicated to the Mexican industry that there are some “Exemptions of Compliance with NOM-051” that Mexican customs brokers can still use when conducting the import process for products imported in bulk or for processing/foodservice/wholesale purposes (not for direct retail sale). The Ministry of Economy explained to the Mexican industry that in order to make use of these compliance exemptions, when filling out the official document to be presented at Mexican customs for importing a shipment (called PEDIMENTO in Spanish), the customs broker needs to include the corresponding “Code” in the PEDIMENTO, to indicate that the product should be exempted from complying with NOM-051 because it is not intended for direct retail sale. Mexican importers have indicated to the Embassy that they have already started to use this provision, and are also attaching a letter to the PEDIMENTO, justifying why the product does not need to comply with NOM-051 (i.e. imported in bulk for processing or for foodservice purposes).

Industry contacts also indicated to the Embassy that another option they are using is to request from a private verification unit authorized to verify compliance of NOM-051, to issue a “Certificate of Non-Application of NOM-051” (CONSTANCIA DE NO APLICACION DE LA NOM-051) for the products, which is then attached to the PEDIMENTO. Mexican industry contacts recommended that companies should evaluate what is the best option on a case by case basis. Industry contacts also indicated that when required, Mexican authorities are providing the option of re-labelling products in a fiscal warehouse at the point of entry or in warehouses inside Mexico, under the supervision of the authority or an authorized private verification unit

When shipping products in bulk or for processing, wholesale or foodservice purposes, the Embassy recommends that Canadian exporters work closely with their Mexican importers to define the best available strategy to demonstrate to Mexican authorities that the product is not required to comply with NOM-051 as it is not intended for retail sale directly to consumers.

Please do not hesitate to contact Alejandro Ruiz (Alejandro.Ruiz@international.gc.ca) or Jennifer Rodrigue Jennifer.Rodrigue@international.gc.ca if you have any questions.

One of Canada’s greatest opportunities for growth in global trade is in the food and beverage processing industry, according to Farm Credit Canada’s (FCC) latest trade report.

“World population growth, higher purchasing power in emerging markets and new trade agreements are key factors in potentially creating more opportunities for Canada to increase exports,” said J.P. Gervais, FCC chief agricultural economist, in releasing this year’s trade report: Opportunities and Challenges to Diversify Canada’s Food Exports.

“Combined with our competitive advantages in natural resources and innovation, and a stellar food safety reputation, Canada has an opportunity to improve its world standing as a major food exporter, as well as to diversify its export markets,” Gervais said.

Canada has long been a major exporter of both agriculture commodities and food, ranking fifth as a global agriculture commodity exporter and 12th as a processed and prepared food and beverage exporter in 2019.

In 2019, Canada’s total food, beverage and commodity exports were worth roughly $67 billion, an increase of almost 10 per cent since 2015. Food exports increased by 27.8 per cent. Food and beverage exports represented less than half (45.5 per cent) of the total value of the country’s agriculture, food and beverage exports.

Canada’s agri-food industry has so far been able to adjust to COVID-19 challenges and meet the needs of Canadian and export customers, yet the disruptions to global food supply chains and trade caused by the pandemic underscore the need for Canada to diversify its export markets and seize related growth and diversification advantages.

The report indicates diversification of the country’s export markets can help reduce financial risks for Canadian producers by lessening our dependency on current major markets. When borders close for any number of reasons – due to trade tensions or shock caused by disease or weather – having a broader range of export markets allows Canadian exports to be re-allocated, rather than reduced.

The potential to diversify our export landscape is a function of the size and growth of import markets where our export presence has historically lagged, according to the report:

  • Of all vegetable oils, canola oil has been the fastest growing behind coconut oil. Imports largely used for consumption (as opposed to biofuel) show a definite preference for Canadian canola oil in multiple Asian and Western economies.
  • Beyond China, most of the markets in which Canadian pork has an advantage are small and well-established with slow recent growth. If Chinese markets were excluded, the markets that show the greatest potential for Canadian pork exports are the European countries of Italy, France, Germany, Belgium and Poland.
  • In 2019, Canada was the fourth largest exporter of potato products, worth just over $1 billion. The expansion of the Western diet globally has increased demand for French fries and potato products. While the United Kingdom is the largest and fastest growing importer, there is opportunity for expansion with other trading partners, such as Western and Eastern European countries and China.
  • From 2009 to 2019, Canada has been the world’s largest exporter of prepared crab, capturing 32.8 per cent of total global exports last year. China, along with South Korea, Indonesia, Vietnam, Thailand and Hong Kong, represent a third of the global import growth.
  • Global prepared and preserved beef imports grew by 58 per cent between 2009 and 2019, and China accounted for almost 40 per cent of that growth. Over the same period, Canadian exports grew by almost 125 per cent. Last year China surpassed the U.S. as the largest beef importer, including prepared and preserved beef. Other growth opportunities reside in Europe and other Asian export destinations.

While market diversification is desirable from a risk management perspective, Gervais notes there are economic challenges that can thwart efforts to diversify Canada food export markets.

“Diversification almost always entails seeking markets that are further away and more expensive to develop,” he cautions. “Plus, selling into one market – rather than multiple markets – might be less expensive due to economies of scale.”

Some price-sensitive markets may also offer limited potential for diversification, due to the higher input and manufacturing cost associated with higher-quality Canadian products, and a slower pace of economic expansion worldwide can mean more timid growth in food demand, according to Gervais.

On the flipside, diversification allows exports to continue when trade partners become unavailable, possibly preventing or reducing business disruptions or revenue loss.

“Disruptions caused by the pandemic serve as a wakeup call at a time when global supply and demand of food are also becoming increasingly difficult to gauge,” Gervais said. “Canada has an opportunity to fortify and strengthen its position as a major food exporter by exploring new markets and ensuring we are not overly reliant on a few.”

By sharing agriculture economic knowledge and forecasts, FCC provides solid insights and expertise to help those in the business of agriculture achieve their goals. For more information and insights on trade and its impact on Canadian agriculture, visit the FCC Ag Economics blog post at fcc.ca/AgEconomics.