The needs and characteristics of consumption of uk market for coffee beans the united kingdom – vietnam free trade agreement and main opportunities for vietnam’s exporters

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The needs and characteristics of consumption of uk market for coffee beans  the united kingdom – vietnam free trade agreement and main opportunities for vietnam’s exporters

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GROUPASSIGNMENT Class: IB1605 Lecturer: Cung Thị Ánh Ngọc Course: IEI301 Group 2: member Nguyễn Lê Trang Linh Phạm Quỳnh Anh Nguyễn Phương Anh Nguyễn Đăng Anh Dũng Nguyễn Diệu Linh FPT University Fall 2022 10 Table of contents I Incoterm rules in this contract II Payment method is used in this contract The risk of the company when using this payment method Some solutions to limit such risk 4 III The analysis report on the United Kingdom market The needs and characteristics of consumption of UK market for coffee beans The United Kingdom – Vietnam Free Trade agreement and main opportunities for Vietnam’s exporters EU’s specific requirements/regulations should Vietnamese exporters pay attention to when exporting to this market 5 IV Reference 15 10 I Incoterm rules in this contract Incoterms rules used in contracts are CFR The duties of ABC Company and XYZ Company under this Incoterms rule ● The duties that Company ABC The seller pays for goods and freight before shipping on board.The exporter will have to sign the contract and pay the necessary costs and freight to bring the goods to Hai Phong port in accordance with the regulations and avoid the risks, damage and loss of goods during the transit, and deliver the goods to the ship The buyer is obliged to deliver the goods in accordance with the specified contract Must prepare all required invoices when buying and selling such as commercial invoices, export permits, sea transport documents Commit to deliver the goods on board and pay all loading costs Carry out import and export customs clearance procedures according to the correct process to ensure on-time delivery Inform the delivery process including the time to prepare the goods, taxes, the time of arrival at the port, the appropriate receiving process for the buyer Provide full invoices, shipping documents related to sea such as conditions loaded on board, freight Be responsible for risks and losses during the delivery of goods on ships, loading and unloading ● The duties of Company XYZ The buyer is obliged to accept the delivery upon receipt of the invoice and transport document Receive goods at the right port of loading specified in the contract Pay the costs of unloading, loading and unloading are not included in the freight to be paid by the exporter Sign a safety insurance contract to ensure the interests of both parties Company XYZ has to bear the risks and losses when the goods have been delivered to the port vessel at the specified port of loading and cleared for import Taxes incurred in the process of importing goods Must follow all necessary procedures for transit if any in the 3rd country and prepare all the required documents when importing and transiting the goods in the 3rd country during transportation The point of transferring risk: Goods and freight are paid by ABC company and delivered on board 10 ● The point of transferring risk The risk of loss or damage to the goods transfers when they are delivered on board the vessel The seller must contract and pay the costs and freight necessary to bring the goods to the port With this condition, company ABC has no obligation to company XYZ about signing an insurance contract, so if necessary, company XYZ should buy insurance for the goods themselves to avoid risks This term has two important ports: the port of departure (Hai Phong port) where the goods are delivered on board the carrier and the port of destination (Southampton port) The risk passes from the seller to the buyer when the seller delivers the goods to the buyer by placing the goods on board the carrier at the port of departure (Hai Phong port) However, the seller will be responsible for concluding a contract of carriage to bring the goods from the port of departure (Hai Phong port) to the port of destination (Southampton port) II Payment method is used in this contract The method of payment being used is a Documentary Collection (Documents against Acceptance) The documents required to take possession of the goods are released by the clearing bank only after the buyer accepts a time draft The risk of the company when using this payment method There are a few risks associated with this type of payment If the buyer does not accept the goods or delays the acceptance then payment can either be delayed or by rejecting the goods the buyer can escape from the transaction As coffee is a perishable item, the loss against a rejection from the buyer will be dealt by the supplier The seller in this case does not receive a bank guarantee for payments which means that if the buyer was to decide to reject the trade, the seller will have to pay for the shipping to ship the product back to himself Even if the buyer does agree to pay and takes the goods he may not pay up on the due date As there is no bank guarantee the buyer can make an escape Some solutions to limit such risk To avoid such mishaps during trades, the seller can use a Letter of Credit as it guarantees payment from the buyer to the seller The bank issues a guarantee against payment for the goods received Although a Letter of Credit is more expensive than a DA, it is still the safer route and guarantees payments In 10 case the buyer rejects the payments, finding another buyer in the same region could be a way out However, it can be a difficult route at times, especially for perishable items so the seller can re-negotiate terms with the buyer in order to convince the buyer for payment The seller can also include a clause in the sales contract that requires the buyer to pay for shipping if the products have to be returned To avoid buyers escaping payment, sellers can ask the buyers to inspect the goods at the loading port and pay upon arrival before transferring ownership If other options seem too costly for the seller then the best thing to would be to dispose of the goods before a bigger loss is made III The analysis report on the United Kingdom market beans The needs and characteristics of consumption of UK market for coffee Coffee is the most popular beverage worldwide with more than 400 billion cups consumed each year The UK is the 5th largest coffee consuming market in Europe On average in the UK, they drink about cups of coffee a day, the total value of coffee consumed in the UK annually is about £ 3.9 billion About 80% of UK households use coffee at home with an estimated demand of more than 38,000 tonnes, accounting for 41% of the entire UK coffee market 57% of coffee is drunk at breakfast, 34% between meals and 13% at other meals Sales of the top 10 beans in the UK in 2020 reached £328 million, accounting for 73.5% of total sales in this coffee segment 10 The UK coffee market is increasingly important for coffee drinking in the workplace, and so coffee shop owners try to locate their shops near business offices There is a difference in different age groups People 20 and younger drank an average of just half a cup of coffee a day, while 20- to 37-yearolds drank 1.3 cups, and 38 to 52-year-olds consumed 2.1 cups of coffee More coffee consumption not only means higher revenue but also more jobs The United Kingdom – Vietnam Free Trade agreement and main opportunities for Vietnam’s exporters a UKVFTA FTA is an acronym for the phrase Free Trade Area, also known as Free Trade Agreement So UKVFTA is the Vietnam - UK Free Trade Agreement that officially completed negotiations on December 11, 2020 and signed on the evening of December 29, 2020 The Agreement is negotiated on the principle of inheriting the commitments already in the Free Trade Agreement between Vietnam and the European 10 Union (EVFTA) with necessary adjustments to ensure conformity with the trade framework bilateral relationship between Vietnam and the UK The Agreement takes effect temporarily from 23 pm on December 31, 2020 (i.e 6:00 am on January 1, 2021 in Vietnam time), and officially takes effect from May 1, 2021 b - The opportunity this agreement brings to Vietnamese exporters 85.6% of tariff lines will be eliminated on January 1, 2021 99.2% of tariff lines will be eliminated on January 1, 2027; 0.8% of tariff lines are partially liberalised through tariff quotas (with a preferential tax rate for products within the quota of 0%) In addition to import tax, the UK gives Vietnam a preferential tariff quota (TRQ) for a number of items with an import tax rate of 0% such as seafood, fruit, coffee, rice, and textiles sewing, furniture… In 2020, Vietnam's exports to the UK will reach about US$5.04 billion, accounting for 0.8% of the UK's total import turnover, while UK exports to Vietnam are worth nearly US$700 million, accounting for nearly US$700 million 0.3% of Vietnam's total imports In the first 10 months of 2021, two-way trade between Vietnam and the UK reached 5.5 billion USD and the import and export value both increased by double digits Accordingly, the export value of Vietnamese goods to the UK reached $4.7 billion, up 15% According to Vietnam Customs, two-way trade turnover between Vietnam and the UK in 2021 will reach impressively high growth despite the COVID-19 pandemic, reaching $6.6 billion, an increase of 17.2% compared to 2020 In which, Vietnam's exports reached nearly $5.8 billion, up 16.4% In the field of investment, as of May 2022, the UK has a total of 462 FDI projects in Vietnam, with a total valid registered investment capital of 4.15 billion USD, accounting for billion accounts for 0.97% of the total foreign investment capital registered in Vietnam Manufacturing and processing industry with 120 projects, registered investment capital reached nearly 1.6 billion USD, accounting for nearly 40% of total investment capital Next is the real estate business with 23 projects, total investment capital of 1.04 billion USD, accounting for 26% of total investment capital Mining ranked third with projects, total registered capital of 701.44 million USD, 10 accounting for 18% of total investment capital The remaining projects are in other fields such as: wholesale and retail, repair of cars, motorbikes and motorbikes; accommodation and catering services; water supply and waste treatment; professional, scientific and technological activities; education and training For example, lychee, longan, rambutan, dragon fruit, pineapple, mango have an additional advantage in accessing the UK market in the context of competitive countries such as Brazil, Thailand, and Malaysia EU’s specific requirements/regulations should Vietnamese exporters pay attention to when exporting to this market The EU is Vietnam's largest coffee consuming market Germany is Vietnam's largest coffee import market in the EU a Customs procedures When importing goods from outside the EU in general and for coffee in particular, when importing goods, customs declaration is required Customs clearance is the procedure by which goods are released upon completion of the import declaration accompanied by relevant documents and full payment of taxes and other customs duties to the customs authority b Basic documents in the customs dossier According to EU regulations, when clearing goods, a declaration must be presented to the Customs office according to the form prescribed by the Customs The basic documents for goods imported into the EU Member States not depend on the value of the shipment or the type of transport Normally, for goods imported into the EU, the following basic documents are required: ● Commercial Invoice( CI) Importer and exporter information, invoice date, invoice number, description of goods, terms of delivery and other details necessary to determine the correct price and freight should be clearly stated fees and insurance ● Single Administrative Document (SAD) The customs declaration is submitted using the standard administrative document , which is a common form for all EU Member States under the Union Customs Code and the Transition Authorization Act (Regulations) EU 2016/3413 dated December 17, 2015) while the e-customs environment is 10 implemented synchronously ● Bill of Lading A copy of the bill of lading (or air waybill) is required for customs clearance Consignees usually need an original bill of lading for import clearance ● Certificate of Origin( C/O) Coffee products circulated on the market must meet PDO ( ) regulations For the export of some products including Coffee to the EU, it is allowed to selfcertify export for shipments valued at less than 6,000 EUR and without having to make a paper C/O and with the condition that the REX code must be registered (Registered Exporter) For goods with a value of more than 6,000 EUR or requested by the importer, a certificate of “CO from EUR” is required first" In addition, goods eligible for GSP (Good Storage Practices) must have a certificate of origin form A "C/O form A" ● Packing list Accompanied by a commercial invoice and transport document, providing information on the imported item and the packaging details of each shipment ● ● ● c Export declaration Applies to shipments with a value of more than 2500 USD Import Licence Under EU regulations, an import licence is required for most shaved commodities including coffee Insurance Certificate Present if premium information is not shown in the commercial invoice Produce traceability Coffee imported into the EU is required to comply with EU requirements and regulations for food Traceability due to growing concerns about food safety and consumer health, traceability is essentially a requirement that coffee products must be tracked worldwide supply chain to ensure food safety, enable appropriate action in the event of unsafe food, and limit the risk of contamination Therefore, having a traceability system is an advantage that creates trust for customers and stabilises market share Examples of trackable data: 10 d Regulations on contaminant The EU regulates that contaminants should be kept as low as possible so as not to threaten human health or negatively affect food quality Common contaminants that can be found in coffee products include: mycotoxins; salmonella; extraction solvent; polycyclic aromatic hydrocarbons (PAHs); acrylamide, ochratoxin (1,4-dimethylnaphthalene, 8-hydroxyquinoline, pinoxaden and valifenalate) maximum residues MRLs (Maximum Residue Level) such as: Glyphosate-0.1 mg/kg, Bixafen- 0.05 mg/kg, Fenazaquin- 0.05 mg/kg) e - Labelling Regulations Exported coffee labels must comply with the EU's general food labelling requirements in regulation (EU) 1169/201119 of 25 October 2011 on Food Information for Consumers (FIC) Coffee labels need additional information to ensure traceability of each batch: Product name; ICO International Coffee Organization's format code; Country of origin (ie Vietnam); Classification/grade; Net weight in kg; For certified coffee: name, code of inspection agency, certificate number For extracted, instant or instant coffee (except for instant torrefacto coffee, which is coffee roasted by a process that includes the addition of a certain 10 amount of sugar during roasting) a statement is required Specific labels apply 10 such as "coffee extract", "instant coffee extract", "instant coffee" or "instant coffee" The term "concentrated" may only appear on the label if the coffee dry matter content is more than 25% by weight, while the term "decaffeinated" must appear if the anhydrous caffeine content does not exceed 0.3 % by weight of coffee dry matter This information must be in the same item as the sales description Coffee extract in solid or powder form: To be considered "coffee", the dry matter content must be not less than 95% by weight of dry coffee, and between 70% and 85% by weight if it is coffee coffee powder The coffee must contain no substances other than those derived from the coffee extraction process and the label must state the coffee dry matter content based on a minimum, expressed as a percentage by weight of the product Liquid coffee extract: The dry matter content must be between 15% and 55% by weight of the coffee solution If containing roasted or unroasted sugars, the percentage must not exceed 12% by weight and the label must include the terms “with”, “preserved with”, “with added” or “roasted with” after the name of the type of road used 11 10 12 10 f Packaging regulations Coffee beans are shipped in woven bags made of natural fibres or jute Jute bags must be tough and strong Other materials, such as grainpro or other innovative materials such as videplast lining, are commonly used to pack specialty coffees inside jute bags Most of the standard quality coffee beans imported into the EU are packed in 60-70 kg/bag jute bags, then into a 20-ton lined container (a type of large special packaging used to close liquids before being added to the container) normal container), with a net weight of 17-19 tons of coffee The use of coffee packaging materials should comply with Regulation (EC) 1935/200420 of 27 October 2004 which sets out basic requirements for all 13 materials that come into contact with food The regulation also sets forth labelling and traceability requirements and procedures for allowing substances 10 to be used through the European Food Safety Authority (EFSA) Annex I to Regulation (EC) 1935/2004 lists the classes of materials that may be covered by specific measures 20 Regulation (EC) 2023/200621 of 22 December 2006 providing good manufacturing practice (GMP) for the groups of materials and articles intended to come into contact with food listed in the annex I Regulation (EC) 1935/2004 g Control over genetically modified food The EU is very cautious about GMOs (Genetically Modified Organism); Only a few genetically modified varieties have been allowed for soybeans, rapeseed and maize, which are used mainly in the feed sector For consumption purposes, most food businesses choose not to sell genetically modified foods and coffee is one of them EC Regulation No 1829/200322, September 22, 2003 updated 2021 specifies that products containing GMOs may not be placed on the market unless authorised and in compliance with labelling regulations h Regulations on organic products In order to export organic products, the producer must obtain a COIs certificate from the control agency before reaching the EU border and be subject to border control before being allowed to import into the EU Organic coffee products and coffee beans must be grown with EU-approved substances (Chitosan hydrochloride, Vinegar, Hydrogen peroxide, Farmyard manure, Liquid animal excrements, ) On July 15, 2021, the EC issued a new Implementation Regulation No 2021/116524 on the promulgation of a list of products and substances permitted for use in organic production, replacing Regulation (EC) No 889/2008 on the detailed regulation of organic production and labelling of organic products related to organic production, labelling and control The new regulation establishes a detailed list of products and substances that are allowed to be used in organic production at all stages in the organic production process for crop production and aquaculture For cultivation, prescribe a list of substances allowed to be used in fertilisers, field treatment, nutrition, and plant protection It also provides for specific licensing procedures for the use of products and 14 substances in certain areas of organic agriculture by third countries The regulation will take effect from January 1, 2022, and a partial effect from January 2024 10 IV Reference https://nongnghiep.vn/ca-phe-viet-nam-doi-mat-nguy-co-mat-thi-truongeu-d283238.html https://www.anthaigroup.vn/vn/tin-tuc/tin-trong-nganh/cac-yeu-cau-xuatkhau-ca-phe-sang-eu.html https://moit.gov.vn/ https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv %3AOJ.L_.2021.239.01.0004.01.ENG&toc=OJ%3AL %3A2021%3A239%3ATOC&fbclid=IwAR2FMHdP5SMhjprNF63r3F40txoEJ yRMUOd-ObxXB-OKXBqTaUzP5GyOtFQ#ntr*1-L_2021239EN.01000801E0001 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX %3A32021R1165&qid=1626685415116 15 10 ... on the United Kingdom market The needs and characteristics of consumption of UK market for coffee beans The United Kingdom – Vietnam Free Trade agreement and main opportunities for Vietnam? ??s exporters. .. opportunities for Vietnam? ??s exporters a UKVFTA FTA is an acronym for the phrase Free Trade Area, also known as Free Trade Agreement So UKVFTA is the Vietnam - UK Free Trade Agreement that officially... The needs and characteristics of consumption of UK market for coffee Coffee is the most popular beverage worldwide with more than 400 billion cups consumed each year The UK is the 5th largest coffee

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