VENEZUELA Agri-Food Market Assessment Report

VENEZUELA

Agri-Food Market Assessment Report

Revised October 10, 2006

For further information about this report, contact:

Dennis Pervis

Markets and Trade Team

Agriculture and Agri-Food Canada

420-4321 Still Creek Dr.

Burnaby BC, Canada

[email protected]

Last updated: October 2006

Although every effort is made to ensure that the information is correct. Agriculture and Agri-Food Canada assumes

no responsibility for its accuracy, reliability, or for any decisions arising from the information contained herein.

mailto:[email protected]

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Highlights

Venezuela:

• has recently emerged from a serious economic recession;

• is benefitting economically from increased petroleum earnings;

• has a population estimated at 27 million growing at 1.7% per year;

• is producing a GDP which is increasing at an estimated 10.2% per year;

• has a very inequitable distribution of income;

• is experiencing a drop in the value of its currency compared to the CAD;

• is rated as a high risk, particularly in Government Effectiveness;

• has withdrawn from the Andean Community and recently became a member ofMERCOSUR;

• imported CAD 659.5 million worth of bulk food in 2005, 20% from Canada;

• reduced bulk food imports from Canada at a rate of -5% per year from 2000 to2005;

• imported CAD 831.7 million worth of intermediate food in 2005, 1% from Canada;

• increased intermediate food imports from Canada at a rate of 6% per year from2000 to 2005;

• imported CAD 820.8 million worth of consumer oriented food in 2005, 1.5% fromCanada;

• decreased consumer oriented food imports from Canada at a rate of -18% per yearfrom 2000 to 2005;

• is experiencing a slow decrease in the size of households;

• is experiencing an increase in the proportion of women in the economically activeand employed populations;

• has imposed a form of price control by subsidizing food sold through governmentowned stores;

• has imposed exchange controls;

• is nationalizing some private companies and turning management over to workers;

• has a policy of increasing trade with the Andean Community and MERCOSURcountries at the expense of imports from other countries;

• is a potential market for Canadian food exporters of high valued unique productsthat target niche markets;

• will be a difficult market for Canadian exporters under its present government.

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Table of Contents

1. Introduction to Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1. Geographic Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2. Social Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.3. Currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.4. Economic Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.5. Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

2. Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.1. Data Sources and Valuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.2. General Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.3. Trade with Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82.4. Trading Paradigms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

3. Agri-food Market Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.1. Canada’s Agricultural and Seafood Sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.2. Venezuela’s Agricultural and Seafood Sectors . . . . . . . . . . . . . . . . . . . . . . . . . 113.3. Venezuela’s Agri-food and Seafood Imports . . . . . . . . . . . . . . . . . . . . . . . . . . . 133.4. Venezuela’s Importation of Bulk Agri-food Products . . . . . . . . . . . . . . . . . . . . 143.5. Venezuela’s Importation of Intermediate Agri-food Products . . . . . . . . . . . . . 193.6. Venezuela’s Importation of Consumer Oriented Products . . . . . . . . . . . . . . . . 253.7. Venezuela’s Importation of Fish and Seafood . . . . . . . . . . . . . . . . . . . . . . . . . 313.8. Competition in the Venezuelan Food Markets . . . . . . . . . . . . . . . . . . . . . . . . . 35

4. Demographic Profile and Consumer Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374.1. Population Distribution by Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374.2. Population Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394.3. Age Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394.4. Population by Origin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404.5. Households . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

5. Income and Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405.1. Economically Active Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405.2. Employed Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415.3. Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425.4. Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

6. Spending on Food and Purchasing Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436.1. Consumer Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436.2. Price Inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

7. Consumer Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 487.1. Venezuelan Purchasing Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

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7.2. Fresh Foods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507.3. Packaged and Processed Foods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527.4. Non-Alcoholic Beverages (Off-trade figures) . . . . . . . . . . . . . . . . . . . . . . . . . . 647.5. Alcoholic Beverages (Off-Trade data) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 667.6. Trends in Food Choices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

8. Market Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 708.1. Manufacturing and Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 718.2. Food Retailing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

9. Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 769.1. Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 769.2. Road Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 769.3. Rail Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779.4. Ports Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779.5. Air Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 789.6. Shipping Costs and Times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

10. Trade Barriers and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8210.1. Customs Regulations/Tariff Rates/Import Taxes . . . . . . . . . . . . . . . . . . . . . . . 8310.2. Import Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8410.3. Label Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

11. Market Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

12. Agri-Food Trade Service - Regional Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

13. Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

ENDNOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

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List of Figures

Figure 1. GDP per Capita. 1995 to 2003. Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Figure 2. Cost of Purchasing a Nutritional Basket of Goods. January 1996 to September

2005. Caracas, Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Figure 3. Exchange Rate Between the VEB and the CAD January 1996 to May 2006. . . . 4Figure 4. Total and Agri-food & Seafood Imports from Canada. Venezuela. . . . . . . . . . . . 8Figure 5. Production and Trend Lines of Beef and Veal. Venezuela. . . . . . . . . . . . . . . . . . 11Figure 6. Production and Trend Lines of Corn (Maize). Venezuela. . . . . . . . . . . . . . . . . . 12Figure 7. Production and Trend Lines of Potatoes. Venezuela. . . . . . . . . . . . . . . . . . . . . . . 12Figure 8. Population by State. 2001. Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37Figure 9. Estimated and Forecast Midyear Population. Venezuela. . . . . . . . . . . . . . . . . . . 39Figure 10. Estimated Population Pyramid, 2006. Venezuela . . . . . . . . . . . . . . . . . . . . . . . 39Figure 11. Distribution of Households by Size. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . 40Figure 12. Economically Active Population by Gender. Venezuela. . . . . . . . . . . . . . . . . . 40Figure 13. Economically Active Population by Industry. Venezuela. . . . . . . . . . . . . . . . . 41Figure 14. Employed Population. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41Figure 15. Indices of Wages. 1997 = 100. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Figure 16. Historical and Forecast Disposable Income at 1990 Prices. . . . . . . . . . . . . . . . 42Figure 17. Historical and Forecast Distribution of Household Disposable Income.

Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Figure 18. Historical and Forecast Indices of Consumer Prices and Food & Non-Alcoholic

Beverages Prices. 1995 = 100. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Figure 19. Historical Price Indices for the 2005 Top Five Expenditure Categories. 1995 =

100. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Figure 20. Historic and Forecast Per Capita Volume of Fresh Food Sold at Retail.

Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Figure 21. Historic and Forecast Per Capita Volume of Frozen/Processed Food Sold at

Retail. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52Figure 22. Historic and Forecast Per Capita Volume of Canned/Preserved Food Sold at

Retail. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53Figure 23. Historic and Forecast Per Capita Volume of Chilled Food Sold at Retail.

Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54Figure 24. Historic and Forecast Per Capita Volume of Dried Food Sold at Retail.

Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54Figure 25. Historic and Forecast Per Capita Volume of Oils and Fats Sold at Retail.

Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55Figure 26. Historic and Forecast Per Capita Volume of Dairy Products Sold at Retail.

Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Figure 27. Historic and Forecast Per Capita Volume of Milk & Ice Cream Sold at Retail.

Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57Figure 28. Historic and Forecast Per Capita Volume of Sauces, Dressings & Condiments

Sold at Retail. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

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Figure 29. Historic and Forecast Per Capita Volume of Snacks & Meal ReplacementsSold at Retail. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Figure 30. Historic and Forecast Per Capita Volume of Confectionery Products Sold atRetail. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Figure 31. Historic and Forecast Per Capita Volume of Spreads Sold at Retail. Venezuela.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Figure 32. Historic and Forecast Per Capita Volume of Pet Food Sold at Retail.Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Figure 33. Historic and Forecast Per Capita Volume of Hot Drinks Sold at Retail.Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Figure 34. Historic and Forecast Per Capita Volume of Soft Drinks Sold at Retail.Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Figure 35. Historic and Forecast Per Capita Volume of Alcoholic Beverages Sold atRetail. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Figure 36. Historic and Forecast Retail Market Shares of Food Sales by Type of Outlet.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Figure 37. Geographic Map of Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

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List of Tables

Table 1. Risk Ratings. Venezuela vs USA. May 2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Table 2. Principal Trading Partners. All Products. 2005. Venezuela. . . . . . . . . . . . . . . . . . 6Table 3. Volume of Fish Catch by Fishery. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Table 4. Top Five Sources of Agri-food and Seafood Imports. Venezuela. . . . . . . . . . . . . 13Table 5. Top Five Sources of Bulk Agri-food Imports. Venezuela. . . . . . . . . . . . . . . . . . . 14Table 6. Top Ten Imported Bulk Agri-food Products. Venezuela. . . . . . . . . . . . . . . . . . . 15Table 7. Top Five Sources of Intermediate Agri-food Imports. Venezuela. . . . . . . . . . . . 19Table 8. Top Ten Imported Intermediate Agri-food Products. Venezuela. . . . . . . . . . . . 20Table 9. Top Five Sources of Consumer Oriented Agri-food Imports. Venezuela. . . . . . 25Table 10. Top Ten Imported Consumer Oriented Agri-food Products. Venezuela. . . . . . 26Table 11. Top Ten Imported Fish and Seafood Products. Venezuela. . . . . . . . . . . . . . . . . . 31Table 12. Minimum Wages. Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Table 13. Allocation of Household Expenditures by Product Group. Venezuela. . . . . . . . 44Table 14. Forecast Sales of Fresh Food at Retail and Rates of Change. 2005 -2010.

Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Table 15. Forecast Trends in Food Choices by Sector. Venezuela. . . . . . . . . . . . . . . . . . . . 68Table 16. Manufacturers and Distributors of Food & Beverage Products. Venezuela. 2004

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71Table 17. Airports. Venezuela. 2005. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78Table 18. Sources of Information about Facilities and Costs of Shipping Food Products to

Venezuela. 2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79Table 19-A. Estimated Transit Times and Frequencies of Ocean Container Services from

Canada to Venezuela. 2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79Table 19-B. Estimated Transit Times and Frequencies of Ocean Container Services from

Canada to Venezuela. 2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80Table 20. Estimated Transit Times, Distances and Frequencies of Air Cargo Service From

Canada to Venezuela. March 2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81Table 21. Possible Market Opportunities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85Table A-1. Area and Estimated Population by State. 2001. Venezuela. . . . . . . . . . . . . . . . 90Table A-2. Population Estimates by Source. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . 93Table A-3. Estimated GDP at Current Prices. Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . . 93Table A-4. Estimated and Forecast Household Number and Size. Venezuela. . . . . . . . . . 95Table A-5. Estimated and Forecast Disposable Household Income. Venezuela. . . . . . . . . 96Table A-6. Economically Active, Employed and Unemployed Populations. Venezuela . . 96Table A-7. Employed and Unemployed Populations and Unemployment Rates by Sex.

Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97Table A-8. Proportion of Expenditure Per Household by Product and Services. Venezuela

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98Table A-9A. Historical and Forecast Year to Year Changes in Price Indexes by

Expenditure Categories. Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99Table A-9B. Historical and Forecast Year to Year Changes in Price Indexes by

Expenditure Categories. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

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Table A-9C. Historical and Forecast Year to Year Changes in Price Indexes byExpenditure Categories. Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Table A-10. Annual Exponential Rates of Change of Retail Sales by Source of Demand.Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

Table A-11. Ocean and River Ports of Venezuela. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106Table A-12. Tariff Rates of Venezuela Under the Andean Community and MERCOSUR

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

1

VENEZUELA

Agri-Food Market Assessment Report

1. Introduction to Venezuela

1.1. Geographic Overview1

Venezuela is located on the northern coast of South America and borders on Guyana,Brazil, Colombia, the Caribbean Sea and the Atlantic Ocean. Off-shore, Venezuela is adjacent toTrinidad & Tobago, the Netherlands Antilles and Aruba. The country has a total area of 912,050km.2 and a land area of 882,050 km.2, a little smaller than British Columbia. See Figure 37 in theappendix.

Venezuela is often described in terms of four regions: 1) the Maracaibo lowlands in thenorthwest; 2) the mountains consisting of northern mountains (an extension of the Andes chainprojecting in a broad east-west arc from the Colombian border along the Caribbean Sea) and amountain range on the northwest border with Colombia; 3) the wide Orinoco plains (known asthe llanos) in the centre of the country and; 4) the highly dissected Guiana highlands in thesoutheast.

The Maracaibo lowlands are bounded on three sides by mountains and is open to theCaribbean Sea to the north. It is flat with only a gentle slope from the mountains to the centre ofthe region. Areas around the southern part of Lake Maracaibo are swampy and haveagriculturally rich soils and significant petroleum resources but is thinly populated.

The mountains along the north coast have peaks over 4,500 m. and fertile valleys. Thisregion contains most of Venezuela’s population industry and agriculture. The mountain rangealong the northwest border with Colombia is the least densely populated part of this region.

The Orinoco plains known as the llanos extends westward from the Caribbean coast tothe Colombian border between the northern mountains and the Orinoco river. Elevations do notexceed 200 m. The land varies from flat to gently rolling.

The Guiana highlands immediately south and east of the Orinoco river is one of the oldestland forms in South America. Erosion has created unusual formations consisting of a sharplyeroded plain forming massive flat-topped bluffs known as tepuis reaching considerable heights.The most famous tepui contains Angel Falls, the worlds highest waterfall.

The climate of Venezuela is strongly affected by altitude and varies from humid tropicalto alpine. The seasons are marked more by rainfall than by temperature. Most of the country hasa distinct rainy season (May through November), referred to as winter and the remainder of theyear as summer. The country may be divided into four temperature zones based on elevation: 1)the tropical zone below 800 m. with temperatures ranging from 26°C and 28°C; 2) 800 m. to2,000 m. with average temperatures from 12°C to 25°C; 3) 2,000 m. to 3,000 m. withtemperatures ranging from 9°C to 11°C and; in the high mountain regions above 3,000 m.,known as the paramos, the temperature will dip below 8°C. Rainfall ranges from 430 mm. per

2

Figure 1. GDP per Capita. 1995 to 2003. Venezuela.

Source: Calculated from data from the Banco

Central de Venezuela and the Pacific

Exchange Rate Service.

year in the western part of the Caribbean coastal areas to about 1,000 mm. in the Orinoco Delta.2

1.2. Social Overview3

By the twentieth century, Venezuela was a blend of three races. No national censusclassifying Venezuelans by ethnicity has been taken since 1926 but a credible estimate for 1990would be 68 percent mestizo (mixed race), 21 percent Caucasian, 10 percent African and 1percent Amerindian. With the high incidence of racial mixing, physical appearance and skincolour has become more important in determining status than ethnicity per se.

Venezuelan society is often discussed in terms of four classes: the elite; the middle class;peasants and; the workers & urban lower class. Before the oil era began in the mid-1920s, about70 percent of the Venezuelan population was rural, illiterate, and poor. Over the next fifty years,the ratios were reversed so that over 88 percent of the population became urban and literate. Nogroup has escaped the impact of this modernization process. Even the most isolated peasants andtribal Indians felt some effects of this economic growth, which opened up access to the elitestatus, expanded opportunities for large numbers of immigrants, increased the size, power, andcohesiveness of the middle class, and created a sector of organized workers within the lowerclass. The elite is not a closed and static group. Prominent politicians, even those from humblebackgrounds, could easily marry into the elite. Successful professionals could also move up andfind acceptance among the upper class. This relative openness of the elite may serve to mitigate,to some extent, the economic extremes that persist between the Venezuelan rich and thoseconsidered "marginal."

Readers interested in more detail of the social structure of Venezuela may access thefollowing website:http://www.photius.com/countries/venezuela/society/venezuela_society_social_structure.html .

1.3. CurrenciesCurrency designations used in this paper are the ISO 4217 codes. Specifically:

Canadian Dollar . . . . . . . . CAD;Venezuelan Bolivar . . . . . . VEB;United States Dollar . . . . . . USD.

For a complete list of the ISO currency codessee the website: www.xe.com/iso4217.htm.

1.4. Economic Overview4

Over the period 1995 to 2003,Venezuela’s GDP at current prices wasincreasing at an estimated rate of 28.71percent per year5 reaching VEB 137,368,156million by 2003.

http://www.photius.com/countries/venezuela/society/venezuela_society_social_structure.html

http://www.xe.com/iso4217.htm

3

Figure 2. Cost of Purchasing a Nutritional Basket of

Goods. January 1996 to September 2005.

Caracas, Venezuela.

Source: Instituto Nacional de Estadistica, Venezuela.

Measured in CADs, Venezuela’s GDP was increasing at an estimated rate of 5.71 percentper year reaching CAD 118,841 million in 2003 and GDP per capita was increasing at 4.07percent per year reaching CAD 4,820 per person by 2003. Figure 1 and Table A-3 indicate that inCADs, Venezuela’s GDP per capita reached a peak of CAD 8,172 in 2001 and then fell 59percent by 2003, indicating a significant economic depression.

More recent data published by The Economist magazine indicates that in the 2Q of 2005,GDP increased 11.1 percent over 2Q of 2004 and in September, 2005, Industrial productionincreased 12.4 percent over September of 2004. By October 2005, consumer prices had increased16.0 percent over October 2004.

The economic growth that occurred before 2001 was fueled by revenue from petroleumexports; however, the benefits were not evenly felt throughout the population. They wereconcentrated in the country’s elite. This inequity has often been maintained through restrictive;measures giving Venezuela a reputation as the country with the least economic freedom in LatinAmerica. A measure of this inequity is provided by Venezuela’s Gini ratio6 of 49.1 (1998)compared to 33.1 (1998) for Canada. In recent years, under president Hugo Chavez, thegovernment embarked on a program of social spending designed to improve the living conditionsof the increasing number of poor. This expenditure was originally thought to be money thegovernment did not have but the high petroleum prices in 2005 and 2006 have assisted in thefunding of this program.

In December 2005, it was announced that Venezuela’s economy expanded 9.4 percent in2005 as the government boosted spending.7 If final figures confirm this growth, Venezuela mayimprove as a market for Canadian food exporters; however, non-economic factors may weighheavily on this assessment.

In 2003, Venezuela’s estimated GDP consisted of: 53.98 percent Services; 24.55 percentPetroleum Activities (Oil & Natural Gas and Refining); 8.56 percent Manufacturing; 4.23percent Agriculture and; 8.68 percent Other. In 1997, 64 percent of the labour force wasemployed in Services, 23 percent in Industryand 13 percent in Agriculture.

The cost of living in Venezuela ismeasured as the cost of purchasing anutritional basket of goods in MetropolitanCaracas, in VEBs. Between January 1996 andSeptember 2005 this measure increased at arate of 1.58 percent per month or 20.74percent per year. This is a high rate ofinflation and affects the purchasing decisionsof consumers, including those related to food.See Figure 2. Consumers who do notexperience equivalent increases in disposableincome will tend to purchase less, in total, and

4

Figure 3. Exchange Rate Between the VEB and the

CAD January 1996 to M ay 2006.

Source: Pacific Exchange Rate Service.

choose cheaper, lower quality food. Some might plant kitchen gardens to supplement foodpurchases.

Figure 3 presents the historical valueof the VEB in CADs. From January 1996 toMay 2006 the VEB fell at a rate of -1.68percent per month or -18.37 percent per year.This deterioration of the VEB had a negativeinfluence on Venezuela’s imports fromCanada.

During 2003 the Venezuelangovernment imposed a currency exchangecontrol and fixed the exchange rate at USD0.000625 per VEB although only a few,mainly publicly owned companies, wereactually able to use this exchange rate. Othercompanies were obliged to use the parallelmarket where exchange rates dropped below USD 0.0003225 per VEB forcing many smallVenezuelan companies to close.

1.5. RiskVenezuela can be a risky market and Canadian food exporters will want to develop a

business paradigm (see section 2.3) and other tools to reduce the risks to acceptable levels. Table1 presents an indication of the risks in the Venezuelan economy compared to the USA.

Table 1. Risk Ratings. Venezuela vsUSA. May 2006.

Risk Type Risk Rating

Venezuela USA

Overall Assessment 68 23

Security 57 32

Political Stability 60 25

Government

Effectiveness

86 21

Legal & Regulatory 73 8

Macroeconomic 75 55

Risk Type Risk Rating

Venezuela USA

5

Foreign Trade &

Payments

71 18

Tax Policy 69 19

Labour Market 64 18

Financial 71 13

Infrastructure 56 22

Source: Economist Intelligence Unit.

Note: 100 = highest risk.

2. Trade

2.1. Data Sources and Valuations In this and following sections, trade data is presented and analyzed. Unless otherwise

indicated, all trade data has been obtained from the World Trade Atlas or the Global Trade Atlas,products of:

Global Trade Information Services, Inc. -GTI-2218 Devine StreetColumbia, SC 29205USATel: (803) 765-1860Fax: (803) 799-5589E-Mail: [email protected] .

The data reported for Venezuela is supplied to GTI by SENIAT - National Customs &Tax Administration and are evaluated FOB for both imports and exports. At the time of theanalysis, data for 2005 is the latest full year available.

FOB (Free On Board): The value of exports as they are moved ontothe ship at the port of export. The buyer bears all costs and risks ofloss of or damage to the goods from that point. The FOB termrequires the seller to clear the goods for export. This term is usedonly for sea or inland waterway transport. For other modes oftransport the FCA (Free Carrier) term should be used.

2.2. General ProfileTrade data available from the World Trade Atlas and the Global Trade Atlas do not

mailto:[email protected]

6

include Venezuelan Government exports of Crude Oil (HS: 2709). Therefore, the total exports ofVenezuela and exports of crude oil are understated.

In 2005, the total value of merchandise imported was CAD 26.5 billion and the totalvalue of merchandise exported was CAD 14.7 billion (not including government exports of crudeoil).

In 2005, Venezuela’s top five export destinations were: the USA; Colombia; theNetherlands; Mexico and; the Netherlands Antilles. Canada ranked seventh as an exportdestination. The top five sources of imports were: the USA; Colombia; Brazil; Mexico and;China. Canada ranked eleventh as a source of imports.

Table 2. Principal Trading Partners. All Products. 2005.Venezuela.

Principal Export Destinations Principal Import Sources

Rank Country Percent

of

Exports

Rank Country Percent

of

Imports

1 USA 49.77 1 USA 30.53

2 Colombia 8.31 2 Colombia 10.94

3 Netherlands 4.52 3 Brazil 9.09

4 Mexico 3.84 4 Mexico 7.02

5 Netherlands

Antilles

2.56 5 China 4.73

7 Canada 1.89 11 Canada 2.09

Source: Calculated from trade data supplied by the Global Trade Atlas.

Note: Government exports of crude oil are not included in these

calculations.

Venezuela’s main exports in 2005 were:• crude oil; • Spongy Ferrous Products & Iron 99.94 percent Pure, Lumps Etc.; • Aluminum, Unwrought; • Semifinished Products of Iron or Nonalloy Steel and;• FL-RL Iron & NA Steel NUN600MM WD Cold RL, No Clad.

Venezuela’s main imports in 2005 were: • Motor Cars and Other Motor Vehicles Designed to Transport People (Other than

Public-transport Type), Including Station Wagons and Racing Cars;• Transmission Apparatus for Radiotelephony, Radiotelegraphy, Radiobroadcasting or

7

Figure 4. Total and Agri-food & Seafood Imports from

Canada. Venezuela.

Source: Calculated from data supplied by the National

Customs & Tax Administration via Global Trade

Atlas.

TV;• Medicaments (Except Vaccines Etc., Bandages or Pharmaceuticals), of Products

(Mixed or Not) for Therapeutic Etc. Uses, in Dosage or Retail Sale Form;• Motor Vehicles for the Transport of Goods and; • Automatic Data Processing Machines; Magnetic Reader Etc.

Venezuela was a member of the Andean Community8, a customs union, consisting ofBolivia, Colombia, Ecuador, Peru and Venezuela. As of December 2004, Chile was an observerat Andean Community meetings.

The trade in goods between Bolivia, Colombia, Ecuador, and Venezuela was fullyderegulated; goods originating in any one of those countries entered the territory of the othersduty-free. These four countries had a free trade area and Peru is becoming a part of it.

In 2005, 12.03 percent of Venezuela’s exports (not including government exports ofcrude oil) and 13.78 percent of imports were with Andean Community countries ,including Peru.

In 2005, the Andean Community and the MERCOSUR (Mercado Comun del Sur),countries (Argentina, Brazil, Paraguay and Uruguay) were expected to implement a tradeagreement. Under this agreement the countries were to work toward the elimination of tariffsamong them on all products by 2015.

In December 2005, Venezuela became an associate member of MERCOSUR, a 1991agreement among Argentina, Brazil, Paraguay and Uruguay to integrate their markets. In April2006, Venezuelan President Chavez said his country will withdraw from the AndeanCommunity. It is not clear how this move from the Andean Community to MERCOSUR willaffect Venezuela’s tariff structure.

2.3. Trade with CanadaAs a member of the Andean

Community Venezuela imposed thecommon external price-band system oftariffs for certain agricultural products,including feed grains, oilseeds, oilseedproducts, wheat, malting barley, milk,pork, poultry, yellow & white corn,soybeans, soybean oil, powdered milk, processed poultry and some otherproducts. The tariff system also appliedto 141 additional commoditiesconsidered to be substitutes or derivedproducts.

8

Ad valorem rates for these products were adjusted according to the relationship betweenmarket commodity reference prices and established floor and ceiling prices. When the referenceprice for a particular market commodity fell below the established floor price, the compensatorytariff for that commodity and related products were adjusted upward. Conversely, when thereference price exceeded the established ceiling, the compensatory tariff was eliminated. Floorand ceiling prices were set once a year based on average prices during the past five years andpublished each April.

The majority of grain tariffs fell between 10 and 20 percent.

Under WTO commitments, Venezuela is entitled to administer tariff rate quotas (TRQs)for up to 62 HS code categories but their application has been arbitrary and inconsistent.

In Ottawa on May 31, 1999, the governments of the Andean Community membercountries and Canada signed the “Cooperation Understanding on Trade and Investment betweenthe Andean Community and the Government of Canada”. In that Understanding, the partiesagreed to: step up and strengthen their economic relations; promote the liberalization of trade &investment and; seek more participation & a closer association of the private sectors, amongother things.

During the period 2000 to 2005, total imports from Canada were decreasing at a rate of-4.36 percent reaching CAD 554 million which is 2.09 percent of total imports from all sources.

2.4. Trading ParadigmsCanadian companies wishing to participate in the economic growth of Venezuela may

wish to consider alternative business paradigms:

Pure ExportThe paradigm assumed in this paper is characterized by production in Canada byCanadian companies with sea or air transport to Venezuela by any availablecarrier. Canadian companies normally cease to be interested in a shipment when itis loaded onto a ship or airplane and payment is received. Wholesaling,distributing and retailing is done by Venezuelan companies at their risk. With thisparadigm the emphasis is on identifying products that Canadian companies canprofitably export and Venezuelan companies can profitably import from Canadaand finding those Venezuelan importers.

Export with AgreementsThis paradigm is much the same as pure export except that Canadian companiesenter into various kinds of agreements with Venezuelan companies to perform oneor more marketing functions such as wholesaling, storage, distributing,advertising and/or retailing.

9

Multi-National OperationsThis paradigm includes a mix of local (in Venezuela) production and imports. Italso includes the performance of marketing functions throughout the marketingchannel. Multi-nationals operate as if there were no borders, placing productionplants in the most economic position in relation to sources of inputs and themarkets to be served. Tariffs and other trade barriers are costs of doing businessand influence the placement of production plants based primarily on economicconsiderations, including the financial and risk aspects. These companies are inthe best position to adjust to changing economic policies and benefit from thecomparative advantages of many countries to the extent that politics allows. Asnoted in Table 16, many multi-national companies have subsidiaries or closeaffiliates in Venezuela.

3. Agri-food Market Overview

3.1. Canada’s Agricultural and Seafood SectorsBetween 2000 and 2005, agri-food and seafood imports of Venezuela from Canada were

decreasing at a rate of -5.95 percent per year reaching CAD 150 million in 2005. This represented 5.47 percent of all agri-food and seafood imports.

In the Canadian economy, agriculture and agri-food accounted for 3.34 percent of GDP in2005, disaggregated as follows:

• primary agriculture and supporting services, 1.35 percent;• agri-food processing 1.55 percent and;• beverage & tobacco manufacturing contributed 0.44 percent.9

Measured by the 2005 farm cash income the five top primary agricultural products were: • cattle worth CAD 5.68 billion, produced primarily in Alberta, followed by Ontario;• dairy worth CAD 4.84 billion, produced primarily in Quebec followed closely by

Ontario;• hogs worth CAD 3.93 billion, produced primarily in Quebec followed closely by

Ontario;• wheat (including durum) worth CAD 2.45 billion, produced primarily in

Saskatchewan followed by Alberta and;• vegetables (potatoes, greenhouse vegetables, and others) worth CAD 2.40 billion,

produced mostly in Ontario followed by British Columbia.

Canada’s five most important agricultural exports in 2005 were: wheat (CAD 2.01billion); meat of bovine animals boneless, fresh or chilled (CAD 1.58 billion); low euric acidrape/colza seeds (CAD 1.23 billion); meat of swine, nesoi, frozen (CAD 1.09 billion) and; meatof swine, nesoi, fresh or chilled (CAD 924 million).

According to the United Nations Food and Agricultural Organization (UN, FAO), in2005, Canada ranked sixth in the world in the production of wheat, producing 25.5 million mt. or

10

Figure 5. Production and Trend Lines of B eef and Veal.

Venezuela.

Source: FAOSTAT data 2006.

4.1 percent of the world’s total production. Export data indicate that 54 percent of this wasexported worth CAD 2.7 billion.

In 2005, the fishing industry contributed 0.17 percent to GDP, disaggregated as follows:• fishing, hunting & trapping (the major part of this category is fishing), 0.08 percent;• seafood product preparation and packaging, 0.9 percent.

The fishing resources of the country are harvested from the north-western Atlantic andnorth-eastern Pacific oceans and from extensive bodies of fresh water. In 2005, Canada exported602,005 mt. of fish and crustaceans, molluscs and other aquatic invertebrates, worth CAD 3.76billion. This places Canada, as an exporter, sixth in the world by volume and third by value.

3.2. Venezuela’s Agricultural and Seafood Sectors10

Venezuela’s agricultural production potential far exceeds its current output levels giventhe vast untapped land and water resources in the central Orinoco plain and the lowlands of thesouthern state of Amazonas. At least 3.4 million hectares of land is suitable for crop farming(arable & permanent crops), yet only 1.1 million were devoted to grain production in 2005.

Irrigated land was estimated by the UN, FAO, at 575,000 hectares in 2003. However, thecomparative area devoted to irrigated rice was only 137,000 hectares. It is uncertain how much ofthe nation’s irrigation infrastructure is operable and adequately maintained, but it is apparent thatexisting irrigation resources are being underutilized for grain production. Rice is the onlyirrigated grain crop and it accounted for only 23.9 percent of that total irrigated crop area. Thescope for further expansion of Venezuela’s irrigation infrastructure is substantial, given thefavorable topography of the central plain and the large number of rivers (over 1,000). In addition,Venezuela estimates that it has at least 18.2 million hectares of pasture land, much of which is injuxtaposition to existing farmland.

The UN, FAO estimates that there are 400,000 farmers in Venezuela, but most of theproductive land is devoted to cattle pasture. The total area devoted to all major crops amounts to 1.9 million hectares. This represents only8 percent of the total land devoted toagriculture, while pasture and cattleranching occupies the remainder. Majorcrops grown (in descending order ofvolume produced in 2005) are: sugarcane;corn; rice; sorghum; bananas; cassava;plantains and; oranges.

The products competing withCanadian exports are beef products, corn,potatoes, wheat and fisheries.

11

Figure 6. Production and Trend Lines of Corn (M aize).

Venezuela.

Source: FAOSTAT data 2006.

Beef Products:Between 1994 and 2005 the stock of cattle increased at a rate of 1.76 percent per year

reaching an estimated 16,300,000 head in 2005. During the same period, the production of beefand veal has trended upward at a rate of 1.64 percent per year. In the late 1990s productiondecreased somewhat in a difficult socio-economic environment. After reaching a peak in 2003,the production of beef and veal decreased, reaching 405,000 mt. in 2005.

Corn (Maize):Corn is Venezuela’s most important domestically produced food grain, accounting for 60

percent of total grain area in the country and 62 percent of grain production. Between 1995 and2005, corn production trended upward at a strong rate of 7.74 percent per year reaching2,050,000 mt. in 2005. The bulk of production is heavily concentrated in the central plains statesof Portuguesa, Guarico, and Barinas. These three states alone account for about 90 percent oftotal corn production.11 Corn yields are relatively low by world standards, averaging about 3.0tons per hectare, implying that little to noneof the crop is irrigated.

According to a recent report (VE5005 – Grain & Feed Annual) from the U.S.Agricultural Attache in Caracas; cornproduction in Venezuela is focused on whitecorn for human consumption. Very littleyellow corn is produced domestically. Therewere intentions to greatly increase white andyellow corn production in 2004 via anextraordinary government financingprogram, however the plan has not beensuccessful and production figures have notshown significant changes.

There are two different markets for corn in Venezuela. White corn is used for food andthe yellow corn is used mostly for animal feed. According to FAO data the per capitaconsumption of corn products reached a peak of 60.4 kg. in 1996 and generally has been indecline, reaching 46.8 kg. in 2003. The price of corn flour is now controlled, and the governmentis supplying corn flour through MERCAL, its chain of food stores at below market prices.

Demand for yellow corn in Venezuela has been softening as hog and poultry productionhas declined due to unfavorable economic conditions and competition from Brazil.

Table Potatoes:

12

Figure 7. Production and Trend Lines of Potatoes.

Venezuela.

Source: UN, FAO, FAOSTAT data 2006.

Potatoes are native to the Andes and inVenezuela, are grown in the states of Merida,Lara, Aragua and Carabobo. Venezuelans eachconsume an average of 13.5 kg. of potatoes peryear.

The UN, FAO reports that 17,799 ha.were harvested in 1995 producing 294,800 mt.During the period 1995 to 2005 the areaharvested increased to 18,500 ha. andproduction increased at a rate of 0.85 percentper year to 350,000 mt.

Wheat:Wheat production in Venezuela is

negligible, amounting to 517 mt. in 1995 and falling to 150 mt. by 2005. The little wheatproduced in the Venezuelan Andean region is milled and consumed close to where it isharvested. Lack of a temperate climate and suitable land are the main reasons for the limitedproduction. Though it produces virtually no wheat, Venezuelans consume large quantities ofbread, crackers, pastries and pasta. According to the UN, FAO data, Between 1995 and 2003 theper capita consumption of wheat products ranged from 39.8 kg. (1996) to 53.2 kg. (2001). In2003, the consumption of wheat products in Venezuela was 47.7 kg. per capita which was 43percent of total per capita consumption of cereals.

Fisheries:Venezuelan fisheries are conducted on inland waters, estuaries, coastal waters, offshore

areas and in the vicinity of the country’s islands. Among the important commercial species aresardines, shrimp, tuna and various demersal finfish. Both industrial and artisanal fisheries12 areimportant. Between 1997 and 2001 the total volume of fish caught was falling at about -5.08percent per year reaching 434,569 mt. in 2001. See Table 3. In 2001, 69.71 percent of the fishcatch went directly for fresh food consumption while 29.91 percent was processed.

Table 3. Volume of Fish Catch by Fishery. Venezuela.

Fishery 1997(Mt)

1998(Mt)

1999(Mt)

2000(Mt)

2001(Mt)

Marine 363,624 400,054 303,563 260,086 318,043

Fresh Water 115,545 113,120 107,096 110,439 116,526

Total 479,169 513,174 410,659 370,525 434,569

Source: UN, FAO, FAOSTAT data 2006.

13

3.3. Venezuela’s Agri-food and Seafood ImportsIn 2005, the top five sources of Venezuela’s agri-food and seafood imports were:

Colombia (22.27 percent); the USA (18.93 percent); Bolivia (9.20 percent); Chile (6.09 percent)and; Canada (5.47 percent).

Table 4. Top Five Sources of Agri-food and Seafood Imports. Venezuela.

Rank* Country 2000

(Million

CAD)

2001

(Million

CAD)

2002

(Million

CAD)

2003

(Million

CAD)

2004

(Million

CAD)

2005

(Million

CAD)

World 2,687.1 3,078.5 2,272.6 1,975.6 2,900.8 2,746.0

1 Colombia 289.4 402.6 297.1 227.6 527.2 611.6

2 USA 696.9 674.6 465.8 502.9 526.4 519.8

3 Bolivia 107.6 269.3 251.1 215.1 265.5 252.6

4 Chile 167.8 201.8 130.9 72.8 123.2 167.1

5 Canada 215.7 220.3 178.6 128.2 220.0 150.2

Other 1,209.7 1,308.9 950.0 829.2 1,238.6 1,044.6

Source: National Customs & Tax Administration via Global Trade Atlas.

* Ranked by 2005 data.

3.4. Venezuela’s Importation of Bulk Agri-food ProductsBetween 2000 and 2005, the value of Venezuela’s imports of bulk agri-food (excluding

seafood) products fell at a rate of -4.75 percent per year reaching CAD 659.5 million in 2005.

Table 5. Top Five Sources of Bulk Agri-food Imports. Venezuela.

Rank* Country 2000

(Million

CAD)

2001

(Million

CAD)

2002

(Million

CAD)

2003

(Million

CAD)

2004

(Million

CAD)

2005

(Million

CAD)

World 817.8 911.7 641.6 610.3 751.8 659.5

1 USA 374.9 339.4 215.9 301.0 274.2 271.6

2 Canada 176.5 187.8 153.9 113.0 197.1 129.5

3 Colombia 80.2 161.7 108.5 85.9 100.4 108.4

Rank* Country 2000

(Million

CAD)

2001

(Million

CAD)

2002

(Million

CAD)

2003

(Million

CAD)

2004

(Million

CAD)

2005

(Million

CAD)

14

4 Guatemala 11.3 4.0 18.5 3.7 30.7 26.8

5 Indonesia 5.3 7.3 5.9 6.1 13.1 21.4

Other 169.7 221.6 138.8 100.6 136.4 101.9


Notes: Some HS classifications are not included in the USDA definition of Bulk products.

* Ranked by 2005 data.

Based on the USDA definition of bulk agri-food products, the five most importantsources were, the USA, Canada, Colombia, Guatemala and Indonesia.

Between 2000 and 2005, Venezuela:• reduced bulk imports from the USA at a rate of -5.34 percent per year reaching CAD

271.6 million worth in 2005;

• reduced bulk imports from Canada at a rate of -4.77 percent per year reachingCAD 129.5 million worth in 2005;

• reduced bulk imports from Colombia at a rate of -0.46 percent per yearreaching CAD 108.4 million worth in 2005;

• increased bulk imports from Guatemala at a rate of 28.77 percent per yearreaching CAD 26.8 million worth in 2005;

• increased bulk imports from Indonesia at a rate of 28.49 percent per yearreaching CAD 21.4 million worth in 2005.

Table 6 presents the top 10 bulk products that were imported from many countries.

Table 6. Top Ten Imported Bulk Agri-food Products. Venezuela.

* HS

Code

Description 2003 2004 2005

Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

1 100190 Wheat (Other than DurumWheat), and Meslin.

130,902 513,054 199,395 747,507 210,673 848,825

2 210690 Food Preparations Nesoi. 69,915 47,869 90,426 48,470 127,514 68,744

* HS

Code


Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

15

3 100110 Durum Wheat. 112,788 483,054 111,527 467,081 118,793 540,971

4 170111 Cane Sugar, Raw, in SolidForm, Not ContainingAdded Flavouring orColouring Matter.

48,282 168,669 71,588 233,209 45,512 127,731

5 400122 Technically SpecifiedNatural Rubber (TSNR) inPrimary Forms or in Plates,Sheets or Strip.

278,234 20,149 45,709 27,492 36,870 22,662

6 071333 Kidney Beans, IncludingWhite Pea Beans(Phaseolus Vulgaris),Dried Shelled, IncludingSeed.

41,007 68,866 41,338 68,368 25,046 37,381

7 100590 Corn (Maize), Other thanSeed Corn.

105,511 604,620 100,045 536,649 21,930 139,366

8 071340 Lentils, Dried Shelled,Including Seed.

4,710 8,373 8,527 11,292 8,807 13,930

9 071320 Chickpeas (Garbanzos)Dried Shelled, IncludingSeeds.

1,316 1,677 2,229 2,191 6,835 4,127

10 520100 Cotton Not Carded orCombed.

15,158 8,400 26,956 12,845 6,235 3,559


Note: Some HS classifications are not included in the USDA definition of Bulk products.

* Ranked by 2005 value.

Unless otherwise indicated, in the following discussion, averages refer to the years 2000to 2005 inclusive.

100190 Wheat (Other than Durum Wheat), and MeslinThe average annual value of imports was CAD 171.7 million. In 2005, Venezuela

imported CAD 210.7 million worth from: the USA (CAD 166.8 million); Canada (CAD 43.8million) and; Lebanon (CAD 5,578).

Between 2000 and 2005, the value of imports from all sources increased at a rate of 5.30percent per year while the value of imports from the Canada decreased at a rate of -11.10 percentper year. Canada was losing market share in an expanding market; Venezuela was reducing thevalue of imports from Canada while increasing imports from the world. In 2005, Canada’smarket share of these imported products was 20.80 percent.

16

210690 Food Preparations NesoiThe average annual value of imports was CAD 88.0 million. In 2005, Venezuela

imported CAD 127.5 million worth from: Colombia (CAD 66.1 million); Mexico (CAD 14.7million); Chile (CAD 14.4 million); the USA (CAD 13.8 million) and; Brazil (CAD 2.9 million).Canada supplied CAD 1.1 million and 27 other countries supplied CAD14.5 million worth ofthese products.

Between 2000 and 2005, the value of imports from all sources increased at a rate of 11.92percent per year while the value of imports from Canada increased at a rate of 40.24 percent peryear. Canada was gaining market share in an expanding market; Venezuela was increasingimports from Canada at a much faster rate than from the world. In 2005, Canada’s market shareof these imported products was 0.85 percent.

100110 Durum WheatThe average annual value of imports was CAD 109.1 million. In 2005, Venezuela

imported CAD 118.8 million worth from: Canada (CAD 67.2 million) and; the USA (CAD 51.6million).

Between 2000 and 2005, the value of imports from all sources increased at a rate of 2.19percent per year while the value of imports from Canada increased at a rate of 5.49 percent peryear. Canada was slowly gaining market share in a slowly expanding market; Venezuela wasincreasing imports from Canada at a slightly faster rate than from the world. In 2005, Canada’smarket share of this imported product was 56.57 percent.

170111 Cane Sugar, Raw, In Solid Form, Not Containing Added Flavouring or ColouringMatter

The average annual value of imports was CAD 75.6 million. In 2005, Venezuelaimported CAD 45.5 million worth from: Colombia (CAD 24.2 million); Guatemala (CAD 21.3million); Italy (CAD 2,129) and; France( CAD 2,004). Canada supplied small amounts of thisproduct to other countries but Venezuela did not import any from Canada during the period 2000to 2005.

Between 2000 and 2005, the value of imports from all sources decreased at a rate of-11.11 percent per year.

400122 Technically Specified Natural Rubber (Tsnr) In Primary Forms Or In Plates,Sheets Or Strip

The average annual value of imports was CAD 26.9 million. In 2005, Venezuelaimported CAD 36.9 million worth from: Indonesia (CAD 21.4 million); Singapore (CAD 6.0million); Guatemala (CAD 4.2 million); Thailand (CAD 3.0 million) and; the USA (CAD938,504). Three other country supplied CAD 1.4 million worth of these products. Canada

17

supplied these products to other countries but Venezuela did not import any from Canada duringthe period 2000 to 2005.

Between 2000 and 2005, the value of imports from all sources were increasing at a rate of23.38 percent per year.

071333 Kidney Beans, Including White Pea Beans (Phaseolus Vulgaris), Dried Shelled,Including Seed

The average annual value of imports was CAD 40.4 million. In 2005, Venezuelaimported CAD 25.0 million worth from: China (CAD 16.9 million); Argentina (CAD 4.1million); Canada (CAD 1.5 million); Colombia (CAD 716,601) and; the USA (CAD 628,210). Four other countries supplied CAD 1.2 million worth of these products.

Between 2000 and 2005, the value of imports from all sources decreased at a rate of -7.28percent per year while the value of imports from Canada decreased at a rate of -18.88 percent peryear. Canada was losing market share in a contracting market; Venezuela was decreasing importsfrom Canada at a much faster rate than from the world. In 2005, Canada’s market share of theseimported products was 5.79 percent.

100590 Corn (Maize), Other than Seed CornThe average annual value of imports was CAD 112.4 million. In 2005, Venezuela

imported CAD 21.9 million worth from: the USA (CAD 20.5 million); Argentina (CAD 1.4million); Brazil (CAD 52,051); Peru (CAD 2,215) and; Lebanon (less than CAD 1,000). Canadalast supplied CAD 67,272 worth of this product in 2004.


071340 Lentils, Dried Shelled, Including SeedThe average annual value of imports was CAD 7.8 million. In 2005, Venezuela imported

CAD 8.8 million worth from: Canada (CAD 6.9 million); Colombia (CAD 1.8 million); the USA(CAD 97,348); Lebanon (CAD 4,645) and; India (less than CAD 1,000).

Between 2000 and 2005, the value of imports from all sources decreased at a rate of -1.51percent per year while the value of imports from Canada decreased at a rate of -4.11 percent peryear. Canada was losing market share in a slowly contracting market; Venezuela was reducingimports from Canada at a faster rate than from the world. In 2005, Canada’s market share ofthese imported products was 78.20 percent.

18

071320 Chickpeas (Garbanzos) Dried Shelled, Including SeedsThe average annual value of imports was CAD 3.0 million. In 2005, Venezuela imported

CAD 6.8 million worth from: Colombia (CAD 5.0 million); Mexico (CAD 1.6 million); Canada(CAD 288,527) and; Lebanon (less than CAD 1,000).

Between 2000 and 2005, the value of imports from all sources increased at a rate of 9.42percent per year while the value of imports from Canada increased at a rate of 4.59 percent peryear. Canada was slowly losing market share in an expanding market; Venezuela was increasingimports from Canada at a slower rate than from the world. In 2005, Canada’s market share ofthese imported products was 4.22 percent.

520100 Cotton, Not Carded or CombedThe average annual value of imports was CAD 24.6 million. In 2005, Venezuela

imported CAD 6.2 million worth from: the USA (CAD 2.1 million); Colombia (CAD 1.7million); Paraguay (CAD 1.2 million); Brazil (CAD 402,765) and; Germany (CAD 344,771).Two other countries supplied CAD 440,648 worth of this product in 2005. Canada supplied thisproduct to other countries but Venezuela did not import any from Canada during the period 2000to 2005.


3.5. Venezuela’s Importation of Intermediate Agri-food ProductsBetween 2000 and 2005, the value of Venezuela’s imports of intermediate agri-food

(excluding seafood) products increased at a rate of 10.16 percent reaching an estimated value ofCAD 831.7 million.

Table 7. Top Five Sources of Intermediate Agri-food Imports. Venezuela.

Rank* Country 2000

(Million

CAD)

2001

(Million

CAD)

2002

(Million

CAD)

2003

(Million

CAD)

2004

(Million

CAD)

2005

(Million

CAD)

World 548.1 586.8 646.6 593.3 931.6 831.7

1 Colombia 56.9 50.2 40.1 37.4 211.9 243.6

2 USA 106.9 140.7 149.5 115.5 136.2 134.0

3 Bolivia 28.5 65.4 96.8 64.8 75.0 69.2

4 Brazil 61.3 52.0 75.1 49.7 73.2 67.8

5 Argentina 89.5 36.5 30.6 53.4 80.6 42.7

Rank* Country 2000

(Million

CAD)

2001

(Million

CAD)

2002

(Million

CAD)

2003

(Million

CAD)

2004

(Million

CAD)

2005

(Million

CAD)

19

17 Canada 5.6 5.7 3.3 1.2 8.7 8.0

Source: National Customs & Tax Administration via Global Trade Atlas. Note: Some HS classifications are not included in the U SDA definition of Intermediate products..


Based on the USDA definition of intermediate agri-food products, the five mostimportant sources in 2005 were, Colombia, the USA, Bolivia, Brazil and Argentina. Canadaranked 17th as a source of intermediate agri-food products.

Between 2000 and 2005, Venezuela:• increased the value of intermediate agri-food imports from Colombia at a rate of

39.00 percent per year reaching CAD 243.6 million in 2005;

• increased the value of intermediate agri-food imports from the USA at a rate of 2.23percent per year reaching CAD 134.0 million in 2005;

• increased the value of intermediate agri-food imports from Bolivia at a rate of 13.54percent per year reaching CAD 69.2 million in 2005;

• increased the value of intermediate agri-food imports from Brazil at a rate of 3.22percent per year reaching CAD 67.8 million in 2005;

• decreased the value of intermediate agri-food imports from Argentina at a rate of-2.16 percent per year reaching CAD 42.7 million in 2005;

• increased the value of intermediate agri-food imports from Canada at a rate of 5.78percent per year reaching CAD 8.0 million in 2005.

Table 8 presents the top 10 intermediate products that were imported from many countriesincluding Canada in 2005.

Table 8. Top Ten Imported Intermediate Agri-food Products. Venezuela.

* HS

Code


Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

1 010290 Bovine Animals, Live,

Nesoi.

71 72 173,519 89,340 202,185 58,535

* HS

Code


Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

20

2 150710 Soybean Oil and its

Fractions, Crude,

Whether or Not

Degummed.

171,881 223,616 219,296 279,348 147,579 209,882

3 110710 Malt, Not Roasted. 72,388 181,280 109,308 255,052 107,427 287,325

4 330210 Mixtures of

Odoriferous Substances

and Mixtures

(Includ ing Alcoholic

Solutions) with a Basis

of These Substances

Used in the Food or

Drink Industries.

52,377 4,221 67,535 4,730 69,405 5,744

5 151800 Animal or Vegetable

Fats, Oils and T heir

Fractions, Boiled,

Oxidized , Etc.; Inedible

Mixes or Preparations

of Animal or Vegetable

Fats and Oils, Neso i.

53,540 102,994 52,973 86,251 38,718 74,371

6 230990 Animal Feed

Preparations (Mixed

Feeds, Etc.), Other than

Dog or Cat Food Put up

for Retail Sale.

16,195 25,185 28,016 45,936 36,373 72,833

7 100510 Corn (Maize) Seed,

Certified, Excluding

Sweet Corn.

9,693 4,577 26,276 10,449 23,431 9,535

8 151110 Palm Oil and its

Fractions, Crude, Not

Chemically Modified.

23,070 31,771 29,578 36,186 16,039 25,570

9 151521 Corn (Maize) Oil and

its Fractions, Crude,

Not Chemically

Modified.

17,919 18,435 11,146 9,993 11,033 11,596

10 120991 Vegetable Seeds for

Sowing.

6,800 134 7,767 219 9,835 272


Note: Some HS classifications are not included in the USDA definition of Intermediate products.


21

Unless otherwise indicated, in the following discussion, average refers to the years 2000to 2005 inclusive.

010290 Bovine Animals, Live, Nesoi

The average annual value of imports was CAD 62.7 million. In 2005, Venezuelaimported CAD 202.2 million worth from Colombia. Canada supplied these products to othercountries but Venezuela did not import them from Canada during the period 2000 to 2005.

Between 2000 and 2005, the value of imports from all sources increased at a rate of509.81 percent per year.

150710 Soybean Oil and its Fractions, Crude, Whether or Not Degummed

The average annual value of imports was CAD 147.6 million. In 2005, Venezuelaimported CAD 136.7 million worth from: Bolivia (CAD 64.1 million); Paraguay (CAD 26.6million); Argentina (CAD 25.8 million); the USA (CAD 9.6 million) and; Mexico (CAD 8.6million). One other country supplied CAD 2.0 million worth of these products. Canada suppliedthese products to other countries but Venezuela did not import them from Canada during theperiod 2000 to 2005.

Between 2000 and 2005, the value of imports from all sources increased at a rate of 10.80percent per year.

110710 Malt, Not Roasted

The average annual value of imports was CAD 85.8 million. In 2005, Venezuelaimported CAD 107.4 million worth from: France (CAD 36.6 million); Belgium (CAD 27.1million); Sweden (CAD 12.7 million); Germany (CAD 10.0 million) and; Ireland (CAD 6.9million). Canada supplied CAD 5.4 million worth and four other countries supplied CAD 8.7million worth of this product.

Between 2000 and 2005, the value of imports from all sources increased at a rate of 9.15percent per year. In 2005, Canada’s market share of this imported product was 5.03 percent.

330210 Mixtures of Odoriferous Substances and Mixtures (Including Alcoholic Solutions)with a Basis of These Substances Used in the Food or Drink Industries

The average annual value of imports was CAD 62.6 million. In 2005, Venezuelaimported CAD 69.4 million worth from: Brazil (CAD 47.6 million); Mexico (CAD 6.2 million);the UK (CAD 3.6 million); Colombia (CAD 3.4 million) and; the USA (CAD 2.8 million).

22

Canada supplied less than CAD 1,000 worth and 18 other countries supplied CAD 5.8 millionworth of these products.

Between 2000 and 2005, the value of imports from all sources increased at a rate of 2.87percent per year while the value of imports from Canada decreased at a rate of -33.18 percent peryear. Canada was losing market share in a slowly expanding market; Venezuela was decreasingimports from Canada while increasing imports from the world. In 2005, Canada’s market shareof these imported products was 0.001 percent.

151800 Animal or Vegetable Fats, Oils and Their Fractions, Boiled, Oxidized, Etc.;Inedible Mixes or Preparations of Animal or Vegetable Fats and Oils Nesoi

The average annual value of imports was CAD 36.6 million. In 2005, Venezuelaimported CAD 38.7 million worth from: the USA (CAD 33.9 million); Colombia (CAD 4.8million) and; Austria (less than CAD 1,000). Canada last supplied CAD 2.0 million worth ofthese products in 2000.


230990 Animal Feed Preparations (Mixed Feeds, Etc.), Other than Dog or Cat Food Putup for Retail Sale

The average annual value of imports was CAD 32.7 million. In 2005, Venezuelaimported CAD 36.4 million worth from: the USA (CAD 19.4 million); Colombia (CAD 2.2million); the UK (CAD 2.0 million); Brazil (CAD 1.8 million) and; Canada (CAD 1.6 million). Eighteen other countries supplied CAD 9.4 million worth of these products in 2005.

Between 2000 and 2005, the value of imports from all sources decreased at a rate of -2.88percent per year while the value of imports from Canada increased at a rate of 175.88 percent peryear. Canada was gaining market share in a slowly contracting market; Venezuela was increasingimports from Canada rapidly while slowly decreasing imports from the world. In 2005, Canada’smarket share of these imported products was 4.42 percent.

100510 Corn (Maize) Seed, Certified, Excluding Sweet Corn

The average annual value of imports was CAD 14.9 million. In 2005, Venezuelaimported CAD 23.4 million worth from: the USA (CAD 8.2 million); Guatemala (CAD 4.9million); Mexico (CAD 4.6 million); Brazil (CAD 3.6 million) and; Colombia (CAD 1.4million). Three other countries supplied CAD 665,837 worth of these products. Canada suppliedthese products to other countries but Venezuela did not import them from Canada during theperiod 2000 to 2005.

23


151110 Palm Oil and its Fractions, Crude, Not Chemically Modified

The average annual value of imports was CAD 13.4 million. In 2005, Venezuelaimported CAD 16.0 million worth from Ecuador. Canada supplied small amounts of theseproducts to other countries but Venezuela did not import them from Canada during the period2000 to 2005.


151521 Corn (Maize) Oil And Its Fractions, Crude, Not Chemically Modified

The average annual value of imports was CAD 11.9 million. In 2005, Venezuelaimported CAD 11.0 million worth from: the USA (CAD 9.5 million) and; Colombia (CAD 1.5million). Canada supplied these products to other countries but Venezuela did not import themfrom Canada during the period 2000 to 2005.


120991 Vegetable Seeds for Sowing

The average annual value of imports was CAD 8.4 million. In 2005, Venezuela importedCAD 9.8 million worth from: the USA (CAD 4.1 million); Chile (CAD 2.5 million); France(CAD 753,149); the Netherlands (CAD 533,669) and; China (CAD 511,734) . Nine othercountries supplied CAD 1.4 million worth of these products. Canada last supplied CAD 17,551worth in 2004.

Between 2000 and 2005, the value of imports from all sources decreased at a rate of -1.13percent per year.

3.6. Venezuela’s Importation of Consumer Oriented Products

Between 2000 and 2005, the value of Venezuela’s imports of consumer oriented agri-food (excluding seafood) products fell at a rate of -3.23 percent per year reaching CAD 820.8million worth in 2005.

24

Table 9. Top Five Sources of Consumer Oriented Agri-food Imports. Venezuela.

Rank* Country 2000

(Million

CAD)

2001

(Million

CAD)

2002

(Million

CAD)

2003

(Million

CAD)

2004

(Million

CAD)

2005

(Million

CAD)

World 818.8 949.9 601.6 441.8 714.7 820.8

1 Colombia 139.4 181.0 146.7 104.4 211.5 248.9

2 Chile 115.0 123.3 71.1 37.8 74.1 108.5

3 Brazil 14.4 25.0 20.9 17.4 77.0 82.5

4 Argentina 10.3 21.3 22.5 12.7 64.7 73.0

5 USA 124.6 142.8 76.2 36.5 49.1 67.3

11 Canada 32.9 25.5 19.1 13.3 14.0 12.5


Note: Some HS classifications are not included in the USDA definition of Consumer Oriented products.


Based on the USDA definition of consumer oriented agri-food products, the five mostimportant sources in 2005 were, Colombia, Chile, Brazil, Argentina and the USA. Canada rankedeleventh as a source of consumer oriented agri-food products.

Between 2000 and 2005, Venezuela:

• increased the value of consumer oriented agri-food imports from Colombia at a rateof 9.03 percent per year reaching CAD 248.9 million in 2005;

• reduced the value of consumer oriented agri-food imports from Chile at a rate of -6.76percent per year reaching CAD 108.5 million in 2005;

• increased the value of consumer oriented agri-food imports from Brazil at a rate of40.56 percent per year reaching CAD 82.5 million in 2005;

• increased the value of consumer oriented agri-food imports from Argentina at a rateof 43.06 percent per year reaching CAD 73.0 million in 2005;

• reduced the value of consumer oriented agri-food imports from the USA at a rate of-18.17 percent per year reaching CAD 67.3 million in 2005;

25

• reduced the value of consumer oriented agri-food imports from Canada at a rate of-18.10 percent per year reaching CAD 12.5 million in 2005.

Table 10 presents the top 10 consumer oriented products that were imported from manycountries including Canada in 2005.

Table 10. Top Ten Imported Consumer Oriented Agri-food Products. Venezuela.

* HS

Code


Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

1 040221 Milk and Cream,

Concentrated, Not

Sweetened, in

Powder, Granules or

Other Solid Forms,

of a Fat Content, by

Weight, Exceeding

1.5%.

143,126 62,628 129,382 49,507 130,684 47,483

2 170490 Sugar Confectionery

(Includ ing W hite

Chocolate), Not

Containing Cocoa,

Nesoi.

28,462 14,887 48,508 27,774 64,032 36,100

3 020712 Meat and Edible

Offal of Chickens,

Not Cut in Pieces,

Frozen.

5,153 4,683 27,139 24,838 43,359 38,708

4 190110 Food Preparations

for Infant Use, Put

up for Retail Sale,

Nesoi.

22,544 6,854 26,354 8,608 32,116 9,179

5 040690 Cheese, Nesoi,

Including Cheddar

and Colby.

16,524 4,508 23,582 5,776 26,440 6,532

6 220290 Nonalcoholic

Beverages, Nesoi

(Including Milk-

based Drinks and

Nonalcoholic Beer).

5,165 4,555 17,551 28,362 26,228 36,852

* HS

Code


Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

26

7 020110 Carcasses and Half-

carcasses of Bovine

Animals, Fresh or

Chilled.

0 0 26,336 8,795 25,714 7,868

8 080810 Apples, Fresh. 6,185 10,098 12,618 16,458 24,514 33,576

9 220421 Wine of Fresh

Grapes (Other than

Sparkling Wine)

and Grape M ust

with Fermentation

Prevented, Etc. by

Adding Alcohol,

Containers of Not

over 2 Liters.

10,737 6,616 16,649 9,681 21,198 11,615

10 180690 Cocoa Preparations,

Not in Bulk Form

Nesoi.

6,056 2,226 12,935 4,466 17,977 6,251


Note: Some HS classifications are not included in the USDA definition of Consumer Oriented products.



040221 Milk and Cream, Concentrated, Not Sweetened, in Powder, Granules or OtherSolid Forms, of a Fat Content, by Weight, Exceeding 1.5 percent

The average annual value of imports was CAD 150.4 million. In 2005, Venezuelaimported CAD 130.7 million worth from: New Zealand (CAD 38.5 million); Argentina (CAD35.4 million); Colombia (CAD 32.0 million); the Netherlands (CAD 8.0 million) and; Uruguay(CAD 7.1 million). Seven other countries supplied CAD 9.5 million worth of these products.Canada supplied these products to other countries but Venezuela did not import them fromCanada during the period 2000 to 2005.


27

170490 Sugar Confectionery (Including White Chocolate), Not Containing Cocoa, Nesoi

The average annual value of imports was CAD 42.8 million. In 2005, Venezuelaimported CAD 64.0 million worth from: Colombia (CAD 50.9 million); Brazil (CAD 2.3million); Spain (CAD 2.3 million); Argentina (CAD 1.9 million) and; the USA (CAD 1.4million). Twenty-three other countries supplied CAD 5.2 million worth of these products.Canada last supplied CAD 5,374 worth of these products in 2004.


020712 Meat And Edible Offal Of Chickens, Not Cut In Pieces, Frozen

The average annual value of imports over the period 2003 to 2005 was CAD 25.2 million.In 2005, Venezuela imported CAD 43.4 million worth from Brazil. Canada supplied theseproducts to other countries but Venezuela did not import them from Canada during the period2000 to 2005.

Between 2003 and 2005, the value of imports from all sources increased at a rate of190.07 percent per year.

190110 Food Preparations for Infant Use, Put up for Retail Sale, Nesoi

The average annual value of imports was CAD 25.4 million. In 2005, Venezuelaimported CAD 32.1 million worth from: Mexico (CAD 14.0 million); Argentina (CAD 8.4million); Ireland (CAD 4.7 million); Spain (CAD 2.2 million) and; the Netherlands (CAD 1.3million). Six other countries supplied CAD 1.5 million worth of these products. Canada lastsupplied CAD 12,416 worth of these products in 2004.


040690 Cheese, Nesoi, Including Cheddar and Colby

The average annual value of imports was CAD 30.7 million. In 2005, Venezuelaimported CAD 26.4 million worth from: Colombia (CAD 7.9 million); Uruguay (CAD 4.5million); New Zealand (CAD 4.5 million); the Netherlands (CAD 4.0 million) and; the USA(CAD 1.7 million). Fifteen other countries supplied CAD 3.9 million worth of these products.Canada supplied these products to other countries but Venezuela did not import them fromCanada during the period 2000 to 2005.


28

220290 Nonalcoholic Beverages, Nesoi (Including Milk-based Drinks and NonalcoholicBeer)

The average annual value of imports was CAD 11.1 million. In 2005, Venezuelaimported CAD 26.2 million worth from: Colombia (CAD 17.3 million); Austria (CAD 5.4million); Mexico (CAD 1.3 million); Germany (CAD 1.2 million) and; the Netherlands (CAD484,345). Canada supplied these products to other countries but Venezuela did not import themfrom Canada during the period 2000 to 2005.


020110 Carcasses and Half-carcasses of Bovine Animals, Fresh or Chilled

The average annual value of imports from 2004 to 2005 was CAD 26.0 million. In 2005,Venezuela imported CAD 25.7 million worth from: Colombia (CAD 25.7 million) and; the USA(CAD 25,482). Canada supplied these products to other countries but Venezuela did not importthem from Canada during the period 2000 to 2005.

Between 2004 and 2005, the value of imports from all sources decreased -2.36 percent.

080810 Apples, Fresh

The average annual value of imports was CAD 24.3 million. In 2005, Venezuelaimported CAD 24.5 million worth from: Chile (CAD 19.4 million); the USA (CAD 4.6 million);France (CAD 446,324); China (CAD 42,855) and; Panama (CAD 16,617). Canada last suppliedCAD 235,739 worth of this product in 2000.


220421 Wine of Fresh Grapes (Other than Sparkling Wine) and Grape Must withFermentation Prevented, Etc. by Adding Alcohol, Containers of Not over 2 Liters

The average annual value of imports was CAD 18.9 million. In 2005, Venezuelaimported CAD 21.2 million worth from: Chile (CAD 13.5 million); Spain (CAD 2.1 million);France (CAD 1.4 million); Italy (1.2 million) and; Argentina (CAD 872,076). Ten other countriessupplied CAD 2.2 million worth of these products. Canada last supplied CAD 1,086 worth ofthese products in 2002.


29

180690 Cocoa Preparations, Not in Bulk Form Nesoi

The average annual value of imports was CAD 11.3 million. In 2005, Venezuelaimported CAD 18.0 million worth from: Colombia (CAD 8.0 million); Ecuador (CAD 1.7million); Argentina (CAD 1.6 million); Italy (CAD 1.5 million) and; Chile (CAD 1.3 million).Canada supplied CAD 1,216 worth and seventeen other countries supplied CAD 3.9 millionworth of these products.

Between 2000 and 2005, the value of imports from all sources increased at a rate of 8.03percent per year. Canada supplied these products in all years 2000 to 2005 except 2004.

3.7. Venezuela’s Importation of Fish and Seafood

According to UN, FAO data, in 2003, Venezuela consumed a total of 448,702 mt. ofseafood as food, placing it 30th in the world and 3rd in South America after Brazil and Peru. Between 1998 and 2003, Venezuela’s per capita consumption of seafood decreased at a rate of-1.57 percent per year reaching 17.5 kg. per person per year placing it 66th in the world and 4th inSouth America after Guyana, Peru and Suriname.

The average value of fish and seafood imported by Venezuela was CAD 57.0 million. In2005, Venezuela imported CAD 64.3 million from: Ecuador (CAD 25.6 million); Chile (CAD11.6 million); the USA (CAD 8.9 million); Colombia (6.2 million) and; Norway (4.0 million).Twenty-eight other countries provided CAD 7.9 million worth of fish and seafood products.Canada last supplied CAD 17,000 worth in 2003.

An exponential trend line fitted to the value of imported of fish and seafood from 2000 to2005 decreases at a rate of -4.74 percent per year.

Table 11 presents the top 10 fish and seafood products imported by Venezuela.

Table 11. Top Ten Imported Fish and Seafood Products. Venezuela.

30

* HS

Code


Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

1 160414 Tunas, Skipjack and

Bonito (Sarda Spp),

Prepared or

Preserved, Whole or

in Pieces, but Not

Minced.

2,748 901 35,409 9,133 31,623 8,716

2 030749 Cuttle Fish and

Squid, Frozen,

Dried, Salted or in

Brine.

1,941 1,642 7,009 4,100 10,311 6,259

3 030420 Fish Fillets, Frozen. 1,185 474 2,624 731 4,516 1,282

4 030551 Cod (Gadus

Morhua, Gadus

Ogac, Gadus

Macrocephalus),

Dried, Whether or

Not Salted but Not

Smoked.

389 66 2,081 247 3,854 406

5 030322 Atlantic Salmon

(Salmo Salar) and

Danube Salmon

(Hucho Hucho),

Excluding Fillets,

Livers and Roes,

Frozen.

531 191 2,640 590 3,643 864

6 160419 Fish, Nesoi,

Prepared or

Preserved, Whole or

in Pieces, but Not

Minced.

385 331 1,032 809 2,727 2,253

7 030379 Fish, Nesoi, with

Bones, Frozen.

365 369 162 96 1,040 1,064

8 030342 Yellowfin Tunas,

(Thunnus

Albacares),

Excluding Fillets,

Livers and Roes,

Frozen.

3,263 3,942 6,432 7,133 1,034 568

9 030310 Pacific Salmon,

with Bones, Frozen.

8 23 284 67 863 117

* HS

Code


Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

Value

(‘000

CAD)

Volume

(Mt)

31

10 030541 Pacific, Atlantic and

Danube Salmon,

Smoked.

105 99 403 53 453 79

Source: National Customs & Tax Administration via W orld Trade Atlas.



160414 Tunas, Skipjack And Bonito (Sarda Spp), Prepared Or Preserved, Whole Or InPieces, But Not Minced

The average annual value of imports was CAD 23.2 million. In 2005, Venezuelaimported CAD 31.6 million worth from: Ecuador (CAD 25.5 million); Colombia (CAD 5.2million); Costa Rica (CAD 400,000); Peru (CAD 218,426) and; Spain (CAD 116,665). Fiveother countries supplied CAD 103,227 worth of these products. Canada last supplied CAD10,584 worth of these products in 2001.


030749 Cuttle Fish And Squid, Frozen, Dried, Salted Or In Brine

The average annual value of imports was CAD 5.3 million. In 2005, Venezuela importedCAD 10.3 million worth from: the USA (CAD 7.6 million); Peru (CAD 2.6 million); Panama(CAD 124,048); Chile (CAD 38,579) and; China (CAD 2,714). Canada last supplied CAD61,439 worth of these products in 2001.


030420 Fish Fillets, Frozen

The average annual value of imports was CAD 6.2 million. In 2005, Venezuela importedCAD 4.5 million worth from: Chile (CAD 3.0 million); Argentina (CAD 629,654); Uganda(CAD 397,163); Tanzania (CAD 310,078) and; the USA (CAD 67,373). Canada last suppliedCAD 23,562 worth of these products in 2001.

32

Between 2000 and 2005, the value of imports from all sources fell at a rate of -19.63percent per year.

030551 Cod (Gadus Morhua, Gadus Ogac, Gadus Macrocephalus), Dried, Whether Or NotSalted But Not Smoked

The average annual value of imports was CAD 2.5 million. In 2005, Venezuela importedCAD 3.9 million worth from: Norway (CAD 3.8 million) and; Spain (CAD 12,460). Canada lastsupplied CAD 213,887 worth of these products in 2001.


030322 Atlantic Salmon (Salmo Salar) And Danube Salmon (Hucho Hucho), ExcludingFillets, Livers And Roes, Frozen

The average annual value of imports was CAD 2.0 million. In 2005, Venezuela importedCAD 3.6 million worth from Chile. Canada last supplied less than CAD 1,000 worth of theseproducts in 2001.


160419 Fish, Nesoi, Prepared Or Preserved, Whole Or In Pieces, But Not Minced

The average annual value of imports was CAD 2.2 million. In 2005, Venezuela importedCAD 2.7 million worth from: Chile (CAD 2.7 million); Peru (CAD 54,574); Spain (CAD 3,745);Argentina (Less than CAD 1,000) and; China (Less than CAD 1,000). Although Canada suppliedthese products to other countries, Venezuela did not import them from Canada during the period2000 to 2005.


030379 Fish, Nesoi, Excluding Fillets, Livers And Roes, Frozen

The average annual value of imports was CAD 2.4 million. In 2005, Venezuela importedCAD 1.0 million worth from: Peru (CAD 636,704); the USA (CAD 171,429); Trinidad &Tobago (CAD 120,895); Colombia (CAD 61,337) and; Chile (CAD 29,736). One other countrysupplied CAD 19,521 worth of these products. Canada last supplied CAD 77,196 worth of theseproducts in 2001.

33


030342 Yellowfin Tunas, (Thunnus Albacares), Excluding Fillets, Livers And Roes, Frozen

The average annual value of imports between 2001 and 2005 was CAD 2.6 million. In2005, Venezuela imported CAD 1.0 million worth from: Colombia (CAD 919,114); Uruguay(CAD 106,435) and; Trinidad & Tobago (CAD 8,640). Although Canada exports these productsto other countries, Venezuela did not import them from Canada during the period 2001 to 2005.


030310 Pacific Salmon (Oncorhynchus Spp.), Excluding Fillets, Livers And Roes, Frozen

The average annual value of imports was CAD 321,581. In 2005, Venezuela importedCAD 862,988 worth from Chile. During the period 2000 to 2005 Canada did not export theseproducts to any country.

Between 2000 and 2005, the value of imports from all sources fell at a rate of 4.73percent per year.

030541 Pacific Salmon (Oncorhynchus Spp.), Atlantic Salmon (Salmo Salar), And DanubeSalmon (Hucho Hucho), Including Fillets, Smoked

The average annual value of imports was CAD 712,666. In 2005, Venezuela importedCAD 453,421 million worth from: Chile (CAD 264,338); Norway (CAD 189,024) and; the USA(Less than CAD 1,000). Canada last supplied CAD 36,599 worth of these products in 2001.


3.8. Competition in the Venezuelan Food Markets

Venezuela was a member of the Andean Community which gave trade advantages toBolivia, Colombia and Ecuador. In December 2005, Venezuela became an associate member ofMERCOSUR. This membership was thought to be more political than economic. However, onApril 19, 2006 President Hugo Chavez announced that Venezuela will withdraw from theAndean Community siting the impending or conclusion of the free trade agreements betweenEcuador, Colombia and Peru, with the USA as the reason. When the trade aspects ofMERCOSUR are implemented they will give trade advantages to Argentina, Brazil, Paraguayand Uruguay. This alliance may have implications for Canada’s exports of wheat as Argentina is

34

a significant producer.

In 2005,Venezuela imported CAD 2,746.0 million worth of Agri-food and Seafoodproducts from 92 countries. The top five sources of these imports were Colombia, the USA,Bolivia, Chile and Canada. These five countries held 61.96 percent of the agri-food and seafoodmarket. During the period 2000 to 2005, the value of agri-food and seafood imports from allsources was falling at a rate of -0.60 percent per year.

Colombia

In 2005, Venezuela imported CAD 611.6 million worth of agri-food and seafood productsfrom Colombia, representing a market share of 22.27 percent.

During the period 2000 to 2005, the value of imports from Colombia was increasing at arate of 13.02 percent per year. Colombia was quickly gaining market share in a slowlycontracting market. Venezuela was increasing imports from Colombia while slowly decreasingimports from the world.

The USA

In 2005, Venezuela imported CAD 519.8 million worth of agri-food and seafoodproducts from the USA, representing a market share of 18.93 percent.

During the period 2000 to 2005, the value of imports from the USA was decreasing at arate of -5.91 percent per year. The USA was losing market share in a slowly contracting market.Venezuela was reducing imports from the USA faster than from the world.

Bolivia

In 2005, Venezuela imported CAD 252.6 million worth of agri-food and seafoodproducts from Bolivia, representing a market share of 9.20 percent.

During the period 2000 to 2005, the value of imports from Bolivia was increasing at arate of 12.33 percent per year. Bolivia was rapidly gaining market share in a slowly contractingmarket. Venezuela was increasing imports from Bolivia while slowly decreasing imports fromthe world.

Chile

In 2005, Venezuela imported CAD 167.1 million worth of agri-food and seafoodproducts from Chile, representing a market share of 6.09 percent.

During the period 2000 to 2005, the value of imports from Chile was slowly decreasing ata rate of -5.79 percent per year. Chile was losing market share in a slowly contracting market.Venezuela was decreasing imports from Chile faster than from the world.

35

Figure 8. Population by State. 2001. Venezuela.

Source: www .statoids.com/uve.html .

Canada

In 2005, Venezuela imported CAD 150.2 million worth of agri-food and seafoodproducts from Canada, representing a market share of 5.47 percent.

During the period 2000 to 2005, the value of imports from Canada was decreasing at arate of -5.95 percent per year. Canada was slowly losing market share in a slowly contractingmarket. Venezuela was decreasing imports from Canada faster than from the world.

4. Demographic Profile and Consumer Market

4.1. Population Distribution by Region

Figure 8 and Table A-1 present the geographical distribution of the population in 2001.The five most populous states were Zulia (3.0 million), Miranda (2.3 million), Carabobo (1.9million) states, the Distrito Capital (1.8 million) and the state of Lara (1.6 million). These fivestates accounted for 10.6 million people or 46.15 percent of the total.

Zulia State is located in the extreme northwest of the West & Northwest region and wasthe most populous state in Venezuela with 12.94 percent of the total population in 2001. Thepopulation density of 47.3 per km.2 was a little above the country average.

http://www.statoids.com/uve.html

36

The state has some rich soil and a considerable agricultural potential. Using subterraneanwater sources it produces sugar cane, cacao, maize, yucca, beans and bananas. The relatively highwages in the petroleum industry results in labour shortages in agriculture. Beef cattle areproduced in the south and southeastern part of the state. A dairy industry produces a largeproportion of the national milk supply and dairy products.

The petroleum industry is increasingly important to the state with most production takingplace in Lake Maracaibo. There is a major petrochemical complex in the state. Other economicresources include phosphates, coal and other minerals. It is reported that Zulia generates 20percent of the country’s GDP. This would suggest that in 2003 the GDP per capita in the statewas CAD 7,966.

Miranda State is located on the north coast and contained 10.94 percent of the country’spopulation in 2001. The population density of 293.2 per km.2 was considerably above the countryaverage.

The main crops grown in the state are cacao, fruits, vegetables, coconuts, yucca, cerealsand flowers. Livestock production included poultry, beef and pork. The fishing sector produced awide variety of seafood including tuna, crab, octopus and squid.

Industrial production included metal products, chemical & nutritional products, spirits &gaseous beverages, graphical arts, textiles and footwear.

Carabobo State is located on the north coast and contained 8.38 percent of the country’spopulation. The population density of 415.5 per km.2 was considerably above the countryaverage.

Industry is a major sector of Carabobo's economy. It is characterized by a diversifiedstructure with a predominance of the intermediate metal and mechanics sectors. Thisdiversification is strengthened by strong linkages among all sectors.

There are several industrial complexes in Carabobo. These complexes included areas forservices and utilities supporting the different industrial activities. They also provide incentivesfor new investments.

Other important economic activities in the state include a major port facility, energy,communications, mining, and tourism.

37

Figure 9. Estimated and Forecast Midyear Population.

Venezuela.

Source: U.S. Census Bureau, International Dat Base.

Figure 10. Estimated Population Pyramid, 2006.

Venezuela.

Source: U.S. Census Bureau, International Data Base.

Distrito Capital is located close to, but inland from, the north coast and includes thenational capital, Caracas. It contains 7.97 percent of the country’s population and has thecountry’s highest population density of 4,240.8 per km.2. Caracas is the economic,administrative, educational, communications and financial center of the nation. In addition, it ishost to the legislative and judicial authorities. The Central bank of Venezuela, the stock-marketand the head offices of the major national banks are located here.

Some of the major companies manufacturing foods, furniture and footwear are located inthis state.

Lara State is located in the northwest part of the country, south of the state of Falcon. In2001 it had 6.75 percent of the country’spopulation with a density of 78.6 perkm.2; about three times the nationalaverage.

Agriculture and commercialactivity are the main economic strengthsof the region. Lara is a leader in theproduction of fragmentation handgrenades, sisal, pimentón, onions andsugar cane. It also produces coffee,potatoes, tomatoes, beans, maize, andbananas. The state produces grapeswhich form the basis for a wine industry.Livestock production includes cattle,pigs, goats, sheep, poultry and a dairyindustry producing cheese.

Tourism is an important industrybased on artists, natural beauty and aunique culture.

4.2. Population TrendsA trend line fitted to the country’s

total population data between 1950 and1993 increases at a rate of 3.36 percentper year. After 1993, the growth ratedecreases each year and is expected tocontinue to decrease through 2050reaching 0.34 percent between 2049 to2050 (See Figure 9).

38

Figure 11. Distribution of Households by Size. Venezuela.

Source: National Statistical Offices / Euromonitor

International.

Note: 2006 to 2015 are forecasts.

While the growth rate of the total population has been slowing, there also has been a shiftin where people live. In 1961, 62.51 percent of Venezuelans lived in urban areas; by 1981, 79.95percent lived in urban areas and by 1990 this figure reached 84.11 percent. This trend is expectedto continue.

4.3. Age DistributionThe reduction in the growth rate of the population forms a bulge at the years 5 to 15 in

the 2006 population pyramid (See Figure 10). In 10 years this bulge will move to age groups 15to 25 when they will be setting up their own households. Some Canadian companies may want to focus on this target group and familiarize it with Canadian products.

4.4. Population by OriginThe population of Venezuela originate from a diversity of cultures. Historically, the

colonial era can be described as a time of much mingling among the Spanish, African andindigenous populations. The 1936 law on Immigration and Settlement attracted skilled workersfrom many countries in the mid to late1940s. After WWII Venezuelareceived considerable numbers ofimmigrants from Spain, Italy,Portugal, Germany and the MiddleEast.

4.5. HouseholdsTable A-4 indicates that as the

population and the number ofhouseholds increases, the size ofhouseholds is decreasing. Between1990 and 2005 the number ofhouseholds in Venezuela increasedfrom 3.8 million to 5.8 million whilethe average size of householdsdecreased from 5.13 to 4.56 persons.Euromonitor expects this trend to continue with the number of households reaching 6.95 millionin 2015 with an average size of 4.45 people. See Figure 11.

39

Figure 12. Economically Active Population by Gender. Venezuela.

Source: National Statistical Offices / Euromonitor

International.

Figure 13. Economically Active Population by Industry.

Venezuela.

Source: U.S. Census Bureau, International Data Base.

5. Income and Employment

5.1. Economically Active Population13

Figure 12 indicates that over the period 1990 to 2005: • the economically active

population increased from 7.2million to 12.4 millionrepresenting an increase from37.49 percent to 49.00 percentof the total population;

• the male/female ratioremained fairly constant atabout 68%/32% until 1994;

• after 1994, the proportion ofthe economically activefemale population increased,reaching 41.29 percent in2005.

The U.S. Bureau of Census provides an indication of the industry distribution of theeconomically active population in 1971, 1981 and 1990. Figure 13 indicates:

• the importance of agriculture, forestry and fishing fell due to rural to urban migration;

• Other industries have increasedtheir importance possibly at theexpense of the “unknown”category.

5.2. Employed Population 14

The employed populationincreased from 6.5 million in 1990 to10.6 million in 2005. It is expected thatthis trend will continue, reaching 11.8million by 2010. As with theeconomically active population theproportion of females employed hasbeen steadily increasing and is forecastto continue increasing.

With an estimated 16.9 millionpeople between the ages of 15 and 64, it is expected that 65 percent of the population of workingage are employed in 2006.

40

Figure 14. Employed Population. Venezuela.

Source: International Labour Organization /

Euromonitor.

Figure 15. Indices of Wages. 1997 = 100. Venezuela.

Source: Banco Central de Venezuela.

Http://www.bcv.org.ve/EnglishVersion/c2/index.a

sp?secc=statistinf .

Table A-7 indicates that theunemployment rate for females wasgreater than for males in 12 of the 16years 1990 to 2005. In 2005, theunemployment rate for males was 13.94percent and 16.47 percent for females.This condition is expected to continuethrough 2010.

5.3. Wages The minimum wage is regulated

by the Ministry of Labour based on therecommendation of the TripartiteCommission for the Revision of Minimum Wage consisting of representatives of thegovernment, workers and private sector employers. Venezuela sets different minimum wages forrural and urban workers. Table 12 presents some recent minimum wage settings.

Table 12. Minimum Wages. Venezuela.

Start Date Rural Urban

Monthly Daily Monthly Daily

VEB CAD VEB CAD VEB CAD VEB CAD

May 1, 2004 266,872.32 191.08 8,895.74 6.37 296,524.80 212.31 9,884.20 7.08

Aug 1, 2004 289,111.70 200.35 9,637.00 6.68 321,235.20 222.62 10,707.80 7.42

Feb 1, 2006 426,917.72 228.42 14,230.56 7.61 465,750.00 248.19 15,525.00 8.31

Sources: ILO Data Bases - www.ilo.org .

Pacific Exchange Rate Service.

Figure 15 presents the indices ofgeneral, private sector and governmentsector wages between 2001 - Q1 and 2005- Q4. Exponential trend lines fitted tothese data series increase at the followingrates: the general index (14.44 percent peryear); the private sector index (13.06percent per year) and; the governmentsector Index (18.13 percent per year).

http://www.ilo.org

41

Figure 16. Historical and Forecast Disposable Income at

1990 Prices.

Source: Euromonitor International from national

statistics.

Figure 17. Historica l and Forecast Distribution of Household

Disposable Income. Venezuela.

Source: Euromonitor International from national statistics.

5.4. IncomeDuring the period 2000 to 2005,

the average disposable income ofVenezuelan households increased fromVEB 12,629,883 to VEB 27,076,502;however, inflation greatly eroded thevalue of this income. In constant 1990VEBs (using 1990 prices) the real disposableincome per household decreased -15.92percent from VEB 344,739 in 2000 toVEB 289,868 in 2005. See Figure 16.

Figure 17 presents thedistributional effects of the economicdifficulties that started in 2002 (see Figure2). Between 2001 and 2002, thepercentage of low incomes (between USD500 to USD 10,000) households,increased from 35.88 percent to 53.65 percent and the percentage of households with higherincomes (over USD 10,000) fell from 64.12 percent to 46.35 percent in 2002. By 2005, 64.32percent of households had low incomes and only 35.68 percent had higher incomes.

Euromonitor forecasts thepercentage of low incomehouseholds to rise slowly reaching67.13 percent in 2010 and higherincome households to fall slowly to32.87 percent. This forecast mayhave to be revised in view of therecent increase in trade earningsfrom petroleum exports and recentpolitical shifts in Venezuela. Thesefactors may result in economicbenefits being more widelydistributed than in the past but at theexpense of inefficiencies in theeconomy.

6. Spending on Food andPurchasing PowerDuring the years 2000 to

2003, consumers received and spentincreasing amounts of money butreceived decreasing amounts of goods and services for it. Consumers react to these pressures byreallocating their expenditures. The changes in percentage allocations derived from the statistics

42

for average household expenditures does not clearly portray these adjustments because they donot differentiate between low and high income households. The reactions of these two will bedifferent.

6.1. Consumer ExpendituresAs the value of the VEB fell due to inflation, households with lower incomes followed a

strategy that may have included elements such as: reducing the proportion of expenditures onnon-essentials; increasing expenditures on essentials; purchasing lower cost (and quality )products; producing some items at home (kitchen garden, making own clothes etc.); preparingfood at home rather than buying highly prepared food; taking lunch to work rather than going to arestaurant; car pooling or using public transport rather than using their own automobile.

Higher income households may have had savings and more than one source of incomeand were more able to closely maintain their pattern of expenditures.

Table 13 presents the average allocation of household expenditures. In 1990 and theperiod 2000 to 2005 the ratio of expenditures, (agri-food & beverage products vs non-agri-food

Table 13. Allocation of Household Expenditures by Product Group. Venezuela.

GOODS & SERVICES PERCENT OF TOTAL EXPENDITURES

1990

(%)

2000

(%)

2001

(%)

2002

(%)

2003

(%)

2004

(%)

2005

(%)

AGRI-FOOD & BEVERAGE PRODUCTS

Bread & Cereals 5.07 2.78 2.84 3.03 2.79 2.72 2.70

Meat 12.85 9.52 9.46 9.42 9.45 9.28 9.51

Fish & Seafood 2.48 1.66 1.65 1.78 1.78 1.76 1.79

Milk Cheese &Eggs

5.44 4.09 3.94 4.03 3.87 3.72 3.92

Oils & Fats 2.45 1.41 1.44 1.56 1.44 1.41 1.41

Fruit 2.41 1.86 1.87 1.78 1.77 1.74 1.81

Vegetables 4.64 2.78 2.78 2.80 2.77 2.72 2.80

Sugar &Confectionery

2.31 1.35 1.35 1.41 1.31 1.27 1.28

Other Food 0.85 0.45 0.42 0.42 0.42 0.41 0.41

Coffee, Tea &Cocoa

1.62 1.18 1.25 1.30 1.25 1.22 1.21

GOODS & SERVICES PERCENT OF TOTAL EXPENDITURES

1990

(%)

2000

(%)

2001

(%)

2002

(%)

2003

(%)

2004

(%)

2005

(%)

43

Mineral Water,Soft Drinks, Fruitand VegetableJuices

1.19 2.02 1.85 1.88 1.84 1.79 1.77

Spirits 1.51 1.03 1.02 1.05 1.08 1.19 1.18

Wine 0.57 0.35 0.38 0.40 0.40 0.45 0.46

Beer 0.84 0.51 0.53 0.52 0.53 0.56 0.58

Tobacco 1.67 1.21 1.20 1.20 1.21 1.31 1.31

All Agri-food andBeverages

45.90 32.19 31.96 32.58 31.91 31.54 32.15

NON AGRI-FOOD & BEVERAGE PRODUCTS AND SERVICES

Clothing &Footwear

8.99 2.38 2.04 2.04 2.09 3.34 3.37

Housing 15.36 14.70 15.41 15.14 15.18 15.14 14.90

Household Goods& Services

3.02 2.58 2.56 2.58 2.60 2.58 2.55

Health Goods &Medical Services

1.78 2.36 2.28 2.32 2.28 2.27 2.26

Transport 2.41 4.99 4.98 5.08 5.07 4.91 4.90

Communications 0.18 0.63 0.63 0.65 0.64 0.64 0.64

Leisure &Recreation

3.33 3.44 3.36 3.42 3.46 3.37 3.29

Education 1.02 1.51 1.47 1.42 1.40 1.39 1.41

Hotels and Catering 9.30 14.04 13.12 13.10 13.30 13.39 13.12

MiscellaneousGoods & Services

8.73 21.19 22.18 21.68 22.07 21.42 21.40

Non Agri-food &Beverages

54.10 67.81 68.04 67.42 68.09 68.46 67.85

Source: Calculated from VEB data at current prices, from National Statistical Office /Euromonitor International.

44

products & services) fell considerably after 1990, ranging from a high of 46% : 54% in 1990 to alow of 32 %/68% in 2004. As the economic difficulties became increasingly severe, theVenezuelan consumer sought out less expensive sources of all purchases, encouraging the growthof private labels. Consumers were perhaps more successful in finding cheaper sources of foodand beverages rather than actually decreasing the amount consumed.

Non-Agri-food & Beverage Products and Services: In 1990, these expendituresconstituted 54.10 percent of total expenditures and reached a peak of 68.46 percent in 2004. Themost important category is “Miscellaneous Goods & Services” (21.40 percent in 2005) whichincludes “Cosmetics & Toiletries”. In Venezuelan society, personal grooming is highly valued.As the economic recession deepened, the value of personal grooming increased and became an“escape valve” for people to counter the difficult times and increase their self-esteem.Venezuelans enjoy feeling clean and smelling nice. This characteristic is a contributing factorexplaining the increasing importance of non-food & beverage products and services in theexpenditure patterns as the recession worsened.

Meat: Meat ranked as the number one agri-food & beverage category in 1990 andremained number one through 2005. In 1990,Venezuelan consumers spent a little less than 13percent of total expenditures on meat but by 2005 this was reduced to less than 10 percent. Thiscan be interpreted as: 1) a reduction in the quantity of meat consumed; 2) a switch to cheaperforms of meat (from frozen or prepared to fresh etc.) and; 3) a switch to cheaper sources of meat(super market to local butcher shop).

Milk, Cheese & Eggs: This product group ranked as the number two agri-food &beverage category in 1990 and remained number two through 2005. In 1990, Venezuelanconsumers spent over 5 percent of total expenditures on milk, cheese & eggs. By 2005 this wasreduced to less than 4 percent. The price controls imposed by the government are resulting insome economic disruptions in this group. While the low price of milk is making it moreaffordable for lower income consumers, it encouraged dairies to divert milk to the production ofcheese which became more profitable. Sometimes there was a shortage of milk. So while milk ismore affordable, consumption dipped slightly.

Consumption of fat-free UHT milk increased by 8 percent in 2005. This product isconsidered to be a luxury purchased by health conscious high income consumers.

Vegetables: Vegetables ranked fourth in agri-food & beverage expenditures in 1990 andby 2005 it rose to third place. Even though Vegetables rose in ranking, the percentage ofconsumer expenditure spent on this category decreased from almost 5 percent in 1990 to lessthan 3 percent in 2005. Vegetables are available in both fresh and frozen format but fresh is themost popular.

45

Figure 18. Historical and Forecast Indices of Consumer

Prices and Food & Non-Alcoholic Beverages

Prices. 1995 = 100. Venezuela.

Sources: Euromonitor International from IMF,

International Financial Statistics.

World Economic Outlook /UN/ National

Statistics.

Figure 19. Historical Price Indices for the 2005 Top

Five Expenditure Categories. 1995 = 100.

Venezuela.

Source: Euromonitor International from IMF and

World Economic Outlook.

Bread & Cereals: This categoryranked third in expenditures on agri-food &beverages in 1990 but fell to fourth place by2005. Artisanal/unpackaged bread was animportant part of the market and the priceswere normally lower than industrially bakedbread. The artisanal bakeries were undersevere economic pressure from the pricecontrol policy of the government and manywere finding it difficult to continue. Whilethe government kept the price of breadartificially low since 2003, wheat was largelyimported and the open market priceincreased over the years. In recent years,middle and upper income consumersincreased their purchases of packaged breadfrom industrial bakeries at the expense ofartisanal bakeries. At the same time thegovernment was promoting the use of cornflour for the production of arepas and other home-made products.

6.2. Price InflationConsumer Goods & Services:

As measured by the index of consumer prices, Venezuela had very high rates of inflationrelative to other countries over the period 1990 to 2005. Figure 18 and Table A-9 indicate thatthe year-on-year inflation rate ranged from 12.53 percent per year (2001/2000) to 99.88 percentper year (1996/1995). An exponential trend line fitted to the price index (1990 to 2005) increasesat a rate of 37.57 percent per year.

Euromonitor forecasts the inflation rateto continue to be high through 2010, rangingfrom 4.50 percent (2006/2005) to 18.08 percent(2007/2006). An exponential trend line fitted tothe forecast index numbers (2005 to 2010)increases at a rate of 12.12 percent per year.

Figure 19 presents the price indexes ofthe top five expenditure categories in 2005.

Food and Non-alcoholic Beverages:The average household spent the

equivalent of CAD 4,768 on food & non-alcoholic beverages in 2005 placing thiscategory in first place in 2005. Its year-on-yearprice inflation ranged from 2.70 percent

46

(2004/2003) to 90.46 percent (1996/1995). See Figure 19 and Table A-9. An exponential trendline fitted to the price index from 1990 to 2005 increases at a rate of 35.13 percent per year, just alittle slower than for consumer goods & services as a whole.

Euromonitor forecasts the inflation rate of food and non-alcoholic beverage prices toremain high through 2010 but lower than for consumer goods & services as a whole. Anexponential trend line fitted to the forecast index from 2005 to 2010 increases at a rate of 11.03percent per year.

Miscellaneous Goods & Services: In 2005, the average household spent the equivalentof CAD 3,566 on products in this category. Year on year inflation ranged from 5.44 percent(1999 / 1998) and 149.47 percent (1996 / 1995). An exponential trend line fitted to the forecastprice index between 1990 and 2005 increases at a rate of 45.18 percent per year.

Housing: In 2005, the average household spent the equivalent of CAD 2,483 on thiscategory. Year-on-year inflation ranged from a low of 2.88 percent (1998 / 1997) to a high of95.78 percent (1996 / 1995). An exponential trend line fitted to the price index from 1990 to2005, increases at a rate of 39.57 percent per year.

Hotels & Catering: In 2005, the average household spent the equivalent of CAD 2,186on products and services in this category. Year-on-year inflation ranged from 3.05 percent (2001/ 2000) and 99.49 percent (1997 / 1996). An exponential trend line fitted to the price indexbetween 1990 and 2005 increases at a rate of 39.43 percent per year.

Transport: In 2005, the average household spent the equivalent of CAD 816 on productsand services in this category. Year-on-year inflation ranged from 5.50 percent (2000 / 1999) and142.54 percent (1996 to 1995). An exponential trend line fitted to the price index between 1990and 2005 increases at a rate of 40.84 percent per year.

7. Consumer Trends 15

The rate of change in the volume of a food products sold at retail is influenced by: 1) six factors affecting demand:

• the rate of population increase; • the rate of change in the price of the product (inflation rate); • the rate of change in the price of substitute products; • the rate of change in the price of complementary products; • the rate of change in consumers’ income and; • changes in tastes and preferences.

2) one factor affecting supply:• scarcity caused by governmental socio-economic policies.

In Venezuela two factors affecting demand have been particularly important indetermining trends in food purchases; 1) high rates of inflation causing real income to fall and 2)changes in tastes & preferences due to increasing urbanization.

47

The data available for Venezuela will be analyzed in section 7.2 to separate the effects ofpopulation increase from the effects of the “other” six factors.

7.1. Venezuelan Purchasing PatternsIn response to falling real incomes, consumers made changes to their purchasing patterns

in many ways. Generally, they: • purchased less of those products that experienced rapid price increases; • purchased more products that were cheap close substitutes for more expensive

products; • purchased less of those products considered luxuries or non-basic products; • maintained the purchase level of highly desirable or essential products.

While changes were taking place in response to falling real incomes, the increasingurbanization of the population resulted in changes in the overall tastes and preferences of thepopulation. Many people who used to eat breakfast were, by 2004, taking only a cup of coffeebefore leaving for work. “Fast food” on the streets may provide a mid-morning snack for manyworkers. In the past, lunch was the most important meal. It was as much a social occasionallowing family members to get together. In more recent years, particularly in urban areas it isnot practical for people to return home from work at lunch time. This pattern is particularlyprevalent among suburban dwellers who commute long distances. They buy their lunch or bringit from home. For many Venezuelans, dinner has become the social meal when greater quantitiesare eaten. Others tend to eat light dinners for several reasons: to care for their figure; there is notmuch left to eat on a tight budget; they are too tired to prepare a meal when both members of acouple work.

Venezuelans like meat but price increases curtailed its purchase or preferred types werereplaced by cheaper meats. Other changes are being made in the purchasing patterns ofVenezuelans. Those who used to have three meals a day now have two; those who use to havesoup as a first course and a second dry dish are now taking just one; people who prefer meatsauce with their pasta now have little or no meat sauce. Venezuelans are eating more snack foodbetween smaller and fewer meals.

In the following discussion of food sectors, the total rate of changes in purchases isdivided into that portion attributed to population growth and that portion attributable to the“other” six factors (five affecting demand and one affecting supply).16

In recent years the Venezuelan government attempted to control inflation byimplementing a government food distribution channel known as “Mercal” which sells foodproducts below market prices. This policy developed into a mix of price caps, fixed exchangerates and fixed interest rates and in February 1993 price control was established. These policiesare causing shortages and other imbalances in the economy. As long as they remain in effect, it isdifficult to forecast future food purchasing patterns in Venezuela. The forecasts presented here are those of Euromonitor.

48

Figure 20. Historic and Forecast Per Capita Volume of

Fresh Food Sold at Retail. Venezuela.

Source: Euromonitor from trade statistics / national

statistics.

7.2. Fresh FoodsBetween 1998 and 2005, the sales of fresh food increased at a rate of 2.72 percent per

year reaching 7,483 thousand mt. in 2005. Of this rate of increase, 1.92 percent is accounted forby population growth and 0.78 percent per year by “other” factors. Sales per capita reached283.40 kg. in 2005.

Venezuelans prefer fresh food over other options and since fresh food has little valueadded it remained cheaper than similar processed and/or packaged food.

Euromonitor forecasts the population of Venezuela to increase between 2005 and 2010, ata rate of 1.68 percent per year while the sales of fresh food will increase at a rate of 2.46 percentper year reaching 8,444 thousand mt. in 2010. “Other” factors are estimated to contribute 0.77percent per year to the total rate of increase. See Table 14 for forecasts of individual freshproducts. Forecasts are subject to error due to governmental socio-economic policies.

Within the fresh food category, Venezuelans adjusted the mix of food purchased. Freshmeat sales increased between 1998 and 2005 at a rate of 5.56 percent per year, reaching 1,289thousand mt. in 2005. Of this rate of increase, 1.92 percent was accounted for by populationgrowth and an estimate 3.57 percent per year by “other” factors. Sales per capita reached 48.81kg. by 2005 up from 28.15 kg. in 1999.

Between 1998 and 2005, the sales offresh vegetables increased at a rate of 3.74percent per year, reaching 1,426 thousandmt. in 2005. Of this rate of increase, 1.92percent is explained by population growthand 1.79 percent per year by “other” factors.Sales per capita reached 54.01 kg. by 2005up from 42.55 kg. in 2001.

Between 1998 and 2005, the sales offresh starchy roots increased at a rate of1.11 percent per year, reaching 925 thousandmt. in 2005. This rate of increase is theresult of a 1.92 percent per year populationgrowth and a -0.79 percent per year negativeinfluence of “other” factors. In 2005, the percapita sales of these products reached 35.03kg. down from 37.47 kg. in 1999.

Between 1998 and 2005, the sales of fresh fruit increased at a rate of 2.00 percent peryear, reaching 2,191 thousand mt. in 2005. Of this rate of increase 1.92 percent is explained bypopulation growth and 0.08 percent by “other” factors. The influence of “other” factors is smallbut in economic hard times, consumers tend to replace expensive processed/preserved fruit withfresh. Sales per capita reached 82.99 kg. by 2005 up from 81.10 kg. in 1999.

49

Between 1998 and 2005, the sales of sugar & sweeteners increased at a rate of2.10 percent per year, reaching 1,004 thousand mt. in 2005. Of this rate of increase 1.92 percentper year is explained by population growth and 0.18 percent per year by “other” factors. Theinfluences of “other” factors are small and may be the result of increased home processing offood, requiring additional complementary products. Sales per capita reached 38.04 kg. in 2005 upfrom 37.43 kg. in 1999.

Table 14. Forecast Sales of Fresh Food at Retail and Rates ofChange. 2005 -2010. Venezuela.

Product Rate ofIncrease

(% per year)*

Rate of IncreaseAttributed to

“Other”Factors**

(% per year)

2010 Sales

(‘000 mt)

Fresh Food (Total) 2.46 0.77 8,444

Meat 3.63 1.92 1,540

Vegetables 2.95 1.25 1,652

Starchy roots 2.62 0.92 1,054

Fruit 2.01 0.32 2,414

Sugar & sweeteners 1.51 -0.17 1,082

Source: Euromonitor from trade sources / national statistics.

* Calculated from Euromonitor data.

** Factors other than population growth.

Note: Population growth is expected to be 1.68% per year.

7.3. Packaged and Processed Foods

Frozen Foods: Between 1998 and 2005, the sales of frozen food decreased at a rate of -5.70 percent per

year reaching 4.88 thousand mt. in 2005. This negative rate of change occurred in spite of thefact that Venezuela's population increased at a rate of 1.92 percent per year. The negativeinfluence of "other" factors is estimated at a very significant at -7.48 percent per year. Sales percapita reached 185 gm. in 2005 down from 312 gm. in 1998.

As prices increased and real incomes fell, consumers reduced their purchases of frozenfood and bought lower priced substitutes, such as fresh food. In addition to income and price

50

Figure 21. Historic and Forecast Per Capita

Volume of Frozen/Processed Food Sold

at Retail. Venezuela.

Source: Euromonitor from trade sources /

national statistics.

incentives, some Venezuelan consumers considerfresh products to be healthier and better tastingthan processed or frozen foods.

Between 2005 and 2010, Euromonitorforecasts the sales of frozen food to increase at arate of 1.95 percent per year reaching 5.39thousand mt. per year. It is also forecast thatduring this time, population will increase at a rateof 1.68 percent per year and “other” factors willcontribute 0.27 percent per year to the rate ofsales. Per capita sales of frozen food is forecast toreach 188 gm. in 2010 compared to 185 gm. in2005. Forecasts are subject to error due togovernmental socio-economic policies.

Within the frozen food sector, between1998 and 2005 Venezuelans reduced theirpurchases of frozen red meat at a rate of -7.92 percent per year reaching 1.48 thousand mt. in2005. This significant negative rate of change occurred in spite of the fact that population wasgrowing at a rate of 1.92 percent per year. The negative influence of "other" factors was verysignificant at -9.65 percent per year. There was a dramatic shift from frozen red meat to fresh.The per capita sales of frozen red meat reached 56 gm. in 2005 compared to 112 gm. in 1998.

Between 1998 and 2005, Venezuelans reduced their purchase of frozen poultry at a rateof -3.90 percent per year, reaching 2.88 thousand mt. by 2005. This negative rate of changeoccurred even though the population was increasing at a rate of 1.92 percent per year. Thenegative influence of "other" factors is estimated to have been -5.71 percent per year. Althoughfrozen poultry meat sales was greater than frozen red meat because it was cheaper, sales fellsignificantly because it was more expensive than fresh poultry meat. The per capita sales offrozen poultry reached 109 gm. in 2005 compared to 165 gm. in 1998.

Between 1998 and 2005, Venezuelans reduced their purchase of frozen vegetables at arate of -11.84 percent per year, reaching 0.14 thousand mt. by 2005. This negative rate of changeoccurred even though the population was increasing at a rate of 1.92 percent per year. Thenegative influence of "other" factors is estimated to have been -13.50 percent per year.Venezuelan consumers clearly replaced frozen vegetables with cheaper fresh vegetables or theproduce of kitchen gardens. Retail sales per capita reached 5 gm. by 2005 compared to almost 15gm. in 1998.

51


Canned/Preserved Food Sold at Retail.

Venezuela.

Source: Euromonitor from trade sources / national

statistics.

Canned / Preserved Food: Between 1998 and 2005, the sales of

canned / preserved food decreased at a rate of-0.18 percent per year reaching 108.06thousand mt. in 2005. This negative rate ofchange occurred even though Venezuela’spopulation was increasing at a rate of 1.92percent per year. The negative influence of“other” factors is estimated to have been -2.06percent per year. Sales per capita reached 4.09kg. by 2005 compared to 4.56 kg. in 1998.

Sales actually increased from 1998reaching a peak in 2001. This was due toincreases in the sales of canned / preserved fish& seafood and canned / preserved tomatoes.

Euromonitor forecasts the sales ofcanned / preserved food to increase between2005 and 2010 at a rate of 1.54 percent per year, reaching 116.34 thousand mt. by 2010. Also,over this time period, the population of Venezuela is forecast to increase at 1.68 percent per year.It is estimated that “other” factors will have a small negative influence on sales( -0.14 percent peryear). Sales per capita are forecast to reach 4.05 kg. in 2010. Forecasts are subject to error due togovernmental socio-economic policies.

Between 2001 and 2005 the sales of canned / preserved fish and seafood decreased at arate of -3.06 percent per year falling from 75.65 thousand mt. in 2001 to 65.16 thousand mt. in2005. This negative rate of change occurred even though Venezuela’s population was increasingat a rate of 1.85 percent per year. The negative influence of “other” factors was estimated at -4.82percent. Sales per capita reached 2.47 kg. by 2005 compared to 3.09 kg. in 2001.

During the period 2001 to 2005, the retail sales of canned / preserved tomatoesdecreased at an annual rate of -11.28 percent reaching 15.44 thousand mt. by 2005. Whilepopulation was growing at a rate of 1.85 percent per year during this period, “other” factorsexerted a strong negative -12.89 percent per year influence. Not only did these products becomeless attractive because of falling real income, Venezuelans have a preference for lower pricedfresh tomatoes. Sales per capita reached 585 gm. by 2005 compared to 1.07 kg. in 2001.

52


Volume of Chilled Food Sold at Retail.

Venezuela.

Source: Euromonitor from trade statistics /


Figure 24. Historic and Forecast Per Capita Volume

of Dried Food Sold at Retail. Venezuela.


statistics.

Chilled Food: Between 1998 and 2005, the sales of

chilled processed food declined at a rate of -2.99percent per year, reaching 108.75 thousand mt. in2005. This decline occurred even thoughVenezuela’s population was increasing at a rate of1.92 percent per year. The negative influences of“other” factors is estimated at -4.82 percent peryear. Sales per capita reached 4.12 kg. by 2005compared to 6.01 kg. in 1998.

Euromonitor forecasts the sales of chilledfood to increase slowly between 2005 and 2010 ata rate of 0.94 percent per year, reaching 113.99thousand mt. by 2010. Also, over this time period,the population of Venezuela is forecast to increaseat 1.68 percent per year. It is estimated that “other”factors will have a small negative influence on sales (-0.73 percent per year). Sales per capita areforecast to reach 3.97 kg. in 2010. Forecasts are subject to error due to governmental socio-economic policies.

Chilled processed meat contributed 98.96 percent of retail sales of this category in 2005and is consumed primarily by upper-middle and upper income consumers which represent lessthan 15 percent of the Venezuelan population. Falling real incomes have resulted in a drop insales at a rate of -2.96 percent per year and factors other than population growth had an estimated-4.79 percent per year effect. Per capita sales fell from 5.94 kg. in 1998 to 4.08 kg. in 2005.

Dried Foods: Between 1998 and 2005, the sales of

dried foods declined at a rate of -0.29 percentper year reaching 594.72 thousand mt. in 2005.This negative rate of change occurred eventhough the population of Venezuela wasincreasing at a rate of 1.92 percent per year. Thenegative effect of “other” factors are estimatedat -2.17 percent per year. Sales per capitareached 22.52 kg. by 2005 compared to 26.62kg. in 1998.

Euromonitor forecasts the sales of driedfood to increase between 2005 and 2010 at arate of 2.01 percent per year, reaching 659.23thousand mt. by 2010. Also, over this timeperiod, the population of Venezuela is forecast to increase at 1.68 percent per year. It is estimatedthat “other” factors will have a small positive influence on sales (0.32 percent per year). Sales per

53


Oils and Fats Sold at Retail. Venezuela.


statistics.

capita are forecast to reach 22.95 kg. in 2010. Forecasts are subject to error due to governmentalsocio-economic policies.

Rice is a major component of this category, comprising 55.28 percent of total sales in2005. Between 1998 and 2005, the retail sales of rice increased at a rate of 1.76 percent per year,reaching 328.77 thousand mt. in 2005. While population was increasing at 1.92 percent per year,“other” factors had small negative effect on the sales of rice; estimated at -0.16 percent per year.

The price of rice is now controlled at below the market rate. This maintained the totalretail sales at a fairly constant level but the falling real incomes and perhaps some shortagesresulted in slowly falling sales per capita. In 2005, the sales per capita was 12.45 kg. compared to13.35 kg. in 1998.

Dried pasta is also a major component of this sector, making up 43.43 percent of thetotal in 2005. Between 1998 and 2005, the sales of dried pasta declined at a rate of -2.45 percentper year, reaching 258.26 thousand mt. in 2005, while the population was increasing at 1.92percent per year. The negative effects of “other” factors was significant at an estimated -4.29percent per year. Pasta is a popular food in Venezuela because it is inexpensive and easy toprepare in a variety of ways. The wheat necessary for producing pasta is imported and withcontrolled prices and exchange rates, the drop in per capita consumption may be due to shortagesrather than unfettered purchasing decisions. Sales per capita reached 9.78 kg. by 2005 comparedto 12.85 kg. in 1998.

Oils & Fats: Between 1998 and 2005, the retail

sales of oils & fats were variable but the trendwas increasing slowly at a rate of 0.20 percentper year reaching 313.31 thousand mt. by2005. This small rate of increase occurredwhile the population of Venezuela wasincreasing at a rate of 1.92 percent per year.The estimated influence of “other” factors is-1.69 percent per year. Sales per person reached 11.87 kg. by 2005 compared to 12.80kg. in 1998. Vegetable & seed oil, margarineand spreadable oils & fats are the mainproducts in this sector. Price controls since2003 combined with adverse exchange rates,have made it difficult for companies to importthese products.

Euromonitor forecasts the sales of oils & fats to increase between 2005 and 2010 at a rateof 2.87 percent per year, reaching 361.20 thousand mt. by 2010. Over this time period, thepopulation of Venezuela is forecast to increase at 1.68 percent per year. It is estimated that“other” factors will have a positive influence on sales (1.17 percent per year). Sales per capita

54


Volume of Dairy Products Sold at Retail.

Venezuela.



are forecast to reach 12.58 kg. in 2010. Forecasts are subject to error due to governmental socio-economic policies.

Between 1998 and 2005, sales of vegetable & seed oils decreased at a rate of -1.10percent per year reaching 167.82 thousand mt. in 2005. With population increasing at 1.92percent per year, “other” factors had an estimated negative influence on sales of -2.96 percent peryear. Per capita sales reached 6.36 kg. in 2005 compared to 7.42 kg. in 1998.

The retail sales of margarine17 increased at a rate of 1.94 percent per year between 1998and 2005 reaching 78.01 thousand mt. in 2005. While population increased at a rate of 1.92percent, “other” factors had a very small (0.02 percent per year) influence on the sales ofmargarine. Sales per capita reached 2.96 kg. in 2005 compared to 2.95 kg. in 1998.

Between 1998 and 2005, the retail sales of spreadable oils & fats18 increased at a rate of1.28 percent per year reaching 58.89 thousand mt. While population increased at a rate of 1.92percent, “other” factors had a small negative effect estimated at -0.63 percent per year. Sales percapita reached 2.23 kg. in 2005 compared to 2.18 kg. in 1998.

Dairy Products Excluding Milk and Ice Cream: This sector was hit hard by the economic

difficulties; many of them caused by price andexchange controls. Economic conditions haverestricted investment in domestic dairyproduction resulting in increased imports of milkand milk products such as cheese. Thisdependence on imports and the falling value ofthe VEB in the parallel market, resulted in highprices and consumers limiting their purchases.Price controls imposed in 2003 slowed thedecline in purchases but the long term recovery ofthe industry will require a more stable economyand freer markets. By 2005 more affluentVenezuelans were able to purchase moreexpensive food products resulting in more milkbeing diverted to the production of processedproducts such as cheese.

Between 1998 and 2005, the sales of dairy products excluding, milk and ice cream,decreased at a rate of -0.76 percent per year reaching 109.28 thousand mt. by 2005. Whilepopulation was growing at the rate of 1.92 percent per year, other factors were having a verynegative -2.63 percent per year influence on sales. Sales per capita reached 4.14 kg. by 2005compared to 4.73 kg. in 1998.

55


Milk & Ice Cream Sold at Retail. Venezuela.


statistics.

Euromonitor forecasts the sales of dairy products excluding milk and ice cream toincrease between 2005 and 2010 at a rate of 3.35 percent per year, reaching 129.39 thousand mt.by 2010. Over this time period, the population of Venezuela is forecast to increase at 1.68percent per year. While population is forecast to increase at a rate of 1.68 percent, it is estimatedthat “other” factors will have a positive influence on sales (1.64 percent per year). Sales percapita are forecast to reach 4.51 kg. in 2010. Forecasts are subject to error due to governmentalsocio-economic policies.

Cheese is a major component of this sector making up 71.53 percent of the total retailsales of dairy products excluding milk and ice cream in 2005. Between 1998 and 2005, the salesof cheese declined at a rate of -0.86 percent per year reaching 78.17 thousand mt. in 2005. Whilepopulation increased at a rate of 1.92 percent, the negative effect of “other” factors is estimatedto have been -2.73 percent per year. Sales per capita reached 2.96 kg. by 2005compared to 3.29kg. in 1998.

Yogurt is also a significant component of this sector making up 28.04 percent of the totaldairy products excluding milk and ice cream, in 2005. Between 1998 and 2005, the sales ofyogurt declined at a rate of -0.59 percent per year reaching 30.64 thousand mt. in 2005. Whilepopulation increased at a rate of 1.92 percent per year, the negative effect of “other” factors isestimated to have been -2.46 percent per year.

Milk and Ice Cream:Between 1998 and 2005, the retail

sales of milk and ice cream declined at a rateof -4.92 percent per year reaching 218,160thousand litres in 2005. The estimated effect offactors other than population growth is -6.71percent per year. Per capita sales reached 8.26litres in 2005, down from 12.9 litres in 1998.

Euromonitor forecasts the sales of milkand ice cream to increase between 2005 and2010 at a rate of 0.25 percent per year,reaching 220,780 thousand litres by 2010. While population is forecast to increase at arate of 1.68 percent, it is estimated that “other”factors will have a negative influence on salesof -1.41 percent per year. Sales per capita are forecast to reach 7.69 litres in 2010. Forecasts aresubject to error due to governmental socio-economic policies.

Milk is the largest component of this sector making up 89.51 percent of the total retailsales in 2005. Between 1998 and 2005, the retail sales of milk declined at a rate of -5.13 percentper year reaching 195,280 thousand litres in 2005. While population increased at a rate of 1.92percent, “other” factors had a negative -6.92 percent per year effect on sales. Sales per capitareached 7.40 litres in 2005, down from 11.76 litres in 1998.

56


of Sauces, Dressings & Condiments Sold at

Retail. Venezuela.


statistics.

Sauces, Dressings & Condiments19:The important products in this sector are, ketchup, regular (as opposed to low fat)

mayonnaise, tomato pastes & purees and pickled products.

Between 1998 and 2005, the retail sales volume of sauces, dressings & condimentsdecreased at a rate of -1.67 percent per year, reaching 87.72 thousand mt. in 2005. Whilepopulation grew at a rate of 1.92 percent, the influence of “other” factors was -3.52 percent peryear. In 2005, the per capita sales of sauces dressings & condiments was 3.32 kg compared to4.09 kg. in 1998. During the difficult economic years, the sales of sauces, dressings &condiments were influenced by price and some products were replaced by more affordable home-made versions.

Euromonitor forecasts the sales of sauces, dressings and condiments to increasebetween 2005 and 2010 at a rate of 2.08 percent per year, reaching 97.2 thousand mt. by 2010. While population is forecast to increase at a rate of 1.68 percent, it is estimated that “other”factors will have a positive 0.39 percent per year influence on the volume of sales. Sales percapita are forecast to reach 3.38 kg. in 2010. Forecasts are subject to error due to governmentalsocio-economic policies.

In 2005, ketchup contributed 45.29 percent of the total sales of sauces, dressings &condiments. Between 2000 and 2005, the sales of ketchup declined at a rate of -1.61 percent peryear reaching 39.73 thousand mt. in 2005. While population grew at a rate of 1.87 percent theinfluence of “other” factors was a negative -3.41 percent per year. In 2005, the sales per capita ofketchup was 1.49 kg. compared to 1.70 kg. in 2000.

In 2005, regular mayonnaisecontributed 15.83 percent of the total sales ofsauces, dressings & condiments. Between2000 and 2005, the sales of regularmayonnaise declined at a rate of -2.31 percentper year reaching 13.89 thousand mt. in 2005.While population grew at a rate of 1.87percent per year, the influence on sales of“other” factors was -4.10 percent per year.The sales per capita reached 521 gm. in 2005compared to 620 gm. in 2000.

In 2005, tomato pastes & pureescontributed 9.68 percent of the total sales ofsauces, dressings & condiments. Between2000 and 2005, the sales of tomato pastes &purees declined at a rate of -4.39 percent peryear reaching 8.49 thousand mt. in 2005. While population was growing at the rate of 1.87percent, the influence of “other”factors on sales was -6.14 percent per year. Sales per capitareached 319 gm. in 2005 compared to 435 gm. in 2000.

57


of Snacks & M eal Replacements Sold at

Retail. Venezuela.



In 2005, pickled products contributed 5.86 percent of the total sales of sauces, dressings& condiments. Between 2000 and 2005, the sales of pickled products declined at a rate of -15.79percent per year reaching 5.14 thousand mt. in 2005. While population grew at the rate of 1.87percent, the influence of “other” factors on sales -17.34 percent per year. Sales per capita was193 gm. in 2005 compared to 454 gm. in 2000.

Snacks & Meal Replacements: Sweet and savoury snacks (fruit snacks,

chips/crisps, extruded snacks, tortilla/corn chips,popcorn, pretzels, nuts, etc.) are not consideredessential items and are not subject to pricecontrols. The economic difficulties of 2003 had asignificant negative effect on the sales of theseproducts, particularly extruded snacks. After2003 the economic turmoil began to settle downand even though many of these products were notsubject to price control their prices remained lowrelative to other foods and some consumers arechoosing to consume more sweet and savourysnacks and reduce traditional food consumption.

Euromonitor forecasts the sales of snacks& meal replacements to increase between 2005and 2010 at a rate of 4.23 percent per year,reaching 36.86 thousand mt. by 2010. While population is forecast to increase at a rate of 1.68percent, it is estimated that “other” factors will have a positive 2.50 percent per year influence onthe volume of sales. Sales per capita are forecast to reach 1.28 kg. in 2010. Forecasts are subjectto error due to governmental socio-economic policies.

The major components of this sector will be analyzed in three time periods:1) 1998 to 2002 when sales increased at a rate of 14.14 percent per year reaching 31.91

thousand mt. in 2002. During this period, population increased at a rate of 1.98percent per year. “other” factors had a large positive influence of 11.92 percent peryear. In 2002, per capita sales reached 1.28 kg. compared to 816 gm. in 1998;

2) 2002 and 2003 when sales fell -21.59 percent to 25.02 thousand mt. whilepopulation increased 1.87 percent and “other” factors contributed a significantnegative influence of -23.03 percent. In 2003, per capita sales fell to 983 gm.and;

3) 2003 to 2005 when sales increased at a rate of 9.59 percent per year reaching30.05 thousand mt. while population increased 1.81 percent per year and“other” factors contributed 7.64 percent per year to sales growth. Per capitasales reached 1.14 kg. by 2005.

The largest component of this sector is extruded snacks which contributed 49.48 percentof the total volume sales volume in 2005. Between 1998 and 2002, the sales of extruded snacks

58

increased at a rate of 17.10 percent per year reaching 14.53 thousand mt. in 2002. Populationgrowth contributed 1.98 percent per year to the increase in sales and “other” factors contributed14.83 percent per year. Sales per capita were 582 gm. in 2002 compared to 326 gm. in 1998.

In 2003, sales of extruded snacks fell -30.83 percent to 10.05 thousand mt. Whilepopulation grew 1.87 percent per year, its positive effect of sales was offset by a very negative-32.10 percent influence of “other” factors. Per capita sales in 2003 was 395 gm.

Between 2003 and 2005, sales of extruded snacks increased at a rate of 21.64 percentreaching 14.87 thousand mt. Population growth contributed 1.81 percent per year to this growthof sales while “other” factors contributed 19.48 percent per year. Per capita sales in 2005 was563 gm.

Other sweet & savoury snacks (fruit snacks, tortilla/corn chips, popcorn, pretzels andothers) made up 24.86 percent of total snacks & meal replacements in 2005. Between 1998 and2002, the sales of other sweet & savoury snacks increased at a rate of 11.50 percent per yearreaching 9.01 thousand mt. in 2002. Population growth contributed 1.98 percent per year to theincrease in sales and “other” factors contributed 9.34 percent per year. Per capita sales was 361gm. in 2002 compared to 260 gm. in 1998.

In 2003, sales of other sweet & savoury snacks fell to 7.43 thousand mt. which was down-17.54 percent from the 2002 level. The positive effect of a population growth of 1.87 percentwas offset by a very negative -19.05 percent influence of “other” factors. Per capita sales was 292gm. in 2003.

Between 2003 and 2005, sales increased at a rate of only 0.27 percent per year reaching7.47 thousand mt. Population growth contributed 1.81 percent per year to this growth while“other” factors contributed an offsetting negative influence of -1.51 percent per year. Per capitasales in 2005 was 283 gm.

Chips / crisps made up 14.01 percent of total snacks & meal replacements in 2005.Between 1998 and 2002, the sales of chips / crisps increased at a rate of 13.30 percent per yearreaching 3.78 thousand mt. in 2002. Population growth contributed 1.98 percent per year to theincrease in sales and “other” factors contributed 11.10 percent per year. Sales per capita were151 gm. in 2002 compared to 100 gm. in 1998.

In 2003, sales of chips / crisps fell -10.05 percent to 3.40 thousand mt. Population growthcontributed 1.87 percent to the change in sales but was offset by a very negative -11.70 percentinfluence of “other” factors. Sales per capita were 134 gm. in 2003.

Between 2003 and 2005, sales increased at a rate of only 11.28 percent per year reaching4.21 thousand mt. Population growth contributed 1.81 percent per year to this rate of increasewhile “other” factors contributed 9.30 percent per year. Sales per capita were 159 gm. in 2005.

59


of Confectionery Products Sold at Retail.

Venezuela.



Confectionery Products: Between 1998 and 2005, the sales of

confectionery products decreased at a rate of -3.38percent per year reaching 19.89 thousand mt. in2005. Population growth was 1.92 percent peryear but was offset by the -5.20 percent negativeinfluence on sales of “other factors. Sales percapita were 753 gm. in 2005 compared to 1.08 kg.in 1998.

Euromonitor forecasts that between 2005and 2010, the sales of confectionery products willincrease at a rate of 2.82 percent per year reaching22.87 thousand mt. in 2010. Population growth isforecast to contribute 1.68 percent per year to thisgrowth while “other” factors will contribute 1.12percent per year. Sales per capita are expected toreach 796 gm. by 2010. Forecasts are subject toerror due to governmental socio-economic policies.

Confectionery sales are closely related to real income levels and during the years 1998 to2004 real incomes fell and confectionery sales dropped. Recently, consumer confidence hasincreased and in 2005 confectionery products experienced an increase in sales, particularlychewing gum. Prices are expected to fall as confectionery products are increasingly produced inVenezuela and Andean countries - primarily Colombia. These changes have been encouraged byforeign exchange controls and agreements with Colombia.

Sugar confectionery was the largest component of the confectionery sector contributing48.87 percent of total confectionery sales in 2005. Between 1998 to 2005 sales increased at a rateof 0.06 percent per year reaching 9.72 thousand mt. in 2005. The population growth rate of 1.92percent was offset by the -1.83 percent influence of “other” factors affecting the sales. Sales percapita were 368 gm. in 2005 compared to 408 gm. in 1998.

Chocolate confectionery products contributed 28.41 percent to the total sales ofconfectionery products in 2005. Between 1998 and 2005, the sales of chocolate confectioneryproducts fell at a rate of -2.42 percent per year, reaching 5.65 thousand mt. in 2005. The 1.92percent per year growth of the population was offset by the negative -4.26 percent per year effectof “other” factors. Sales per capita were 214 gm. in 2005 compared to 281 gm. in 1998.

Chewing gum contributed 22.72 percent to the total sales of confectionery products in2005. Between 1998 and 2005, the sales of chewing gum fell at a rapid rate of -9.56 percent peryear, reaching 4.52 thousand mt. in 2005. The positive influence on sales of the 1.92 percent peryear population increase was offset by the negative -11.27 percent per year influence of “other”factors. Sales per capita were 171 gm. in 2005 compared to 390 gm. in 1998.

60


of Spreads Sold at Retail. Venezuela.

Source Euromonitor from trade sources / national

statistics.

Spreads: Between 1998 and 2005, the retail sales

of spreads fell at a rate of -9.50 percent per year,reaching 1.40 thousand mt. in 2005. Thepositive influence on sales of a 1.92 percent peryear population growth was offset by a strongnegative -11.21 percent per year effect of“other” factors. Sales per capita were 52.96 gm.in 2005 compared to 111 gm. in 1998.

Spreads are non-essential food items thatare normally purchased by upper-incomeconsumers and are viewed as luxury items bythe rest of the Venezuelan population. As realincomes decrease, all income levels reducedpurchases to some extent.

Euromonitor forecasts that between 2005 and 2010, the sales of spreads will increase at arate of 1.81 percent per year reaching 1.53 thousand mt. in 2010. Population growth is forecast tocontribute 1.68 percent per year to this growth while “other” factors will contribute 0.13 percentper year. Sales per capita are expected to reach 53.39 gm. by 2010. Forecasts are subject to errordue to governmental socio-economic policies.

Jams & preserves contributed 49.29 percent to the total sales volume of spreads in 2005.Between 1998 and 2005, the retail sales of jams and preserves fell at a rate of -12.20 percent peryear reaching 690 mt. by 2005. The positive effect of a 1.92 percent per year rate of populationgrowth was offset by a significantly negative -13.86 percent influence of “other” factors. In 2005,the Sales per capita were 26 gm. in 2005 compared to 66 gm. in 1998. Jams & preserves havenot greatly penetrated the market because of their high price and consumer preferences fortraditional arepas.

Honey contributed 43.57 percent to the total sales volume of spreads in 2005. Between1998 and 2005, the retail sales of honey fell at a rate of -5.16 percent per year, reaching 610 mt.by 2005. The positive effect on sales of a 1.92 percent per year rate of population growth wasoffset by a negative -6.94 percent per year effect of “other” factors. Sales per capita of were 23gm. in 2005 compared to 36 gm. in 1998. Lower priced artisanal honey is sold in independentgrocery stores and open-air markets. Imported honey is sold in super markets and hypermarketswhere upper-income consumers shop.

Other spreads includes chocolate, nut and yeast spreads. Only 100 mt. or 4 gm. percapita of these products were sold in 2005.

61


of Pet Food Sold at Retail. Venezuela.


statistics.


Hot Drinks Sold at Retail. Venezuela.


statistics.

Pet Food: Between 1998 and 2005, the retail sales

of pet food fell at a rate of -0.37 percent peryear reaching 37.7 thousand mt. by 2005. Thepositive influence on sales of the 1.92 percentper year population growth was offset by anegative -2.25 percent per year effects of“other” factors. Sales per capita were 1.43 kg.in 2005 compared to 1.69 kg. in 1998.

In 2003, the sales of pet food fell 20.24percent from the 2002 level. This was due to anumber of factors including the general strikeof 2002 - 2003 and the fact that somedistributors went out of business. Much of thisdrop in sales may have been due to a lack ofavailable product rather than a shift in demanddue to falling real income.

Euromonitor forecast that between 2005 and 2010 sales of pet food will increase at a rateof 5.73 percent per year reaching 50.7 thousand mt. by 2010. The positive effect on sales of a1.68 percent per year population growth is expected to be reinforced by a 3.98 percent per yeareffect of “other” factors. Sales per capita is forecast to be 1.76 kg. in 2010. The industry isexpecting an increase in sales as long as there are no more economic shocks in the near future.Forecasts are subject to error due to governmental socio-economic policies.

7.4. Non-Alcoholic Beverages (Off-trade figures)20

Hot Drinks: Between 1998 and 2005, retail sales of

hot drinks decreased at a rate of -0.25 percentper year reaching 53.0 thousand mt. by 2005.The positive effect on sales of a 1.92 percentper year population growth was offset by a-2.13 percent per year negative effect of“other” factors. Sales per capita were 2.01 kg.in 2005 compared to 2.36 gm. in 1998.

The decrease in sales of hot drinks wasthe result of a number of factors including: thedecline in consumers real income; productshortages after the strikes of 2002 and; foreignexchange controls in 2003.

62


Soft Drinks Sold at Retail. Venezuela.


statistics.

Euromonitor forecasts that between 2005 and 2010 sales of hot drinks will increase at arate of 1.98 percent per year reaching 58.5 thousand mt. by 2010. The positive effect on sales of a1.68 percent per year population growth will be reinforced by the 0.30 percent per year positiveeffect of “other” factors. Per capita sales volume of hot drinks is forecast to reach 2.04 kg. by2010. Forecasts are subject to error due to governmental socio-economic policies.

With 57.47 percent of the volume of hot drink sales in 2005, coffee is the most importanthot drink. Between 1998 and 2005, the retail sales of coffee declined at a rate of -0.55 percent peryear reaching 30.5 thousand mt. by 2005. The effect on sales of a 1.92 percent per yearpopulation growth was more than offset by a negative -2.42 percent per year effect of “other”factors. Sales per capita were 1.16 kg. in 2005 compared to 1.39 kg. in 1998.

Coffee is a very traditional drink in Venezuela and is well entrenched in the culture.However since 1998 it has been losing market share. This was due to increased competition fromnewly introduced brands of tea and other hot drinks. These drinks were introduced withaccompanying “branding” as part of a “healthier life” which appealed to a significant portion ofthe Venezuelan population.

In 2005, other hot drinks contributed 41.78 percent of the total sales of hot drinks andwas the second most important hot drink category. Between 1998 and 2005, the sales volume ofother hot drinks increased at the rate of 0.11 percent per year, reaching 22.2 thousand mt. in2005. The positive influence on sales of a 1.92 percent population growth was partially offset bya negative -1.78 percent effect of “other” factors. Sales per capita was 839 gm. in 2005 comparedto 957 gm. in 1998.

In 2005, tea accounted for only 0.75 percent of the sales volume of hot drinks. Althoughsales are relatively small, the increasing concern of Venezuelans with health and beauty as wellas the increasing acceptance of holistic practices and oriental medicines, tea and infusions arebecoming increasingly popular.

Soft Drinks: Between 1998 and 2005, the sales

volume of soft drinks increased at a rate of2.65 percent per year reaching 2,212 millionlitres in 2005. The positive effect on sales ofthe 1.92 percent per year population growthwas reinforced by a positive 0.72 percent peryear effect of “other” factors. Sales per capitawere 83.77 litres in 2005 compared to 81.07litres in 1998.

Although the trend in sales volume wasupward between 1998 and 2005, there was asharp drop from 2002 to 2003 due primarily togeneral strikes. Production and distribution

63

resumed in 2004 and most of the sales rate lost in 2003 was regained.

Euromonitor forecasts the sales volume of soft drinks to increase from 2005 to 2010 at arate of 2.76 percent reaching 2,538 million litres in 2010. The positive effect of a 1.68 percentper year population growth will be reinforced by a positive 1.06 percent effect of “other” factors.Sales per capita is expected to be 88.4 litres in 2010. Forecasts are subject to error due togovernmental socio-economic policies.

In 2005, carbonated products was the major soft drink category contributing 74.93percent of the total soft drink sales volume. Between 1998 and 2005, the sales of carbonatedproducts increased at a rate of 1.61 percent per year, reaching 1,657 million litres. The positiveeffect on sales of a 1.92 percent per year population growth was partially offset by a smallnegative -0.30 percent effect of “other” factors. Sales per capita were 62.8 litres in 2005compared to 64.8 litres in 1998.

In 2005, fruit & vegetable juices contributed 11.06 percent of total soft drink salesvolume. Between 1998 and 2005, the sales volume increased at a rate of 4.25 percent per yearreaching 245 million litres in 2005. The effect on sales volume of the 1.92 percent per yearpopulation growth was reinforced by a 2.29 percent per year effect of “other” factors. Sales percapita were 9.3 litres in 2005 compared to 7.9 litres in 1998.

In 2005, bottled water contributed 10.82 percent of total soft drink sales volume.Between 1998 and 2005, the sales volume increased at a rate of 7.92 percent per year reachingover 239 million litres in 2005. The effect on sales volume of the 1.92 percent per yearpopulation growth was reinforced by a 5.89 percent per year effect of “other” factors. Sales percapita were 9.1 litres in 2005 compared to 6.5 litres in 1998.

Bottled water sales are influenced by two factors. 1) It is distributed primarily by homedeliveries and improvements in the system have contributed to the growth in sales. 2) Consumersare increasingly aware of the health benefits of keeping well hydrated.

In 2005, functional drinks, concentrates and RTD (ready to drink) products contributed2.45 percent, 0.02 percent and 0.72 percent of total soft drink sales, respectively.

7.5. Alcoholic Beverages (Off-Trade data)Between 1998 to 2005 the sales volume of alcoholic beverages increased at a rate of 0.54

percent per year, reaching 1,984 million litres in 2005. The effect on sales volume of the 1.92percent per year population growth was partially offset by a negative -1.35 percent per year effectof “other” factors. Sales per capita were 75.2 litres in 2005 compared to 80.3 litres in 1998.

Euromonitor forecasts the sales volume of alcoholic beverages to increase between 2005and 2010 at a rate of 2.32 percent per year reaching 2,228 million litres. The positive effect onsales volume of a 1.68 percent per year population growth is expected to be reinforced by apositive 0.63 percent per year effect of “other” factors. Sales per capita will be 77.6 litres in

64


of Alcoholic Beverages Sold at Retail.

Venezuela.


statistics.

2010. Forecasts are subject to error due to governmental socio-economic policies.

In 2005, beer contributed 95.22 percentto the total sales volume of alcoholic beverages.Between 1998 and 2005, the sales volume ofbeer increased at a rate of 0.45 percent per year,reaching 1,889 million litres. The effect on salesvolume of the 1.92 percent per year populationgrowth was partially offset by a negative -1.44percent per year effect of “other” factors. Salesper capita were 71.6 litres in 2005 compared to77.4 litres in 1998.

In 2005, spirits contributed 4.33 percentto the sales volume of alcoholic beverages.Between 1998 and 2005, the sales of spiritsincreased at a rate of 2.99 percent per year,reaching 86 million litres. The effect on sales volume of the 1.92 percent per year populationgrowth was reinforced by a positive 1.05 percent per year effect of “other” factors. Sales percapita were 3.3 litres in 2005 compared to 2.6 litres in 1998.

In 2005, cider & perry, flavoured alcoholic beverages, and wine contributed 0.01percent, 0.13 percent and 0.30 percent of the total sales volume of alcoholic beverages,respectively.

7.6. Trends in Food ChoicesThe decisions made at all levels of the marketing channels in response to government

policies are affecting the range of choices available to consumers.

The government policies affecting the food markets are foreign exchange rate control,foreign currency control and food price control and individual food sectors are affecteddifferently by these policies. In 2002 the proportion of households experiencing low disposableincomes rose sharply and continued to rise slowly through 2004. As the effects of governmentpolicies took hold in the economy, some food producers, distributors and retailers:

• experienced increasing costs of imported products - both completed products and rawmaterials;

• were forced out of business;• looked to domestic and Andean countries for products and raw material where

possible;• were often unable to meet the demand for some food products (shortages).

Consumers adjusted their purchasing pattern by:

65

• reducing total expenditures on both food and non-food products;• shifting to less expensive food products;• not purchasing some less essential food products;• purchasing more products used in home-made value-added activities.

After the politico-economic crisis in 2002 and 2003, Venezuela experienced a slighteconomic recovery in 2004. This was aided when the referendum to revoke the government ofPresident Chavez was allowed. Peace was subsequently restored in the country and peoplereturned to their usual economic activity. After the President's government was ratified, attentionshifted from the uncertain political climate to improving the economy.

The expected future trends by food sector are indicated in Table 15.

Table 15. Forecast Trends in Food Choices by Sector. Venezuela.

Food Sector(% Change*)

Expected Future Trends in Food Choices. 2005 to 2010

Five Largest Increases Five Largest Decreases

% Change* % Change*

Fresh(12.85%)

Meat (19.53%)

Vegetables (15.82%)

Eggs (15.65%)

Starchy roots (13.90%)

Fruit (10.19%)

None

Frozen(10.45%)

Ready meals (15.79%)

Processed vegetables (14.29%)

Poultry (11.46%)

Desserts (7.69%)

Red meat(6.76%)

None

Canned /Preserved(7.66%)

Ready meals (42.61%)

Soup (20.00%)

Fish /seafood (11.23%)

Meat & meat products (8.11%)

Vegetables (0.88%)

Fruit (-15.81%)

Beans (-12.00%)

Tomatoes (-8.87%)

Chilled(4.82%)

Chilled/fresh pasta (8.00%)

Chilled processed meat (4.79%)

None

Dried(10.85%)

Dried pasta (12.51%)

Rice (9.78%)

Dehydrated soup (7.79%)

Dessert mixes (-19.61%)

Oils & Fats(15.29)

Olive oil (33.59%)

Spreadable oils % fats (21.41%)

Margarine (14.68%)

Butter (14.59%)

Vegetable & seed oil (12.91%)

None

Food Sector(% Change*)

Expected Future Trends in Food Choices. 2005 to 2010

Five Largest Increases Five Largest Decreases

% Change* % Change*

66

Dairy & IceCream

Ice cream (22.86%)

Cheese (19.23%)

Yogurt (16.35%)

Chilled & shelf stable desserts (15.22%)

Milk (-1.33%)

Sauces,Dressings &Condiments(10.78%)

Ketchup (15.33%)

Regular mayonnaise (10.51%)

Other (8.70%)

Tomato pastes & purees (6.71%)

Pickled Products (-8.56%)

Snacks & MealReplacements(22.66%)

Snack bars (50.00% )

Extruded snacks (27.51%)

Chips & crisps (21.62%)

Nuts (16.67%)

Meal replacements (16.67%)

None

Confectionery(14.98%)

Chewing gum (19.25%)

Sugar confections (16.26%)

Chocolate confections (9.38%)

None

Spreads(9.29%)

Honey (13.11%)

Jams & preserves (7.25%)

None

Pet Food(34.32%)

Dog & cat (35.82%)

Other (12.30%)

None

Hot Drinks(10.21%)

Other hot drinks (15.93%)

Tea (8.27% )

Coffee (6.08%)

None

Soft Drinks -Off-trade sales(14.76%)

Bottled water (21.94%)

RTD tea (20.88%)

Functional drinks (15.49%)

Fruit/vegetable juices (15.48%)

Carbonates (13.54%)

Concentrates (-30.77%)

AlcoholicBeverages(12.27%)

Favoured alcoholic beverages (36.51% )

Wine (34.05%)

Cider/perry (24.81%)

Spirits (21.32%)

Beer (11.76%)

None

Source: Based on Euromonitor forecasts.

* Calculated as (B/A)-1. Where: A = Sales volume in 2005; B = Forecast sales volume in 2010.

67

8. Market StructureIn Venezuela, food manufacturing and distribution are dominated by subsidiaries or

affiliates of large multinational companies while retailing has been dominated by independentgrocers closely followed by food specialists (butchers, bakers etc.).

Between 1999 and 2003, Venezuela experienced political turbulence and economicdeterioration. President Hugo Chavez was elected in 1998 and has been largely blamed for theeconomic problems. His policies were based on his campaign platform of “revolution” forVenezuelan politics and economics - a revolution of interventionism in both politics andeconomics. The policies that evolved out of this approach were protectionist and pro-workingclass.

A long strike in 2002 at Petroleos de Venezuela, the state-run oil company, resulted in a97 percent decrease in oil production and exports. This in turn triggered a significant decline inreal GDP. In February 2003, after the labour action caused the floating exchange rate to fall 35percent, the VEB was fixed at USD 1.00 = VEB 1,598.

As a result of the politico-economic volatility all aspects of the food market structurehave been under stress for several years. In addition to the adjustments consumers have beenmaking in response to falling real disposable income, general strikes, political & socialinstability, and the falling value of the VEB on the parallel market, the marketing channels havebeen frustrated by Mercal, a government marketing channel selling food at less than marketprices.

8.1. Manufacturing and DistributionManufacturing of packaged food and their distribution are dominated by multinationals or

their subsidiaries/affiliates. In 2004, the top five companies by market share were: PlumroseLatinamericana CA. (6.8 percent), a subsidiary of a Danish company; Nestle Venezuela SA. (5.5percent), a subsidiary of the parent Swiss company; Cargill de Venezuela CA. (5.5 percent), asubsidiary of Cargill Inc. of the USA; Empresas Polar CA. (4.8 percent), a subsidiary of PepsiCoof the USA and; Industria Lactea Venezolana CA. (Indulac) (4.6 percent), part of the ParmalatGroup of Italy. See Table16.

Table 16. Manufacturers and Distributors of Food & Beverage Products. Venezuela.2004

Company MarketShare(%)

Functions Products Parent /AffiliatedCompany

ParentCountry

Plumrose

Lantinamericana

CA.

6.8 (Packaged

food)

Manufacturer,

Exporter,

Distributor.

Canned food,

Processed meat.

East Asiatic

Company

Denmark



ParentCountry

68

Nestle Venezuela

SA.

8.2 (Dog & cat

food )

5.5 (Packaged

food)

0.62 (Soft

drinks)

Manufacturing,

Exporting.

Dairy products

Confectionery,

Sweets, Creams,

Sauces, Cereals,

Seasonings,

Biscuits, Hot

drinks, Pet food.

Chocolates, Soft

drinks, Soups.

Nestle SA. Switzerland

Cargill de

Venezuela CA.

8.9 (Dog & cat

food).

5.5 (Packaged

food).

Manufacturing,

Distributing.

Various, including

inputs to food

manufacturers

(flours, pasta, rice).

Cargill Inc. USA

Empresas Polar

CA.

4.8 (Various) Manufacturing. Flour, Edible oil,

Ice cream, Snacks,

Beer, Non

alcoholic

beverages.

PepsiCo Inc. USA

Industria Lactea

Venezolana CA.

(Indulac)

4.6 (Packaged

food),

5.8 (Soft

drinks)

Manufacturing,

Distributing,

Exporting.

UHT milk, Yogurt,

Cheese, Other,

Fruit juice,

Chocolates,

Biscuits, Other.

Parmalat Italy

Pasteurizadora

Tachira CA.

4.2 (Packaged

food)

Manufacturing,

Exporting.

Dairy products

(Milk, Soft

cheese), Fruit

juices.

Unknown Venezuela

Productos Lacteos

Flor de Aragua

CA.

2.9 (Packaged

food)

Manufacturing.

Distributing.

Cheese. None None

Industrias

Alimenticias

Hermo de

Venezuela CA.

2.9 Manufacturing. Meat. Unknown Unknown

Mavesa SA. 2.1 (Packaged

food)

Manufacturing,

Distributing,

Exporting.

Mayonnaise,

Margarine, Cheese,

Ketchup, Cleaning

products, Other.

Empresas

Polar CA.

Venezuela

(PepsiCo)

USA

Snacks America

Latina Venezuela

SRL.

2.0 (Packaged

food)

Unknown Snacks. PepsiCo

(2002)

USA



ParentCountry

69

Alimentos Kraft de

Venezuela CA.

0.34

(Packaged

food)

1.6 (Soft

drinks)

Manufacturing,

Distribution.

Snacks, Drinks,

Cheese,

Convenience

meals.

Philip Morris

Co. Inc.

USA

Bimbo de

Venezuela CA.

1.36

(Packaged

food)

Manufacturing,

Distributing.

Bakery products. Sara Lee

(Spain) - Sara

Lee

USA

Del Monte Andina

CA.

0.46

(Packaged

food)

Manufacturing. Canned fruit &

vegetables, Frozen

fruit & vegetables.

Del Monte

Foods Co.

USA

Bristol-Meyers de

Venezuela SCA.

0.09

(Packaged

food)

Manufacturing,

Distributing.

Consumer

healthcare

products,

Pharmaceuticals,

Toiletries.

Bristo l-

Meyers

Squibb Co.

USA

Procter & Gamble

de Venezuela CA.

0.07

(Packaged

food)

Manufacturing. Cosmetics,

Toiletries,

Household

chemicals, Snacks,

Detergents,

Healthcare prods.

The Procter

& Gamble

Co.

USA

Cadipro Milk

Products

0.06

(Packaged

food)

Manufacturing. Dairy products

(Butter, Cream),

Fruit juice.

Nestle Venezuela

(Switzerland)

Productos EFE

CA.

1.00

(Packaged

food)

Manufacturing.

Distributor.

Ice cream, Frozen

desserts,

Confectionery.

Empresas

Polar CA.

(PepsiCo)

Venezuela

(USA)

Productos Quaker

CA

0.32

(Packaged

food)

Manufacturing.

Distributing.

Exporting.

Processed oats,

Rice products,

Wheat products,

Syrups, Cereals,

Soft drinks.

Quaker O ats

(USA) -

PesiCo

USA

Sucesora de Jose

Puig y Cia CA.

2002 Net

Sales (VEB

70,002 billion)

Manufacturing.

Distributing.

Exporting.

Biscuits. None?

Unilever Andina

de Venezuela SA.

5.3 (Hot

drinks).

0.75

(Packaged

food)

Distributor. Cosmetics, Chilled

desserts, Frozen

food, Household

cleaners, Teas, Ice

cream, Oils,

Spreads.

Unilever

Group

UK &

Netherlands.



ParentCountry

70

Figure 36. Historic and Forecast Retail Market

Shares of Food Sales by Type of Outlet.



Wyeth SA.,

Laboratories

0.12

(Packaged

food)

Manufacturer. Pharmaceuticals.

Health care prods.

Wyeth Labs USA

Source: Euromonitor from trade sources / national statistics.

8.2. Food RetailingRetail food stores are classified into seven categories, food specialists, independent

grocers, convenience stores, discounters, supermarkets, hypermarkets and others.

Historical sales data are available for food retailers from 1999 to 2005 and Euromonitorforecasts are available for 2006 to 2010.

Government Policies: The political friction between the Chavez

government and the business sector has had anegative impact on food retailers. In December2002 this friction lead to a general labour strike,virtually bringing the economy to a stop. Thegoal was to force the president to either resign orhold an early referendum on his continuedpresidency. The strike ended after nine weeks.During the strike an informal “black” marketwith high prices arose due to the scarcities in thelegal markets. The government imposed pricecontrols on a large number of food products inlate 2002 and early 2003. These were consideredinsufficient and the government began to openMercal (Mercado de Alimentos) supermarkets close to low income neighbourhoods, selling foodproducts at a 50 percent subsidy. It is estimated that, in 2003 Mercal stores had 20 percent of thefood market.

Food Specialists: This category refers to retail outlets specializing in the sale of single food categories such

as bread and flour confectioneries (bakers), meat and meat products (butchers), fish and seafood(fishmonger),etc.

In 1999 food specialists held 27.24 percent of food sales; however, their share dropped to12.27 percent by 2005. Euromonitor expects the market share of food specialists to rangebetween 11 percent and 12 percent from 2006 to 2010.

71

Independent Grocers: This category includes retail outlets selling a wide range of predominantly food products.

Owned by an entrepreneur who owns and operates between one and ten retail outlets. They aremainly family businesses and food usually accounts for at least 50 percent of sales.

Similar to food specialists, independent grocers lost market share between 1999 and2005. In 1999, they had 32.28 percent of the food market but by 2005 their market share wasonly 9.33 percent. Euromonitor forecasts the market share of independent grocers to rangebetween 8.00 percent and 9.00 percent during the period 2006 to 2010.

Convenience Stores: This category sells a wide range of groceries in stores with less than 400 m2 of selling

area. They differentiate themselves from other food stores by: opening for extended hours;locating in residential neighbourhoods; selling or renting videos; selling take-away food andother non-food items. Gas stations often have convenience stores attached to them.

Convenience stores have a very small share of the food market. They held a market shareof 0.46 percent in 1999 falling to 0.11 percent by 2005. Euromonitor forecasts this market shareto range between 0.10 percent and 0.11 percent during the period 2006 and 2010.

Discounters: This category is often divided into two types “hard discounters” and “soft discounters”.

Hard discounters are retail outlets with 300 - 900 m2 of selling area, and fewer than 1,000product lines. Products are normally private-label or budget brands. Soft discounters are usuallylarger in size and stock between 1,000 and 4,000 product lines including some leading brands atdiscounted prices. This category does not include mass merchandisers nor warehouse clubs.

Sales data time series for discounters begin in 2003 when they held 22.79 percent of thefood market. By 2005, they held a market share of 53.07 percent. Euromonitor forecasts the foodmarket share of discounters to increase slightly to 54.22 percent by 2010.

The market shares are calculated from retail sales value and since discounters sell atlower prices than other retailers, “market share” probably understates their importance.

Supermarkets: These are retail outlets selling groceries in a selling area of between 400 and 2,500 m2.

Sales consist of at least 70 percent of food products and everyday commodities.

In 1999, supermarkets were the most important market channel with 34.27 percent shareof the food market. By 2005, their market share had shrunk to 21.48 percent and discounterswere the most important channel. Euromonitor forecasts the market share of supermarkets torange between 20 percent and 22 percent between 2006 and 2010.

72

One of the leading supermarket chains is CADA; owned indirectly by French,Colombian, Venezuelan and USA interests. In 2003 it operated 39 outlets (down from 49 in2001) with a total of 42,900 m2 of selling area ( down from 53,900 m2 in 2001). CADA hasmanaged to increase its sales per m2 from VEB 5.94 million in 2001 to VEB 8.21 million in2003. CADA’s main rival, Central Madeirense, has increased sales area to 49,900 m2 in 2003 butsales per m2 have fallen to VEB 5.61 million (food and non-food) from VEB 7.71 million in2001.

Hypermarkets: These retail outlets sell groceries and non-food merchandise and have a retail sales area

over 2,500 m2. They are frequently located out-of-town or constitute the anchor store in ashopping centre.

The food market share of hypermarkets increased from 3.18 percent in 1999 reaching apeak of 4.93 percent in 2002. After 2002 hypermarkets began to lose market share reaching 2.20percent by 2005. Euromonitor forecasts that the food market share of hypermarkets will increaseslowly reaching 3.04 percent by 2010.

Makro is the leader in the hypermarkets of Venezuela and is part of the Dutchconglomerate of the same name. It started out as a cash-and-carry operation serving small andmedium sized independent retailers and food service providers. It later expanded to include thegeneral public; mainly middle-class consumers. In order to shop at Makro, customers mustregister with the store. Makro controls 61 percent of hypermarket sales (food and non-food) inVenezuela and the majority of its 17 outlets are outside Caracas. The sales area was 153,000 m2

in 2003 attracting VEB 8.8 billion per m2 in sales (food and non-food).

Makro’s closest competitor is Exito, owned by the same group as the CADAsupermarkets. In 2003 it had eight outlets with a total of 60,000 m2 selling area, attracting VEB6.40 billion per m2 in sales.

Other: This refers to other retailers selling predominantly food, beverages and tobacco or any

combination of these.

Other food sellers have increased market share from 3.80 percent in 1999 to 6.00 percentin 2003. The market share of these sellers is forecast to drop to 5.76 percent by 2008.

9. Transportation21

The Ministry of Infrastructure is responsible for regulating the transport sector. It is alsoresponsible for policies relating to ports, quays, airports and passenger terminals. In some cases,the Ministry coordinates with the states and municipalities.

73

9.1. InfrastructureVenezuela is a middle-income country with a relatively well-developed transportation

infrastructure compared to other Latin American countries. Scheduled air service and good all-weather roads, connect major cities and all regions of the country. However, the roads aresometimes poorly marked and congested around urban centers,

The country is connected to the rest of the world by air, sea and road. Ocean-basedinfrastructure is heavily related to the export of petroleum products although container and otherimport related facilities are available.

9.2. Road InfrastructureHighway construction is both costly and dangerous because of the rough mountainous

terrain in the areas of dense population. Nevertheless, the government has undertaken massivehighway construction projects throughout the country. Major ventures include:

• completion of the Caracas-La Guaira Autopista, which links the capital with itsairport at Maiquetía and its seaport at La Guaira;

• completion of a section of the Pan-American Highway connecting Carora with theColombian border and;

• the General Rafael Urdañeta Bridge which crosses the narrow neck of waterconnecting Lake Maracaibo with the Gulf of Venezuela and provides a direct surfacelink between Maracaibo and the east.

By 2002, Venezuela had 96,155 km. of highway, of which 32,308 km. were paved. In 2000 therewere 1,326,200 passenger cars and 1,078,578 commercial vehicles in Venezuela.

9.3. Rail InfrastructureVenezuela's two railroads carry mostly freight. Rail transportation is concentrated in the

northern states of Lara, Miranda, Carabobo, Aragua, and Yaracuy, with branches connecting theprincipal seaports with the important cities of the central highlands.

In 2002 there were 682 km. of track, 434 km. of which were owned and operated by thegovernment. Much of the equipment is antiquated, and the linking of lines is difficult because ofthe different gauges in use. The government planned in the early 1980s to build a 3,900 km. railroad network by the end of the decade; however, the financial crisis that began in 1983resulted in the program being scaled down to 2,000 km. over 20 years.

9.4. Ports InfrastructureMaritime transport is extremely important to Venezuela because almost all its foreign

trade (with the exception of trade with neighbouring countries) is by sea. The National AquaticAreas Institute (INEA) is responsible for planning and controlling port activities. Ports are ownedby the Federal Government and administered by the states; some of them are managed ascommercial companies, and others are concessions given to private firms. The national portssystem is composed of nine multipurpose public ports which handle the majority of general cargo

74

entering and leaving Venezuela: Puerto Cabello, La Guaira, Maracaibo, Guanta, Guaranao,Carúpano, Puerto Sucre, El Guamache and La Ceiba. The first four of these handle 90 per cent ofcargo other than petroleum, iron and bauxite. There are seven mineral ore ports on the OrinocoRiver which also handle general cargo: Palúa, Puerto Ordaz, Sidor Matanzas, BAUXILUM-Matanzas, VENALUM, ALCASA and BAUXILUM-El Jobal. Petroleum and its by-products areexported through special terminals managed by the Petroleos de Venezuela S.A., the governmentoil company.

A total of 34 Venezuelan ocean and river ports have been identified (see Table A-11).They may be divided into three groups: ports in the Maracaibo area, primarily exportingpetroleum products; ports along the north coast, serving the petroleum industry, the fishingindustry and general cargo and; ports on the Orinoco river system primarily serving the miningand metal industries.

Only three ports report container facilities - La Guaira, Puerto Cabello and Guanta, all onthe north coast.

La Guaira is 30 km. from Caracas and is often called the front door ofVenezuela. It is one of the most important ports of the country handling generalcargo, and containers. It is also a fishing and military port. The port has a capacityto unload 11 to 13 containers per hour.

Port Cabello, in the state of Carabobo is a very busy port with great economicimportance to the country. It handles grain, general cargo, fertilizer, chemicals andcontainers and is also a military port. The port has a capacity to unload 10 to 13containers per hour.

The port of Guanta, located on the north coast in Anzaotegui State, handlesgeneral cargo and containers. It has a capacity to unload 11 to 13 containers perhour.

9.5. Air InfrastructureIn 2001, Venezuelan airlines transported a total of 3.74 million kg. of freight, which is

almost 4 per cent of the freight traffic market. Foreign airlines transported 92.87 million kg.,slightly over 90 per cent of total air freight on international routes.

Venezuela is reported to have 95 domestic airports and 235 authorized airfields. (TheWorld Fact Book reports that in 2005 Venezuela had 360 airports. See Table 17). Twenty-four ofthe airports take scheduled commercial flights. Venezuela’s international airports are: Maiquetía,Valencia, Maracaibo, Barquisimeto, Barcelona, Coro, Porlamar, San Antonio del Táchira, PuertoOrdaz, Maturín and Josefa Camejos (Punto Fijo, Falcón State). The Federal State owns theairports and, with the exception of three private airports, they are managed by the various states.The major international airport is the Simón Bolívar International Airport at Maiquetía (VargasState), 30 km. from Caracas and has the capacity to handle 8.5 million passengers/year. Fiveairlines with Venezuelan ownership operate scheduled international flights: Aeropostal, Aero

75

Servicio del Carabobo (ASERCA), AVENSA, Santa Bárbara Airlines and Servivensa.

Table 17. Airports. Venezuela. 2005.

RunwayLength

(Metres)

Airportswith PavedRunways

Airports withUnpavedRunways

> 3,047 5 0

2,438 - 3,047 11 0

1,524 - 2,437 33 9

914 - 1,523 60 89

< 914 19 144

Total 128 242

Source: CIA, The W orld Factbook.

9.6. Shipping Costs and TimesMany factors are involved in the cost of shipping food products to Venezuela and the

total cost can vary considerably. Exporters should contact shipping companies, their agents orforwarding companies to obtain up-to-date information on facilities and costs. See Table 18.

Table 18. Sources of Information about Facilities and Costs of Shipping FoodProducts to Venezuela. 2006.

Port Web Page

Halifax. http://www.portofhalifax.ca/AbsPage.aspx?id=60&siteid=1&lang=1. (Search for

Shipping and Freight Services)

Montreal. http://www.port-montreal.com/site/3_0/3_3.jsp?lang=en.

Toronto. Information not available on port site, see www.superpages.ca.

Vancouver. www.portvancouver.com/trade_shipping/shipping_agents/container.html.

Ocean transit times from Canada to Venezuela can range from 10 days to 104 daysdepending on the origin and destination. See table 19.

Table 19-A. Estimated Transit Times and Frequencies of Ocean Container Servicesfrom Canada to Venezuela. 2006.

http://www.portofhalifax.ca/AbsPage.aspx?id=60&siteid=1&lang=1

http://www.port-montreal.com/site/3_0/3_3.jsp?lang=en

http://www.superpages.ca

http://www.portvancouver.com/trade_shipping/shipping_agents/container.html

76

VenezuelanDestinations

Canadian Origins

Vancouver Winnipeg Toronto

EstimatedTransit Time

(Days)

EstimatedFrequency

(Days BetweenDepartures)


(Days)

EstimatedFrequency



(Days)

EstimatedFrequency


El Guamache. 96 to 97 viaOakland &Kingston.

7 to 14. 16 viaHalifax &Kingston.

4 to 7.

Guanta. 13 to 15 viaHalifax &Kingston.

7 to 11. 13 to 14 viaHalifax &Kingston.

7 to 14.

Guaranao. 97 to 104 viaOakland,USA,Kingston &PuertoCabello.

7. 17 to 22 viaHalifax,Kingston &PuertoCabello.

4 to 9.

La Guaira. 15 to 17 viaHalifax &Kingston,Jamaica.

7 to 15. 15 to 17 viaHalifax &Kingston,Jamaica.

7 to 14.

Porlamar. 99 to 100 viaOakland,USA andKingston,Jamaica.

7 to 14.

PuertoCabello.

13 to 24 viaHalifax &Kingston,Jamaica.

4 to 9. 13 to 24 viaHalifax &Kingston,Jamaica.

4 to 9.

Source: www.zim.com .

Table 19-B. Estimated Transit Times and Frequencies of OceanContainer Services from Canada to Venezuela.2006.


Canadian Origins

Montreal Halifax


(Days)

EstimatedFrequency



(Days)

EstimatedFrequency


El Guamache. 16 viaHalifax &Kingston.

5 to 9. 13 viaKingston.

4 to 9.

http://www.zim.com


Canadian Origins

Montreal Halifax


(Days)

EstimatedFrequency



(Days)

EstimatedFrequency


77

Guanta. 13 to 15 viaHalifax &Kingston.

7 to 14. 10 to 19 viaKingston.

4 to 9.

Guaranao. 22 to 17 viaHalifax,Kingston &PuertoCabello.

4 to 9. 14 to 19 viaKingston &PuertoCabello.

4 to 9.

La Guaira. 15 to 17 viaHalifax &Kingston.


4 to 9.

PuertoCabello.

13 to 24 viaHalifax &Kingston.


4 to 9.

Source: www.zim.com .

According to Kuehne and Nagel, in May - June 2006, it cost USD 1,551 to send astandard 20 foot container of food products from Montreal to La Guaira, Venezuela. These costscan vary considerably.

As of March 2006, Air Canada provides bulkload cargo services in cooperation withCielos Airlines (Cielos del Peru), to Caracas and Valencia via Miami. Service is also availablevia Port of Spain.

Exporters should consult Air Canada or a freight forwarder for up-to-date information oncosts and options for shipping food products by air. Freight forwarders in your city may be foundat the website: www.superpages.ca.

Table 20. Estimated Transit Times, Distances and Frequencies of Air Cargo ServiceFrom Canada to Venezuela. March 2006.

http://www.zim.com

http://www.superpages.ca

78

CanadianOrigins

Venezuelan Destinations

Caracas Valencia

EstimatedDistance

(Km)

Frequency(Time Between

Departures)

EstimatedDistance

(Km)

Frequency(Time Between

Departures)

Calgary. Via Toronto & M iami.

6,894 km.

35 min. to 16.75

hrs. in Calgary.

Via Toronto & M iami.

6,854 km.

35 min. to 16.75

hrs. in Calgary.

Via Los Angeles &

Miami. 7,884 km.

Via Los Angeles &

Miami. 7,844 km.

Halifax. Via Toronto & M iami.

5,445 km.

5 min. to 11 .83 hrs.

in Halifax.


5,405 km.

5 min. to 11 .83 hrs.

in Halifax.

Via Montreal &

Miami. 5,256 km.

Via Montreal &

Miami. 5,216 km.

Montreal. Via Toronto & M iami.

4,689 km.

10 min. to 12 hrs.

in Montreal.


4,649 km.

10 min. to 12 hrs. in

Montreal.

Via Miami. 4,469 km. Via Miami. 4,429 km.

Toronto. Via Miami. 4,184 km. 3.25 to 15.83 hrs.

in Toronto.

Via Miami.4,144 km. 3.25 to 15.83 hrs. in

Toronto.

Vancouver. Via Toronto & M iami.

7,544 km.

45 min. to 16.25

hrs. in Vancouver.


7,504 km.

45 min. to 16.25

hrs. in Vancouver.

Via Los Angeles &

Miami. 7,699 km.

Via Los Angeles &

Miami. 7,659 km.

Winnipeg. Via Toronto & M iami.

5,701 km.

1.00 to 21.41 hrs.

in Winnipeg.


5,661 km.

1.00 to 21.41 hrs. in

Winnipeg.

Sources: http://www.aircanada.com/cargo/en/, http://www.cielos-airlines.com/home_e.php.

10. Trade Barriers and RegulationsVenezuelan import procedures can be cumbersome and Canadian exporters may require

the services of a customs agent. Exporters should contact their regional office of the Agri-FoodTrade Service (See Section 12) for the latest information on documentation requirements andother formalities.

Venezuela has been a member of “The Andean Community”, which began its formalexistence in 1969 with the signing of the “Cartegena Agreement”. Initially the signatories wereColombia, Bolivia, Chile, Ecuador and Peru. Venezuela joined in 1973 and Chile withdrew in1976. The three key activities of the Andean Community are: Increased integration of theeconomies; Economic Development and Trade competitiveness and; Political Cooperation andSocial Development

http://www.aircanada.com/cargo/en/

http://www.cielos-airlines.com/home_e.php

79

Under Plan Zero, initiated in September 2003, customs authorities may stop and inspectshipments and any discrepancies in the documentation and the actual contents of the shipmentare grounds to stop shipments and require clarification or confiscate the shipment.

Recently, Venezuela became a member of MERCOSUR but it will take several years forthe common tariffs of MERCOSUR to replace those of the Andean Community. An indication ofthe differences in the two tariff regimes is presented in Table A-12. It is estimated that theAndean Community common tariff resulted in a weighted average tariff of 15.12% on Canadianproducts while the common tariffs under MERCOSUR would result in an average tariff of10.04%.

As of 2006 all documents must be in Spanish and the invoice must be typewritten(photocopy not accepted) in duplicate. Documents required are:

• customs declaration;• commercial invoice;• bill of lading;• packing list;• certificate of origin;• special certificates, permits or authorization for sale (sanitary/phytosanitary, quality

etc.).

10.1. Customs Regulations/Tariff Rates/Import TaxesIn 1994 the Andean Community approved a set of “Common External Tariffs” consisting

of four levels or bands (5 percent, 10 percent, 15 percent and 20 percent). Venezuelaimplemented them in 1995. Customs authorities accept the value of the shipment as indicated inthe documentation, but recent regulations allow them to reference a base price in order todetermine a minimum price for the purpose of customs value.

For certain agricultural products, including feed grains, oilseeds products, wheat, milk,pork, poultry, processed poultry and yellow corn a price band system is in place. Ad valoremrates for these products are adjusted according to the relationship between market commodityreference prices and established floor and ceiling prices. When the reference price of a particularmarket commodity falls below the established floor price, the compensatory tariff for thatcommodity and related products is adjusted upward. Conversely when the reference priceexceeds the established ceiling, the compensatory tariff is eliminated. Floor and ceiling prices areset once a year in April based on average prices during the past five years.

The general VAT (value added tax) is 14 percent. Effective September 1, 2005 the VATon beef, pork, mutton, and goat meat (all previously exempt from VAT), cooking oils, livestockand livestock feed concentrates or liquids (all previously subject to 14 percent), was set to 8percent.

10.2. Import LicensesEffective July 4, 2002, importers are required to obtain a Certificate of No National

80

Production (CNP) before getting the applicable Andean Community external tariff rate. Productssubject to import restriction require import licenses. Currently, these take the form of permits orprior authorization for environmental, health and safety reasons. Licences are granted by theministry responsible for the product in question. The ministry will issue a CNP which will permitthe import with normal third country (non Andean Community) duty rate.

Some items may be effectively prohibited under current licensing and sanitationcertification requirements. Also, the foreign exchange allocation system can be an effectivedeterrent to imports of various products that are locally available, such as pork and corn.

Sanitary/phytosanitary licenses must be obtained by the producer, exporter or importer.

Fishery and aquaculture products and by-products require licences from the Ministry ofAgriculture and Land’s (MAL), National Fisheries and Aquaculture Institute (INAPESCA) incoordination with the Ministry of Health and Social Development (MSDS).

Wild animals and their products require a license issued by PROFAUNA, anAutonomous Service of the Ministry of the Environment and Renewable Natural Resources.

Plant products require phytosanitary certificates from the country of origin, priorinspection, and the production of a phytosanitary permit as indicated in the customs tariff.

Food products in the HS classifications 03, 04, 05, 16, 19, 20 and 21 require importlicences from MSDS. Food product, medicaments and active ingredients in the following HSclassifications require a sanitary permit from MSDS: 02, 03, 04, 05, 12, 13, 17, 25, 28, 29, 30, 38and 56.

10.3. Label RequirementsLabels must be in Spanish and list: all ingredients; the contents of the package in the

metric system or in units and; the registration number from the Ministry of Health or the Ministryof Production and Commerce in the case of animal feeds or veterinary medicines. Stickers areallowed for imported products and must identify the importer.

11. Market OpportunitiesVenezuela’s population is increasing and after an economically painful recession and

political turmoil, the country appears to be entering a period of economic growth, fueled by highprices for petroleum products. Household sizes are falling slowly and women are entering theworkforce in increasing numbers. These factors bode well for Canadian food companies wantingto export to Venezuela.

Politically, Venezuela is still potentially volatile. The president is implementing socialpolicies designed to raise the living standards of the low income segments of Venezuelan society.However, some of the policies (price and exchange rate fixing, worker management of stateowned corporations) are likely to have negative economic consequences and cause tensions in

81

society. Generally, the government policies are not friendly to imports from countries outside theAndean Community and MERCOSUR. Canadian exporters who are interested in Venezuela forthe “long haul” may find it advantageous to target niche markets serving middle to upper incomegroups with unique high quality products. It is expected that these products will be demandeddespite competition from the Andean Community and/or the MERCOSUR countries. Aseconomic development progresses, the social and economic volatility may decrease andCanadian companies who are already in the market at that time will have an advantage.

At this time (August 2006), Venezuela represents a risky market relative to many othercountries. The five areas of highest risk are: Government Effectiveness; Macroeconomic; Legal& Regulatory; Foreign Trade & Payments and; Financial.

If Canadian exporters with a long term view are able to implement a trading paradigm(see section 2.3) which reduces the risks to an acceptable level they may wish to consider theproducts listed in Table 21. All products should be of a quality required by middle to upperincome consumers.

Table 21. Possible Market Opportunities.

Frozen Foods - Ready meals

- Processed vegetables

- Poultry

- Desserts

- Red meat

Canned and PreservedFoods - Ready meals

- Soup

- Fish/seafood

- Meat & meat products

- Vegetables

Chilled - Pasta

- Processed meat

Dried Foods - Pasta

- Rice

- Dehydrated soup

Oils and Fats - Spreadable o ils & fats

- Margarine

- Vegetable & seed oil

Sauces, Dressings &Condiments - Ketchup

- Regular mayonnaise

- Tomato pastes & purees

Dairy & Ice Cream - Ice cream

- Cheese

- Yogurt

- Shelf stable desserts

Snacks & MealReplacements - Meal replacements

- Extruded snacks

- Chips & crisps

- Snack bars

- Nuts

Confectionery - Sugar confectionery

Spreads - Honey

- Jams & Preserves

Pet Food - Dog & cat

Soft Drinks - Bottled water

- Functional drinks

- Fruit / vegetable juices

- Carbonates

82

Alcoholic Beverages - Flavoured alcoholic beverages

- Wine

- Cider / perry

- Spirits

12. Agri-Food Trade Service - Regional Offices

Alberta & Territories Regional OfficeAgriculture and Agri-Food Canada9700 Jasper Avenue, Suite 720Edmonton, ABT5J 4G5Voice (780) 495-4141Fax (780) 495-3324

Atlantic Regional OfficeAgriculture and Agri-Food Canada1800 Argyle Street, 5th FloorHalifax, NSB3J 2N7Voice (902) 426-6151Fax (902) 426-3439

British Columbia Regional OfficeAgriculture and Agri-Food CanadaSuite 420, 4321 Still Creek DriveBurnaby, BCV5C 6S7Voice (604) 666-6344Fax (604) 666-7235Email: [email protected]

Manitoba Regional OfficeAgriculture and Agri-Food Canada303 Main Street, Room 402Winnipeg, MBR3C 3G7 Fax (204) 983-4583Voice (204) 983-3032

Ontario Regional OfficeAgriculture and Agri-Food Canada

83

174 Stone Road WestGuelph, ONN1G 4S9Tel: (519) 829-9400Fax: (519) 837-9782

Quebec Regional OfficeAgriculture and Agri-Food Canada2001, University, Room 746-MMontréal, QCH3A 3N2 Voice (514) 283-8888Fax (514) 496-3966

Quebec City OfficeAgriculture and Agri-Food Canada901, rue du Cap-Diamant, Floor 3Québec, QCG1K 4K1 Fax (418) 648-7342Voice (418) 648-4775

Saskatchewan Regional Office401 - 1800 Hamilton StreetRegina, SKS4P 4K7Main reception: (306) 780-5545Facsimile: (306) 780-7360

Saskatoon Office7th Floor, 123 - 2nd Avenue SouthSaskatoon, SKS7K 7E6Telephone: (306) 975-5842Facsimile: (306) 975-5334

13. ConclusionsAn initial view of the Venezuelan economy would suggest that following a significant

recession, it is now a growing market with opportunities for Canadian exporters. Venezuela:

• has a population estimated at 27 million;• has an estimated rate of population growth of 1.7 percent per year;• had a GDP that increased in 4th quarter 2005 by 10.2 percent over 4th quarter 2004

(The Economist);

84

• experienced a 13.5 percent increase in industrial production, December 2005 overDecember 2004 (The Economist);

• had a 12 month trade balance of USD 31.5 billion to the end of 2005;• imported CAD 659.5 million worth of bulk food in 2005, 20 percent from Canada;• imported CAD 831.7 million worth of intermediate food in 2005, 1.0 percent from

Canada;• imported CAD 820.8 million worth of consumer oriented food (excluding seafood) in

2005, 1.5 percent from Canada.

A closer look at the Venezuelan socio-economic situation reveals the country to beproblematic for Canadian exporters now and in the near future - specifically, Venezuela:

• has a very uneven distribution of income; reducing the significance of measures ofaverage incomes;

• has preferential trade agreements with the Andean Community and/or MERCOSURcountries;

• is politically inclined to exclude imports from countries who are not members of theAndean Community or MERCOSUR;

• is rated as risky by the Economist Intelligence Unit, particularly in the areas ofGovernment Effectiveness, Macroeconomic; Legal & Regulatory; Foreign Trade &Payments and Financial;

• is implementing policies that are likely to produce economic imbalances andshortages in the near future;

# subsidization of food through a government retail chain;# fixing the USD per VEB exchange rate;# controlling the availability of foreign exchange to the private sector;# nationalization of private enterprises and turning management over to

workers.

Companies who are prepared to export to Venezuela may wish to consider theprospective opportunities identified in Table 21. These opportunities have been chosen based onforecast rates of increases in consumption from 2005 to 2010 and Canada’s technical ability toproduce them.

85

Figure 37. Geographic Map of Venezuela.

APPENDIX

86

Table A-1. Area and Estimated Population by State. 2001. Venezuela.

State or Region Area(km2)

Population Density(People/km2)

CENTRAL REGION

1 Anzoategui 43,300 1,222,225 28.2

2 Apure 76,500 377,756 4.9

3 Barinas 35,200 624,508 17.7

4 Cojedes 14,800 253,105 17.1

5 Delta Amacuro 40,200 97,987 2.4

6 Guarico 64,986 627,086 9.6

7 Monagas 28,900 712,626 24.7

8 Portugesa 15,200 725,740 47.7

SUBTOTAL /AVERAGE

319,086 4,641,033 14.5

NORTHERN REGION

9 Aragua 7,014 1,449,616 206.7

10 Carabobo 4,650 1,932,168 415.5

11 DependenciasFederales

120 1,651 13.8

12 Distrito Capital 433 1,836,286 4,240.8

13 Miranda 7,950 2,330,872 293.2

14 Nueva Esparta 1,150 373,851 325.1

15 Sucre 11,800 786,483 66.7

16 Vargas 1,497 298,109 199.1

SUBTOTAL /AVERAGE

34,614 9,009,036 260.3

SOUTH & SOUTHEAST REGION

17 Amazonas 180,145 70,464 0.4

18 Bolivar 238,000 1,214,846 5.1

State or Region Area(km2)

Population Density(People/km2)

87

SUBTOTAL /AVERAGE

418,145 1,285,310 3.1

WEST & NORTHWEST REGION

19 Falcon 24,800 763,188 30.8

20 Lara 19,800 1,556,415 78.6

21 Merida 11,300 715,268 63.3

22 Tachira 11,100 992,669 89.4

23 Trujillo 7,400 608,563 82.2

24 Yaracuy 7,100 499,049 70.3

25 Zulia 63,100 2,983,679 47.3

SUBTOTAL /AVERAGE

144,600 8,118,831 56.1

TOTAL /AVERAGE

916,445 23,054,210 25.2

Source: www.statoids.com/uve.html .

http://www.statoids.com/uve.html

88

Table A-2. Population Estimates by Source. Venezuela.

Year Population

U.S. Census

Bureau *Euromonitor** Internet*** Internet"

1981 15,166,255 15,511,150 14,516,735

1990 19,325,222 19,499,840 18,105,265

1995 21,555,902 21,887,690

1996 21,968,602 22,365,760

1997 22,374,398 22,843,980

1998 22,772,515 23,321,930

1999 23,162,188 23,799,280

2000 23,542,649 24,275,670 24,310,896

2001 23,916,810 24,750,970 23,054,210 24,765,581

2002 24,287,670 25,225,000 25,219,910

2003 24,654,694 25,697,560 25,673,550

2004 25,017,387 26,168,690 26,127,351

2005 25,375,281 26,638,240 26,577,423

2006 25,730,435 27,105,890 27,030,656

Source: * U.S. Census Bureau, International Data Base

** Population: national estimates at mid-year: National statistical

offices/UN/Euromonitor International. - mid year.

*** www.citypopulation.de/Venezuela.html .

" Instituto Nacional de Estadística.

http://www.ine.gov.ve/poblacion/salidadistribucion.asp?Tt=Cuadro202&c

uadro=cuadro202 .

Table A-3. Estimated GDP at Current Prices. Venezuela.

Year GDP(Million VEB)

GDP(MillionCAD)

Population GDP perPerson(CAD)

1995 13,685,686 94,869 21,555,902 4,401

1996 29,437,682 100,927 21,968,602 4,594

http://www.citypopulation.de/Venezuela.html

http://www.ine.gov.ve/poblacion/salidadistribucion.asp?Tt=Cuadro202&cuadro=cuadro202

http://www.ine.gov.ve/poblacion/salidadistribucion.asp?Tt=Cuadro202&cuadro=cuadro202

Year GDP(Million VEB)

GDP(MillionCAD)

Population GDP perPerson(CAD)

89

1997 43,343,669 123,032 22,374,398 5,499

1998 52,482,466 142,353 22,772,515 6,251

1999 62,577,039 153,739 23,162,188 6,638

2000 82,450,674 180,122 23,542,649 7,651

2001 91,324,773 195,447 23,916,810 8,172

2002 110,782,356 157,614 24,287,670 6,489

2003 137,368,156 118,841 24,654,694 4,820

2004 25,017,387

2005 25,375,281

Source: GDP, Banco Central de Venezuela. http://www.bcv.org.ve/excel/7_1_2i.xls.

Population, U.S. Census Bureau, International Data Base.

CAD per VEB exchange rate: Pacific Exchange Rate Service.

Note: GDP in VEB is aggregated over types of economic activities at current

prices.

90

Table A-4. Estimated and Forecast Household Number andSize. Venezuela.

Year UN Estimates* Euromonitor Estimates**

Number ofHouseholds

(‘000)

Size ofHouseholds(Persons)

Number ofHouseholds

(‘000)

Size ofHouseholds(Persons)

1990 3,527 5.53 3,750.9 5.13

1995 4,084 5.35 4,416.2 4.90

2000 4,700 5.14 5,131.9 4.68

2001 5,261.2 4.66

2002 5,397.5 4.63

2003 5,530.5 4.60

2004 5,661.4 4.58

2005 5,381 4.92 5,789.7 4.56

2010 6,084 4.72 6,398.0 4.49

2015 6,800 4.54 6,954.7 4.45

2020 7,527 4.37

2025 8,256 4.21

Sources: * United Nations Human Settlements Programme.

** National Statistical Offices via Euromonitor International.

91

Table A-5. Estimated and ForecastDisposable Household Income.Venezuela.

Year Disposable Income per Household

Constant1990 VEBs

CurrentVEBs

CAD

1990 432,625 432,625

1995 355,056 2,224,546 15,421

2000 344,753 12,629,883 27,596

2005 203,678 21,888,846 12,608

2010 94,872 21,702,909

2015 72,949 21,609,836

Sources: National Statistical Office via Euromonitor

International. Pacific Exchange Rate Service.

Note: Exchange Rates (CAD per VEB): 1995,

.006932; 2000, .002185; 2005, .000576.

Table A-6. Economically Active, Employed and Unemployed Populations. Venezuela

Year Economically Active* Employed** Unemployed

Male Female Total Male Female Total Male Female Total %***

1990 4,963,100 2,282,600 7,245,700 4,449,930 2,053,370 6,503,300 514,170 229,230 743,400 10.26

1991 5,028,600 2,389,300 7,417,900 4,546,900 2,169,300 6,716,200 481,700 220,000 701,700 9.46

1992 5,135,600 2,402,200 7,537,800 4,716,900 2,238,500 6,955,400 418,700 163,700 582,400 7.73

1993 5,191,200 2,355,100 7,546,300 4,820,000 2,222,800 7,042,800 371,200 132,300 503,500 6.67

1994 5,495,800 2,530,690 8,026,490 5,053,400 2,285,690 7,339,090 442,400 245,000 687,400 8.56

1995 5,689,010 2,855,660 8,544,670 5,180,190 2,489,780 7,668,970 508,820 365,880 874,700 10.24

1996 5,876,300 3,122,500 8,998,800 5,271,300 2,684,600 7,955,900 605,000 437,900 1,042,900 11.59

1997 6,098,060 3,409,060 9,507,120 5,505,660 2,940,760 8,446,420 592,400 468,300 1,060,700 11.16

1998 6,236,800 3,582,500 9,819,300 5,620,400 3,106,300 8,726,700 616,400 476,200 1,092,600 11.13

1999 6,360,900 3,780,800 10,141,700 5,483,130 3,133,000 8,616,130 877,740 647,760 1,525,500 15.04

2000 6,598,800 4,035,500 10,634,300 5,731,100 3,479,700 9,210,800 867,700 555,800 1,423,500 13.39

2001 6,783,810 4,320,970 11,104,780 5,956,710 3,712,270 9,668,980 827,100 608,700 1,435,800 12.93

2002 7,046,820 4,627,090 11,673,910 6,048,220 3,803,090 9,851,310 998,600 824,000 1,822,600 15.61

Year Economically Active* Employed** Unemployed

Male Female Total Male Female Total Male Female Total %***

92

2003 7,171,600 4,859,800 12,031,400 6,024,170 3,833,630 9,857,800 1,147,430 1,026,170 2,173,600 18.07

2004 7,244,400 4,987,400 12,231,800 6,207,120 4,037,720 10,244,840 1,037,280 949,680 1,986,960 16.24

2005 7,299,150 5,133,630 12,432,780 6,310,770 4,278,650 10,589,420 988,380 854,980 1,843,360 14.83

Source: International Labour Organization / Euromonitor International.

* See Endnote 11.

** See Endnote 12.

*** Calculated as: A/(A+B) Where A = Unemployed population. B = Employed population.

Table A-7. Employed and Unemployed Populations and Unemployment Rates by Sex.Venezuela.

Year Employed Unemployed Unemployed Rate *%

Male Female Male Female Male Female

1990 4,449,930 2,053,370 514,170 229,200 10.36 10.04

1991 4,546,900 2,169,300 481,700 220,000 9.58 9.21

1992 4,716,900 2,238,500 418,700 163,700 8.15 6.81

1993 4,820,000 2,222,800 371,200 132,300 7.15 5.62

1994 5,053,400 2,285,690 442,400 245,000 8.05 9.68

1995 5,180,190 2,489,780 508,820 366,300 8.94 12.81

1996 5,271,300 2,684,600 605,000 437,900 10.30 14.02

1997 5,505,660 2,940,760 592,400 468,300 9.71 13.74

1998 5,620,400 3,106,300 616,400 476,200 9.88 13.29

1999 5,483,130 3,133,000 877,740 647,800 13.80 17.13

2000 5,731,100 3,479,700 867,700 555,800 13.15 13.77

2001 5,956,710 3,712,270 827,100 608,700 12.19 14.09

2002 6,048,220 3,803,090 998,600 824,100 14.17 17.81

2003 6,024,170 3,833,630 1,147,430 831,300 16.00 21.12

2004 6,207,120 4,037,720 1,037,280 837,800 14.32 19.04

2005 6,310,770 4,278,650 988,380 850,100 13.54 16.65

Year Employed Unemployed Unemployed Rate *%

Male Female Male Female Male Female

93

Source: International Labour Organization / Euromonitor.

* Calculated as: A/(A+B) Where A = Unemployed population. B = Employed population.

Table A-8. Proportion of Expenditure Per Household by Product and Services.Venezuela.

GOODS ANDSERVICES

2000(%)

2001(%)

2002(%)

2003(%)

2004(%)

2005(%)

2006(%)

2007(%)

2008(%)

2009(%)

2010(%)

AGRI-FOOD AND BEVERAGE PRODUCTS

Bread & Cereals 2.78 2.84 3.03 2.79 2.72 2.70 2.69 2.70 2.76 2.81 2.84

Meat 9.52 9.46 9.42 9.45 9.28 9.51 9.32 9.34 9.45 9.44 9.43

Fish & Seafood 1.66 1.65 1.78 1.78 1.76 1.79 1.75 1.79 1.78 1.79 1.80

Milk Cheese &Eggs

4.09 3.94 4.03 3.87 3.72 3.92 3.86 3.88 3.94 3.93 3.93

Oils & Fats 1.41 1.44 1.56 1.44 1.41 1.41 1.41 1.43 1.46 1.45 1.46

Fruit 1.86 1.87 1.78 1.77 1.74 1.81 1.77 1.75 1.79 1.78 1.77

Vegetables 2.78 2.78 2.80 2.77 2.72 2.80 2.73 2.72 2.76 2.74 2.73

Sugar &Confectionery

1.35 1.35 1.41 1.31 1.27 1.28 1.27 1.29 1.31 1.31 1.32

Other Food 0.45 0.42 0.42 0.42 0.41 0.41 0.41 0.41 0.42 0.42 0.43

Coffee, Tea &Cocoa

1.18 1.25 1.30 1.25 1.22 1.21 1.19 1.20 1.22 1.19 1.18

Mineral Water,Soft Drinks, Fruitand VegetableJuices

2.02 1.85 1.88 1.84 1.79 1.77 1.74 1.74 1.76 1.73 1.71

Spirits 1.03 1.02 1.05 1.08 1.19 1.18 1.17 1.17 1.15 1.13 1.13

Wine 0.35 0.38 0.40 0.40 0.45 0.46 0.46 0.47 0.46 0.45 0.45

Beer 0.51 0.53 0.52 0.53 0.56 0.58 0.60 0.61 0.61 0.60 0.60

Tobacco 1.21 1.20 1.20 1.21 1.31 1.31 1.30 1.29 1.25 1.22 1.22

Agri-Food &BeverageSubtotal

32.19 31.96 32.58 31.91 31.54 32.15 31.67 31.80 32.11 31.99 31.99

NON AGRI-FOOD GOODS AND SERVICES

Clothing &Footwear

2.38 2.04 2.04 2.09 3.34 3.37 3.55 3.66 3.84 4.02 4.18

Housing 14.70 15.41 15.14 15.18 15.14 14.90 15.04 14.95 14.81 14.81 14.78

GOODS ANDSERVICES

2000(%)

2001(%)

2002(%)

2003(%)

2004(%)

2005(%)

2006(%)

2007(%)

2008(%)

2009(%)

2010(%)

94

Household Goods& Services

2.58 2.56 2.58 2.60 2.58 2.55 2.53 2.47 2.43 2.43 2.45

Health Goods &Medical Services

2.36 2.28 2.32 2.28 2.27 2.26 2.27 2.30 2.33 2.29 2.32

Transport 4.99 4.98 5.08 5.07 4.91 4.90 4.88 4.84 4.82 4.81 4.80

Communications 0.63 0.63 0.65 0.64 0.64 0.64 0.65 0.65 0.66 0.66 0.67

Leisure &Recreation

3.44 3.36 3.42 3.46 3.37 3.29 3.28 3.24 3.20 3.17 3.13

Education 1.51 1.47 1.42 1.40 1.39 1.41 1.41 1.42 1.42 1.44 1.45

Hotels andCatering

14.04 13.12 13.10 13.30 13.39 13.12 13.25 13.32 13.28 13.32 13.35

MiscellaneousGoods & Services

21.19 22.18 21.68 22.07 21.42 21.40 21.47 21.34 21.10 21.05 20.87

Non Agri-Food &BeverageSubtotal

67.81 68.04 67.42 68.09 68.46 67.85 68.33 68.20 67.89 68.01 68.01

TotalExpenditures

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Source: Calculated From Data Supplied by the National Statistical Office / Euromonitor International. Pacific ExchangeService.

Notes: Based on current VEBs.

Table A-9A. Historical and Forecast Year to Year Changes in Price Indexes byExpenditure Categories. Venezuela.

YEAR CONSUM ER

GOO DS &

SERVICES

(% change)

FOOD & NON-

ALCO HO LIC

BEVERAGES

(% change)

ALCO HO LIC

BEVERAGES

& TOBACCO

(% change)

CLOTHING

AND

FOOTWEAR

(% change)

HOUSING

(% change)

1990 to1991

34.21 37.72 15.32 17.22 46.99

1991 to1992

31.42 30.49 41.79 16.24 42.58

1992 to1993

38.12 33.29 26.81 -13.22 55.79

1993 to1994

60.83 52.68 51.75 32.30 65.97

1994 to1995

59.92 42.63 42.33 38.10 88.11

1995to1996

99.88 90.46 118.70 44.43 95.78

YEAR CONSUM ER

GOO DS &

SERVICES

(% change)

FOOD & NON-

ALCO HO LIC

BEVERAGES

(% change)

ALCO HO LIC

BEVERAGES

& TOBACCO

(% change)

CLOTHING

AND

FOOTWEAR

(% change)

HOUSING

(% change)

95

1996 to1997

50.04 40.77 33.76 -5.64 21.87

1997 to1998

35.78 44.14 37.77 39.67 2.88

1998 to1999

23.57 25.58 11.82 14.36 35.19

1999 to2000

16.21 18.85 6.76 30.15 22.62

2000 to2001

12.53 9.39 10.53 4.90 23.19

2001 to2002

22.43 26.45 18.97 19.44 30.93

2002 to2003

31.09 43.70 36.68 21.51 41.86

2003 to2004

21.75 2.70 24.86 24.76 31.29

2004 to2005

16.60 14.43 20.52 17.57 23.27

2005 to2006

4.50 11.79

2006 to2007

18.08 11.59

2007 to2008

14.59 10.02

2008 to2009

11.01 11.54

2009 to2010

8.17 10.43

Source: Calculated from Price Indexes P rovided by Euromonitor International.

Note: 1995 = 100.

Data after 2005 are forecasts.

Table A-9B. Historical and Forecast Year to Year Changes in Price Indexes byExpenditure Categories. Venezuela.

96

YEAR HOUSEH ’LD

GOO DS &

SERVICES

(% change)

HEALTH &

MEDICAL

SERVICES

(% change)

TRANSPORT

(% change)

COMMUNICAT’N

(% change)

LEISURE &

RECREATION

(% change)

1990 to1991

91.67 32.13 14.30 41.13 29.16

1991 to1992

42.52 43.70 24.22 46.40 17.64

1992 to1993

20.84 32.52 59.93 86.20 19.28

1993 to1994

65.55 59.83 70.40 94.78 45.41

1994 to1995

34.95 68.92 71.14 63.35 59.49

1995to1996

72.84 135.64 142.54 111.77 151.24

1996 to1997

72.73 70.33 70.26 94.87 69.83

1997 to1998

28.65 58.51 54.83 15.71 15.41

1998 to1999

3.95 6.26 11.85 14.50 33.02

1999 to2000

42.16 6.59 5.50 27.94 7.34

2000 to2001

27.75 10.20 10.25 15.34 16.10

2001 to2002

21.64 9.55 11.05 22.56 16.78

2002 to2003

20.94 16.96 20.62 9.54 13.05

2003 to2004

25.22 29.19 25.11 24.77 25.04

2004 to2005

17.60 18.03 17.49 14.69 15.69

Source: Calculated from Price Indexes Provided by Euromonitor International.

Note: 1995 = 100.


Table A-9C. Historical and Forecast Year toYear Changes in Price Indexes byExpenditure Categories.Venezuela.

97

YEAR EDUCATION

(% change)

HOTEL &

CATERING

(% change)

MISC.

GOO DS &

SERVICES

(% change)

1990 to1991

60.20 23.97 15.08

1991 to1992

42.23 30.83 6.18

1992 to1993

48.77 45.63 109.28

1993 to1994

69.39 55.90 98.72

1994 to1995

77.71 57.26 89.04

1995to1996

105.90 86.03 149.47

1996 to1997

34.75 99.49 97.94

1997 to1998

49.44 49.04 27.95

1998 to1999

19.68 35.33 5.44

1999 to2000

14.74 12.78 5.59

2000 to2001

13.58 3.05 12.08

2001 to2002

10.46 12.92 20.64

2002 to2003

24.41 15.35 25.77

2003 to2004

24.28 26.01 23.81

2004 to2005

18.02 16.59 18.14

Source: Calculated from Price Indexes Provided by

Euromonitor International.

Note: 1995 = 100.


98

Table A-10. Annual Exponential Rates of Change of Retail Sales by Source of Demand.Venezuela.

Historical1998 to 2005(% per year)

Forecast2005 to 2010(% per year)

Forecast2010

Change Due toPopulation Increase

1.92 1.68 Retail Sales Units

TOTALCHANGE

(%/yr)

CHANGEDUE TOOTHER

FACTORS(%/yr)

TOTALCHANGE

(%/yr)

CHANGEDUE TOOTHER

FACTORS(%/yr)

Fresh FoodMeatVegetablesStarchy rootsFruitSugar &sweeteners

2.725.563.741.112.00

2.10

0.783.571.79

-0.790.08

0.18

2.463.632.952.622.01

1.51

0.771.921.250.920.32

-0.17

8,4441,5401,6521,0542,414

1,082

‘000 mt

Frozen FoodRed meatPoultryVegetables

-5.70-7.92-3.90

-11.84

-7.48-9.65-5.71

-13.50

1.951.392.092.49

0.27-0.290.400.80

5.391.583.210.16

‘000 mt

Canned / PreservedFood

Meat productsFish & seafoodVegetablesTomatoesReady meals

-0.18-1.141.22

-5.67-0.8225.33

-2.06-3.00-0.69-7.45-2.6922.97

1.541.552.200.15

-1.837.79

-0.14-0.130.51

-1.50-3.456.01

116.3412.6772.484.57

14.077.53

‘000 mt

Chilled FoodMeatFresh pasta

-2.99-2.96-6.80

-4.82-4.79-8.56

0.940.931.55

-0.73-0.74-0.13

113.99112.78

1.08

‘000 mt

Dried FoodRiceSoupPasta

-0.291.762.55

-2.45

-2.17-0.160.62

-4.29

2.011.961.482.13

0.320.28

-0.200.44

659.23360.92

6.09290.58

‘000 mt



Forecast2010



TOTALCHANGE

(%/yr)

CHANGEDUE TOOTHER

FACTORS(%/yr)

TOTALCHANGE

(%/yr)

CHANGEDUE TOOTHER

FACTORS(%/yr)

99

Oils & FatsVegetable & seedoilMargarineSpreadable oils &fats

0.20

-1.101.94

1.28

-1.69

-2.960.02

-0.63

2.87

2.452.78

3.90

1.17

0.761.08

2.18

361.20

189.4889.46

71.50

‘000 mt

Dairy Products & IceCream

Milk & ice creamMilkIce cream

Other dairyCheeseYogurt

-4.92-5.13-2.76-0.76-0.86-0.59

-6.71-6.92-4.59-2.63-2.73-2.46

0.25-0.254.153.353.473.07

-1.41-1.902.431.641.761.37

220,790.49192,680.0028,110.49

129.3993.2035.65

‘000 litres

‘000 mt

Snacks & MealReplacements

Chips or crispsExtruded snacksOther sweet &savoury

4.957.336.71

1.97

2.975.304.70

0.04

4.234.355.01

3.04

2.502.623.28

1.34

36.865.12

18.96

8.69

‘000 mt

ConfectioneryChocolate conf’nsSugar confectionsChewing gum

-3.38-2.420.06

-9.56

-5.20-4.26-1.83

-11.27

2.821.793.063.55

1.120.111.351.84

22.876.18

11.305.39

‘000 mt

SpreadsJams & preservesHoney

-9.50-12.20-5.16

-11.21-13.86-6.94

1.811.412.40

0.13-0.270.71

1.530.740.69

‘000 mt

Pet FoodDog & cat foodOther pet food

-0.37-0.675.20

-2.25-2.543.22

5.735.942.34

3.984.190.65

50.6747.962.71

‘000 mt



Forecast2010



TOTALCHANGE

(%/yr)

CHANGEDUE TOOTHER

FACTORS(%/yr)

TOTALCHANGE

(%/yr)

CHANGEDUE TOOTHER

FACTORS(%/yr)

100

Non-AlcoholicBeveragesHot Drinks

CoffeeOther hot drinks

Soft DrinksCarbonatesFruit & veg. juicesBottled water

-0.25-0.550.112.651.614.257.92

-2.13-2.42-1.780.72

-0.302.295.89

1.981.222.992.762.522.954.06

0.30-0.451.291.060.831.252.34

58.4632.3425.69

2,538.371,881.79

282.61291.79

‘000 mt

Millionlitres

Alcoholic BeveragesBeerWineSpirits

0.540.45

-4.312.99

-1.35-1.44-6.111.05

2.322.236.003.95

0.630.544.252.23

2,227.882,111.52

8.11104.28

Millionlitres

Source: Calculated from data supplied by Euromonitor.

Note: Major components of each category are included.

Table A-11. Ocean and River Ports of Venezuela.

Port Main Products /Functions

ContainerUnload

Rate

Location

Puerto Miranda

(Maracaibo).

Crude oil, Refined fuel

oil.

None. Lake Maracaibo,

Zulia State.

Bajo Grande

(Maracaibo).

Crude oil. None. Lake Maracaibo,

Zulia State.

La Salina

(Maracaibo).

Crude oil, Natural gas. None. Lake Maracaibo,

Zulia State.

El Tablazo

(Maracaibo).

Chemicals, Petroleum

products.

None. Lake Maracaibo,

Zulia State.

El Palito. Petroleum products. None. 7 miles from

Puerto Cabello,

Carabobo State.


ContainerUnload

Rate

Location

101

Punto Cardon. Chemicals, Petroleum

products.

None. Paraguana

Peninsula, Punto

Fijo, Falcon

State.

Amuay. Petroleum products. None. Paraguana

Peninsula, Punto

Fijo, Falcon

State.

Monobuoy

Petrozuata.

Heavy crude oil. None. Anzoategui

State.

Jose Petro terminal. Crude oil. None. Anzoategui

State.

Sincor Jose Marine

Terminal.

Chemicals, Petroleum

products.

None. Anzoategui

State.

Monoboyo Bitor. Heavy crude oil. None. Anzoategui

State.

Jose/Pequiven

(Jose Fertiniro).

Ammonia. None. Anzoategui

State.

Guaragao. Crude oil, Refined

products.

None. Anzoategui

State.

Guiria. Fishing, Military. None. Sucre State.

La Guaira. General cargo,

Containers, Fishing,

Military.

11 - 13 per hr. Vargas State.

Puerto Cabello. Grain, General cargo,

Fertilizer, Containers,

Military, Chemicals.

10 - 13 per hr. Carabobo State.

Guanta. General cargo,

Containers.

11 - 13 per hr. Anzaotegui

State.

Pamatacualito

(Guanta).

? ? Anzaotegui

State.

Pertigalete

(Guanta).

Cement. None. Anzaotegui

State.

Puerto Ordaz. Iron ore. None. Left bank of the

Caroni River

near the

confluence with

the Orinoco.

Bolivar State.


ContainerUnload

Rate

Location

102

Sidor

(Puerto Ordaz).

General cargo, Steel,

Scrap metal.

None. 195 miles up the

Orinoco River.

Venalum

(Puerto Ordaz).

General cargo, Bulk

cargo.


Orinoco River.

Alcasa

(Puerto Ordaz).

Bulk cargo - unload

only, Coke, Pitch/tar,

Alumina.


Orinoco River.

Port of

Ferrominera del

Orinoco

(Puerto Ordaz).

Bulk cargo, Iron ore. None. At Puerto Ordaz.

Copal (Palua)

(Puerto Ordaz).

General cargo, Iron ore. None. 181.4 miles up

the Orinoco

River.

San Felix

(Ciudad Guayana).

General cargo,

Aluminum ingots, Grain.


Orinoco River.

Cementos Guayana

(Puerto Ordaz).

1) Crude oil export.

2) Bulk cement - unload

only.

None. 194.5 miles up

the Orinoco

River.

Port of Bauxilum

(Puerto Ordaz).

Bulk (Bauxite, Alumina,

Caustic soda).

None. 192.8 miles up

the Orinoco

River.

Guaranao

(Puerto Fijo).

General cargo.

Containers (probably no

specialized cranes).

None. Falcon State.

Maracaibo Lake

Port.

General cargo, Bulk

cargo.

None. Zulia State.

San Francisco

(Maracaibo).

Coal from Colombia. None. Zulia State ??

Bulkwayuu

(Maracaibo).

A floating station

dedicated to coal.

None. Zulia State.

La Ceiba

(Maracaibo).

Coal, Silica sand,

Gypsum, Salt, Coke

coal, bananas, sugar.

None. S.E. shore of

Lake Maracaibo.

Zulia State.

Puerto Sucre

(Cumana).

? ? Sucre State.

El Guamache. Containers (no

specialized cranes),

Other.

? Nueva Esparta

State (Isla de

Margarita).


ContainerUnload

Rate

Location

103

Porlamar. Containers (probably no

specialized cranes),

Other.

? Nueva Esparta

State (Isla de

Margarita).

Sources: http://www.selinger.com/, www.puertoelguamache.com .

Table A-12. Tariff Rates of Venezuela Under the AndeanCommunity and MERCOSUR.

HS Product Description AndeanCommunity

(%)

MERCOSUR

(%)

10011000 Wheat, durum 15(4) 10(1)

10019000 Wheat, nes 15(4) 10(1)

20041000 Potatoes prepared or preserved other

than by vinegar or acetic acid, frozen

20 14

07134091 Lentils,green incl French green (dark

speckled),dried,shell,w/n skin/split, nes

15 10(1)

07131020 Peas split, dried 15(3) 10(1)

10083000 Canary seed 15 8(1)

07134099 Lentils,o/t seeds f sowing, dried, shelled,

whether or not skinned or split, nes

15 10

11071000 Malt, not roasted 15 14

07011000 Potatoes seed, fresh or chilled 5 0

07019000 Potatoes, fresh or chilled nes 15 10

04081100 Egg yolks dried 20 10

07133992 Black beans, dried, shelled, whether or

not skinned or split

15 10

07134010 Lentil seeds of a kind used for sowing,

dried, shelled

5 0

11031910 Oat groats and meal 20 10

12075000 Mustard seeds, whether or not broken 15(4) 8(1)

07131092 Peas, nes, yellow, dried, shelled, whether

or not skinned

15 10

07131091 Peas, nes, green, dried, shelled, whether

or not skinned

15 10

07109000 Mixtures of vegetables, frozen 15 10

http://www.selinger.com/

http://www.puertoelguamache.com


(%)

MERCOSUR

(%)

104

24031000 Smoking tobacco, whether or not cntg

tobacco substitutes in any proportion

20 20

07133393 Red kidney beans, light, dried, shelled,

whether or not skinned or split, nes

15 10

07133993 Great Northern beans, dried, shelled,

whether or not skinned or split

15 10

06049110 Christmas trees, fresh 10 8

07133999 Beans dried, shelled, whether or not

skinned or split, nes

15 10

21069080 Food preparations, nes 20(6) 16

12060090 Sunflower seeds, nes, whether or not

broken

15 8

07133399 Kidney beans, nes, dried, shelled,

whether or not skinned or split

15 10

11029000 Cereal flour nes 20 10

23099010 Poultry feeds, complete 15 8

10040090 Oats, nes 5 8

07132091 Chickpeas, Kabuli varieties, dried,

shelled, whether or not skinned or split

15 10

11041200 Oats, rolled or flaked grains 20 10

11042910 Barley, worked (eg, hulled, pearled,

sliced or kibbled)

20 10

21033000 Mustard flour and meal and prepared

mustard

20 16(2)

33021000 Mixtures of odoriferous subst inc

alcohlic sol for the food or drink

industries

10(5) 14

10082000 Millet 15 8(1)

23099090 Animal feed preparations, nes 15 8

12119000 Plants &pts of plants(incl seed & fruit)

used in pharm, perf, insect etc, nes

10 8

01031000 Swine, live pure-bred breeding 5 0

24011090 Tobacco, unmanufactured, not stemmed

or stripped, nes

10 14

02062200 Bovine livers, edible offal, frozen 20 10

12040090 Linseed (including solin), nes, whether or

not broken

15 8

07131099 Peas, nes, dried, shelled, whether or not

skinned

15 10


(%)

MERCOSUR

(%)

105

35021100 Egg albumin, dried 10 14

07104000 Sweet corn, frozen 15 10

19059010 Bread, pastry, cakes, biscuits and similar

baked products and puddings

20 18

21039000 Sauces and preparations nes and mixed

condiments and mixed seasonings

20 16(2)

04041019 Whey powder, whether or not sweetened 20 14

07102100 Peas, frozen 15 10

07133991 Pinto beans, dried, shelled, whether or

not skinned or split

15 10

Source: Markets and Trade Team AAFC.

(1) Tariff is zero if product is used as seed.

(2) Tariff is 18% for sealed products where the content is less than or equal to 1 kg.

(3) Tariff is 5% id product is to be used as seed.

(4) 15% + or - DV. Where DV refers to an import duty addition or subtraction

under the Andean Price Band System. Wheat for seed purposes is subject to

only a 5% tariff.

(5) Tariff is 5% for alcoholic mixtures that contain more than 0.5% alcohol.

(6) Heading 210690 contains more than 20 subheadings that could match the

description of HS code 21069080. Tariffs range from 5% to 20% (the majority

being closer to 20%).

106

1. US Library of Congress. http://countrystudies.us/venezuela/8.htm .

2. US Library of Congress. http://countrystudies.us/venezuela/9.htm .

3. US Library of Congress andhttp://www.recipes4us.co.uk/Cooking%20by%20Country/Venezuela.htm.

4. Banco Central de Venezuela.http://www.bcv.org.ve/EnglishVersion/c2/index.asp?secc=statistinf

5. Unless otherwise indicated, rates of change refer to the rate of change of an exponential trendline fitted to a data set.

6. The Gini ratio is a measure of the inequality of income distribution. A value of zero indicatesthat all incomes are equal, a value of 100 indicates total inequality.

7. “Venezuela’s Economy Expanded 9.4% in 2005" http://www.embavenez-us.org/news.php?nid=2182 .

8. For more information about the Andian Community visit the website:http://www.comunidadandina.org/endex.htm .

9. Calculated from “GDP at basic prices in chained (1997) dollars.”www.statcan.ca/english/freepub/15-001-XIE/00306/table4.htm.

10. Much of this section is derived from: USDA, Production Estimates and Crop AssessmentDivision, FAS. “Venezuela: Agricultural Overview.”http://www.fas.usda.gov/pecad/highlights/2005/07/July2005/Venezuela_Jul05.htm.

11. According to historical statistics circa 2001 from the Ministry of Agriculture and Lands(MAT) which are no longer being published or distributed publicly.

12. Artisanal fisheries: Also known as subsistence or sometimes aboriginal fishing. Refers tofishing for subsistence needs by coastal or island ethnic and indigenous groups usingtraditional methods.

13. The economically active population "comprises all persons of either sex who furnish thesupply of labour for the production of economic goods and services as defined by the UnitedNations systems of national accounts and balances, during a specified time-reference period".

14. The ILO international definition of employment provides separate criteria for persons in paidemployment and persons in self-employment in order to accommodate the idea thatemployment covers any work, be it for wage or salary, profit or family gain, including theproduction of goods for own consumption: The "employed" comprise all persons above aspecific age who during a specified brief period, either one week or one day, were in the

ENDNOTES

http://countrystudies.us/venezuela/8.htm

http://countrystudies.us/venezuela/9.htm

http://www.recipes4us.co.uk/Cooking%20by%20Country/Venezuela.htm

http://www.bcv.org.ve/EnglishVersion/c2/index.asp?secc=statistinf

http://www.embavenez-us.org/news.php?nid=2182

http://www.embavenez-us.org/news.php?nid=2182

http://www.comunidadandina.org/endex.htm

http://www.statcan.ca/english/freepub/15-001-XIE/00306/table4.htm

http://www.fas.usda.gov/pecad/highlights/2005/07/July2005/Venezuela_Jul05.htm

107

following categories: (A) "paid employment": (I) "at work": persons who during the referenceperiod performed some work for wage or salary, in cash or in kind; (ii) "with a job but not atwork": persons who, having already worked in their present job, were temporarily not at workduring the reference period and had a formal attachment to their job. (B) "self-employment":(I) "at work": persons who during the reference period performed some work for profit orfamily gain, in cash or in kind: (ii) "with an enterprise but not at work": persons with anenterprise, which may be a business enterprise, a farm or a service undertaking, who weretemporarily not at work during the reference period for any specific reason. For operationalpurposes, the notion "some work" may be interpreted as work for at least one hour. Unpaidfamily workers at work should be considered as in self-employment irrespective of thenumber of hours worked during the reference period. Apprentices who received pay in cashor in kind should be considered in paid employment and classified as "at work" or "not atwork" on the same basis as other persons in paid employment. Members of the armed forcesshould be included among persons in paid employment. They should include both the regularand temporary members.

15. Euromonitor, Consumer Lifestyles in Venezuela (April 2005).

16. The annual rate of change of retail sales due to “other” factors is calculated as ((1+a)/(1+b))-1, where “a” = Total annual rate of change of retail sales. “b” = annual rate of populationgrowth

17. Margarine is defined as: fatty solid butter substitute consisting of a blend of hydrogenatedvegetable oils mixed with emulsifiers, vitamins, colouring matter, and other ingredients. Alltypes of margarine and cooking margarine, including low-fat variants. Note: Margarine ispaper-wrapped as opposed to spreads, which are packed in rectangular cups. Margarine istypically used to fry food in a pan, alternatively to bake. It also has a higher level of fat whichallows it to resist high temperatures. Its texture is hard due to the high level of fat present.NB: spreadable oils and fats marketed as “margarine” fall under “spreadable oils and fats”using Euromonitor definitions. Leading global examples include Rama (Unilever), Becel(Unilever Group), Claybom (Unilever), Milda (Unilever). (Source: Euromonitor).

18. See 14 above.

19. The aggregation of tomato pastes and purees, bouillon / stock cubes, herbs and spices,fermented, soy, wet, dry sauces / powder mixes, ketchup and mayonnaise. (Source:Euromonitor).

20. “Off-trade” refers to products that are consumed off the premises where they were purchased.“On-trade” refers to products that are consumed on the premises where they are purchased.

21. Much of the information in this section is from the WTO document WT/TPR/E/108.

VENEZUELA Agri-Food Market Assessment Report

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