Haiti

Export Guide to the Consumer Food Market

September 1997

Prepared for the U.S. Department of Agriculture

by Fintrac Inc.

This guide is one of ten individual guides available (not including a summary guide), covering the following countries and territories: Aruba and Curacao; the Bahamas; Barbados; British Territories, comprising Anguilla, the British Virgin Islands, the Cayman Islands, and the Turks and Caicos; the Dominican Republic; Guadeloupe and Martinique; Haiti; Jamaica; and the Organization of Eastern Caribbean States, comprising Antigua and Barbuda, Dominica, Grenada, St. Kitts-Nevis, and St. Vincent and the Grenadines.

For more information, contact USDA/FAS offices in the Dominican Republic and Miami:

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List of Abbreviations Used

Table of Contents

Basic Facts (Geography, Demographics, Infrastructure)

Haiti occupies the western one-third of the island of Hispaniola, the eastern two-thirds being occupied by the Dominican Republic. It is located 750 miles southeast of Miami and 50 miles east of Cuba in the Caribbean. A French speaking country, it has a total area of 27,750 square kilometers, slightly larger than Maryland, and is divided into nine administrative divisions. About two-thirds of the land area is rough and mountainous. Areas of low land contain several lakes, and numerous rivers flow from the eastern mountain slopes to the sea. The climate is tropical or semiarid where mountains in the East cut off trade winds. The total population is 7.2 million, with about 70 percent living in rural areas. Port-au-Prince is the capital and the most populated city. Together with Petionville, a city located on the outskirts, it has an estimated population of 1.5 million. The second largest city is Cap Haitien, in the north, with a population of 107 thousand. About 95 percent of the population are of African descent; the rest is mostly of mixed African-Caucasian ancestry. A few are of European or Levantine stock.

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The political turmoil of 1991-1994 has left the Haitian economy in a shambles. Haiti now depends heavily on international assistance, including food grants from the United States. GNP per capita is estimated at $340 (1996) and unemployment and underemployment at 70 percent. Agriculture is mainly small-scale subsistence farming and accounts for 44 percent of GNP while employing two-thirds of the population. Major crop exports are coffee, cocoa, sisal and mangoes. Haiti is the second largest exporter of mangoes to the US market. The currency is the Haitian gourde.

Two major seaports are active, the first in Port-au-Prince, and the second in Cap Haitien. The Port-au-Prince port has a roll-on/roll-off facility, a thirty-ton gantry crane and a fifty-ton mobile crane. Main shipping lines include American Gulf Line, Antillean Marine, CGM Sud, Crowley American Transport, Hapag Lloyd, Navieras de Puerto Rico, Nedlloyd Lines, Seaboard Marine, Tecmarine and others. The international airport is located in Port-au-Prince and features cargo facilities. Air cargo lines include Air Canada, Air Express International, Air France, Air Haiti, Air Jamaica, ALM, American Airlines, Haiti Air Freight International S.A., Haiti Trans Air, Nationair, and North Star Airlines. The Haitian internal transportation network includes a total of 2,500 miles of roads, of which 600 miles are paved, 600 miles otherwise improved, and 1,300 miles unimproved.

Consumer Trends and Attitude Towards Imports

Close to 75 percent of the Haitian population lives below the poverty line, subsisting on small-scale farming and international assistance. About 90 percent of the population rely on outdoor markets for the large majority of their food supply. Only about 40 percent of the population shop at supermarkets, and in most cases it is to buy specific items not available in the outdoor markets. Price is the predominant factor governing all purchasing decisions.

A small minority of the population, however, benefits from a high standard of living and has access to high quality and sophisticated goods. They represent the most important sources of revenue for supermarkets. Grocery shopping is usually daily, as the Haitian household rarely stores food products. Refrigerator ownership rate is low, around 20 percent, and those that do own a refrigerator do not always fully utilize it because of the high cost, and irregularity, of power supply. Electricity service is available to 45 percent of the population in Port-au-Prince and to only 3 percent of the population in the rest of the country.

About 75 percent of Haiti's food supply is accounted for by imports. There is some local production of fruits, vegetables, rice, cereals, poultry meat, and other products, but not in sufficient quantities to meet local demand. The attitude toward imported food is generally positive, but, outside of staple foods such as beans, imported foods are usually considered unaffordable by the mass of the population. The origin of the products does not play an important role in most cases, as only price matters to the consumer.

The Wholesale Food Sector

The Haitian wholesale market involves a multitude of small players. They include importing companies, supermarkets (many of which also operate wholesale divisions), and numerous individuals who import foods occasionally on an informal basis. Professional importers and supermarkets supply the retailers and HRI (hotel, restaurant, and institutional) trade, as well as the individual street resellers and open air markets. Overall, it is estimated that between fifty to sixty companies actively participate in the food import market. Many of them sell the entirety of their merchandise to retailers but some also distribute directly to the consumer. Informal importers play a very important role in the supply of the market, accounting for an estimated one-third to one-half of total food imports.

The majority of wholesalers are located in Port-au-Prince and Petionville. Most only supply the local market but the largest ones also supply retailers in the provinces. Cap Haitien in the north and Jacmel in the south also have some importers/wholesalers that supply the local market. Haitian wholesale companies tend to specialize in selected product lines. Some represent brands from major US or European manufacturers but also carry non-proprietary products. Comparatively, supermarkets tend to import a wider variety of items. Their favored sources of supply are wholesalers and manufacturers that offer a wide range of products. The largest Haitian food importers bring in one or two containers a week, while most only import one or two containers per month on average. Major food wholesale companies include Alimpex, D'Adesky Import Export, Francheco Import Export, Generale d'Importation, and the Group Brandt. Major importing supermarkets include Caribbean Supermarket, K-Dis, Market Saint-Pierre, and Public's Supermarket.

Haitian wholesale companies tend to have only minimal investments in equipment. In general, they try to minimize warehousing as they lack the facilities to assure proper handling and storage of food products. An average Haitian wholesaler has one medium-sized warehouse from which customers are served. Very few companies deal with fresh or frozen products or have temperature-controlled rooms. Only large wholesalers operate a fleet of trucks and undertake delivery services in town. Wholesalers do not deliver in the provinces, but require that customers come to the warehouse and take delivery themselves. Only major and/or known retailers are allowed to buy on credit, the majority of sales being on a cash-and-carry basis.

The future of wholesale distribution depends on the development of the Haitian economy. Haiti will continue to depend on imported products and wholesalers should play an important role in the supply of the market in the future. However, their predominance will not emerge until order has returned to the market and the informal sector is regularized.

The Retail Food Sector

Street stalls and open air markets account for 90 percent of food sales to the consumer, the remainder being effectuated by supermarkets and convenience stores. There are four major open air markets and about forty supermarkets in Port-au-Prince/Petionville. Each of the other cities has one or two open air markets, and between two and four supermarkets. Convenience stores are present in all neighborhoods, but their number is not known precisely.

Street stalls and open air markets are the main sources of supply for food products. They involve individual resellers that settle down on the floor or set up a rudimentary stall to display their products. Product offerings can be imported as well as locally produced, and include fruits and vegetables, meat, seafood, confectionery, beverages and fruit juices. Suppliers to market vendors include local producers, supermarkets, wholesalers, and the informal commercial importers. These vendors rarely hold an inventory of food products. However, the outdoor markets generally have depots that allow for the storage of dry food products such as rice, flour, beans and cereals.

Convenience stores are small stores of 100 to 300 square feet that carry a variety of foods and non-food products. They are owned and operated by one or two people and are present in every neighborhood. They carry staple foods as well as confectionery items, dairy products, beverages, and ice cream. Large supermarkets, wholesalers and informal importers supply these stores. They do not have code bar scanners and do not accept credit cards.

Haitian supermarkets are of small size. The largest one, Caribbean Supermarket, only has six checkout stands. There are no chains of supermarkets in Haiti, but three companies (Big Star Supermarket, Public's Supermarket and Eagle Supermarket) each have two affiliated outlets in addition to their main stores. Public's and Caribbean Supermarket accept credit cards, and are the only supermarkets which have scanners and use bar codes. Other major supermarkets include Express Supermarket, K-Dis, Market Saint-Pierre, and Oriental Market. Haitian supermarkets usually undertake direct imports and carry a wide variety of products. It is estimated that about 80 percent of the products which supermarkets offer are not available from any other category of retailer.

As price remains the most determinant factor, open air markets will continue to play an important role in the Haitian food distribution system. There are currently no reports of any extension project or of new investment plans in the supermarket business. Gas stations, however, are starting to offer food products, increasing the number of convenience stores competing in the marketplace.

Business Relationships/Choosing a Partner

The Haitian food distribution market is fragmented and disorganized. It would be difficult to identify one partner able to offer a national coverage for every category of products. For some selected items, however, wholesalers could offer highly valuable contribution, as they are familiar with the market and are well-known by retailers. They are still the most recommended partners for high volume items. Grocery products, on the other hand, can be directly marketed to supermarkets as well as to wholesalers. Supermarkets either sell the products themselves in their stores or resell them to smaller vendors. A common practice is also to do business through an agent compensated on a commission basis. The agent usually promotes the products to wholesalers and retailers in his immediate territory.

Haitians are open to working with foreign exporters and are well disposed towards US businesspeople. Appointments with Haitian businesspeople should be made in advance. The workday is usually from 8:00 am to 5:00 pm. Most businessmen can converse in English. Invitations to restaurants are appreciated and business is usually discussed in restaurants as much as in offices.

Major importers benefit from credit terms from their traditional suppliers. Bank financing is difficult to obtain and interest rates are high.

Laws and Regulations Concerning Imported Food

Besides an outdated and unenforced "Code of Health", there are no specific laws or regulations on food products in Haiti. The only requirement is to mention the expiration date of the product on the packaging. There are no regulations on food additives, pesticides or contaminants.

Since the return to constitutional order in 1994, the Government of Haiti has embarked on an ambitious program of economic and structural reform. This program includes, particularly, a progressive trade modernization and liberalization ending fiscal year 1998/1999.

The situation of import procedure is not clearly defined due to the fact that five government agencies are concerned: the Ministry of Economics and Finance (MEF); the Ministry of Trade and Industry (MIC); the Ministry of Agriculture (MARNDR); the Ministry of Public Health (MSPP); and the Customs Administration (AGD)

It is advisable to follow these steps:

A declaration must be made at customs by the importer within 21 days after the arrival of imported goods in Haiti, otherwise a fine of 5 percent of CIF value is applicable. The importer must present to Customs: the bill of lading or the airway bill; the original invoice from supplier; the pre-import documents; and all relevant documentation requested by Customs. At that time, a physical verification of goods is done by Customs.

Tariffs and Other Taxes

Haiti's former Custom tariff structure, which was characterized by tariffs of up to 50 percent, has been lowered to the 0 to 15 percent range (except for petroleum) and quantitative restrictions have been eliminated since 1995. The adoption of the Harmonized System, as tariff nomenclature, has been approved by parliament but it is not yet in practice since the new matching law reducing maximum tariffs and tariff dispersion through a three-band regime in the 0 to 10 percent range has not been approved yet by Parliament. An automated control system (ASYCUDA) has been established and is expected to become fully operational at the Port-au-Prince harbor and airport in January 1998. Also, the GATT (WTO) basis of value has been presented for approval to parliament.

Haiti recently became a member of CARICOM and will apply the CARICOM External Tariff (CET). The maximum CET rate is 35 percent, with a 5 percent surcharge for many agricultural products. A listing of Haitian tariffs for consumer food products follows as Appendix 2.

The following sequence is applied by Customs to determine the total of duties and taxes payable by the importer.

Contacts for Regulatory Information

Consumer Food Imports

Official Haitian import statistics are not available. Therefore, official export statistics from the US, EU, and Canada are used in this analysis. Haiti imported $56 million of consumer food and beverage products from the US in 1996, according to official US export statistics.⁽¹⁾ The EU supplied $29 million and Canada supplied $7 million, giving just over $91 million in total imports from these three suppliers in 1996. Other suppliers (mostly the Dominican Republic and other Caribbean Basin countries) are estimated to supply not more than 20 percent of the total import market estimated at $110 to $120 million.

See Table 1 for a breakdown of imports by commodity category and supplying country.

Despite Haiti's relatively large population, the import market is small compared to many other Caribbean countries. Extreme poverty, the small size of the middle class, and an undeveloped tourism industry are expected to remain constraints to expanded market prospects for luxury food and beverage products. An estimated 75 percent of the current import market is comprised of basic food stuffs, such as frozen chicken, powdered and other non-fresh milk, dried peas, sugar, and basic cereal preparations. Sizeable quantities of these items are likely supplied by bilateral and multilateral development agencies (either free or at reduced costs to the poor consumer).

1. Consumer foods are defined for the purposes of this market study as the following two-digit Harmonized System categories: 02 (Meat, Fresh, Frozen and Dried), 03 (Fish And Seafood, Fresh, Frozen and Dried), 04 (Dairy and Eggs), 07 (Vegetables, Fresh, Frozen and Dried), 08 (Fruit And Nuts), 09 (Coffee, Tea, Mate And Spices), 16 (Preparations Of Meat and Fish), 17 (Sugars And Sugar Confectionary), 18 (Cocoa And Cocoa Preparations), 19 (Preparations Of Cereals), 20 (Preparations Of Vegetables and Fruits), 21 (Miscellaneous Edible Preparations), 22 (Beverages, Spirits And Vinegar).

Luxury food and beverage items in Haiti (processed items normally found in US supermarkets) are out of reach of the typical Haitian consumer. However, the higher income groups, while small in number, do demand these items. These groups include foreign aid advisors, who typically shop for most items at the small Haitian supermarkets. US brands are common in these supermarkets (see Appendix 1) and, while the sales volumes may be lower than in most Caribbean countries, opportunities do exist for US suppliers. However, because of the low volumes, US producers are advised to sell through Miami-based wholesalers and consolidators who ship container loads of mixed products to Haitian importers.

Best prospects for US exporters can be divided into two categories: high volume basic food stuffs and low volume, but high value, 'luxury' food items. For the former category, best prospects for US suppliers will continue to be chicken, meat offal, sugar, dried leguminous vegetables, basic cereal

preparations, and various dairy products (mostly non-fresh milk). High value supermarket opportunities, albeit at lower volumes, include: higher value meats, cheese, some fresh temperate fruits and vegetables, chocolate and other candies, higher value cereal preparations (cake mixes, breakfast cereals, pasta, biscuits, snack foods), canned fruits and vegetables, condiments, fruit juices, and other non-alcoholic beverage items. The US also has a sizeable market share of the imported beer market and a smaller share of the wine market.

Appendix 1

Products in Haitian Supermarkets:

A Representative List

Appendix 2

Tariff Rates for Consumer Food Products in Haiti