Asian markets remain a key focus for New Zealand food and beverage companies wanting to grow their export business. While growth prospects remain high over the long-term, challenges exist. Here are some insights gained from F&B distribution partners we work with across Asia on the state of business in each country.

South Korea

The NZ-Korea FTA is raising awareness of New Zealand as a source of quality food products. That said, the phase down on tariffs is very slow and in some sectors, such as fruit processing, New Zealand is still at a heavy tariff disadvantage to Chile who has had a FTA with Korea for many years. Current threats from South Korea’s volatile neighbour to the north are affecting consumer spending on discretionary items including imported F&B. On a positive note, the Government continues to introduce measures to control the unfair demands that major retailers impose on their suppliers, thus enabling a greater diversity of international food products to make their way to Korean consumers.


Singapore remains the key exhibition market for retail F&B brands wanting to gain a foothold in Southeast Asia. However, the retail (supermarket) sector is experiencing challenging times; according to leading distributors we work with, uncertain economic conditions have resulted in consumers saving their discretionary income instead of spending it on luxury F&B items. This is putting pressure on profits from the imported food aisles in supermarkets. The flow on effect has resulted in overhauls in management roles at the major retail groups as retailers scramble to fend of depressed sales. We are also seeing greater demands by the retailers in the form of expensive listing fees and compulsory A&P (advertising and promotion) costs. Disruptive online supermarkets Red Mart and Honest Bee are finally starting to be seen as genuine competition to the two major retail groups with more and more consumers attracted to their diverse product range, convenience and better prices.


Malaysia is one of the few Southeast Asian countries with a bustling group of independent retailers competing with regional behemoths like the Dairyfarm Group. Unfortunately, business has suffered recently in the wake of the political turmoil from the 1MDB scandal which has destabilised the currency. Lingering challenges associated with the introduction of GST in April 2015 and weak returns in the petrochemical industry have also weakened GDP. My industry contacts tell me that supermarket trade is down as much as 15-20% yoy due to depressed consumer demand. Thankfully, Food Service trade is performing well, but the currency devaluation is having to be absorbed by distributors as customers push back on wholesale pricing. The wine sector has been affected by increased regulation leading to introduction of bureaucratic processes and increased costs, as well as longer Customs clearance delays.


As an economy that is heavily reliant on tourist trade, business is suffering as visitor numbers still fail to reach their pre-Military Coup numbers. A reduction in European visitors has been offset by a significant increase in tourists from China; however, different consumer preferences have downstream effects on demands for specific types of imported food products. The wine sector has been plagued by a series of changes to the excise taxes. Excise tax was once based on the CFR value of goods and was revised to be based on the estimated wholesale price but it has recently changed again and is now based on the final retail price. New excise taxes are also being introduced this month to include a sugar tax on consumer products in an effort to support healthy eating.