Foreign Involvement in Hong Kong’s F&B Industry
Hong Kong is an important and lucrative destination for all types of food products. It is home to a generally affluent community of over seven million. Hong Kong also receives many millions of tourists from all over the world every year. The vast majority of these tourists are from mainland China; Hong Kong draws approximately 45 million visitors from mainland China annually.
Hong Kong has limited trade barriers with regard to exports because it has one of the most open markets in the world. The F&B market in Hong Kong is very competitive, which also requires all producers to have to balance product quality and cost. The countries from which Hong Kong imports the largest quantities of F&B products are China, the United States, Brazil, France, and the Netherlands. Almost all F&B products consumed in Hong Kong are imported; approximately 95% of the F&B products in Hong Kong are from abroad. Therefore, Hong Kong is heavily reliant on F&B imports.
Hong Kong is also a trading hub in China, Macau, and other parts of the Asia-Pacific region for re-exports of F&B products. Demand for different types of convenient foodstuffs has risen. Customers have also become increasingly aware of nutritional values, traceability issues, and food safety. Many F&B producers in Hong Kong have noted these changing demands and acted accordingly so that their products will be more marketable around the world.
Many manufacturers of Hong Kong food and beverages deal with supermarket and overseas importers directly. The food and beverage trading companies located in Hong Kong are vital to the introduction of Hong Kong’s food products to foreign markets. They also help smaller manufacturers sell their products abroad.
A large number of companies in Hong Kong have established a significant presence in foreign markets. Kee Wah Bakery, Vitasoy, Amey, Lee Kum Kee, Lam Soon, and Kampery are among Hong Kong’s foremost F&B companies. Many of these companies have expanded abroad in order to increase their sales all over the world. These Hong Kong companies have aggressively spread to overseas markets so that they could be recognized internationally. There have also been businesses which have built factories abroad in order to serve the local markets of foreign countries. For example, Vitasoy Group has expanded far beyond Hong Kong and today sells its goods in more than 40 countries. The company now has manufacturing facilities not only in Hong Kong, but also in Shenzhen, Foshan, Wuhan, Shanghai, Australia, and Taiwan.
On January 1, 2019, the latest Goods Trade Agreement between the Government of Hong Kong and the Department of Commerce came into effect. The new agreement specifies the most recent rules regarding origin arrangement. Goods which are not subject to the Goods Specific Origin Regulations will enjoy zero tariff status in accordance with their conformity to the Hong Kong products and the general rules of origin.
Status of Specific Subdivisions of Hong Kong’s F&B Industry
Three of the major subdivisions of Hong Kong’s F&B industry are the meat industry, the fruit and vegetable industry, and the alcoholic beverage industry. Each of these industries is faced with different sets of circumstances which affect their level of profitability as well as from which countries most of the products of these industries are imported.
Hong Kong’s meat industry has shown significant growth in recent years. This growth has been driven by an increase in demand for premium meat. The influx of affluent tourists as well as the steady rise in local income have combined to drive up demand for premium meat products in Hong Kong. The country from which Hong Kong imports the most premium meat products is Australia. The high levels of food safety, traceability, consumer confidence, and value for money have caused many customers in Hong Kong to choose Australian meat. Commercial purchasers have made plans to expand Hong Kong’s selection of meat products to include safe, hormone-free, and natural meat products. However, due to the increasing availability in Hong Kong of plant products, more customers will opt for meat-free food in the long term.
Hong Kong’s fruit and vegetable industry is thriving because it is one of the world’s highest per capita consumers of fresh fruit and vegetables. Just as is the case with all other food products in Hong Kong, most fruit and vegetables bought and sold in Hong Kong are imported. Only around 5% of such products are produced locally. The bulk of imported fruit and vegetables sold in Hong Kong originate from China, the United States, and Australia. Pesticide-free, natural, and hydroponic fruit and vegetables are often those preferred by customers in Hong Kong. Hong Kong’s straightforward import system and effective logistics network have served to increase the general competitiveness nature of the fruit and vegetable industry there, especially with regard to fresh products.
Hong Kong’s market for alcoholic beverages has also been expanding. Customers there are reasonably knowledgeable about alcoholic beverages. They also tend to be interested in learning about new trends in alcoholic beverages due to the increases in general consumption of alcohol and international travel. Many consumers in Hong Kong have also begin to develop a preference for microbrews and niche items instead of the alcoholic beverages typically sold in the mainstream market.