Regulation & Safety

Forget football: Can Brazilians now stomach the unpalatable truth of confectionery exports?

10-Jul-2014 - By Vladimir Pekic
Sinking ship: Brazil's confectionery exports hampered by 'red tape', says ABICAB
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Brazilian confectionery manufacturers are forced to commit up to 15% of exports costs towards resolving bureaucratic problems that hinder their sales abroad, according to the Brazilian confectionery industry Association (ABICAB).

Companies associated with ABICAB reveal that they spend between 6% and 15% of their export costs solely to resolve red-tape related problems. Furthermore, time-related export problems arise, as it can take up to six months to sort out the necessary product documentation,” ABICAB told ConfectioneryNews.

Companies in Brazil’s confectionery sector often complain about issuance of sanitary certificates, a service that is not provided by Brazilian authorities and which generates large costs for exporters on a monthly basis.

Exporters often have to contract third-parties or they create new staff posts to deal exclusively with the ‘bureaucratic problems’.

Hindering deals

Daniela Pernambuco from the export division of Erechim-based candy manufacturer Berbau Industria Balas Finas Munarfrey said: “With us being based in [Brazil’s southernmost state] Rio Grande do Sul, we have faced problems to secure the necessary documentation in other states, because certain [Brazilian] laboratories do not have the necessary authorization to issue documents and analyses to out-of-state companies, which prevents us from attending certain client requests. This directly affects the possibility of closing deals.”

Cristian Ahlert, in charge of exports at candy manufacturer Docile Alimentos, said:  “What leaves me perplexed is the fact that Brazilian institutions are not seeking solutions. They are merely rejecting requests, without even trying to understand the problem.“

My suggestion would be for Brazilian organs to unite and, after researching the requirements put forward by importing countries, to create unified documentation that is easily accessible to exporting companies. The excess of jurisdictions existing in Brazil led to the loss of our agility and efficiency,” he added.

Falling exports

Brazil, the third largest confectionery producer in the world, reported a drop in exports in 2013. Last year’s figures from ABICAB, shows that the country exported just 30,000 metric tonnes (MT) of chocolates and 76,000 MT of other confectionery products, down from 32,000 MT and 79,000 MT in 2012, respectively.

Solange Isidoro, ABICAB’s vice president of exports, blamed the poor result on the economic crisis in Argentina, one of Brazil’s largest commercial partners, as well as the infamous ‘Custo Brasil’ [cost of doing business in Brazil]. The exports chief added that Brazilian confectioners were primarily focused on selling in the domestic market.

Despite the drop in exports, some companies are attempting to regain lost stakes in foreign markets through a range of capacity-building projects. “Industries that invest in products that offer nutraceutical properties, sophisticated packaging, new flavors and consumer-pleasing formats are the ones doing their homework. This is the main approach of the sector’s export strategy.”

Shipping troubles

Brazilian torrone manufacturer Montevérgine stressed that bureaucracy was not only a detrimental cost factor, but also caused serious delays in the release of export containers.

On several occasions, our paperwork was not finalized in time to fulfill the deadlines set by the shipper, forcing us to wait for the next ship. Storing a container at the port results in exorbitant charges,” explained Montevérgine’s export manager João Ricardo Altério.

Related topics: Emerging Markets, Regulation & Safety, Chocolate, Candy, Gum, Biscuits