MARKET OF MEAT IN THE REPUBLIC OF LEBANON

Transcription

1 2010 MARKET OF MEAT IN THE REPUBLIC OF LEBANON Khoury Statistics and Studies 9/30/2010

2 2 Khoury Statistics and Studies October 12, 2010 M/s Embassy of Argentina Economic and Commercial Section 2nd floor, Résidence des Jardins 161 Sursock Street Mar Nicolas sector Beirut Lebanon Sirs, With reference to your request about the Lebanese market of Meats, we hereby submit our response enclosing a market survey, dated on October 12, 2010, prepared by KHOURY STATISTICS AND STUDIES. We have welcomed the privilege of working for the Commercial Section of the Embassy of Argentina in Lebanon, and we remain at your disposal for any additional research on this subject. Respectfully, Lic. Miguel Khoury 2

3 3 TABLE OF CONTENTS I. INTRODUCTION...04 Page 1. BACKGROUND OF THE STUDY METHODOLOGY MARGIN OF ERROR PRODUCTS COVERED II. GENERAL ENVIRONMENT GENERAL INFORMATION GEOGRAPHICAL ENVIRONMENT POLITICAL ENVIRONMENT DEMOGRAPHIC ENVIRONMENT SOCIO ECONOMIC ENVIRONMENT BUSINESS ENVIRONMENT...18 III. LEGAL AND REGULATORY FRAMEWORK MAIN LAWS AND REGULATIONS CUSTOM AND VAT RATES 30 IV. MARKET DESCRIPTION GENERAL VIEW ON MEATS OF LEBANON LIVESTOCK LEBANESE MEAT MARKET STATISTICS MEAT PRODUCERS, IMPORTERS AND TRADERS IN LEBANON AVERAGE SELLING PRICES REPORT ABOUT LEBANON S MEAT INDUSTRY.38 V. DATA BASE LEBANESE MEAT TRADERS WITH ARGENTINA LEBANESE MEAT TRADERS MEAT AND GAME, PROCESSED PRESERVED MEAT SALTED DRIED OR SMOKED HAM AND SALAMI CANNED MEAT COCLUSION

4 4 I INTRODUCTION 1. BACKGROUND OF THE STUDY At the request of the Commercial Section in the Embassy of the Republic of Argentina in Beirut Lebanon, KHOURY STATISTICS AND STUDIES has conducted a survey in relation with the Lebanese Meat market. The main objectives of the study are:* To provide a general overview of the prevailing demographic socio economic, and business environment in Lebanon. To describe the legal and regulatory framework governing the import and distribution of Meats in Lebanon. To identify main productions, importers and exporters of Meat in Lebanon. To provide detailed quantitative data on the above mentioned market, including data on value of local production, imports, exports, and market size. The study starts with brief information and data on the general environment prevailing in Lebanon including essential demographic and socio economic figures. The study proceeds with a description of main laws and regulations related to the Lebanese market of Meats products. The study subsequently provides a comprehensive description of the above mentioned market, and this includes information on main manufacturers, importers, exporters and distributors. Finally, the study provides data on the value of local production, imports and exports, and on market size. *This survey is to explore meat market in the Republic of Lebanon (RL). The purpose of this market survey is to find out feasibility of exporting frozen meat from Argentina to Lebanon by analyzing the existing situation in the Lebanese meat market. The objectives of the survey on meat market in Lebanon are as follows: To find out the role of the meat market in the general industrial setup of RL. To study the current state of the companies involved in meat processing in Lebanon. To find out business opportunities for the export of Argentinian meat into the Lebanese market. To give statistical information on Lebanon s meat market. To identify the business environment and understand the tax regime, foreign trade regulations, and foreign investment regulations. 4

5 5 2. METHODOLOGY For the purpose of the present study, KHOURY STATISTICS AND STUDIES has conducted a complete desk research in all available official public records, commercial records, reference documents, registries, publications, etc., for quantitative information on the Lebanese market of Meat products. This includes the following sources: Lebanese customs Chamber of Commerce, Industry & Agriculture in different Mohafazats (Beirut & Mount Lebanon, North Lebanon, South Lebanon, Bekaa) Association of Lebanese Industrialists Ministry of Agriculture. Ministry of Economy. A complete research has been conducted also in all available legal references in order to verify main laws and regulations related to the import and distribution of the concerned products. KHOURY STATISTICS AND STUDIES has performed subsequently a comprehensive field research in order to identify main manufacturers, importers and exporters, in addition to main brands sold on the Lebanese market with their retail prices. All findings have been checked and validated with established enterprises operating on the Lebanese market of Meats products, as well as with independent professional sources. 3. MARGIN OF ERROR All efforts have been made in the present study in order to provide, as much as possible, accurate and reliable quantitative and qualitative information on the Lebanese market of Meats products. However, a margin of error of maximum 3% must be taken into consideration as far as value of local production; imports, exports and market size are concerned. 5

6 6 4. PRODUCTS COVERED The present market study covers the following products: Trading of meat & its kinds. Lebanese ranches, meat production and distribution. 6

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8 8 II. GENERAL ENVIRONMENT 1. GENERAL INFORMATION All information, figures and data in this item correspond to the year Demographic and economic figures are estimates. General information Capital Area Official language Other languages Currency Political status Political system Legislative authority Executive authority Economic system Beirut 10,452 km2 Arabic English, French Lebanese Pound (LBP) or (L.L.) Independent Republic Parliamentary democracy Elected parliament President/Council of ministers Liberal market economy Geography Surface 10,452 km2 Coast length 210 km Maximum altitude 3,083 m Average temperature 20.7 C Rainfall 688 mm Humidity rate 68% Demography Population 4,100,000 Annual growth rate 3% Number of households 910,000 Average household size 4.50 Life expectancy at birth 73 years Working population 1,230,000 Urban population 80% 8

9 9 Education Literacy rate 93% (Male), 85% (Female) Land use Arable land o.w irrigated Grazing Forest & woodland Other land Total 207,060 ha 60,047 ha 360,000 ha 79,560 ha 301,580 ha 1,045,200 ha Infrastructure Roads (paved) Railways Airport (civil) Ports (commercial) Electricity 7,200 km Non functional, old, obsolete Rafic Hariri International Airport Beirut, Tripoli, Saida 1,350 MW Economy Inflation rate 10% Exchange rate (LBP/$) 1,507.5 (year average) GDP $28,020 m GDP per capita $7,185 Real GDP growth rate 4.4% Exports $3,478,000,000 Imports $16,137,000,000 Trade balance $12,659,000,000 (40.7% more than 2007) Balance of payments Budget deficit Gross domestic debt Net domestic debt 9 $3,461m (surplus) LBP 3,502bn LBP39,007 bn LBP30,681 bn

10 10 Net total debt (public) External debt Central Bank reserves Central Bank gold reserves Customer deposits in comm. banks Customer loans by commercial banks Beirut Stock Exchange market capitalization LBP62,562 bn $21,148 m $17,062 m $8,032 m LBP 99,908 bn LBP 55,352 bn $9,323 m 1 year T bill yield 7.58% Overnight rate 3.5% 2. GEOGRAPHICAL ENVIRONMENT Lebanon is situated on the eastern side of the Mediterranean basin, between the parallel (north) and the parallel (east). Its frontiers (borders) are: Syria (with which it has a 375 km long border) to the north and east Israel (with which it has an 80 km. long border) to the south; The Mediterranean Sea (on which it has a 250 km long coast) to the west. Lebanon has a surface of 10,452 sq. meters. It has a diversified geography, which is spread on: 2 large plains: The coastal plain and the famous Bekaa plain. 2 long mountain chains: Mount Lebanon (highest summit 3,083 m) and the Anti Liban chain (highest summit 2,814 m). Lebanon is rich in water. There are more than 15 rivers, the biggest of which, the Litani river, is 160 km. long. 10

11 11 The climate is pleasant and moderate, characterized by relatively smaller variations of temperature, long periods of sunshine (approx. 300 days/year) and relatively abundant rainfall in a short period of the year (from November to March). In winter season, snow falls in mountain areas, and skiing is practiced in several resorts. In summer season, hot temperatures in coastal areas are ideal for swimming and beach sports, while moderate temperatures in mountain areas favour summering activities. 3. POLITICAL ENVIRONMENT Lebanon is an independent and sovereign State. Lebanon is also a democratic, parliamentary, multi party, Republic. The Lebanese Constitution (established in 1926, amended in 1989) guarantees, among other fundamental rights, individual liberty, liberty of thought, liberty of religion, as well as propriety. Legislative power belongs to an elected 128 member parliament, with new elections held every four years. Executive power belongs to the President of the Republic, elected by the Lebanese parliament for a period of six years, and to the Council of Ministers. Judiciary power belongs to the different tribunals and courts. The Lebanese Constitution was amended by the Taif Agreement, a new national charter voted by the Parliament on 30 September 1989, which sealed national reconciliation, and which put an end to the state of war prevailing from 1975 in the country. The Taif Agreement has provided for a large number of changes in the way Lebanon is administered, in the framework of a reform plan destined to correct social imbalances in the country and secure political stability. 11

12 12 4. DEMOGRAPHIC ENVIRONMENT Distribution of the Lebanese population by Mohafaza (Province) Year 2008 Mohafaza Population Percentage Mount Lebanon 1,476,000 36% North Lebanon 820,000 20% Bekaa 574,000 14% Beirut 533,000 13% South Lebanon 480,000 12% Nabatieh 217,000 5% Total 4,100, % Distribution of the Lebanese population by age group Year 2008 Age group Population Percentage , % , % , % , % , % , % , % , % , % , % , % , % , % 65 and above 209, % Total 4,100, % 12

13 13 Distribution of the Lebanese population by nationality Year 2007 Nationality Number Percentage Lebanese 3,624, % Palestinian Refugees 344, % Other 131, % Total 4,100, % Distribution of the Lebanese population by ethnic group Year 2007 Nationality Number % Arab 3,895,000 95% Armenian 164,000 4% Other 41,000 1% Total 4,100, % Religions: (18 religious sects recognized) Muslim 59.7% (Shia, Sunni, Druze, Isma'ilite, Alawite or Nusayri), Christian 39% (Maronite Catholic, Greek Orthodox, Melkite Catholic, Armenian Orthodox, Syrian Catholic, Armenian Catholic, Syrian Orthodox, Roman Catholic, Chaldean, Assyrian, Copt, Protestant), Jewish and other 1.3% Total number for the first and second month of years: : Number of visitors for the first and second months of year 2009: 174,210 visitors. An increase of 73.66% compared with the same period of year 2007 that registered 100,316 visitors. An increase of 50.96% compared with the same period of year 2008 that registered 115,400 visitors. (Source: Ministry of Tourism of Lebanon) Languages: Arabic (official), English, French, Armenian 13

14 14 5. SOCIO ECONOMIC ENVIRONMENT Lebanon has a liberal free market economy. The Lebanese economy is mostly dominated by the private sector, and by free enterprise. There has never been an exchange control in Lebanon. Since the end of the state of war and the reunification of the country in 1990, many important economic developments have taken place, among which the following main developments: The stabilization of the national currency The control of inflation rate, which has been reduced to less than 5% The modernization and enlargement of Rafic Hariri International Airport (formerly Beirut International Airport), which has become one of the best airports in the Middle East The execution of large modernization and upgrading works on the physical infrastructure (roads, electricity, telecommunications, water, sewage, etc.), and the enlargement of this infrastructure The execution of Solidere Sal s ambitious and unique project for the reconstruction and development of Beirut City Centre which resulted in a central zone with a state ofthe art infrastructure, architecture, facilities and features The voting and implementation of new laws for the promotion of investments in the country, particularly law number 360 dated 16/8/2001* The creation of official institutions for the promotion and development of investments, particularly Investment Development Authority of Lebanon (IDAL) and the establishment for the Guarantee of Investments The signing of several international agreements for the opening of foreign markets to Lebanese products The enlargement of the income tax base and the strengthening of income tax collection The implementation of the Value Added Tax (VAT) * The new Investment Development Law 360 dated 16/8/2001 classified Lebanon into three investment zones (A, B and C). The incentives for investment projects will be based on the classification of the project within one particular investment zone. 14

15 15 However, economic conditions remain largely affected by a number of structural and fundamental problems, mainly by the budget deficit, the internal public debt and the deficit of the trade balance, as well as by the still unstable and uncertain local and regional situation. Economic conditions remain also affected by the relative weakness of the purchasing power of the population, as shown in the following tables containing a distribution of the population s income. However, in parallel with the improvement in the political situation in the country, a significant improvement in socio economic conditions has taken place as from the second half of the year There is a strong belief among local, regional and international economic circles that Lebanon may be heading towards an era of economic growth and prosperity, following the conclusion of the Doha agreement in April 2008, which ended a period of 3 years of political turmoil and subsequent economic problems, the election of H.E. the President of the Lebanese Republic in May 2008, the election of the Parliament in 7 June 2009 and the constitution of the present Council of Ministers in 10 November Distribution of Lebanese working population by Mohafaza (Province) Year 2008 Mohafaza Population Percentage Mount Lebanon 442,800 36% North Lebanon 209,100 17% South Lebanon 184,500 15% Beirut 147,600 12% Bekaa 159,900 13% Nabatieh 86,100 7% Total 1,230, % 15

16 16 Distribution of the Lebanese working population by economic sector Year 2008 Sector Population Percentage Commerce & services 627,300 51% Public sector 159,900 13% Industry 172,200 14% Agriculture 147,600 12% Construction 49,200 4% Other 73,800 6% Total 1,230, % Distribution of Lebanese working population by professional category Year 2008 Category Population % Salaried 639,600 52% Self employed 270,600 22% Daily worker 196,800 16% Employer 73,800 6% Other 49,200 4% Total 1,230, % Distribution of Lebanese working population by gender Year 2007 Gender Population % Male 986, % Female 243, % Total 1,230, % 16

17 17 Distribution of Lebanese households by monthly income Year 2008 Income Households Percentage <$500 18,200 2% $501 $ ,200 22% $751 $ ,800 28% $1001 $ ,600 16% $1501 $ ,100 11% $2001 $ ,800 8% $3001 $ ,600 6% $4001 $ ,400 4% >$ ,300 3% Total 910, % Distribution of Gross Domestic Product GDP by economic sector Year 2008 Sector Percentage Agriculture 5.40% Industry 17.20% Construction 14.10% Commerce & services 63.30% Total 100% 17

18 18 6. BUSINESS ENVIRONMENT 6.1 Foreign ownership of business With the exception of a limited number of business activities, Lebanese laws authorize 100% foreign ownership of enterprises. Many Lebanese companies are partially owned or wholly owned by Arab and foreign natural persons or legal persons. Arab and foreign companies can establish representative offices and operational branches in Lebanon. Company registration authority is the Ministry of Economy, Register of Commerce. Arab and foreign companies seeking to establish representative offices and branches must register also with the Ministry of Economy and Trade, department of Foreign Companies. Profits and dividends are freely convertible in foreign currency and transferable abroad. Enterprises having commercial representation as object (as line of business), and enterprises applying for the registration in Lebanon of a commercial agency, must be 100% Lebanese owned. 6.2 Foreign ownership of real estate Under certain limits and restrictions, Arabs are foreign natural and legal persons can own real estate properties on freehold basis in Lebanon. Registration authority is the Ministry of Finance, Land Registry. 18

19 Tax structure The tax on corporate profits (income tax) amounts to 15%. Tax on dividends amounts to 10%. Value Added Tax (VAT) amounts to 10%. Tax authority is the Ministry of Finance, Revenue Division, Income Tax department/vat department. 6.4 Exchange control There has never been any form of currency exchange control in Lebanon. 6.5 Commercial representation Lebanese laws normally provide strong protection to local commercial agents and representatives against termination or breach of agency agreements. Commercial agency agreements cannot be registered and protected for basic and essential goods such as food products and pharmaceuticals. Registration authority is the Ministry of Economy and Trade, Office of Protection of Property. 6.6 Intellectual and industrial property Lebanese laws provide strong protection to registered intellectual and industrial property. Trade marks, patents and copyrights can be registered in Lebanon by local and foreign concerns. Registration authority is the Ministry of Economy and Trade, Office of Protection of Property. 19

20 Free zones There is one free zone in Lebanon, the Beirut Port Free Zone, into which goods can be imported for re export without payment of Customs duties. There are plans to establish other free zones in the country. 6.8 Labor laws According to prevailing laws and regulations, all salaried personnel (Lebanese and non Lebanese) must be duly registered at the Caisse Nationale de la Sécurité Sociale (National Social Security Fund). Non Lebanese employees must hold a residence permit (delivered by the Direction Générale de la Sureté Générale) and a working permit (delivered by the Ministry of Labor). Litigation between employers and employees are examined by the Labor Courts. 6.9 Legal form of enterprises The following legal form of enterprises exists in Lebanon: Société anonyme libanaise (SAL) (Joint stock company) Société anonyme libanaise off shore (Joint stock company off shore) Société anonyme libanaise holding (Joint stock company holding) Société en commandite par action (Limited partnership by shares) Société à responsabilité limitée (SARL) (Limited liability Company) Société en nom collectif (SNC) (Partnership) Société en commandite simple (SCS) (Limited partnership) Maison en nom simple/entreprise individuelle (Proprietorship) 20

21 21 1. MAIN LAWS AND REGULATIONS III. LEGAL AND REGULATORY FRAMEWORK The establishment and exploitation of meats products industries is subject to the granting of an industrial license issued by the Ministry of Industry and a permit by the local municipal council. The import and export of meat products, of all types and categories, is free and is not subject to the granting of any license unless the laboratory certification by an independent institution under the Ministry of Agriculture control, and the origin certificate for imported meats. Main laws and regulations prevailing in Lebanon, of interest or relevance to the market of meat, are the following: Resolution number 1/5 dated 30 December 2000 Environmental conditions for granting a license for the establishment or exploitation of vegetables and fruits keeping (cooling, pickling, cooking, and canning). Resolution 40/1 dated 20/03/1996 / amendment to resolution 22/1 to impose environmental conditions on factories. Resolution 6/1 dated 12/01/2005 giving all the institutions, laboratories and factories a grace period of one month to correct their situation and complete the application of environment standards. Required Import Documentation A custom declaration form must be presented with a pre forma invoice or a contract indicating the specifications, quantity, and value of goods being imported. Meat and meat products are one of the products that must be certified. Imported food products labels must have the manufacturer s name, contents, weight, and best before date. It is required labelling by the registered trademark for meat. Special requirements for INVOICES They should contain the number of parcels, quantity of goods, their description, trade marks as also the nature of merchandise. They should carry the following attestation: "We certify that this Invoice is original and authentic. It is the only one issued by us for the goods described herein and that 21

22 22 the value in this Invoice is the correct value of this consignment without deduction of any discount or payment in advance. Furthermore the origin of the goods is exclusively Argentina (AR) and has been manufactured in our own factory." Special Conditions: Meat exporters should present the following additional documents: Certificate of Origin* Veterinary Certificate. (SENASA) Certificate of Halal slaughter (Centro Islamico Argentina) Special Meats Importation: In addition to the general shipping documents all meat shipments directed to Islamic consumers must be accompanied by the following certificates: 1. A certificate of "Halal" meat: This certificate indicates that slaughtering has taken place in an officially licensed slaughterhouse according to Islamic procedures. The "Halal" meat certificate should be legalized by a recognized Islamic Center in (Argentina). It must also accompany shipments of poultry into Lebanon. 2. An Official Health Certificate: This certificate should indicate the date of slaughter, kind of animal and average age, in each shipment. The health certificate must also indicate that animals were examined within twelve hours before being slaughtered, and directly after, by a licensed veterinarian, and were found free from disease and suitable for human consumption. The Health Certificate is required for all exports to Lebanon of all kinds of meats, (including poultry and seafood), meat products, livestock, vegetables, fruits, and human blood, attesting to the fact that they are free from pests and/or disease. * The Certificate of Origin and the Invoice should mention the: Net Weight and the Gross Weight of the consignment. Origin of goods. Value of goods both in figures and words, in U.S. Dollars. Name and address of the exporter. Name and address of the consignee. They should be both signed by the Exporter and attested by the same Chamber of Commerce. Source: Embassy of Lebanon Argentina 22

23 23 Meat importation: The Decree N 500 / 1 dated on the 21st of September, 2010 determines conditions that must be considered for meat importation. This Decree was issued by the Lebanese Minister of Agriculture Mr. Hussein Hajj Hassan. Article I: Definitions: Decree words meanings: 1 Meats: are parts apt for human consumption resulting from the slaughter of healthy animals of cattle, buffalo, sheep, goats, camels, pigs, resulting from the abattoirs prepared in licensed slaughterhouses and subject to veterinary control before and after the slaughter of animals. 2 Refrigerated meats: It is the result of keeping meats fresh and that were cooled under the refrigeration storage conditions at a temperature ranging from the interior between zero and two degrees centigrade in compliance with the terms of the humidity needed to save the integrity, quality and suitability for the duration of validity, not to change the characteristics, sensory taste and physicochemical. 3 Frozen meats: Meats are subject to a process of immediate and fast freeze under low temperature which makes the thermal time for maximum crystallization pass quickly, in condition of keeping the interior temperature, after the thermal stability, at 18 C or less. Article II: 1 Refrigerated and frozen meat are allowed to be imported from countries or free of diseases areas listed in the Regulations issued by the World Organization for Animal Health, and in special the exporter country has to be classified under a limited risk or under control in accordance with the World Organization for Animal Health of mad cow disease (BSE). 2 The Minister of Agriculture, upon an evaluation of an epidemiological situation in the country of origin submitted by the Directorate of Livestock on the basis of the International Health Organizations and the World Organization for Animal Health (OIE) publications, has the decision to allow the importation from that country /or from some regions / or to prevent it /, basing on Veterinary Health Certificate or similar to what is required between Lebanon and the country of origin. 23

24 24 3 With reference to the use of hormones and steroids, the conditions of the Codex Alimentarius are applied. Article III: Registration of establishments wishing to export to Lebanon: 1 Applications for the registration of establishments wishing to export to Lebanon are submitted to the Directorate of Livestock and attached by the following documents: A Certificate of Registration issued by the Veterinary Authorities in the country of origin stating the following: I That the establishment is registered for production, packing and meat cutting, and it put into practice the quality standards and officially approved (GMP) and have the technical specifications SOP (standard operating procedure) which enable it for export to foreign markets. II That the company operates under an (integrated system), in the range of its function and owns: B A certificate of analysis (or HACCP) (ISO22000) issued by an accredited institution in the country of origin, stating that the company complies with the implementation of all health conditions, functional and quality required for the slaughter, preparation, cutting, freezing and packaging. C A certificate stating that the export of meat to be classified as Category A or equivalent. 2 Applications are exanimate by a Committee headed by the General Director of Agriculture with the following membership: a Director of Livestock. b Head of the import, export and quarantine veterinarian. c Head of animal health. 3 The Commission elevates the reading to the Minister of Agriculture for its final approval, no more than fifteen days from the date of the presentation of the complete documents. The committee may call, if necessary, a representative of the World Organization for Animal Health (OIE) as advisers. 24

25 25 4 If necessary, the Ministry of Agriculture Directorate of Livestock has the right to detect these companies in the country of origin, before authorization of export to Lebanon at the expense of the importer or distributor. 5 The Ministry of Agriculture (Directorate of Livestock) issues the annual statement including the authorized companies, factories, and slaughterhouses for export meat to Lebanon. The Ministry can re examine this statement wherever needed, modifying, accepting, or rejecting permissions for companies, slaughterhouses and factories, according to the quality of the exported meat to Lebanon. 6 The General Directorate of Customs will be notified about decisions related to the modification or cancellation of the registered Companies. Article IV: General specifications for meat packing and cargo: 1 Carcasses must be exposed to a temperature between 2 and 4 C for 24 hours before cutting, packaging, refrigeration and freezing. 2 Meat must be demilitarized from lymph nodes and nerves appearing near to the surface. 3 Carcasses or pieces should be packed in thick transparent vacuum bags, permitted globally (relative to chilled meat). 4 Meat boxes should be placed into reefers on pallets leaving spaces for good ventilation and cooling, and not exceeding the permitted limit inside the reefer. 5 Reefers must be equipped with outlet to record the temperature of the refrigerant Thermograph, working continuously for the duration of shipping* in accordance with Decree No. 61 / 1 dated 25/02/2010. It may also rely on electronic (temperature data logger) in the reefer in accordance with Decree No. 573 / 1 dated 22/12/ According to chilled meat: Meat bags must be packed in large boxes and the interior overlaid with paper or plastic, etc. to prevent water filtration during transport. 7 For frozen meat: During the process of transport reefers, complete slaughters or pieces must be protected with plastic bags or sterile fabric or similar within cardboard boxes. * (Keeping a copy of the temperature schedule to be presented with the goods) 25

26 26 8 Refrigerated and frozen meat carcasses must be moved and preserved in reefers or coolers for the duration of transport, handling and storage under temperature of 18 C and below. 9 It is not permitted to download any of the reefers contents in another port except of the final port. Article V: Specification of the card definition: 1 Complete or parts of meat carcasses must be stamped by the slaughterhouse with its identification number in the country of origin. 2 Each meat bag should carry a definition card collaged inside the nylon bag or printed on the outside with indelible ink or collaged on the bag, not removable, indicating clearly, with bold letters not less than 5 mm. of width each, the following information: The word "chilled meat or "frozen meat" and type of animal meat (cattle, sheep, goats, buffaloes, pigs). Country of origin, slaughterhouse name, number, cutting factory name and its number in the country of origin. Slaughtering date, production date and expiry date. Preservation temperature of the meat. Commercial brand of the exporter company. Type of parts. 3 The outer package must have definition card similar to the above mentioned definition. 4 English, French and Arabic languages (if necessary) must be used on definition card on the meat packages. The used foreign language is adopted as a good reference in case of differences, or confused information between Arabic and foreign language. 5 Meat classified in the bag or the cardboard box must be confined to the same animal group. 26

27 27 Article VI: Special conditions for import and shipping: 1 Import of chilled or frozen meat is not allowed by land or by sea unless within equipped reefers for this purpose. 2 Meat importation by air is allowed without reefers in condition of providing the necessary temperature inside the aircraft equipped with a thermograph. 3 Import should be from the country of origin within special reefers for Lebanon and it is not allowed to download any of its contents in any port for transit. No matter for the transfer of the whole reefer from a vessel to another during the shipment as Transshipment. 4 The determined time for meat shipments to Lebanon, referred in Article I of this Decree, and the expiry date for human consumption according to the following table: Meat: The maximum arrival date to Lebanon considering the production date and the validity for human consumption considering the production date, a Chilled meat mostly in form of large pieces from fifteen days to twenty eight days. b Refined and vacuum packed chilled fifty three days to 12 weeks (84 days) for beef meat. 10 weeks (70 days) for sheep meat. c Frozen meat at temperature of 18 Cº and below, less than six months to fourteen months for beef meat. Nine months for sheep meat, if not exceeded five days from the date of slaughter to the production date. 5 Chilled meat will be rejected in case of raised temperature in the reefers to 4 C, for 24 continuous hours, for the duration of the shipment. 6 Frozen meat will be rejected in case of high temperature in the reefers for more than 15 C, for more than 24 continuous hours, for the duration of the shipment. 7 Import of unprepared and unprocessed minced meat is prohibited. 27

28 28 Article VII: Documents required to be enclosed with the imported meat: 1 Health certificate, from the veterinary authorities of the country of origin in accordance with the veterinary authorities in Lebanon, which proves that the goods are faultless, free of disease, appropriate for human consumption and says: originated from animals coming from zones free of associated diseases. 2 A certificate of origin issued by the Chamber of Commerce and / or agriculture and / or industry, or any entity authorized to issue certificates of origin. Article VIII: Implement all conditions exposed in the Decree No. 57 / 1 dated on (about procedure of samples compilation from products of animal origin foodstuffs, in case of import or export) or any decision taken later in this field. Article IX: Reject the deliverance in case of any violation of any provision of this decree. Article X: In case of repeated rejections of a deliverance from an exporter establishment for three times during the twelve months, the exporter establishment will not be allowed to export to Lebanon and its registration will be cancelled and can be entitled to apply for new registration. Article XI: The Minister of Agriculture has the right to approve additional laboratory tests in a laboratory approved by the Ministry of Agriculture based on the opinion of the Directorate of Livestock and the proposal of the General Director. Article XII: Transport and sale conditions in Lebanon: 1 On the approval for incoming goods to enter the Lebanese territory, same must be trucked from the port to the warehouses of frozen meat within its reefers. 28

29 29 2 The imported meats must be saved in storage refrigerators and freezers in their proper packages. 3 The meat only can be sold by wholesale in their proper packages, without removing or changing it. 4 Freezing the chilled meat is not permitted for any reason. Article XIII: Slaughtering on the Islamic way: Those interested in the import of slaughtered meat on the Islamic way have to pursue the following: In addition to what is required in this Decree: 1 Add a paragraph in the register file for that purpose. 2 Include certificate from the Islamic supervisory of slaughter in the country of origin, which confirm that the meat is slaughtered on the Islamic way and duly certified and recognized by the Dar Al Fatwa and the Higher Islamic Shiite Council in Lebanon. 3 The paragraph says: "Slaughtered according to the Islamic way (Halal)," in a clear and explicit definition or a card definition carried on each packet, with the name of the recognized Islamic authority supervisor on the slaughter. Article XIV: Cancel any provisions contrary to the contents of this Decree, in particular Decrees: N : 144 / 1 dated 06/03/1998 and N : 106 / 1 dated 06/03/1998 and N : 105 / 1 dated 04 / 10/2004 and N : 90 / 1 dated 20/9/1999 and N : 366 / 1 dated 13/11/2001 and N : 234 / 1 dated 28/08/2003 and N : 191 / 1 dated 06/30 / 2004 and N : 93 / 1 dated 14/03/2005 and N : 81 / 1 day 06/03/2006 and N : 233 / 1 dated 08/28/2003 and N : 105 / 1 dated 06/03/1998. N : 438 / 1 dated 03/10/2009 and N : 513 / 1 dated 11/07/2009. Article XV: This decree is notified wherever needed, and will be effective after three months from the date of issue. 29

30 30 2. CUSTOMS AND VAT RATES Customs Duties: A) Import 1. Customs Duty On July 1995, all import customs duties were unified under one customs duty known as the Single Customs Duty". The calculation of the customs duties is based on the type of the duty. For instance, the proportional duty is computed on the basis of a proportion of the value of the goods (15% of the value) while the qualitative duty is calculated on the basis of a specific amount for each quantity unit such as the weight, number, size etc. (for instance: u$s 0.33 per one net kilogram or u$s 0.17 per liter etc.) There are other types of customs duties which are proportional with a qualitative minimum or vice versa (for instance: 35% of the value of the goods and a minimum of u$s 0.34 per 1 net kg). In this case, the customs duty is calculated according to proportion and quantity unit and the highest duty is collected. 2. Local Consumption Duty Since November 1998, the local consumption duty has been separated from the customs duty and it has been applicable to certain types of goods including, but not limited to, tobacco products, fuels, cars, cement, lime, plaster and alcohols. This duty is applicable to imported products and locally produced products. 3. The Value Added Tax ( VAT) As of 1st of February 2002, the value added tax has been implemented in Lebanon and it covers the majority of products which are included in the customs tariff. The value added tax represents 10% of the value. The taxable value of the imported goods is the value of the goods which is approved by the Customs in addition to the customs duty and any other due charges and fees of the imported goods. The goods, which are subject to the value added tax upon import and their rates, are indicated by their identification numbers in the schedule of tariff of customs duties according to the Harmonized System. N.B: The value added tax is applicable to imported products and locally produced products also. 30

31 31 4. Stamp Duty In addition to the Single Customs Duty, the Local Consumption duty and value added tax, each declaration is subject to a lump sum of U$S which represents the value of the stamps that must be posted on the customs declaration and its enclosures notwithstanding the type or number of such enclosures. This duty is not applicable to export declarations. B) Export The exported goods are not subject to any of the duties mentioned here above. Lebanese Custom Tariffs Custom duties and VAT rates applicable on the concerned product and are described in the following table: Tariff Number Description Duty Method Tax Base Rate 0201 Meat of bovine animals, fresh or chilled Carcasses and halfcarcasses Customs Value 5% Other cuts with bone in Customs Value 5% Boneless Customs Value 0% 0202 Meat of bovine animals, frozen Carcasses and halfcarcasses Customs Value 5% Other cuts with bone in Customs Value 5% Boneless Customs Value 0% 0203 Meat of swine, fresh, chilled or frozen Fresh or chilled : Carcasses and halfcarcasses Hams, shoulders and cuts thereof, with bone in Customs Value 5% Customs Value 5% Other Customs Value 5% Frozen : Carcasses and halfcarcasses Customs Value 5% Hams, shoulders and cuts thereof, with bone in Customs Value 5% Other Customs Value 5% 0204 Meat of sheep or goats, fresh, chilled or frozen Carcasses and halfcarcasses of lamb, fresh or chilled Customs Value 5% 31

32 Other meat of sheep, fresh or chilled : Carcasses and halfcarcasses Customs Value 5% Other cuts with bone in Customs Value 5% Boneless Customs Value 5% Carcasses and halfcarcasses Customs Value 5% of lamb, frozen Other meat of sheep, frozen : Carcasses and halfcarcasses Customs Value 5% Other cuts with bone in Customs Value 5% Boneless Customs Value 5% Meat of goats Customs Value 5% Of bovine animals, fresh or Customs Value 5% chilled Of bovine animals, frozen : Of swine, frozen : Customs MIN Net KG 1000 LL Customs MIN Net KG 2000 LL Cuts and offal, fresh or Customs Value 70% chilled Other, fresh or chilled Customs Value 5% Other, frozen Customs Value 5% Of rabbits or hares Customs Value 5% Of reptiles (including snakes Customs Value 5% and turtles) Other Customs Value 5% Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted, fresh, chilled, frozen, salted, in brine, dried or smoked. Customs Value 5% Meat of swine : Hams, shoulders and cuts thereof, with bone in Bellies (streaky) and cuts thereof VAT Value+Duty 10% Customs Value 5% VAT Value+Duty 10% Customs Value 5% VAT Value+Duty 10% Other Customs Value 5% VAT Value+Duty 10% Meat of bovine animals Customs Value 5% VAT Value+Duty 10% Of primates Customs Value 5% VAT Value+Duty 10% VAT Value+Duty 10% SOURCE: Lebanese Customs 32

33 33 1. GENERAL VIEW ON MEATS OF LEBANON IV. MARKET DESCRIPTION Lebanon has 300 days of sunshine a year, and enjoys good ranches for animals like Cows, cattle, buffalo, sheep, goats, camels, pigs, and horses. Lebanese people consume more than 40.5 tons of meat per year, producing and exporting another 24 tons. Lebanese community living throughout the world imports Lebanese processed food and meats. 2. LIVESTOCK Livestok production in Lebanon is an important activity, particularly in mountainous areas and in the Baalbek-Hermel area on the eastern mountain chain where soil fertility is relatively low. While the number of goats has been relatively stable for more than two decades, sheep production has increased sharply. In recent years, livestock production (goats and sheep) has relied increasingly on feed blocks and feed supplements, thereby reducing dependence on wild grazing and ultimately leading to more sedentary animal production. Bovines and dairy production is becoming increasingly popular. In the past five years, several medium-to large-scale dairy farms have been established in the North and in the Beqaa. Several grant and loan agreements (proposed by organizations such as USAID) have encouraged farmers to expand dairy production. The table shows the evolution of livestock production from 1980 to 1999: Category Variation (%) Cows 55,612 75, Sheep 145, , Goats 444, ,965 2 Total 645, ,

34 34 3. LEBANESE MEAT MARKET Lebanese food processing industry, including meat processing, is one of the most promising and growing sectors of the economy. Lebanon has a fast growing food processing sector with export potential. One of the sectors which food processing enterprises mainly specialize in is meat and meat products like (Kafta, kebbeh, shish kabab, Shish Taouk, and Armenian smoked meat, sausages, etc.), which are sold not only in Lebanon but also in other regions. By the other side most of Lebanese s food processing plants are actively looking for foreign partners to increase their production. MARKETING AND DISTRIBUTION Meat imports are carried out, regardless, by the largest distributors of food and drinks, supermarkets at their own businesses and shops dedicated exclusively to the category food products and slaughterhouses. MARKET CHARACTERISTICS In this country exists a very important trading activity of Meat, which has variety of diverse origins like (Australia, Brazil, Paraguay, France, New Zealand, China, Canada, Uruguay, Argentina, USA, Poland, Denmark, Puerto Rico, Netherlands, South Africa etc ). (Source: Lebanese Customs) At the moment, the supply of Argentinean meat is very limited, although it has been a steady increase in 2008, following the devaluation of the Euro against the dollar. Thus, exports during 2008 reached U$S 494,205 (141,585 kgs.) making Argentina one of the possible suppliers of meat to Lebanon. Argentinian meat is famous with its quality; sanitary control; good packing and refrigeration which make it easy to enter the Lebanese market. However and in order to achieve sustained, long term presence and the integration into the Lebanese market, Argentinean meat should continue with continuous trade and promotion activities including an aggressive advertisement, publicity, exhibitions, tasting, etc. 34

35 35 4. SATISTICTS LEBANESE GENERAL IMPORTS in thousands of USD Total imports GENERAL TRADE BALANCE BETWEEN LEBANON AND ARGETINA (All goods) Year Imports Exports Difference 2004 USD 48,433,000 USD 197,000 USD -48,236, USD 23,147,000 USD 165,000 USD -22,982, USD 30,641,000 USD 260,000 USD -30,381, USD 52,845,000 USD 316,000 USD -52,529, USD 59,661,000 USD 418,000 USD -59,243,000 MEAT OF BOVINE ANIMALS, FRESH OR CHILLED/ / IMPORTATION LAST YEARS (FROM ALL COUNTRIES) Year U$S Quantity (KGS) 2010 (Till August) 86,097,432 15,937, Years Total , ,00 35

36 36 MAIN EXPORTER COUNTRIES / BOVINE Country Value (U$S) Quantity (KGS) Participation Brazil 73,039,659 13,754, % Australia 4,500, , % Paraguay 2,412, , % China 2,349, , % United States 1,216, , % Uruguay , % Denmark 560, , % Puerto Rico 224, , % Netherlands 697, , % Argentina 183,700 29, % New Zealand 47, , % France 32, , % South Africa 23, , Totals 86,097, , % EXPORT VOLUME OF LEBANESE MEAT: TON/YEAR Year Tons Tons Tons Tons Tons 2010 (Till August) 24 Tons 36

37 37 GENERAL IMPORTATION OF LEBANESE MEAT: By kgs. / Year ( / / / / / / / / / / / / / / and ) Year Value (u$s) Kgs (till august) 106,887,922 22,458, ,148,520 41,508, ,176,405 30,670, ,118,833 27,028, ,330,499 25,397,009 Years Total 538,662, ,064,014 LEBANESE IMPORTATION OF FRESH OR CHILLED MEAT OF SHEEP: By Kgs. /Year / / / / From: Australia, France, New Zealand, China, Poland, Canada, USA and Argentina. Year Value (u$s) Kgs (till august) 1, , , , , , , , ,440 Years Total 5,826 1,416, MEAT PRODUCERS, IMPORTERS, TRADERS and PROCESSING IN LEBANON There are several companies in Lebanon, which are engaged in meat processing activity. These companies use both local and imported meat for processing. The companies presented below are the most well-known names in meat processing industry in Lebanon. Product Quantity Meat traders* 54 Meat and game, processed and preserved* 8 Meat, salted, dried or smoked * 21 Ham and salami * 6 Canned Meat * 18 Meat frozen and chilled 22 Meat, processed, fresh 23 Meat, sausage casings 26 Abattoir Products 17 *See details below 37

38 38 6. AVERAGE SELLING PRICES The range of meat is vast and varied and, the price spectrum too. Meat of good quality costs the public between 7,14 and 30,00 dollars per Kilo, can reach 23,22 dollars for those of superior quality and kind. Imported fine meat depends on its type, quality and country origin. 7. REPORT ABOUT LEBANON S MEAT INDUSTRY Lebanon still has a long way to go in meeting rigorous, international health and safety standards on meat. Today, only 50% of all meat consumed in Lebanon is fresh Lebanon imported 75% of all frozen meat consumed last year (6,841 tons out of 9,124 tons in all). Frozen meat from India costs about $ 3.75 per kilogram, less than chilled meat from Brazil or Paraguay, which costs $ 7.14 per kilogram, and substantially less than fresh meat from live European cattle, which costs $ 12,5 $ 30,00 per kilogram. As one industry source explained, The demand for cheaper and cheaper meat, like from India, has grown steadily, just as the old sources of meat have become more expensive. Indeed, faced with growing price differentials, the composition of the Lebanese meat diet has changed considerably over the last decade. In fact, some observers now estimate that 15% of all meat consumed in Lebanon is frozen, 25% chilled, and about 50% fresh. Rewind to ten years ago and about 75% of all meat at the dinner table was fresh, derived from live cattle slaughtered locally. Frozen meat represented only a small part of the market. Live cattle is still Lebanon s number one commodity import, ahead of cigarettes, at a total value of $135 million last year, but imports of frozen meat from India have risen by 27% and 57% in 2002 and 2003, respectively. Added to this is the fact that nearly 95% of all meat needs are now being met by overseas sources. Gone are the days when Lebanon had a thriving domestic livestock system. For some critics, the government s decision to halt the increasing stream of Indian meat imports appeared to offer tacit acknowledgement that, even though inspectors ostensibly discovered the spoiled meat, some risk was present that the meat might have 38

39 39 entered the marketplace health and safety controls, these critics said, were not as strong as the government claimed. A top official close to the issue disputed this notion though, saying that international sampling procedures were used on all meat imports, which includes taking a piece from the front, middle and back of each 22 tons container of frozen or chilled meat that arrives in Lebanon and testing it for bacteriological and viral contaminants. There are 40 or so slaughterhouses and meat processing facilities in the country nearly half of which are essentially unlicensed, despite handling nearly half of the 40,000 tons of meat consumed in Lebanon each year. Since municipalities control and monitor the slaughterhouses that lie within their own jurisdictions, a patchwork of irregular standards and procedures has emerged that inhibits industry wide surveillance and early warning measures. This chaotic situation has even led the Cattle and Butchers Syndicate to call for the closing of the main slaughterhouse serving Beirut, the Quarantine, saying that only a completely new facility could meet modern health and safety standards. As one top official closely involved with the issue put it bluntly, The slaughterhouses present a serious problem. (SEE DECREE/ PAGE 20) In banning meat imports from India, the government avoided dealing with the issue of Paraguayan meat, which the EU bans on similar grounds as Indian meat (10% of all chilled meat imports are from Paraguay, with the other 90% from Brazil). This concern may not be a factor for much longer though, as several sources closely involved in the issue predicted that it would only be a matter of weeks before meat from Paraguay was also banned. Despite the problems and late inning measures, it appears that Lebanon is finally moving ahead with reforms in the meat sector. Both the ministries of agriculture and economy, in addition to the United Nations Industrial Development Organization, are pushing forward a food safety law that will help Lebanon gain World Trade Organization membership, as well as better protection for consumers. See all report By William Long magazine.com/getarticle.php?article=