Buen Día e-Marketplace | Trade Missions


Recommendation:	This recommendation was sent by Mr. Marcio Francesquine, Trade Commissioner Service of Canada, Canadian Consulate in Sao Paulo. In Brazil quality of the product is a given, and price the key, if not the main, driver in all negotiations. An import cost structure that may increases FOB cost up to 85%, on average, in addition to complex tax system and costly logistic have made Brazilian buyers very aggressive negotiators. The fact that every food manufacturer in the world is now knocking at their door with very aggressive offers (payment terms up to 90 days, marketing funds) has only made things worse for new suppliers trying to get shelf space. As elsewhere, new suppliers are expected to make an investment in marketing campaigns (in the form of discounts over the invoices), to help promote the product. Also, while buyers will have no problem to work with confirmed letters of credit, after their credit worthness has been established they may ask you to ship COD (cash against document) in order to avoid the high costs related to opening and confirming letters of credit. Brazilian law requires that food products to be registered with the Ministry of Agriculture which, amongst other things, pre-aproves the labels, that must be in portuguese and exhibit the name of the importer [for liability reasons]. The importer, be it a trader/agent or retailer, may and usually will handle the process but the exporter will be required to provide all technical information and, if the case, cover the costs of international inspection of the manufacturing plant by Brazilian officials. In summary, Brazil is not a market for the faint of heart. It requires a long term strategy and commitment (funds, staff) as it may be two years before your first order is shipped. However, it is a market that offers unlimited potential for growth, as economic stabilization steadly increases purchase power of poorer population (35 million people have moved from the "D" and "E" economic class, into the "C", or middle, class in the past 5 years, and upward mobility is expected to continue in coming years.