UKVFTA supports Vietnam's coffee industry to expand market share in the UK

Vietnamese businesses need to pay attention to tastes because the British taste does not drink strong coffee like Vietnamese black coffee, so the finished product having a strong smell and flavor will be hard to sell in this market.

The Import-Export Department (Ministry of Industry and Trade) said that the Vietnam – UK Free Trade Agreement (UKVFTA) came into effect and has greatly supported the Vietnamese coffee industry to expand its market share in the UK.

Thuan An coffee has traceability stamps, a registered planting area code, and registration for trademark protection of goods and products. Photo: Nguyen Dung-VNA

Especially six years after the agreement, import tax will be eliminated for 99.2% of tariff lines, equivalent to 99.7% of Vietnam’s export turnover. Therefore, Vietnamese businesses need to quickly take advantage of opportunities from UKVFTA and pay attention to tastes because British tastes are not similar to Vietnamese. The finished coffee with a strong smell and flavor will be hard to sell in this market.

In addition, British people have a habit of reading information on the packaging very carefully to determine if any contains allergies and how to process it and meets ESG (environmental, social, and governance) or not. It is also a point that businesses need to keep in mind to offer products that are both suitable for consumer tastes and have beautiful packaging.

To increase the market share of Vietnamese goods in the UK market, experts say that businesses need to organize production according to British quality standards and understand the procedures for exporting to this market. Along with that, continue to improve product quality by investing in preservation and transportation technology, especially agricultural products.

Experts also note that it is critical to register the trademark for protection in the UK. Simultaneously, actively building and developing a network of business communities, proactively approaching large British distribution groups to become the unit that supplies goods to these distribution chains.

The Ministry of Industry and Trade always accompanies Vietnamese enterprises in goods exporting processes. Currently, the Government has national brand programs, and the Ministry of Industry and Trade will continue to support businesses to promote their brands through traditional trade promotion programs.

At the same time, the Ministry of Industry and Trade will support businesses in finding and connecting with partners like notes to be easy to successfully export orders to the UK market in particular and the international market in general.

According to Mr. Ngo Chung Khanh – Deputy Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade) that in general, the thinking of building legislation to implement free trade agreements (FTAs) of Vietnam has raised a new approach that is willing to accept higher standards of commitment than in the framework of the World Trade Organization (WTO).

Before the proposals, the Government assigned the Ministry of Industry and Trade to develop a set of indicators to evaluate the utilization of FTAs. The issuance of the expected Index will create a breakthrough in thinking for FTA implementation, including UKVFTA.

In August 2022, Statistics from the Ministry of Industry and Trade, Vietnam’s coffee exports to the UK reached 2,230 tons, worth 4.75 million USD, an increase of 21.6% in volume and 18% in value compared to the previous month. This figure decreased by 35% in volume and 27.8% in value compared to August 2021.

However, in the past eight months, Vietnam’s coffee exports to the UK market still reached 34,680 tons, worth 70.68 million USD, an increase of 57.9% in volume and 84.2% in value compared to the period in 2021.

Currently, Vietnam exports three types of coffee to the UK, including Robusta, Arabica, and processed coffee products. Among them, the export of Robusta coffee to the UK reached over 31,000 tons, worth 61 million USD, up 80.7% in volume and 117.8% in value over the same period in 2021, the export of Arabica coffee reached 162 tons, worth 701,000 USD, up 1,295.9% in volume and up 1,199% in value, processed coffee exports reached 4.16 million USD, up 12.3% over the same surveyed period.

Therefore, Vietnam’s coffee market share of total British imports increased sharply from 16.33% in the first six months of 2021 to 29.92% in the first six months of 2022.