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International Resources: Global Market Profile: Peru

Peru

As part of its commitment to providing its members with market analysis and insight, PMA has compiled the following information about Peru from Attaché Reports submitted by the U.S. Department of Agriculture’s Foreign Agricultural Service, as well as the CIA World Factbook, embassy sites, and business etiquette reference guides.

Fresh Fruit, Vegetable, and Flower Market
Consumer Trends
Entering the Australian Market
Trade Agreements
Food Standards and Regulations
Business Protocol
Export Business Reminders
Government Resources and related links

Fresh Fruit, Vegetable, and Flower Market

Fruit and Vegetable Market

In 2005, food imports grew in Peru to $339 million, with countries such as Chile, Argentina, Colombia, and the United States as the main suppliers. Peru imports a great deal of fresh fruits, including apples, pears, peaches, cherries, and almonds. Exporters compete on the basis of free on board (FOB) price and quality.

As of 2006, the United States was Peru’s top import and export partner; China and Switzerland were Peru’s second and third export partners, while Brazil and China were second and third for imports, respectively.

The major commodities exported by Peru are: asparagus, grapes, citrus fruits, and avocados. Peru has also greatly increased its tropical fruit trade, especially in bananas and mangos. Peru is one of the world’s largest asparagus producers and exporters. Peru’s location in the southern hemisphere allows the country to supply northern hemisphere nations with produce during counter-seasons.

Currently agriculture counts for 8.7% of Peru’s GDP and 9% of the country’s labor.

Fresh Flower Market

Peruvian flower exports to world markets grew 55% between the years 2000 and 2006. Tthe floriculture industry in Peru has the advantage of being able to produce species that are uncommon in northern countries, due to its diversity of species and different seasons. The main flowers exported are gysophilia, carnation, statice, and ammynajus. The major markets for Peruvian flower exports are the United States, Italy, the Netherlands, Canada, Japan, and Switzerland.

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Consumer Trends

Lima is the major market for consumer-oriented foods with almost one third of Peru’s total population, more than 60% of the national income, and 80% of the total food retail market. However, many imported goods are only affordable to people in the higher socio-economic levels.

Supermarkets, restaurants, and hotels usually purchase food products through importers and distributors. Selecting the correct importer and distributors is important for market entry.

Consumers can purchase food principally through supermarket chains. Imported goods make up 5% of consumer-oriented goods sold in Peruvian supermarkets. Good prospects for exportation to Peru include snacks, fruit and vegetable juices, fresh and canned fruits and vegetables, dairy products, wines, liquors, and pet foods.

Peruvian consumers purchase a lot of ready-to-eat meals and snack foods, due to more women and a younger work force. The increasing diversity in the business, money-making sector has augmented the acceptance of foreign foods and trends. There is also an increasing market for low-fat, sugar-free, dietetic products. However, there are market constraints such as customer preferences for fresh food, limited purchasing power, and tariff and non-tariff barriers.

Ninety-two per cent of consumers in the top socio-economic levels shop at supermarkets at least once a month. Traditional food markets are frequented by ‘low’ income socio-economic levels, where purchase decisions are based more on the price than brand name and the convenience of location. However, traditional markets offer limited opportunity for sales of imported food products. Distributors generally supply locally produced products to retailers in cities outside Lima.

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Entering the Peruvian Market

In order to enter the Peruvian food market, non-Peruvian companies should directly or indirectly contact local food processing companies, importers, wholesalers, and distributors. Indirect contact is normally through brokers, agents or representatives; all called enchufados. Enchufados can navigate through the maze of networks in Peru; both business and governmental. Regardless of which strategy is chosen, personal visits are highly recommended. Your Peruvian partner should be well known to the non-Peruvian company before any permanent contractual arrangement is made. Your Peruvian counterpart should be able to provide updated information on market consumer trends, current market development and trade business practices.

The business day in Peru usually begins at 8:00 a.m. and ends between 5:00 and 6:00 p.m. In Peru it is common for offices to be opened six days a week. Many Peruvians go home for lunch so offices sometimes close from 1:00 p.m. until 3:00 p.m. It is common for morning meetings to be followed by a lunch, so try not to schedule more than one meeting per morning.

Avoid scheduling meetings in January through March, because this is when many Peruvians take vacations. Days surrounding Christmas and Easter are also bad times for meetings. If at all possible, avoid planning meetings during national holidays as well. A list of most of the holidays celebrated in Peru can be found here.

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Trade Agreements

Peru has the following regional trade agreements:

Peru has Free Trade Agreements with the following countries:

Singapore (Peru-Singapore Free Trade Agreement)
Chile (Peru-Chile Free Trade Agreement)
Mexico (Peru-Mexico Free Trade Agreement)
Cuba (Peru-Cuba Free Trade Agreement)
Mercosur (Peru-Mercosur Free Trade Agreement)
United States (Peru-United States Free Trade Agreement)
Canada (Peru-Canada Free Trade Agreement)

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Food Standards and Regulations

Sanitary inspection, food registration, packaging and control regulations for food and beverages are included in the Supreme Decree No. 007-98-SA of September 25, 1998.

General import and inspection procedures

In order to clear Customs (SUNAT) imports must have a Unique Customs Declaration (DUA), a commercial invoice, an airway bill or bill of lading, a packing list, an insurance letter and a food sanitary registry for food processed products from DIGESA or a health certificate for animals, plants or their by-products complying with SENASA’s import requirements. Once the customs agent transmits the DUA electronically, SUNAT will determine the type of control for the merchandise within the following channels: green, orange and red. Channel green permits delivery of the product once duties are paid; channel orange requires review of the documentation and channel red requires review of the documentation and physical inspection.

Food and beverage sanitary registration

The importer needs to submit a sworn application to DIGESA (available at

www.digesa.sld.pe) accompanied by a certificate of free trade and use, the future label and the registration receipt ($69 approximately). If the certificate is not available, the importer should present a document issued by the Peruvian Consulate in the country of origin. The sworn application includes the contact information of the importer’s company and the manufacturer, his tax payer’s identification (R.U.C.), the list of products requested and for each product the content, results of physical-chemical and microbiological analysis, lot code system, expiration date, packing material and storage conditions. This procedure will take no more than seven working days. The Sanitary Registration will be valid for five years from the date of issue and may be renewed between seven and sixty working days before the expiration date.

Certificates for animals, plants and their by-products

Before the product is shipped, the importer must request an import permit from SENASA ($25 approximately). The exporter must provide to the importer the corresponding official health certificate of the country of origin, including the specific certification requirements of SENASA. USDA agencies that issue health certificates for Peru are the Animal and Plant Health
Inspection Service (APHIS) for animals and plants and their derived products, the Food Safety and Inspection Service (FSIS) for meats and their by-products and the Agricultural Marketing Service (AMS) for U.S. dairy products.

Labeling requirements

Imported packaged foods must carry a separate adhesive label before reaching the point of sale with a Spanish translation of the label including the importer/distributor’s contact information and R.U.C. Law 28405 of November 30, 2004 requires labeling for value added products other than foods (which could be included in the future). Imported value-added products that do not comply with the provisions of this law, will require proper labeling in private storage for clearing customs.

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Business Protocol

Dress professionally and conservatively. Men should wear a well tailored suit. Women should wear suits or dresses in a tailored style complemented by jewelry and make-up. Colored nail polish is acceptable in Peruvian business culture.
There is no such thing as business casual in Peru, and tennis shoes and shorts are meant only for the gym or the beach. All foreigners should refrain from wearing traditional native Peru indigenous garb, because it is considered insulting.
If invited to an official party, normally tuxedos and cocktail dresses or evening gowns are the acceptable attire, but you may ask your host what would be appropriate to wear.
Prior appointments for meetings are necessary. It is advisable to make meeting arrangements two weeks in advance and confirm them upon arrival in Peru.
Do not make unannounced visits or impromptu calls to any business.
At business meetings punctuality is valued; however, do not be upset or show disapproval if your counterpart is late.
Peruvians stand very close when conversing. Direct eye contact is important because it shows interest and sincerity.
A handshake accompanied by a smile is an appropriate greeting in a business setting for both men and women. Shake hands upon departure as well. Once a friendship has been established, many Peruvian men will hug and women might kiss each other on the cheek.
A handshake may be accompanied by the appropriate greeting for the time of day: Buenos días (good morning), Buenas tardes (good afternoon) or Buenas noches (good evening).
Business cards are exchanged at the very start of the initial meeting. Try and have one side translated into Spanish. Keep cards in good condition – a shabby card will reflect badly on you. Include your title if you have one; titles are important in Peru.
Use titles where they apply. If no title exists, simply use Señor (male) or Señora (female) followed by the surname. Address a person directly by using his or her title only. A PhD or a physician is called Doctor, teachers prefer the title Profesor, engineers go by Ingeniero, architects are Arquitecto, and lawyers are Abogado.
Like many South Americans, Peruvians use both their maternal and paternal surnames. The father's surname is listed first and is the one used in conversation.
Always let your Peruvian counterpart progress to the stage of formality. First names are used between close friends - wait until invited to move to a first-name basis.
Remember that decisions are made by the most senior person at meetings so it is important to provide all necessary information during the meeting.
Also, aside from who has the best service or product, what really determines a Peruvian's decision will be which person has been the best at establishing and maintaining a good rapport.
It is important to be patient as time is not of the essence in Peru – meetings will last as long as they need to last.
Be tactful and diplomatic. If you are too direct, Peruvians will not value what you have to say.
During negotiations, Peruvians like to discuss all aspects of the contract, not specific parts. Also everything will be reviewed, and re-reviewed even if it seems like irrelevant data. Always try to be flexible, ask questions, and avoid confrontation.
Try to provide material in many ways (i.e. power points, attractive graphics, etc.).
Never change your negotiation team midway through the process. This might cause your Peruvian counterparts to stop negotiations.
If you want to invite your counterpart over for dinner or lunch during the negotiation process, be sure to only ask the key players. After negotiation is complete you may invite everyone who was involved on the project.
In Peru you should arrive about 30 minutes late for social functions. If attending a dinner remain 30 minutes after dinner ends.
Peruvians eat late. Many dinners invitations are for 9:00 p.m., which means dinner will not be served until 10:30 p.m.
If invited to a tea at a Peruvian’s home, it is normally from 6:00 p.m. to 8:00 p.m.
Rest both hands on the table when eating out. It is considered rude to keep your hand on your lap.
Entertaining will normally be conducted in a prestigious restaurant with spouses included. If your counterpart visits you, it is common courtesy to reciprocate this gesture.
Business is rarely discussed over dinners.

Gift giving is common in business settings, but not at the first meeting. Normally paying for dinner or lunch is an acceptable gesture after you initially meet. Social situations are the best times to give a gift, due to the relaxed atmosphere. Gifts which represent your home area and culture are good choices and will be greatly appreciated. Make sure to keep company logos small, but gifts that represent your company are appropriate. Other good gift ideas include small electronic devises, name brand pens, ties, or scarves made in natural fabrics.
Gift giving is also common if invited to a Peruvian’s home. Sweets, chocolates, wine, a good whisky or liquor are appropriate gifts. Sending roses after the dinner is also a common practice. However, do not send red roses because they indicate romantic feelings. Sending any flower other than a rose is considered cheap.
When giving a gift in Peru, do not give a handkerchief, 13 of anything, or use the colors purple or black, all have religious connotations. Do not give scissors, knives, or anything sharp because it will indicate you want to sever the relationship. Also make sure to take into account the social idiosyncrasies (family history, social standing, education, etc) that create the caste system. Gifts are opened when received.

If asking for directions in Peru you will most likely get an answer, even if the person you ask does not know the answer. Make sure to ask multiple people for directions.
Crossing your legs with your ankle on your knee is considered rude. Instead, cross your legs at the knee.
To beckon someone to come to you, move your fingers back and forth with your hand facing the ground.

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Export Business Reminders

Build at least a minimum team within your company to help on the Peruvian market.
Use metric terms.
Ensure that all sales documentation is correct.
The date is written Day/Month/Year.
Have multiple copies of all paperwork (i.e. documentation, bill of lading, etc.) and make sure all paperwork is accompanied with a Spanish translation.
Be patient regarding requests for documentation, ingredients lists, production process, and quality assurance and respond to such requests with diligence and in a timely fashion.
Use letters of credit to reduce risk.
Hedge export values with your bank if you are concerned about exchange rate risk.
Set up wire transfers for payments.

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International Resources: Global Market Profile: Peru

Table of Contents

Fresh Fruit, Vegetable, and Flower Market

Consumer Trends

Entering the Peruvian Market

Trade Agreements

Food Standards and Regulations

Business Protocol

Export Business Reminders

Related Links and Government Resources