Exporting to Finland
Total Page:16
File Type:pdf, Size:1020Kb
Exporting to Finland MINISTRY FOR FOREIGN AFFAIRS OF FINLAND FINNPARTNERSHIP Contents 3 Foreword 4 Finland as an export market 9 Complying with legal requirements 15 Private sector standards and codes – Photos: Association for an inevitable part of today’s business Promoting Fairtrade in Finland: 6, 7, 13 and Shutterstock 19 From export price to retail price Layout: Innocorp Oy 22 Further information Printed by: Erweko Oy 2008 Foreword Developing countries are becoming increasingly important trading partners for Finland. In recent years, imports from developing countries have outstripped the growth of imports from devel- oped countries by a significant margin. A growing demand for new products and services opens up opportunities for both small and large exporters from developing countries. At the same time, Finnish consumers are concerned about prod- uct safety, environmental sustainability, and decent working conditions, and require that producers and service providers adhere to a high quality and ethical standards. This publication is intended to serve as a user-friendly hand- book for small and large exporters from developing countries interested in exporting to Finland. While the focus is on the facilitation of trade from developing countries, I hope that the infor- mation provided in this publication will benefit interested exporters regardless of their origin. It provides an overview of the Finnish market, business practices as well as the required standards and regulations. Procedures related to exporting to Finland may seem complicated, but assistance in complying with the required rules and regulations as well as in finding potential partners in Finland can be obtained from several actors. Further information and contact details are provided at the end of this publication. Finland is a Member State of the European Union and a relatively small country, which can be a good stepping-stone for aspiring exporters to the wider European markets. Regulations and practices in Finland and the European Union are to a large extent harmonized. Therefore, this publication pro- vides useful information also to exporters interested in other European countries. This publication is a part of Finland’s ongoing efforts to promote trade with developing countries and to provide them with opportunities to better participate in the global economy. I hope that it will be a useful tool for foreign companies, Governments and NGOs in providing information on Finland as a trading partner. Minister for Trade and Development 3 Finland as an export market Small country, density is quite low with 15.5 inhabitants per high standard of living square kilometre. By their ethnic background, the population is very homogeneous, only about Finland is the most northern country of the 2% having a foreign origin. The official languages European Union. Its neighbours are Sweden and are Finnish – 94% of the population speak Finn- Norway in the west, Russia in the east and Esto- ish as their mother tongue – and Swedish (6%). nia – across the Gulf of Finland – in the south. Finland’s history is very much linked with the The population is about 5.3 million, of which neighbouring countries. In the 12th century, the two thirds live in the urban areas. The capital of first missionaries from Sweden crossed the Bal- Finland, Helsinki, lies on the south coast. Other tic Sea and Finland became part of the Swedish bigger cities are Turku, Tampere, Jyväskylä, Kuo- realm. In 1809, Sweden surrended Finland to pio and Oulu. Around one million people live in Russia and in 1917 Finland declared indepen- the Helsinki metropolitan area. The population dence from Russia. In 1995, Finland joined the 4 European Union (EU) and intro- Gulf Cooperation Council (GCC). duced the single currency euro The value of imports was 59.5 with the other countries in billion euros, of which 56% the euro area in 2002. came from the EU area. As concerns politics, The major import coun- Finland has a long history tries outside the Euro- of multiparty coalition pean Economic Area governments. After the are Russia, China, latest parliamentary USA, Japan and South election in spring 2007, Korea. the Government was The value of formed by the biggest imports from develop- parties, the Centre Party ing countries was 10.1 and the National Coalition billion euros, i.e. 17% of all Party; Social Democrats are the imports, in 2007. The growth biggest party in opposition. rate of imports from developing Finland is an advanced industrial econ- countries averaged 24% per year from omy. The GDP per capita was 33,803 euros in 2004 to 2007. The average growth rate of total 2007. The value of exports in 2007 was 65.5 imports was 13%, while imports from the EU billion euros, the major groups being electronics, grew on average by 10% during the same peri- machines and appliances as well as metal and od. In the coming years, the potential for growth forest products. The EU countries represent is similar, giving particularly the developing 63% of the exports and the biggest countries countries highly promising opportunities for outside the European Economic Area1 are Rus- increasing their business with Finland. sia, USA, China, Japan and the countries of the Efficiently organised retail market The total value of the Finnish retail market is approximately 34 billion euros (2007), which is shared by 29,000 retail stores. Over the past 10 years, consumption has grown by an average of 3% annually. Of the average household budget, food represents now about 12%, although its share is declining – growing product groups are interior, household and health articles. Department stores sell annually worth over 6 billion euros, food stores (incl. hypermarkets) over 12 billion euros, clothing specialists close to 2 billion euros and sports goods specialists around 1 billion euros. The big chains dominate most retail sectors. In the food sector, self-service 5 In the clothing sector, the market is dominated by the department stores. Of companies special- ising in clothing, the biggest are H&M, Texmoda Fashion Group, Seppälä and Lindex (the two lat- ter are owned by Stockmann). In sports products, Kesko with its Intersport dealers and department stores dominate the market. Buying and other support to stores is centrally organised All big chains have strict store concepts, even if the stores are run by private entrepreneurs. stores account for almost 100% of business in Store space planning, buying, logistics, basic the field, the amount of specialized food service assortment, marketing and even pricing de- stores being limited. cisions are made in the central organisation. The biggest groups are expanding their busi- This makes life easier for the suppliers as the nesses also to the other Nordic countries, the negotiation partners are thus few and the buying Baltic countries and Russia, which means that volumes in each chain can be centralized. On the dealing successfully with such retail groups can other hand, getting a product chosen to a chain’s lead to sales to a much wider market than only basic assortment requires bigger volumes than the Finnish market. selling to one or a few stores only, which puts small suppliers at a disadvantage. Major players in retail trade In food products, the big players are S-Group, Kesko and Tradeka. The S-Group is a con- sumer co-operative with a market share of 39.9% in 2006, whose buying and logistics company is called Inex Partners. Kesko and the K-retailers are together the second biggest group (33.4%). Tradeka served by Tuko Logistics holds a share of 11.9% and the German discounter chain Lidl 4.1%. About 10% of the market is held by smaller companies outside of the big chains. The three biggest department stores are the S-Group (Sokos department stores and Prisma hypermarkets), Kesko (K-Citymarket hypermar- kets, Anttila department stores, Kodin Ykkönen for home and interior decoration) and Stock- mann. 6 A growing part of retailers’ basic assortments are their own brands, made in compliance with the retail group’s specifications. Such brands are typical especially in the food and daily goods sector, but advancing also in clothing, home tex- tiles and other special goods. A chain´s basic assortment normally covers 60-80% of the sales, but the member retailers can individually choose plenty of products into their own store-specific assortments. They buy such products mainly from nearby suppliers or – in case of imported products – from so-called warehouse assortment that the central organi- sation offers for this purpose. Thus suppliers that are too small to serve the whole chain still have numerous possibilities of selling through the warehouse assortment. Connections to European alliances Buying is centralized within each chain not only nationally, but in many cases also at the European level. Kesko Food is a member of Associated Mar- keting Services (AMS), a strategic buying alliance based in the Netherlands. The S-Group has its own channels through CoopNorden, Tuko Logistics is a member of United Nordic Inc., Bigs and EMD, In addition to such foreign partners, there Intersport Finland is linked with Intersport Inter- are also many import companies and agents national etc. All this means that some purchasing specialising in certain sectors, based in Finland, decisions are made in such buying alliances, and which import and sell products to retail groups there are also European-wide own brands, such and other clients. Most of them are relatively as Euroshopper for the AMS members. small family enterprises and therefore used to working both with smaller suppliers and with smaller retail clients. Practically all these agents Import companies serving retail are members of the Finnish Foreign Trade groups and individual retailers Agents’ Federation, an association of commer- cial agents, distributors and importers. On its The big retail groups normally buy at least website (www.agenttiliitto.fi) you can find the half of the imported goods directly from their members classified by product groups.