Quality products in the European poultry market Pascale Magdelaine Vilnius, 3/10/ 2006

International and European background

US 18.7 MillionsT (+3% in 2005) UE MillionsT (+0.5% in 2005) BRAZIL 8.6 MillionsT ( +9% in 2005) Thaïland 1 MillionT (-35 % in 2004, + 5% in 2005) Russian Federation 1.3 MillionT (+ 8% in 2005) World poultry production 80 MillionsTonnes in 2005 (+ 3 %/ year since 2000) CHINA 13,4 MillionsT ( +1.5% in 2005) Source OFIVAL/ FAO/UE

Changes in world poultry trade Exportations 1000T BRAZIL EU US CHINA THAILAND International trade 7.5 MillionT Source OFIVAL

World poultry trade 2005/2006  New record for the brazilian poultry exports in 2005  Some difficulties in 2006: brazilian exports dropped about 12% (7 months 06/05) –Whole chicken towards middle east (-33.5%) –Cuts -8% ; –+ 50% for processed products –Very low prices on the domestic brazilian market  Increase in US exports in 2005, stable in volume in 2006 but prices drop  Thailand : –Stop of the exports of raw poultry meat (390 MT en 2003) –Strong increase for elaborated cooked products (100 MT in 2002, 236 MT in 2005, 350 MT expected in 2006)

Source : ITAVI from EU Commission and national statistics EU 25 : 11MT produced in %/ T

Extra EU poultry trade (1000 T) Export % Import % Source Commission

WTO agreement (Marrakech) impact 91% 19% Part of exports with refunds Source Commission Tonnes

Extra EU poultry trade (value) 1000 € Source Commission

European poultry consumption and domestic markets

N°1 N°2 N°3 Poultry rank L’Agence française pour le développement international des entreprisesfévrier % 17% 20% 21% 23% 24% 26% 35% Poultry meat second in the European meat consumption 39% 35% % of total meat consumption 18% 20% 35% 28%

Domestic markets > T High individual consumption level

Changes in consumption habits %

New trends in European poultry market  More fresh products, even in the north European countries, where the frozen products are loosing weight (UK, Germany, Belgium).  More processed products :

More quality products  Increasing of specifications and collective approach to guarantee some qualitative caracteristics (sanitary quality, animal welfare, feed quality, rearing conditions, …)  Between 15 and 25 % of the chicken European under quality specifications  Various approach according to the countries –Label Rouge in France –Organic poultry –Free range in UK –“pollo corral” in Spain –Global approach in Netherlands (IKB) or Germany (QS)

French poultry market : various species and various quality levels

French Context : 26% of French chicken production benefit from an official sign of quality (33% if excluding production for extra EU export) ITAVI from SCEES

The French market Various species… Total chicken 50% ITAVI from TNS SOFRES 2005 Cuts 80% Cuts 9% Cuts 95%

…. and quality levels ITAVI from TNS SOFRES

Global French poultry market stable Strong increase for processed products ITAVI from TNS SOFRES Purchases in volume 2005/2003 % per year

French consumers demands according to different types of poultry products Whole chickenCutsProcessed/ cooked products Convenience-+++ Price+/-+++ Sanitary quality and origin +++- Taste++ (linked to the rearing practices) -+ (recipe)

In conclusion, actual trends in European consumers demands  Sanitary security  Convenience products  More fresh products  Good rearing conditions (animal health and welfare, feed quality,..)  Guarantee on origin and traceability  Good taste  … and correct prices.

Thank for your attention