Having recently alternated between Berlin and Brussels and being a great coffee lover I can’t help but wonder what is the principal difference between Belgian and German coffee markets. From a viewpoint of a simple and an uninvolved consumer grocery shopping in Germany is more affordable than in Belgium – price differences sometimes stretch up to 40-50%. However, when it comes to bio/fair-trade coffee markets in these countries the situation is flipped. The substantial price discrepancy exists – tasty and healthy ground bio coffee is cheaper in Belgium. I discovered that I really like bio coffee from Delhaize – Belgian grocery chain – that offers couple of varieties, different in strengths and flavors. The price of a 250g coffee varies between 2.50-3.00 EUR per package. On the other hand, the price in a German supermarket REWE is between 4.00-5.00 EUR per 250g-package. However, a consumer who decides to by a bigger packaged bio coffee in Germany (i.e., 500g) is going to pay a similar price as a Belgian consumer for his/her two packages of a 250g coffee.

So, is this trend related to consumer preferences or to different trade barriers in these countries? Are Germans simply used to buying bigger quantities or are Belgians more conscious of their purchasing choices – thus buying smaller quantities and better quality food? Who determines the market price? I don’t have clear answers to these questions, nor to many others; however, I can gather some basic facts that I hope would guide me towards the right answers.

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US, Canada, EU and Japan are the world’s biggest importers of coffee. In 2009 it was estimated that the EU market for organic coffee amounted to barely 2% of the total coffee market, while the organic/fair-trade coffee market amounted to 2.6%.[3] “In absolute volumes, the largest markets for certified coffee in Europe are Germany, France and the United Kingdom, followed by the Netherlands and Belgium, while the market share of certified coffee is highest in the United Kingdom, Denmark, the Netherlands, Finland, Austria, Luxemburg, Sweden and Germany.”[4] Table 1 below pictures import trends for organic coffee among biggest coffee importers. Just by comparing data with a naked eye, one may conclude that Belgium imports more organic coffee per capita than Germany, which could be a key for a desired explanation. Table 2 below depicts sale of fair-trade certified coffee in selected European countries and one may notice that market share for Belgium amounted to 2.8%, while a market share for fair-trade certified coffee amounted to significantly lower 1.5% in Germany.

Besides consumer preferences these trends could be shaped by barriers to trade imposed by Germany and Belgium in regards to coffee imports. EU – similarly to its counterparts – does not impose any import duties on green coffee; however, Member States respectively apply different duties on processed coffee, while US and Canada do not levy any duties. [5] More details to follow in the subsequent post.

Imports of organic coffee by importing country
Imports of organic coffee by importing country
Sales of fair-trade certified coffee in selected European countries
Sales of fair-trade certified coffee in selected European countries

[1] http://www.cbi.eu/system/files/marketintel/2011_Coffee_in_Belgium.pdf

[2] http://www.thecoffeeguide.org/coffee-guide/the-markets-for-coffee/Europe—European-Union—Summary-data/

[3] http://www.fao.org/fileadmin/templates/organicexports/docs/Market_Organic_FT_Coffee.pdf

[4] http://www.fao.org/fileadmin/templates/organicexports/docs/Market_Organic_FT_Coffee.pdf

[5] http://www.thecoffeeguide.org/coffee-guide/the-markets-for-coffee/Tariff-barriers