Agri-Food
Past, Present and Future Report
Poland

June 2011

The Government of Canada has prepared this report based on primary and secondary sources of information. Readers should take note that the Government of Canada does not guarantee the accuracy of any of the information contained in this report, nor does it necessarily endorse the organizations listed herein. Readers should independently verify the accuracy and reliability of the information. This report is intended as a concise overview of the market for those interested in its potential and is not intended to provide in-depth analysis which may be required by the individual exporter. Although every effort has been made to ensure that the information is correct, Agriculture and Agri-Food Canada assumes no responsibility for its accuracy, reliability, or for any decisions arising from the information contained herein.

Please address any comments or suggestions you have on this report to: infoservice@agr.gc.ca




Table of Contents





Executive Summary

  • Poland is Canada's largest trade partner in Central and Eastern Europe. Canada-Poland bilateral trade totalled $1.2 million in 2010.
  • The agricultural sector represents 3.9% of Poland's GDP.
  • Poland has a largely homogenous population, with close to 98% of the population identifying themselves as Poles.
  • A large proportion of Polish consumers (61.8%) live in an urban metropolis, exposing them to Western influences in the country.
  • Slimming pills and teas, organic and health foods, special oils and fats and other health foods such as yoghurt, vitamins and high-fibre products including bread and pasta have seen favourable growth.
  • Poland leads the EU in the total number of convenience stores, which hold a market share of over 50%, while supermarkets and hypermarkets make up only 21%.
  • Specific agri-food products that hold strong opportunities in the Polish marketplace include grains, mainly durum wheat, barley and corn; animal fodder; pork and poultry, including offal; fish and seafood; oils; fruit and nuts.
  • Consumer exports dominate Canada's trade with Poland.

Overview

Poland is one of the largest countries in Central and Eastern Europe and the sixth most populous state in the EU. Located at the crossroads of Eastern and Western Europe, Poland extends from the Baltic coast in the north to the Czech Republic and Slovakia borders in the south, and from Germany in the west to Russia, Lithuania, Belarus and Ukraine in the east. Due to its prime location, Poland is considered an excellent gateway into the European market. Often referred to as "The heart of Europe", Poland is home to almost 40 million residents, and is located in the rapidly growing Central European region.

Since its establishment in 1989, Poland has transformed itself into a stable, democratic country with strong institutions. This stability has been further enhanced with the country's 2004 accession into the EU. Successes in Poland have been built on major structural reforms and privatization, strong export performance, foreign direct investment (FDI) inflows, and a highly educated and skilled workforce.

Poland weathered the global financial crisis better than any other country in the EU. It was the only EU country able to sustain a positive growth rate in 2009. Growth continued on into 2010, to 3.4%, and is expected to continue increasing.

New trends have penetrated the Polish market. Increasingly busy lifestyles have led consumers toward convenience foods and unhealthy snacking, while health awareness has caused a trend toward slimming products and organic food products among other consumers.


Canada-Poland Relations

Relations between Canada and Poland date back to 1935 when their first bilateral treaty was signed. Since then, over 25 agreements have been implemented and the nations continue to enjoy excellent bilateral relations and an expanding trade and investment relationship. Political relations are also very strong. The first visit by a Canadian Prime Minister occurred in 1999, and Canada was the first nation to approve Poland's membership to the North Atlantic Treaty Organization (NATO); a decision that greatly emphasised the importance of the countries' relationship and fostered future co-operation.

Since 1989, Canada and Poland have collaborated on more than 270 projects in the areas of education and training, private sector development, democracy and good governance, agriculture, and environmental protection. Poland's growing economy continues to present many investment opportunities for Canadian companies. A significant number of Canadian companies have established operations in Poland such as Bombardier Transportation, McCain Foods, Maple Leaf Foods, Pratt & Whitney, Royal Group Technologies, Semex, Shoppers Drug Mart, SNC Lavalin, Wentworth Technologies, and Yogen Fruz.

Canada-Poland Bilateral Trade (2010)
Poland Total Trade (2009) $324.9 billion
Exports $155.1 billion
Imports $169.8 billion
Trade balance ($14.7 billion)
Canada-Poland Trade $1.2 billion
Exports $219.7 million
Imports $992.5 million
Trade balance ($772.8 million)
Canada-Poland Ag Trade $116.9 million
Exports $16.1 million
Imports $100.8 million
Trade balance ($84.7 million)
  • Poland is Canada's largest market in Central and Eastern Europe. Canada-Poland bilateral trade totalled $1.2 billion in 2010.
  • Top Canadian exports to Poland include parts of turbo jets or turbo propellers ($24.2 million), airplanes ($19.7 million), power transmission equipment ($5.6 million) and helicopters ($5.2 million).
  • Top Canadian imports from Poland include parts of turbo jets or turbo propellers ($217.1 million), silver ($195.7 million), raw furskins ($49.0 million) and parts of power transmission equipment ($45.7 million).

Agricultural Trade

Poland has a strong agricultural heritage, with a large number of its products in high demand. Main agricultural products produced in Poland include fruits, vegetables, potatoes, wheat, eggs, dairy, poultry and pork. The country is a leading producer in Europe of dairy, apples, potatoes, and rye.

Total agricultural exports to Poland decreased by 19% between 2009 and 2010. This could possibly be a lasting result of the global economic recession, as exports saw a slight increase between 2007 and 2008. Despite decreasing exports, imports increased 113% from 2009 to 2010. Imports from Poland have been steadily growing, seeing a 129% increase from 2007 to 2010.

Poland is currently Canada's 68th largest destination for agri-food exports, while Canada is ranked as the 42nd largest market for Polish agri-food imports.

Canada's Top 5 Agricultural Exports to Poland (2010)
Eggs, bird, in shell, fresh, preserved or cooked $2.9 million
Fruits and other edible parts of plants $2.7 million
Raw mink furskins, whole $1.7 million
Mucilages and thickeners $0.9 million
Protein concentrates $0.7 million
  • Canada's top agricultural export to Poland in 2010 was eggs at 18.5% of total agri-food exports.
  • Other notable Canadian exports included fruits and other edible parts of plants (16.8%), raw mink furskins (10.6%), mucilages and thickeners (5.7%) and protein concentrates (4.5%).
  • Canada's top five exports in 2010 overcame non-alcoholic beverages, which were Canada's largest export to Poland, accounting for over 20.4% of total exports.
Canada's Top 5 Agricultural Imports from Poland (2010)
Raw mink furskins, whole $49.0 million
Chocolate and other food preparations containing cocoa nes $12.2 million
Vodka $8.7 million
Beer made from malt $6.4 million
Prep of cereals, flour, starch or milk for infant use $4.8 million
  • Canada's top agricultural import from Poland in 2010 was whole raw mink furskins, representing 48.6% of total imports.
  • Chocolate and other food preparations containing cocoa fell from first in 2009 to second in 2010, accounting for 12.1% of total imports.
  • Other popular imports included vodka (8.6%), beer made from malt (6.3%) and prep of cereals, flour, starch or milk for infant use (4.8%).

Complete statistical summary available at: www.ats-sea.agr.gc.ca/stats/da-do-eng.htm


Economy

Poland's economy has undergone major reforms since 1989, when it transitioned from a centrally planned economy to a stable, free market system. The country's 2004 entry into the EU has been the most influential factor in shaping the Polish economy in recent years, causing the government to change and introduce new laws in order to secure its admission. Having successfully implemented liberalization policies, executed a large privatization program, and attracted foreign direct investment (FDI), Poland stands out as a successful transition economy in today's Central and Eastern European community.

Aside from such achievements, many challenges still lie ahead including deficiencies in road and rail infrastructure, suffering business environment, high unemployment and lack of international competitiveness.

The agricultural sector, at 3.9% of Poland's GDP, represents a very small percentage of total GDP compared to the industry and services sectors, at 31.8% and 63% respectively. Agriculture continues to be a vital sector and employs only 15.2% of the total work force.

Gross Domestic Product (2010)
GDP $438.9 billion
GDP growth 3.4% (2010)
3.7% (2011)
GDP/capita $11,521.64
GDP/capita (PPP) $18,800.00

Current

  • Major industries include machine building, iron and steel, mining, shipbuilding and automobiles.
  • Inflation increased to 3.5% in 2009, but has seen a decreasing trend in 2010 to 2.4%.
  • The unemployment rate in 2010 was high at 9.8%. This is an increase of almost 2% from 2009.
  • GDP growth saw a steep decline from 5% in 2008 to 1.7% in 2009. This change is likely due to the global economic recession. However, growth is on the rebound, hitting 3.4% in 2010.
  • Although Poland is a net exporter in agri-products, it currently runs an account deficit of -2.4%.
  • Poland was ranked 70 out of 183 countries in the World Bank's 2011 Ease of Doing Business Report.

Forecast

  • Inflation is expected to rise slightly, peaking at 3.2% in 2012, and then stabilizing at 2.5% in 2013.
  • The International Monetary Fund (IMF) has projected a slow decrease in the unemployment rate to 8.9% in 2011 and 8.5% in 2013.
  • GDP is expected to continue growing; however the rates seen before the crisis will not be re-established until after 2015. It has been estimated by the IMF that GDP will grow 3.7% in 2011 and 3.9% in 2012.
  • The account deficit is expected to increase, hitting -2.9% in 2012 and then stabilizing around -2.5% in 2013.

Consumer Market

Poland has a largely homogenous population, with close to 98% of the population identifying themselves as Poles. A large proportion of Polish consumers (61.8%) live in an urban metropolis, exposing them to Western influences in the country. Increased influence of Western culture has eroded several traditional beliefs held by Polish citizens, especially in the case of large families. There is now an increasing trend towards having smaller families, which allows for greater purchasing power of the general population.

There are a number of trends and evolutions in Poland's consumer market that are currently impacting an exporter's approach to entering the marketplace. Poles have demonstrated a preference for traditional Polish cuisine in lieu of Western-style food. Consumers' diets have also become much more diversified as Polish consumers' interest in new ethnic dishes expands. Chinese, Indian, Italian, Mexican, Vietnamese and Mediterranean cuisine have become increasingly popular.

A major development in the Polish market is the rise of hectic lifestyles, which have led to the popularity of foodservice establishments, convenience foods, and unhealthy snacking. Busier lifestyles mean that meal preparation and eating time is declining, causing the demand for processed foods and convenience products to rise. Fast growing commodities include ready meals, frozen and chilled food, processed food products and fast food restaurants. Fast food has become increasingly popular, recording 5% growth in 2009, and Poles' intake of sugary, salty and fattening foods has surged in recent years. These trends indicate a shift from expenditure on necessities towards consumer durables such as cars and household goods.

In response to this trend, the government has begun promoting the benefits of healthy lifestyles, encouraging healthy eating and regular exercise. Many Poles have embraced this lifestyle and natural and organic foods have become common in many meals.

Consumption and Expenditure

  • Poles' eating and spending habits have significantly changed over the past 15 years mainly due to rising disposable incomes and increasing availability of a wide variety of affordable domestic and imported products and services.
  • Approximately 20% of consumer expenditure goes toward the purchase of food and non-alcoholic beverages.
  • Polish consumers tend to eat more at home and only ten per cent of total food expenditure goes toward food for consumption outside of the home.
  • Poles' busy lifestyles are fuelling the growth of sandwich and salad bars, as well as the home delivery and takeaway food sectors.
  • Although Poles have always preferred fresh, quality foods that come directly from local farms, organic and "environmentally friendly" foods are now considered very important factors that influence purchasing decisions.
  • Hot drinks are very popular products. Tea is especially popular, although coffee has also seen a rise in popularity that has been boosted by the growth of coffee chains.

Health and Wellness

  • The Polish market for health and well-being products has stimulated demand for better-quality food.
  • Slimming pills and teas, organic and health foods, special oils and fats and other health foods such as yogurt, vitamins and high-fibre products like bread and pasta have seen favourable growth.
  • Yogurt producers have begun to introduce probiotic yogurt products.
  • Consumers have started to show interest in vitamins and fortified products, especially fruit juices and smoothies.
  • As a result of the growing health trend, there has been increased demand for sports drinks. Whether tied to sports or not, this product segment has seen significant demand increase.
  • Soy-based products, along with breakfast cereals, snack bars and reduced calorie sweet and savoury snacks are enjoying increasing sales.
  • With the growing prevalence of healthier eating habits, Poles' consumption of red meat, such as beef, veal, lamb, mutton and goat, has been declining. Poultry sales have been affected recently by domestic bird flu cases.
  • Fish and seafood consumption has increased in recent years as it is considered a healthy alternative to red meat.
  • Poles spend around 8% of their income on fresh foods; sales of fresh foods have been boosted by the trend towards healthy living.

Retail Food Sector

  • The growing affluence of the population is evidenced by the emergence of large shopping centers and hypermarkets that service populous areas throughout the country. Such developments are changing the shopping dynamic of many families and young professionals, allowing them to make one or two large shopping trips per week rather than multiple outings as goods are needed.
  • Poland is the only EU country to have sustained annual growth in retail sales in 2009.
  • Poland leads the EU in the total number of convenience stores, which hold a market share of over 50%.
  • Convenience stores and kiosks make up 55% of the market in Poland, while supermarkets and hypermarkets make up only 21%. However, hypermarkets account for 40% of retail sales in Poland.
  • Supermarkets and hypermarkets represent the preferred location for weekly shopping, as they offer a wide variety of items with a range of prices and promotions.
  • Despite the growth of large mass retailers, small neighbourhood stores continue to be popular shopping outlets. This is especially so in rural areas and amongst older consumers in cities which prefer smaller shopping formats.

High Value Retail Items

Pet Food

  • Cats and dogs are the most popular domestic animals in Poland.
  • With six million cats and eight million dogs, Poland boasts the second largest population of domestic animals in Europe.
  • Growth in the pet food market averages between 6% and 7% annually.
  • Poland's pet food market has demonstrated so much potential that new players with no experience in the business are entering the market.

Baby Food

  • Despite a continuing trend towards smaller families, expenditure on baby and infant food and milk is growing steadily.
  • Young mothers are increasingly searching for ready-made products for babies that will allow them to reconcile work with the duties of being a mother.

Opportunities

Poland's food market presents ample opportunity for Canadian agri-food exporters.

  • Poland's accession into the EU has increased demand for new technologies and services, including agriculture and agri-food products and services.
  • Specific agri-food products that hold strong opportunities in the Polish marketplace include grains, mainly durum wheat, barley and corn; animal fodder; pork and poultry, including offal; fish and seafood; oils; fruit and nuts.
  • Processed foods are becoming increasingly popular owing to the busy lifestyles most Poles contend with. Products such as ethnic foods, frozen and precooked meals and snacks have seen increased demand.
  • Awareness of the positive impacts of healthy food have increased demand for organic and health foods in Poland, as well as slimming products.
  • Other areas of interest for Polish consumers include wine, nuts, seafood, distilled spirits, dried fruit, grapefruit, and processed food
  • In Export Development Canada's (EDC) Trade Opportunities Matrix of the Top 10 potential sectors in Poland, processed food products ranked 8th. There was a domestic market growth forecast of 20.3% for 2010.

Competitors

Poland's recent accession into the EU has increased its reliance on its European neighbours as import sources, making the country a more challenging market for Canadian exporters to penetrate. Polish trade is now dominated by the EU, with over 80% of imports and exports going to and from other EU member states.

Neighbouring Germany is by far Poland's most important trading partner, accounting for nearly 30% of the value of Polish trade. Other important markets include France, Spain, the Netherlands, Denmark and Italy. In terms of agricultural trade, Poland's principal import markets include Germany (26.7%), the Netherlands (12.3%), Spain (5.8%), Belgium (5.3%) and Denmark (5.3%). Canada ranks as Poland's 42nd largest import market. These countries represent Canada's top competition in penetrating the Polish market, especially as internally traded products in the EU are duty-free.


Access Issues

Poland remains a country of constant trade and investment interest for Canadian and foreign investors, and holds strong potential for Canadian companies wanting to penetrate the EU and/or Central and Eastern European markets. To facilitate successful market entry, Canadian exporters are encouraged to develop market entry strategies that include working with a local importer and distributor to develop a presence, gain valuable market advice, and best position a product to meet local tastes, laws and pricing.

Poland is a member of the Central European Free Trade Agreement (CEFTA), the EU, the Organization for Economic Co-operation and Development (OECD), the Organization for Security and Co-operation in Europe (OSCE), the North Atlantic Treaty Organization (NATO), and the World Trade Organization (WTO), and implements international accords and policies from these bodies.

However, Canadian exporters must be aware of the costly terms of business to place their food products on the shelves of large retailers. Poland also has a complicated system of product registration and transportation costs are much higher for Canadians compared to members of the EU. The World Bank has ranked Poland 70th out of a total 183 countries through its 2011 Ease of Doing Business Index. Poland was ranked low in starting a business, procuring a construction permit and paying taxes.

Poland's duty structure imposed on imports is highly transparent and stable. Duties apply to all products imported into Poland; however, duty rates vary according to the product or service and its country of origin.

  • In addition to customs tariffs, imported goods are subject to taxes (i.e. value added tax (VAT) and excise tax on some goods). The basic rate of the VAT is 22% which applies to most goods, while food and necessity products have a reduced rate of 7% depending on the type of product or service. There is also a transitional 3% rate for farm products.
  • Labelling requirements are completely co-ordinated with EU regulations. Product labelling requirements depend on the type of good and its intended use. All consumer products must carry Polish labels.
  • Challenges to entering the Polish marketplace include strong competition from EU countries, preferential import tariffs for products originating from EU and CEFTA countries, and the ongoing adaptation of Polish regulations to meet EU requirements.

The majority of Poland's requirements governing imports are co-ordinated with EU regulations, while others are specific to the country. It is recommended that Canadian exporters contact the Customs Service of the Republic of Poland when checking import duties on individual products.

Customs Service of the Republic of Poland- Customs Information
Tel: (48 22) 694-3194
E-mail: Informacja.celna@mofnet.gov.pl


Business Travel Tips

  • Polish business customs are very similar to those in North America and Western Europe. Poles, however, are more formal than Canadians, and typically expect to be addressed by their family name until otherwise stated.
  • Business attire is formal, including a suit and tie for men and a suit or dress for women.
  • Normal business hours run from 9:00 a.m. to 5:00 p.m.
  • Poles will generally want a clear understanding of what each business meeting will entail; therefore, an agenda, company profile and product literature should be provided.
  • Although English is widely spoken in large cities in Poland, it is not always done so outside of urban areas. Therefore, one should always determine in advance whether materials and presentations need to be translated, and if business meetings should incorporate a translator. Even minimal efforts to speak the language are appreciated by Polish business people.
  • Personal relationships are considered important to Polish business people.
  • It is customary for business people to shake hands upon meeting, and a woman should not be alarmed if a man steps forward to kiss her hand.
  • Exchanging business cards is the norm in Poland. Cards are generally given to each person at a meeting

For more information on safety and security in Poland, please see the Department of Foreign Affairs and International Trade's Travel Advisory Note: www.voyage.gc.ca/countries_pays/report_rapport-eng.asp?id=241000


Agriculture Sector & Policies

Poland's agricultural sector accounts for 3.9% of GDP and employs approximately 15% of the population. A large portion of farms are small and therefore rely on government subsidies which, on average, account for one third of farmers' incomes. This is primarily due to extra labour, lack of investment, and inefficient operations in need of modernization. Although the number of farms greater than 15 hectares has been increasing, the number of small and uneconomical farms is prevalent.

EU accession has allowed Polish farmers to benefit from significant amounts of transitional funds which totalled over US$1.9 billion in 2004. Poland also saw a more than 40% increase in food exports to Western Europe in the same year. Moving forward, the EU will finance half of farm modernization costs. Such reforms should increase overall agricultural production, supply, and demand.

Poland's agriculture policy is defined according to the EU's Common Agricultural Policy (CAP). The CAP attempts to ensure that agriculture thrives while placing a focus on environmental sustainability. The CAP has also placed more emphasis on the quality of agricultural goods rather than quantity.

Poland's main agricultural commodities include eggs, fruit, pork, poultry, vegetables, especially potatoes and sugar beets and wheat. Poland is one of the world's largest apple, blackcurrant, berry fruit, cabbage, fruit juice concentrate, pork and potato producers in the world. Arable land accounts for approximately 46% of total agricultural land, and permanent crops make up 1% of this land. There are 1,000 sq. km of irrigated land in Poland.


Contact Information

The Canadian Embassy in Poland
Street/Mailing Address:
ul. J. Matejki 1/5
00-481 Warsaw, Poland
Tel: (011-48-22) 584-3360
Fax: (011-48-22) 584-3195
E-Mail: wsaw-td@international.gc.ca
Web Site: www.tradecommissioner.gc.ca/pl

Territories/Responsibilities: Poland, Belarus
Office Hours: Monday-Friday: 0830-1630
Time Difference E.S.T.: +6

Ms. Hanna Mroz
Trade Commissioner
Agricultural Technology and Equipment, Agriculture, Food and Beverages, Fish and Seafood Products, Information and Communications Technologies
Email: wsaw-td@international.gc.ca


Key Resources

  • Canadian Agriculture Trade Statistics (CATS) - Stats Can/AAFC
  • Canadian Exports and Imports - Industry Canada – 2010
  • Consumer Foodservice in Poland - Euromonitor International – 2010
  • Consumer Lifestyles in Poland - Euromonitor International – 2010
  • DFAIT – The Embassy of Canada to Poland - 2011
  • DFAIT – Cultural Information – Poland – 2009
  • European Union – Agriculture - 2011
  • Statistics – Trade, Investment & Economic Statistics - DFAIT - 2007
  • Government of Canada – Canada-Poland Relations - 2010
  • Import Regulations - International Trade Canada - Trade Commissioner Service – 2007
  • Packaged Food – Poland – Euromonitor International – 2010
  • Poland - Cental Intelligence Agency World Fact Book - 2011
  • Poland Republic Country Overview - EDC Economics - 2007
  • Poland - Country Profile - Economist – 2007
  • Polish Information and Foreign Investment Agency – Population
  • USDA Foreign Agricultural Service – Exporter Guide Annual - 2009
  • USDA Foreign Agricultural Service – Poland: Retail Foods – 2010
  • U.S. Department of State – Background Note: Poland – 2010
  • Virtual Trade Commissioner – Great Opportunities in Poland for Canadian Countries – 2010
  • The World Bank – Ease of Doing Business in Poland – 2011