Germany Market Access

Import regulations and customs duties

Regulations
In accordance with its European Union membership, Germany applies the European Union (EU) rules that are in force in all European Union countries. While the EU has a rather liberal foreign trade policy, there is certain number of restrictions, especially on farm products, following the implementation of the CAP (Common Agricultural Policy): the application of compensations on import and export of farm products, aimed at favouring the development of agriculture within the EU, implies a certain number of control and regulation systems for the goods entering the EU territory.

Moreover, for sanitary reasons, regarding Genetically Modified Organisms (after being allowed in the European territory), their presence should be systematically specified on packaging. The beef cattle bred on hormones is also forbidden to import.

The BSE crisis (often called the "mad cow disease") urged the European Authorities to strengthen the phytosanitary measures to make sure of the quality of meats entering and circulating in the EU territory. The principle of precaution is now widespread: in case of doubt, the import is prohibited until proof is made of the non-harmfulness of products.

Distribution

With more than 82 million people, the German market is the largest and most important in Europe. It is both very competitive and segmented, with supply-side saturation in many sectors and for many products. Quality and service are of the utmost importance in this market. The main trading areas of the country North Rhine-Westphalia, Baden Wurtenberg, Bavaria, Hamburg, Berlin and Hanover, as well as Leipzig in the former East Germany.

The structure of German distribution is characterised by:
- a large number of small independent shops
- a low level of concentration in each sector, compared to the main European markets (France, United Kingdom, Belgium)
- a predominance of distribution in city centres and urban areas
- a low number of hypermarkets
- a predominance of discount stores and the importance of distance selling (mail order, e-commerce, teleshopping).

German distribution is divided up according to the following distribution channels:

The top three German distribution groups are Metro, Rewe and Edeka/Ava. Discount stores are the leading format for food distribution, registering a growth of approximately 10% and generating 40% of total food sales. The growth in the number of discounters, such as Lidl and Aldi has forced distributors to wage a price war: thus, insufficient margins risk slowing down the modernisation of sales outlets and the development of new distribution concepts. The relationships between the distributors and their suppliers, reputed to be very difficult, have become even more strained. A trend toward consolidation has developed, and groups such as Karstadt-Quelle, Edeka-Tengelmann and discounters such as Wal-Mart have engaged in severe competition, resulting in a lowering of suppliers' margins.

Classification of the top ten German distributors in 2003

The Business to Business (B to B) market

To sell in Germany, it is vital to be represented on a regional level, either by independent regional agents, or by a national organisation with regional support. Regional division usually corresponds with the Länder. However, North Rhine-Westphalia and Bavaria can be divided into two areas each, owing to their very large size.

Germany is the world's leading country for the organisation of trade exhibitions and fairs: these events are vital for a company to make a name for itself, find out who its competition is, find new customers, and develop loyalty among longer-standing ones. One benchmark exhibition is EUROSHOP, the premier worldwide retail distribution exhibition, with almost 1,500 exhibitors. The cities which stage international trade fairs are: Cologne, Düsseldorf, Frankfurt, Hanover, Munich, Nuremberg, Berlin, Leipzig, Stuttgart, Hamburg and Essen. In addition, regional exhibitions are held all over Germany, generally smaller and which are organised by either distributors or agents.

Transportation of goods

By road
The German road network covers more than 238,000 km of roads of which more than 11,000 km are toll free highways. On highways, tax for industrial vehicles having an authorised total weight exceeding 12 tons is effective since 1995. Rates are established per day, week, month or year and consist in a subscription which entitles to a certificate which the driver must show.

By rail
The railroad network extends over 44.500 km of lines and transported 290 million tons of goods in 1999.
The public railway Deutsche Bahn company works as a private firm since 1995.

By sea
The main German ports are: Hamburg, Rostock, Bremen and Duisburg.

By air
The airport of Frankfurt, the most important, ensures 70% of the air freight. It ranks 9th in the world due to the quantity of freight transported in 1999 which represent 1,600,000 tons. The other main international airports are Munich, Stuttgart, Dusseldorf.

Standards

The 2 products certification and normalisation reference bodies for a company willing to export to Germany are the TÜV and the Deutsches Institut für Normung ( DIN) which is a member of the European Committee of Normalization ( CEN), the European Telecommunications Standards Institute and the European Committee for Electrotechnical Standardisation.

All German technical rules (about 24,000 standards) are included in the DIN catalogue, and standards are inspected at least every 5 years. If a standard does not correspond anymore to the requirements, it is worked on. If it is not updated anymore, it is suppressed with no substitution. Standards can be used by anyone, but they are not compulsory. However, the State can base itself on certain DIN standards to establish enforced national standards.

Patents and brands

The body in charge of the protecting intellectual property in Germany is the Deutsches Patent-und Markenamt ( DPMA).