Agri-Food Sector Profile[1] - Dominican Republic
March 2014
Produced by the Canadian Trade Commissioner Service
Market Overview
The Dominican Republic (DR) is the second-largest country in the Caribbean, with a population of
approximately 9.9 million. The Dominican economy has been one of the fastest growing in Latin
America since 2005 and managed recoup fairly well from the 2009 slowdown, averaging a 4.7%
annual GDP growth for 2010-2013.
The DR agricultural sector's contribution to total GDP grew 4.1% in 2012 (compared to the previous
year), propelled by a considerable growth in non-traditional and organic crops. The agricultural sector
(i.e. crops and livestock) represents 7.6% of the country's GDP, a contribution that has stayed
stable since 2009.
Dominican agricultural activities are diverse, and can be divided in 2 main categories: production for
local consumption, and export-oriented production. Most of the agricultural activities focus on staple
goods for local consumption such as sugar cane, plantains, potatoes, yucca, grains (beans, rice),
fruits (mango, bananas, pineapples, coconut) and vegetables (tomatoes, lettuce, etc). With regards
to animal products, the DR has a significant production of eggs, milk, poultry, pork meat, and beef (in
smaller quantities).
It is estimated that the local production meets between 60%-70% of the country's demand, and has
to be complemented with imports in order to be able to fully supply it. Among the top imports of
staple food products are beans, garlic, onions, potatoes, and rice.
On the other hand, there is the export-oriented agricultural production, which is dominated by items
such as cocoa beans and its by-products, coffee beans, coconuts, mangoes, spices, fruits, and
vegetables. Two very important components of export-oriented production are greenhouse
production and organic production, both of which, in most cases, are organized in clusters. The DR is
the world largest exporter of organic bananas and organic cocoa, and also exports a considerable
amount of organic coffee and tropical fruits.
Greenhouse-environment production has gained popularity in the country in the last decade, due to
the quality of its output and the profitability of the operations. Greenhouse production focuses mainly
on vegetables and fruits for export, such as tomatoes, peppers, cucumbers, and cantaloupes.
The DR has a relatively solid and experienced agri-food industry comprised of food and beverage
processors. These processors manufacture products such as edible oils, wheat-based products,
processed meat, canned goods, sauces, dairy, fruit juices, and alcoholic beverages (particularly rum
and beer). Production of these items relies on a combination of local and imported input.
The DR exported C$31.8M of agrifood products to Canada in 2013. Main exports were cocoa beans,
tobacco, vegetables, fruits, and rum. The Dominican agrifood production may represent a good
business opportunity for Canadian companies looking to source fruits and vegetables to supply the
Canadian market. There are some foreign companies that have installed packing facilities in the DR in
order to source and export products to North America and Europe.
On the other hand, while the country has a varied and consistent agricultural output, almost half of
its exports are of little value-added, leaving a great unexploited potential for value-added products.
There are several multinational enterprises which have had a strong presence in the DR market for
many years, either through direct investment in production facilities, corporate distribution offices, or
authorized distributors. Some of these brands, with which Dominicans are very familiar, are Quaker,
Kellogs, Kraft, McCain, Heinz, Goya, Nestlé, and Président, among others.
It is estimated that approximately 30%-40% of all food and beverages consumed in the DR are
imported. Total food imports in 2013 are estimated at over $1.7 billion, with the US and the EU being
the main suppliers. The US alone exported US$1.05b of agrifood products to the DR. Agricultural
imports can be grouped in 3 major categories:
Bulk agricultural commodities: such as wheat, beans, corn, etc
Intermediate products: soybean meal, vegetable oils, animal fats, fish & seafood, meats,
fresh fruits, sugar and other sweeteners, and tobacco.
Processed, consumer-ready products: breakfast cereals, salted fish, bottled beverages,
dairy, snack foods, canned goods, etc.
While the share of processed, value-added products has experienced an increase over the last 5
years, it is also true that the origin of these goods has also been shifting to low-cost suppliers in
order to find items suitable for the market pricewise. Products from South and Central America, as
well as from Asia and Mexico, are now a common view at the store shelves.
The Dominican Republic has a very strong and dynamic tourism industry, which generates a large
demand for agri-food products of many kinds, both locally-produced and imported. The National
Hotels and Restaurants Association (ASONAHORES), estimates the annual consumption of food and
beverage of the tourism industry at over US$500M, and is expected to keep increasing. In 2013 the
country received 5.2 million tourists, most of which came from North America and Europe. With over
65,000 hotel rooms, most of which belong to all-inclusive resorts, the tourism industry is expected to
continue to offer opportunities for international suppliers of products such as prime cuts of beef and
pork, fish & seafood, fruits, beverages, and dairy products, among others.
There are several well-established institutional suppliers which serve hotels and restaurants, serving
as the main distribution channel to reach the tourism industry.
Canada has been a traditional supplier of dry fish to the DR, and to a lesser extent, of frozen fish &
seafood. Total Dominican imports of fish and seafood (fresh, frozen and dried) were US$102.3 and
US$110.8M in 2011, and 2012 respectively. Main import products in this category are dry fish, frozen
fish fillet, frozen H&G fish, and crustaceans.
Dry fish (herring, cod, saithe, pollock, hake) usually accounts for approximately 60% of total seafood
imports. Norway (salted pollock, salted saithe) and Canada (smoked herring) have an overwhelming
control of the dry fish market in the DR, with a combined 90% market share. Canadian exports of fish
& seafood to the DR reached C$17.1M in 2013, including smoked herring, hake, Pollock, and frozen
red fish.
Canadian agrifood and seafood exports to the DR have had its ups and downs in the last 3 years,
going from C$51.5M in 2010 to C$37.9M in 2011, and back up to C$42.5M in 2012. Imports from
Canada represent only a small share of the Dominican Republic's total agricultural and agri-food
imports. Total Canadian agrifood, fish and seafood exports to the DR shrank by 25% in 2013, totalling
C$31.5M.
Table 1: Top Canadian Agri-Food and Seafood Exports to the Dominican Republic (CAD)
Rank
HS Code
Export
2011
2012
2013
1
03054230
Herring, bloaters, smoked,
including fillets
$15,914,116
$18,955,563
$15,515,197
2
12081000
Soya beans, flour, and meals
0
0
$6,246,411
3
07133991
Pinto beans, dried, shelled
$1,418,621
$2,833,968
$1,043,276
4
11041200
Oats, rolled or flaked grains
0
$214,451
$894,792
5
03056921
Hake, salted or in brine, but not
dried or smoked
$952,523
$400,909
$753,900
6
07132091
Chickpeas, kabuli varieties, dried,
shelled
$63,898
$226,433
$636,890
7
13023900
Mucilages and thickeners, derived
from vegetable products
$244,971
$169,542
$508,969
8
11042200
Oats, hulled, pearled, sliced or
kibbled
$249,391
$691,206
$495,311
9
07019000
Potatoes, fresh or chilled nes
$1,666,749
$653,492
$490,716
10
07134091
Lentils, green incl French green
$430,451
$225,782
$416,263
Among the Canadian brands of processed food and beverage products present in the Dominican
market are Dare, McCain, Pilliteri, Yogen Fruz, and Cap-Pelé.
Market Trends
While most of the population's daily diet is comprised of traditional, locally-produced staple food
items (rice, beans, plantains, meats, and vegetables), Dominican consumers in urban centers have
become more sophisticated, especially in the middle and high socio-economic segments. In the last
years, there has been a sustainable (and growing) demand for processed, consumer-ready products
such as breakfast cereals, snacks, dairy, frozen foods - including desserts, nutritional foods, and
others.
There has also been an explosion in the number of international food restaurants in the DR, mainly in
its capital Santo Domingo, and in Santiago. This has caused a higher demand for some import food
products such as prime cut meats, fish and seafood, pastas, dairy, and beverages.
Dominicans in the middle- to upper-income brackets are becoming increasingly health conscious and
aware of food safety issues. Some consumers are demanding healthier food, with less saturated fat,
cholesterol, sugar and carbohydrate content. Diet and health products may therefore represent a
niche market that could be served by Canadian suppliers.
Market-entry Considerations
With a few exceptions, market access for agricultural and agrifood products to the DR is pretty
straightforward. For agricultural products, a commercial invoice and a phitosanitary certificate
(issued by CFIA in the case of Canadian products) should be submitted with the shipment, and the
importer has to submit a "No objection certificate" issued by DR's Ministry of Agriculture, to Customs.
For animal products, the phito certificate would be replaced by a zoosanitary certificate (also issued
by CFIA).
There are eight agri-food items which are protected under the "Technical Rectification" clause
approved by the World Trade Organisation (WTO): rice, beans, garlic, powdered milk, sugar, onions,
corn, and unprocessed chicken. Imports of these products are subject to tariff rate quotas and a
specific import calendar, and also require special permits from the Dominican government prior to
entering the country.
Imports of animals normally require certificates of origin and other veterinary documentation to
assure disease-free status.
The DR has a Free Trade Agreement with the US and Central American countries (DR-CAFTA) as well
as an Economic Partnership Agreement (EPA) with the EU. Products from these countries enter the
DR either tariff-free or with a preferential tariff. Having been in place for 8 years now, the DR-CAFTA
is the one affecting more Canadian exporters because of the preferential access it grants US
products over Canadian competitors (i.e. potatoes, beef, pork meat, beans, fish, etc).
Dominican Republic's labelling requirement mandates that all pre-packed foods must have a sanitary
registry number, and the label should be in Spanish, including on it information on the ingredients,
expiration date, industrial and sanitary registry numbers, name and address of
manufacturer/distributor, among others. However, DR authorities have been "temporarily" accepting
(for a few years) that importers stick a Spanish label with the required information on top of or next
to the original ones. Nutritional information, which is not mandatory under this norm, will be required
at a later stage (TBD).
Tariffs and Import Taxes
Taxes and duties for imported goods are applied on an "ad-valorem" basis, using the cost, insurance
and freight (c.i.f.) price, expressed in U.S. dollars, and multiplying it by the official foreign exchange
rate. All duties and taxes are collected in Dominican pesos. Generally, imports will be subject to some
or all of the three taxes outlined in Table 2, unless exempted by law.
Table 2: Dominican Republic Import Tariffs and Taxes
Type of Tax
Description
Tariff (Arancel)
A basic import tax that ranges from 3% to 45% is applied on a
product-by-product basis.
Luxury Tax (Impuesto
Selectivo al Consumo)
The consumption tax applied to luxury imports or "non-essential"
goods ranges from 15% to 80%. The tax is calculated on the c.i.f.
price. Luxury goods include, amongst others, perfume, whiskey,
motor vehicles and tobacco.
Industrialized Goods and
Services Tax (Impuesto de
Transferencia a los Bienes
Industrializados y
Servicios [ITBIS])
An 18% sales tax is applied to processed agricultural goods and most
of the non-agricultural goods and services. ITBIS is calculated using
the c.i.f. price plus the amount paid for all taxes and duties
previously mentioned. There's a lower 11% ITBIs that applies to
staple food products.
Market Access Issues
Beef and Poultry
Imports of Canadian beef into the Dominican Republic have been banned since the discovery of a BSE
case in Alberta back in May 2003. There have been several pre-agreements since then in order to
resume imports from Canada, but they have failed to materialize because the DR is not considered a
priority market by Canadian Beef (formerly Canadian Beef Exporters Association). Furthermore,
imports of processed or unprocessed chicken from British Columbia are banned; however, imports of
processed chicken products originating elsewhere in Canada are permitted.
Potatoes soil content levels
The DR has had strict tolerance levels for soil content in import potatoes (table & seed) allegedly
because of the phytosanitary risks it may pose. Table potatoes were allowed a max of 1 gram of soil
content per kilogram of weight (0.1%). Seed potatoes a max of 5 grams of soil content per kilogram
of weight (0.5%), plus a nematicide treatment either at origin or at destination (before sowing).
However, as a result of negotiations which ended with a Memorandum of Understanding (MoU), the
soil tolerance limit has been increased to 0.75% for both seeds and tablestock.
Key Participants and Competitors
The Dominican agri-food market is served by many major international companies, particularly those
from the United States and the EU. The US holds over 50% of the market share for imported food
into the DR, with over US$1b of exports a year. Large American brokers ship large volumes of
different products to the DR. Indeed, the Dominican Republic is the fifth largest market in the
American continent for U.S. agricultural exports, behind Canada, Mexico, Venezuela, and Colombia.
The predominance of American products in some segments has increased yearly with the
implementation of the DR-CAFTA Free Trade Agreement between the DR, the US and 4 Central
American countries. Under DR-CAFTA, American food products can enter the DR either duty free, or
paying a preferential customs duty. Furthermore, for products whose customs duties were not
removed immediately, there are yearly duty-free quotas that can be imported. These items include
beans, meats, poultry, potatoes, dairy, rice, and ice cream, among others.
The EU is also a strong competitor, especially for products like carbonated and alcoholic beverages,
dairy, processed meats, canned foods, and frozen food. On the other hand, Asian countries have
increasingly gained market share in products such as fish and seafood, and produce.
Distribution Channels
The best way of entering the DR market is through a local distributor. Distributors are able to reach
the main retail channels such as supermarkets and Mom and Pop stores (colmados), which combined
account for almost 100% of retail food sale. They also supply institutional customers such as hotels
and restaurants.
The Dominican retail sector comprises chains of hypermarkets and supermarkets, smaller independent
supermarkets, and colmados (small corner stores). Approximately 50% of retail food products are
sold via colmados and open markets, while the other 50% are sold through supermarkets and
hypermarkets. Supermarkets and hypermarkets represent the primary sales venues for imported
products targeting consumers in the middle- and upper-income brackets. Although retail sales are
highly concentrated in Santo Domingo and Santiago, in the last 3 years the main retailer chains have
been expanding to smaller cities and towns, increasing considerably their numbers of stores
nationwide.
Importation and distribution of processed food and beverage products is primarily carried out by
independent importers/distributors, which in turn supply supermarkets and colmados. Supermarkets
also import directly, often under exclusivity agreements. Most of these chains also operate their own
separate holding companies, which function as importers/distributors not only for their own stores
but also for the retail trade in general.
Within the foodservice sector business, hotels, major resorts, and upscale restaurants source the
majority of their food products from local institutional importers and distributors.
Table 3: Major Players in the Distribution of Food and Beverage Products in the Dominican
Republic
Market Channel
Supermarket and hypermarket* chains
Retailer/Wholesaler
Grupo Ramos:
Multicentro (24 stores)*;
Supermercados Pola (5 stores)
Centro Cuesta Nacional:
Supermercados Nacional (13 stores);
Jumbo (7 stores)*;
Supermercados La Cadena (9 stores);
Plaza Lama (8 stores)*;
Supermercados Bravo (6 stores);
PriceSmart (2 stores)*;
Carrefour (1 store)*
Wholesalers and distributors
Almacenes León;
Anacaona & Lonjeff;
Alvarez & Sanchez;
Alpa Import;
Almacenes Continente;
Grupo Mejia Arcala
Hotel and restaurant suppliers (meats, fish and
seafood)
Frigorificos Bahía;
Congelados del Caribe;
Distribuidora Latitudes;
Mopax Caribbean Imports;
Pesqueria Martinez;
Petro Antillana
Alcoholic beverages importers
El Catador;
Hiper Marcas;
Vinos, S.A.;
Pastoriza C x A;
Importadora Villalba;
Punto & Corcho;
Manuel Gonzalez Cuesta;
Alvarez & Sanchez;
Bodegas Julian Barcelo e Hijos
Key Contacts
Canadian Government Contacts
Canadian Embassy in Santo Domingo
Contact:
Regis Batista-Lemaire, Trade Commissioner
Trade Commissioner Service - Dominican Republic
Agriculture and Agri-Food Canada
Contact:
Ada Rodriguez, International Market Development Officer
Canadian Food Inspection Agency
Email:
[email protected]
Department of Foreign Affairs, Trade and Development (DFATD)
Latin America and Caribbean Commercial Relations Division (WOLC)
Contact:
Pearl Williams, Trade Commissioner
Business Sector Bureau (BMM)
Contact:
William Muhwezi, Trade Commissioner
Dominican Contacts
Embassy of the Dominican Republic in Canada
Contact:
Renso Herrera, Trade and Business Advisor
Association of Hotels and Restaurants, Inc. (ASONAHORES)
Contact: Ms Violeta Vargas, Membership Executive
Email:
[email protected]
Norms and Standards Directory (DIGENOR)
Contact: Ms Patricia Pereyra
Email:
[email protected]
Ministry of Agriculture
Plant Health Division (Phytosanitary Control)
Contact:
Mr Manuel Durán, Deputy Director
Useful Internet Sites
Agriculture and Agri-Food Canada
Agri Food Trade Service Canada
Industry Canada
USDA Foreign Agriculture Service
Footnotes
[1] 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.