Why this is important to Wisconsin businesses: After scandals involving bird flu, pesticide, and Hepatitis E contamination, South Korea is increasingly looking to imported sources of eggs and sausage.
In the wake of an outbreak of bird flu, South Korea is facing another international embarrassment: eggs contaminated with pesticide. In 2016, during an outbreak of bird flu, South Korea imported eggs from other countries including Australia, New Zealand, Denmark and Spain. South Korea also imported eggs from the U.S. until bird flu was found in Tennessee and Korea ceased imports from the U.S. However, after the contaminated egg crisis continued to spread in South Korea, the country lifted its ban on imports of U.S. poultry and eggs, according to the U.S. Department of Agriculture. The current pesticide problem is considered worse than bird flu. The anxiety of the Korean people has grown as news of the contamination has spread, and the consumption of eggs has declined—a troubling trend for restaurants and companies that sell eggs and egg products.
According to the latest trade data from the Korea International Trade Association, bird eggs in shell, fresh, preserved or cooked (HS# 0407) were increasingly imported into the South Korean market, and import volumes for this category reached $6.5 million for the first seven months of 2017. After the U.S., China, Australia, Thailand and the Netherlands were the top import sources for these eggs; however, the U.S. and China remain the main sources. (Table 1)
Table 1. South Korea’s imports of bird eggs, in shell, fresh, preserved or cooked (HSK code# 0407)
| Country | 2016 | 2017 (Jan-July) | |||
| Value
(in thousands) |
Growth Rate
(%) |
Value
(in thousands) |
Growth Rate
(%) |
||
| Total | $2,728 | -1.1 | $6,475 | 362.3 | |
| 1 | U.S.A. | $1,012 | 30.8 | $3,253 | 496.0 |
| 2 | China | $1,030 | -4.0 | $996 | 19.4 |
| 3 | Australia | $0.0 | 0 | $807 | 100.0 |
| 4 | Thailand | $0.0 | 0 | $509 | 100.0 |
| 5 | Netherlands | $0.0 | 0 | $464 | 100.0 |
Source: Korea Int'l Trade Assoc.
Besides eggs contaminated with pesticide, South Korea’s three major hypermarket chain stores (E-Mart, Lotte Mart and Homeplus) announced that they have suspended the sale of sausages imported from Germany and the Netherlands due to potential contamination with Hepatitis E. Since this virus can cause fever, appetite and nausea, these hypermarkets and retailers have suspended the sale of these sausage imports until the government releases the results of its inspection.
In 2016, the U.S. exported more than $33 million worth of sausages and similar meat products, meat offal or blood to South Korea for both direct consumption and food preparation. Although the U.S. dominates the South Korean market for imported sausages and similar products, imports from New Zealand and Europe are increasing enough to pose a threat to U.S. market dominance, indicating opportunities for U.S. exporters of these products.
Table 2. South Korea’s imports of sausages and similar products, of meat, meat offal or blood; food preparations based on these products (HSK code# 1601.00)
| Country | 2016 | 2017 (Jan-July) | |||
| Value
(in thousands) |
Growth Rate
(%) |
Value
(in thousands) |
Growth Rate
(%) |
||
| Total | $36,082 | 16.3 | $20,963 | 6.8 | |
| 1 | U.S.A. | $33,455 | 16.3 | $19,059 | 5.1 |
| 2 | Denmark | $1,463 | 51.8 | $799 | 2.1 |
| 3 | Spain | $400 | 3.5 | $300 | 37.8 |
| 4 | Australia | $324 | -21.6 | $286 | -1.1 |
| 5 | New Zealand | $32 | N/A* | $275 | 700.6 |
Source: Korea Int'l Trade Assoc.
*There were no imports from New Zealand in this category in 2015.
Both brand name recognition and brand loyalty play an important role in selling products in South Korea. Due to the scandals of contaminated eggs and sausages in South Korea, many brands of European sausage and South Korean eggs have lost consumers’ trust, but these items remain popular in the South Korean diet. The timing is right for Wisconsin egg farms and sausage companies to enter the market and win the hearts of South Korean consumers.