Austria Market Access

Import regulations and customs duties

Regulations
In accordance with its European Union membership, Austria applies the European Union rules that are in force in all European Union countries. While the EU has a rather liberal foreign trade policy, there is a 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 (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 more widespread: in case of doubt, the import is prohibited until proof is made of the non-harmfulness of products.

Distribution

Despite being a relatively small country, Austria is an important strategic player because it is geographically located at the crossroads of the European Union. Today, the Austrian market is saturated in all major sectors and in order to penetrate this market advertising is a must; all the more so because Austrian consumers are becoming less price sensitive and care more about in-store customer service.

The principal trading zones of the country are Vienna, Vorarlberg and Burgenland, with important areas like Styria and Tirol.

The Business to Consumer (B to C) market

In 2004, nearly 80% of the retail market in Austria was controlled by foreign companies, with German companies having a strong presence. In fact, Germany plays a very important role in Austrian commerce, and it owns more than 15% of the capital invested in some 500 companies.

Since 1995, Austria has set its sites on Eastern European countries, thus changing its import channels. This phenomenon further strengthened after 2005 with the entry of these countries into the European Union.
In 2003, the retail food market was valued at 14.3 billion euros, an increase of 3.9% as compared to 2002. Two groups dominate this market:
- Rewe austria (German origin) has a 30.2% market-share and is the market leader in the food distribution.
- Spar (Austrian origin) has 28.2% of the market-share.

Discount stores also constitute a huge market as they account for 25.6% of the total turnover of the retail food market. Hofer controls 16.2% of the market-share which is far beyond Lidl with only 2.6%.
Food distribution is very consolidated and is dominated by a few big groups which control 2/3rd of total sales in the country. Amongst these, the major foreign groups are Bipa dealing in drugstores, Lutz and Ikea dealing in furniture.

The retail market is dominated by big German groups like Markant and Metro. The largest chain of stores in the country belongs to the group Billa.

The Business to Business (B to B) market

The Austrian market is very consolidated and thus difficult to penetrate, all the more so because competition from foreign companies already exists. Therefore, it is recommended to choose a distributor that will cover the whole or part of the country, or partner with an Austrian company in order to benefit from its local knowledge and expertise. There are numerous agents and distributors for all products. Generally speaking, in addition to Austria, these agents and distributors also cover other areas such as the Central European and West European countries.

Franchising has become widespread, with 305 franchise systems operating in the country but, at the same time, they are closing at an annual rate of 4.5%. However, if the brand is well-known, franchising remains the best method for setting up in the country.

Every year Austria organises around 40 exhibitions for various industries throughout the country. This helps to facilitate the meeting of distributors and suppliers. Two "investment exhibitions" are held annually; one in Salzburg (Gewinn MoneyWorld) and another in Vienna (GewinnMesse Wien).

Transportation of goods

By road
The road network consists in 106,000 km of excellent quality and modern roads. More than half of the road freight just transits through Austria, which constitutes one of the trading hubs between western and eastern Europe.

By rail
Austria has 6,200 km of railways. With a tunnel going under the Tyrolean Alps, Austria is trying to increase its railway capacity, in order to absorb the transit traffic generated by the European Single market. In 1994, Railways transported approximately 71,000 million tons of goods. The national railway company is the Österreichische Bundesbahn."

By sea
The Danube is a communication line of an international importance. Goods transport using this means increased due to the opening of the Rhine-Main-Danube canal, where 7,700 million tons of goods were transported in 1994.

By air
Austria has 6 main airports: Vienna, Graz, Salzburg, Linz, Innsbruck and Klagenfurt. There are two national airline companies, - the state-owned Austrian Airlines and the private airlines called Lauda Air.

Standards

The organisation in charge of developing the activities of normalisation is called the Österreichisches Normungsinstitut. It is a member of the CEN (European Committee for standardisation).

All the imported products should be approved by ÖNORM and by the Austrian organisation TÜV for manufactured goods. The EU regulations are recognised. It is preferable for the exporter to obtain several approved certificates for his products, even if they are not compulsory, as they give more credibility to Austrian consumers. The quality standards ISO 9000 are essential.

Patents and brands

The body responsible for the protection of intellectual property in Austria is the Österreichisches Patentamt.

Austria signed the Agreement of Paris concerning the protection of the industrial property and the agreement which establishes the World Intellectual property Organization (WIPO), as well as the Agreement of Munich, the Agreement of Madrid and the Patent Co-operation Treaty (PCT).