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International Resources: Global Market Profile: Spain

As part of its commitment to providing its members with market analysis and insight, PMA has compiled the following information about Spain from Attaché Reports submitted by the U.S. Department of Agriculture’s Foreign Agricultural Service, as well as the CIA World Factbook, embassy sites, and business etiquette reference guides.

Entering the Spanish Market

The key for an exporter wishing to enter this market is to appoint an agent or distributor or to establish a subsidiary. A representative in Spain will likely know the different consumption patterns and preferences in each of the country’s 17 autonomous regions.

The different regions may also have different hours of operation for the work week. Normally, business weeks run from Monday to Friday with many Spaniards working anywhere from 8:30 a.m. to 6:00 p.m. with a lunch of an hour and a half. July and August are months when many people in Spain take vacations. Also, avoid Christmas and Easter times. Another note is that many businesspeople take 4 day weekends if a holiday falls on a Tuesday or Thursday. 

Not all businesspeople speak English, so it is wise to check if you should hire an interpreter. Understand that the use of an interpreter will cause the length of meetings to increase, so patience is important.

Trust and personal relationships are the cornerstone of business in Spain. The Spanish prefer to do business with those they know and trust. So it is important that you spend sufficient time letting your business colleagues get to know you. Once you develop a relationship, it will prevail, even if you switch companies, since your Spanish business colleagues' allegiance will be to you, rather than the company you represent.

Spain has 17 regions, many having different tastes and preferences. It is common to enlist the help of local representatives (often found in larger cities like Madrid and Barcelona). These representatives help not only with making business relationships, but also with understanding the consumption attitudes and preferences of the many regions. Along with local representatives, customs/brokerage agents are widely used to ensure products are cleared quickly through custom houses. However, American products are given a 3 month grace period for improper documentation as long as a signed agreement waiver from a customs agent accompanies the product.  

Spain is escaping its machismo roots. Women are more commonly seen receiving a college education. Also, there has been a significant increase in the number of women in the business world, as compared to the past.

Face-to-face contact is preferred to written or telephone communication and the way you present yourself are of critical importance when dealing with Spaniards. Spaniards, like many societies, are concerned that they look good in the eyes of others and try to avoid looking foolish at all times. It is best to display modesty when describing your achievements and accomplishments. Communication is formal and follows rules of protocol. Always avoid confrontation if at all possible. Spaniards do not like to publicly admit that they are incorrect.

Gift giving is only customary at the conclusion of successful business negotiations. Gifts should be nicely wrapped and of fine quality (brand names). Give gifts with company logos only if they are pens on nice desk accessories. Do not give something overly extravagant, because it will be perceived as a bribe. However, if invited to a Spaniard’s home, you can bring chocolates, pastries, or cakes; wine, liqueur, or brandy; or flowers to the hostess. Never give 13 flowers, it is bad luck. If you know your hosts have children, they may be included in the evening, so a small gift for them is always appreciated. All gifts are open upon receiving in front of the giver.

Agriculture constitutes 3.9% of Spain’s GDP and 5.3% of the country’s labor force. In 2004, Spain constituted for 11.1% of global fruit and vegetable exports.

Spain is one of the European Union’s biggest producers of fresh fruits and vegetables. Spain is the world’s largest producer of citrus fruit for fresh consumption. In 2003, Spain accounted for 25% of exported citrus fruit.

Apples, oranges, tangerines, other citrus, and berries are some of Spain’s main fruit exports. As for vegetables, Spain grows onion, tomatoes, potatoes, lettuce, cucumbers, and peppers as some of its major commodities.

The European Union receives most of Spain’s fresh produce exports, with Germany and France as the largest recipients. Japan, the United States, and Canada also import large quantities of Spanish produce. Spain receives most of its competition from Israel, Morocco, Turkey, China, and South America.

Doing Business in the Spanish Market

First impressions are important. Some differences are simply due to the language barrier; others are due to differences in deeply held traditions and practices. If you maintain a polite, patient and professional manner, the likelihood of committing a serious faux pas will be greatly diminished. To help bridge the gaps, we suggest:

• Appointments are mandatory and should be made in advance, preferably by telephone or fax. Reconfirm in writing or by telephone the week before.
• You should arrive on time for meetings; however, social events rarely begin on time.  
• When introduced, expect to shake hands. Many men use a two-handed shake where the left hand is placed on the right forearm of the other person.
• Present your business card to the receptionist upon arriving. Have one side of your card translated into Spanish. Hand your card so the Spanish side faces the recipient.
• Business dress is stylish yet, conservative. Dress as you would in the rest of Europe. Elegant accessories are important for both men and women.
•  The first meeting is generally formal and is used to get to know each other. Do not be surprised if no business is actually conducted during the first meeting.
• Agendas are often used but not always needed to be followed too strict.
• Make sure all your printed material is available in both English and Spanish.
• Several people may speak at once. You may be interrupted while you are speaking. This is not an insult; it merely means the person is interested in what you are saying.
• Spaniards place great importance on the character of the person with whom they do business. Hierarchy and rank are important. You should deal with people of similar rank to your own.
• Decisions are not reached at meetings. Meetings are for discussion and to exchange ideas. Most Spaniards do not give their opinion at meetings. Therefore, it is important to watch their non-verbal communication.
• Spaniards do not like to lose face, so they will not necessarily say that they do not understand something, particularly if you are not speaking Spanish. You must be adept at discerning body language.
• Decision-making is held at the top of the company, since this is a hierarchical country. You may never actually meet the person who ultimately makes the decision.
• Spaniards are very thorough. They will review every minute detail to make certain it is understood.
• First, you must reach an oral understanding. A formal contract will be drawn up at a later date. Spaniards expect both sides to strictly adhere to the terms of a contract.
• If invited to a Spaniard's home, remain standing until invited to sit down. You may be shown to a particular seat.
• Do not begin eating until the hostess starts.
• Always keep your hands visible when eating. Keep your wrists resting on the edge of the table and use utensils to eat most food. Even fruit is eaten with a knife and fork.
• The host gives the first toast. An honored guest should return the toast later in the meal. It is acceptable for a woman to make a toast.
• If you have not finished eating, cross your knife and fork on your plate with the fork over the knife. If you are finished, indicate it by laying your knife and fork parallel on your plate, tines facing up, with the handles facing to the right.
• Do not get up until the guest of honor does.
• If a Spanish counterpart visits you, take them to an excellent restaurant, because many Spaniards are knowledgeable about gourmet food and wine.
• The American gesture for “O.K.” is considered rude.
• To beckon someone, do not use your finger, but rather your whole hand with your palm facing the ground.

Consumer Preferences, Tastes, and Traditions

These ideas may help you focus your product approach. Attention to catering to customer preferences is a key to success in the Spanish produce market. Demands for new products are high in Spain. New selling techniques are becoming very popular. Vending machines have spread throughout Spain in the last decade. Direct marketing by mail order, telephone, television, or electronic commerce is growing considerably. The organic market is entering Spain by force; many consumers are looking for Genetically Modified Organisms (GMO) free products.

Many Spaniards travel abroad, especially to the United States. Upon returning home from traveling, many consumers desire recreating foods they sampled on their journeys, so ethnic foods are becoming popular. Also, the demand for foods requiring little preparation is growing in Spain.

New selling techniques are becoming very popular. Vending machines have spread throughout Spain in the last decade. Direct marketing by mail order, telephone, television, or electronic commerce is growing considerably.

Export Business Reminders

Before coming to Spain, use the many sources of information, for example, the Foreign Agricultural Service, state agricultural offices, and state/regional trade organizations.                                                                                

• Build at least a minimum team within your company to help on the Spanish market.
• Use metric terms.
• Ensure that all sales documentation is correct.
• Be patient regarding requests for documentation, ingredients lists, production process, and quality assurance.
• Respond to such requests with diligence and in a timely fashion.
• Use letters of credit to reduce risk.
• Hedge export values with your U.S. bank if you are concerned about exchange rate risk.
• Set up wire transfers for payments.

Remember all labeling must be in Spanish. When products go through Spanish customs, terminology must be exact for the tariff classification of which the product is being imported. Also in order to clear customs, all products must possess:

• Bill of Lading
• Certificate of Origin
• Original Commercial Invoice with Copy
• Import Declaration (issued by the State Secretariat of Commerce)
• Health Certificate

Food Standards and Regulations

The European Union establishes the rules and regulations governing production, trade, and labeling in Spain. If an exporter is already exporting to a country in the European Union, the exporter is more than likely already meeting most of the requirements for exporting to Spain.

Consult Food and Agricultural Import Regulations & Standard Report for Iberian Peninsula (SP5020) – www.fas.usda.gov/gainfiles/200507/146130239.doc

The Ministry of Agriculture has an office at all custom houses to conduct sanitary and phytosanitary inspections of all foodstuffs.   

Advantages and Disadvantages to doing business in Spain

Information: Import/Export

In 2003, Spanish agricultural imports from all countries (millions): $24,870, U.S. market share: 5%.

Consumer food imports from all countries (millions): $22,401, U.S. market share: 4.8%.

U.S. Exports to Spain

*Calendar Year and Year-to-Date Comparison (In Thousands of Dollars)

U.S. Imports from Spain

 Trade Agreements

Spain enjoys a long-standing and wide-ranging bilateral relationship with the United States and has traditionally been a good export market for U.S. production. The country has a number of sales channels ranging from traditional distribution methods, in which wholesalers sell to small shops that sell to the public, to large multinational supermarkets and retail stores. Department stores, hypermarkets, shopping centers, and very specialized outlets are introducing the customer fidelity concept, which usually involves issuing of client cards, cumulative discounts, and special offers for frequent customers.

Spain is also a member of the European Union. Since becoming a member state, Spain has joined the European Union’ Common Agricultural Policy, which oversees all agriculture.

European Union agricultural and trade policies are major determinants of agricultural production and trade. The European Union’s Common Agricultural Policy is primarily a domestically oriented farm policy that has shaped all European Union member state’s agriculture since 1962. The Common Agricultural Policy states that there will be product preference in the internal market of the European Union over foreign imports through common customs tariffs.

Spain Annual Exporter Guide (2005)

http://www.fas.usda.gov/gainfiles/200509/146131076.doc

Information regarding:
a) market structure/trends available page 12 of the guide
b) food retail sector available page 12 of the guide and via the retail sector reports: www.fas.usda.gov/gainfiles/200309/145986184.doc

Spanish Related Links and Resources

Currency - the currency of Spain is the Euro. Use the free currency converter to compare to dollars, British Pounds, etc.

Weather - visit Yahoo!'s up to date Weather for Spain.

News - check out all the latest Google news on Spain.

Intercultural Know-How - use the Intercultural Business Communication tool for tips on doing business in Spain.

Dialing Code - the international dialing code is +34.

Time -Spain is +1 GMT. Find out the current time.

History - read about the long and rich history of Spain.

Free guide to Spain - travel, people, money, living, driving, articles about Spain.

Government Resources

• Spain’s Ministry of Agriculture:  http://www.mapa.es/portada_en.htm
• U.S. Embassy and Consulates in Spain:  http://madrid.usembassy.gov/linken.html
• European Food Safety Authority is the regulatory body for all European Union member states.
• Background Notes on Spain