Importing Coffee from Costa Rica to Canada

.docx

School

Acsenda School of Management *

*We aren’t endorsed by this school

Course

432

Subject

Management

Date

Feb 20, 2024

Type

docx

Pages

6

Uploaded by MinisterMonkey8170

Report
Importing Coffee 1 Importing Coffee from Costa Rica to Canada Mandeep Kaur (20000793) Acsenda School Of Management BIBM 432 Professor: - Mr. Au, Mike December 20, 2023
Importing Coffee 2 Importing Coffee from Costa Rica to Canada 1. Product Overview The selected product for importation into Canada is "ICE Arabica," a premium coffee beverage sourced from Costa Rica, Kenya, and Brazil. The vendor responsible for supplying this product is Volcafe Costa Rica, a prominent coffee exporter in Costa Rica, holding a significant share of up to 35% of the country's annual coffee exports (Volcafe, 2023b). The product is a blend of Arabica beans from these diverse regions, promising Canadian consumers a rich and distinctive coffee experience. ICE Arabica presents a lucrative opportunity in the Canadian market due to consumers' growing interest in high-quality coffee. While exploring potential sales opportunities, it's essential to note that certain commodities, including food and beverages, are subject to regulations by federal or provincial government agencies. Therefore, thorough research is required to identify any necessary permits for importing coffee into Canada. 2. Customs Requirements & Importation Controls The Harmonized System (HS) Classification Code for ICE Arabica is Chapter 09, falling under the sub-heading 09.01 for Coffee, Tea, Maté, and Spices. The specific HS Code is 0901.11.00, indicating that the product is unroasted coffee and it is not decaffeinated (World Customs Organization, 2022). The applicable duty rate for this product is 0%, with the preferential tariff treatment being the Goods and Services Tax (Government of Canada, 2023). While coffee itself doesn't face severe restrictions, it is crucial to adhere to labeling requirements set by the Canadian government. The label must include the commodity (coffee
Importing Coffee 3 beans), manufacturer details, net quantity, and country of origin (P. S. and P. C. Government of Canada, 2023). 3. Transportation & Freight ICE Arabica is packaged in jute bags, with each bag weighing 59 kg and having dimensions of 30cm x 45cm x 76cm. The total importation quantity is 325 jute bags, resulting in a total weight of 2925 kgs. The product will be transported in 20 containers, each with external dimensions of 6.06m x 2.44m x 2.59m (length x width x height). Sea transport is chosen as the mode of transportation, with the shipment originating from Puerto de Puntarenas and destined for the Port of Vancouver. The freight rate for this transportation is 2500 CAD per container. Landed Cost Calculation & Pricing Decision The landed cost calculation involves considering the transportation cost, unit price, and total purchase price. In this case, the transportation cost is 2500 CAD, and the unit price is set at 10 CAD. The total purchase price sums up to 29,250 CAD. Adding the transportation cost, the total landed cost is 31,750 CAD. The markup is determined as 25447.5 CAD per container, providing a comprehensive understanding of the financial implications of the importation. Sales Decision: In setting a selling price for ICE Arabica, a competitive approach is adopted. Comparisons with similar products reveal that ICE Arabica is competitively priced at 18.7 CAD, offering a favorable balance between quality and affordability. Two comparable products in the market are ICE Robusta, priced at 20 CAD, and Arbitrage Arabica, priced at 8 CAD (Volcafe, 2023b). The decision to sell directly to both consumers (B2C) and businesses (B2B) through
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help