In this new series, we break down the process of how to import goods into Australia from various countries. The third post in the series focuses on France, a major luxury goods exporter.
The Republic of France has a population of almost 65 million people, making it the second most populous nation in the European Union (EU) after Germany. Beyond Western Europe, France has overseas departments and collectivities in the Atlantic, Indian, Pacific and Southern Oceans that account for 20 per cent of its total territory and nearly five per cent of its population.
There are substantial trade and investment links between Australia and France. In 2017-18, Australia’s two-way goods and services trade with France was valued at A$9.9 billion, making France Australia’s 17th largest trading partner, and fourth largest in the EU (behind the UK, Germany, and Italy).
In 2017-18, goods imports from France were valued at A$5.1 billion, and Australian goods exports to France at A$1.6 billion. Australia’s services imports from France were $2.3 billion and Australia’s services exports to France were $931 million.
In 2017, France’s total investment stock in Australia was valued at $24.8 billion. In 2017, the stock of Australian investment in France totalled $51 billion. France is the 9th ranked market for Australian investment abroad.
The top exports of France are Planes, Helicopters, and/or Spacecraft($48.8B), Packaged Medicaments ($24.6B), Cars ($24.1B), Vehicle Parts($18.4B) and Wine ($10.7B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Cars ($35.1B), Crude Petroleum($20.6B), Refined Petroleum ($16.7B), Aircraft Parts ($15.9B) and Petroleum Gas ($15.3B).
Australia and the European Union (EU) launched negotiations for a free trade agreement (FTA) on 18 June 2018. The first Negotiating Round was held in Brussels in July 2018, and the second in Canberra in November 2018.
How to import goods from France to Australia
1. Product sourcing & validation
Different to China or other South-East Asian manufacturing countries, due to the government’s policy of ‘national champions’, there is a leading French company present in almost all major services and industries. Therefore, your product may be sourced from a large supplier or conglomerate of that industry. It is always important to validate that your product will be well received in the Australian market with proper background market research.
- Australian requirements for importers: Australia has very strict biosecurity laws surrounding certain products. You must keep track of the product safety standards, labelling requirements, and laws surrounding import permits.
- Minimum order requirements: Major French suppliers require high MOQs in the thousands of units, as any less than this is unprofitable. If you are a small business or start-up, this may not be feasible for you, and you may have to look at a more local or family-business level, where there is higher price per unit but lower minimum quantity requirements.
- Sourcing suppliers: There are a few portals where you can browse French suppliers of multiple industries here and here.
Product validation is always a necessary step before importing any goods into Australia. If you are a new business, make sure your product or business idea is well and truly marketable and sellable in Australia. Do not over-commit to a big order before doing this step.
2. Discuss terms of trading with your supplier
Your terms of trading could determine how much responsibility you may have with your cargo. Read about our Incoterms and why this is so important to establish from the get-go with your secured supplier. Once your product and contract is signed, it is much harder to renegotiate these terms. On the other hand, if your supplier are unable to extend logistical help, find an exporting agent or freight forwarder that can help you navigate the clearance procedures for each type of incoterm.
3. Understand the various regulations, tariffs, and licenses you need to export.
France is part of the EU and at this stage Australia and EU does not have a Free Trade Agreement. The process of establishing the FTA is currently in progress (as of Feb 2019) and the successful implementation of one will mean that tariffs will be reduced significantly.
Since July 1, 2009, all companies established outside of the EU are required to have an EORI number if they wish to lodge a customs declaration or an Entry/Exit Summary declaration. An EORI refers to an Economic Operator Registration and Identification, which allows all transit between the EU nations and to/from other nations outside of the EU.
A majority of French imports into Australia are luxury goods, as well as cosmetics and dangerous goods that often consists of alcohol and cannot be transported by air. Having a good customs broker that knows the regulations and transporting requirements with cosmetics, dangerous and high value goods will allow you to not only save money by getting it right the first time, but also protect your goods. You may also be required to obtain an import permit with certain categories of imports, such as batteries.
Duty refunds are available also to certain products. To determine whether or not your product is eligible for a duty refund, you will need to know your product's HS Code and do some research on the Department of Foreign Affairs and Trade website. Alternatively, you can also approach a freight forwarder or customs broker and consult with them to see what type of duty refunds and tax exemption programs you are eligible for.
Australia has strict product safety standards. For instance, any products deriving from wood must be fumigated and treated before being released at the border. More often than not this is done at origin as Australian customs will charge you far more. Make sure your product is compliant with Australian safety standards before importing. A list of regulated products is available on Productsafety.gov.au. However, this site does not include electronic product standards and regulations.
If you are importing milk products, animal-derived or food products, you will also require an import permit. This guide from the Department of Agriculture and Water Resources will help you determine whether you need an import permit and how to get one.
4. Arranging transport for your cargo ahead of time.
Transporting your goods from France can go much more smoothly if you deal with a courier or freight forwarder. Use the guide below as to who to go to when dealing with France-Australia logistics:
If you are importing in peak season (October - January), it is important that you arrange for your cargo transport well ahead of time. Read this blog post for more tips to prepare for peak season trading.
Depending on the nature of your goods, many options may be available for transporting your cargo. As a rule of thumb, if you are a beginner importer, it is best to go with a reliable courier such as DHL, TNT, etc. while you build your market volume. If you are a seasoned importer, freight forwarders and 3PL are a great way to improve your profitability and reduce freight costs by pooling the 3PL's resources and leveraging their economies of scale.
To determine what type of transport is best for your cargo, download our Beginners to Freight Forwarding guide.
While speaking to your freight forwarder, it is important to give them the right information so they can arrange the best route and transport options for you. For instance, seafood importers must be able to obtain an import permit and will undergo strict inspection procedures in Australia, therefore this information must be obtained before approaching a freight forwarder.
5. Distribute and market your product in Australia
In order to have a success import venture to Australia, your goods must reach the hands of the consumers in the right place, under the right circumstances. Finding retailers and stockists of your products to get your products in the hands of Australians will be crucial to your business plan. Do your research into the target market and where they are hanging out in order to effectively market your product.
Having a 3PL to deal with warehousing and distribution can save huge headaches when it comes to distributing your goods. As seasoned freight forwarders, we also find having the same 3PL as your customs clearance effectively streamlines your entire process and improve your bottom line, and also frees up your time to deal with important business stuff.
Final words for importers from France to Australia
Language is often the main barrier when importing and exporting from France. As so, it is important to do some research into how you will communicate with your preferred suppliers. Although many executives speak English it is courteous to check beforehand.The most important characteristic of French business culture is the emphasis on courtesy and formality.
Titles (Dr, Prof. etc.) should be used both in correspondence and in face-to-face meetings – business contacts are not normally addressed on a first name basis. Style of dress is very important in the business world. For men, office and corporate wear is formal consisting of suit and tie and fashionable semi-conservative wear is considered appropriate for women.
French companies are interested in long-term partnerships and once established they need to be maintained with regular visits to France that will ensure continued collaboration.
Do not schedule business meetings in August (summer vacation) or workdays adjacent to public holidays.
Whale Logistics is the major logistics partner for many France-based companies such as LVMH. We specialize in bringing your cargo safely and efficiently from France to Australia and vice versa. As an award-winning freight forwarder and company, we are able to offer our clients a full freight service that includes import/export, customs clearance, 3PL, and warehousing and distribution. We are proud to be Australian-owned, service-focused, translating to highly satisfied clients. We have been named Excellence in Business, Business of the Year, Employer of the Year, to name a few.
Your import journey from France to Australia starts here. Contact one of our friendly Customer Success Managers to see how we can help to transform your business.