To enjoy preferential tax rates as committed in the UKVFTA, Vietnamese seafood products must prove their origin. (Source: Vneconomy)

Vietnamese tuna is enjoying an advantage in the UK market thanks to tariff incentives from the UK-Vietnam Free Trade Agreement (UKVFTA).

Take advantage of the offer

Regarding tariff commitments, the UKVFTA has a mechanism to follow the Vietnam-European Union Free Trade Agreement (EVFTA), which means that import tariffs on fresh and frozen tuna products will be quickly eliminated. Tariffs on frozen tuna loins or fillets will be eliminated over a period of 3 years from 18% to 0%.

For processed tuna used for canned tuna - the base rate of 24% will be reduced over a 7-year schedule.

For canned and packaged tuna, the quota will be 11,500 tons per year, which will be duty-free. After that, the original tariff of 20.5% will be applied, which will be reduced by 3.5% each year. With this agreement, Vietnamese tuna products are gaining an advantage in the UK market.

To enjoy preferential tax rates as committed in the UKVFTA, Vietnamese seafood products must prove their origin. The regulations on Rules of Origin in the UKVFTA are similar to those of the EVFTA, with the origin criteria for raw seafood and processed seafood in the UKVFTA being pure origin.

This means that raw, semi-processed and processed seafood exported from Vietnam are considered to have origin under the UKVFTA Agreement when the seafood raw materials used in the production process are purely of Vietnamese origin (born or raised, caught and processed entirely in Vietnam), and are not allowed to be imported from a third country outside the Agreement.

It can be seen that in 2021, the first year of implementing the Agreement, this market imported seafood worth about 3.1 billion pounds, equivalent to more than 3.7 billion USD in 2021. Of which, tuna ranked second with a proportion of 16% of total seafood imports of this market with 113.5 thousand tons, accounting for a quite modest market share of about 2%.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), in 2024, after a continuous decline in the first 3 months of the year, Vietnam's tuna exports to the UK have increased again in recent months, and increased by 56% in June, reaching 742,000 USD.

However, the high growth rate was still not enough to offset the previous decline. Therefore, in the first 6 months of 2024, the cumulative export turnover of tuna to this market reached 3.6 million USD, down 5% over the same period.

Increase processed products

Frozen tuna meat/loins code HS03 is still the main export product of Vietnam to the UK, accounting for 92% of the turnover. Vietnam is currently the second largest supplier of frozen tuna meat/loins code HS03 outside the EU to the UK market (after Korea). However, this year the UK has tended to reduce imports of frozen tuna meat/loins from Vietnam and other markets.

In the UK market, tuna is sold in many types of products such as raw, processed, sushi, sauced, cakes or breaded... Of which, canned and bagged tuna products are the most consumed but have been on a downward trend since last year.

On the contrary, consumption of tuna products such as sushi or breaded tuna tends to increase. Therefore, this is an opportunity for countries to increase their exports of processed and canned tuna products to the UK.

According to VASEP, in the canned and pouched tuna market segment, Ecuador, Mauritius, Seychelles and the Philippines are the four main suppliers to the UK market. Vietnam is only a small supplier to the UK for this product group. Currently, its rival Ecuador has signed an FTA with the UK. This is creating favorable conditions for this country to increase exports to the UK when it owns a strong fleet and an abundant supply of pure tuna.

Meanwhile, Vietnam has a lower catch, along with regulations limiting the size of skipjack tuna that can be caught, which is causing the output to decrease. This situation makes it difficult for businesses to have enough supply of skipjack tuna - the main raw material for the canned tuna processing and export industry - with pure origin for production and export.

According to statistics from the Seafish agency, 69% of British people's choices in the canned seafood group are tuna products. (Photo: Nguyen Hung)

From the above factors, VASEP believes that tuna exports to the UK will likely find it difficult to maintain growth momentum until the end of this year.

According to the Import-Export Department (Ministry of Industry and Trade), in terms of processed and canned products, tuna is the top choice of British consumers. In the UK, tuna is a food used mainly in fast food, such as sandwiches, or in many meals when traveling.

According to statistics from the Seafish agency, 69% of British people's choices in the canned seafood group are tuna products. In addition, due to the characteristics of fatty fish that are quite suitable for many forms of processing, some other processed tuna products such as salads, toppings, bread... are also very popular in this market.

Similar to other markets in the European region, consumers in the UK also tend to pay attention not only to the origin and quality of products, but also to factors related to labor, environment, or the sustainability of the value chain in the production and supply of products. Other basic factors such as price, processing method and similarity in meals, and place of use are still of interest.

Meanwhile, according to VASEP, Vietnam’s catch is inherently much lower than its neighbor’s due to the lower fishing capacity of its fleet. In addition, regulations limiting the size of tuna allowed to be caught are making the output even lower. Enterprises do not have enough supply of tuna - the main raw material for the canned tuna processing and export industry - of pure origin for production and export.

Therefore, to promote this product to the UK, according to experts, Vietnamese enterprises need to increase the application of science and technology, develop modern production and processing systems, thereby optimizing the production process to improve the quality and added value of products, helping Vietnamese seafood gradually reach international standards and create competitive advantages. Along with that, diversify export products and increase deeply processed products. Choose market segments and distribution channels suitable for the products and scale of the enterprise; focus on understanding the tastes and characteristics of the market.