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The Advantages of Using a Bonded Warehouse in Mexico

Posted by on 9:55 am in News | Comments Off on The Advantages of Using a Bonded Warehouse in Mexico

If you’re an exporter of goods to Mexico, you’ll understand the costs of doing so. One of the major costs, of course, is the transportation of your product, whether it is cigarettes or wine, cheese or spare parts for heavy industrial machinery. To make your export product as competitive as possible, it’s obviously shipping as much of it as possible, bringing the cost per item down. If you are the importer of goods to Mexico, and the product you are importing pays a huge tax or duty, such as cigarettes, wine or energy shots, you will want to hear how a bonded warehouse works to save hundreds of thousands of dollars in cash flow. You might have a customer who wants to take your product, but only a limited amount at a time: cash flow is king, especially in times of economic difficulty. You know the customer will come through with his orders, but in the meantime to keep the cost to him down – and keep him coming back for more – you need to find a way to ship in quantity. You could find a storage facility in Mexico to ‘drip feed’ the customer as he requests more stock, but that means you’ll need to pay the upfront costs of importation duties and taxes, as well as the costs of storage, possibly even the insurance of your stock in a foreign country. It might seem that you’re stuck between a rock and a hard place. You either have to eat the costs of exporting smaller amounts of your product to Mexico or suffer the negative cash flow of having to pay import duties and taxes as well as the costs of storage to keep your logistical transportation costs down. Either way, your margins are going to be hit. Or you lose the customer to a competitor. That’s where bonded warehousing comes in. What is a bonded warehouse? Bonded warehousing allows you to move your goods to Mexico, without officially importing them. You keep title to the goods and they are there in the country, ready to be distributed or sold quickly to your Mexican customers. It’s a little like having an extension of your own storage facility at your factory in America. Neither you nor your Mexican importer will have to pay any import duty until the goods are moved out of the bonded warehouse. That’s a big reason to use these facilities, which are licensed under a concession granted by Mexican law. You can keep your products in storage for up to two years, though, of course, you’ll have to pay storage costs while they are within the facility (public bonded warehouse are called almacendoras). To prove ownership of the stored products, you’ll be given a warehouse certificate. Short Story: I have a short story to tell, a few years ago we had a client who wanted to sell US made cigarettes into Mexico, he wanted to be paid upfront for the cigarettes from the distributor, the distributor did not want to pay upfront, but agreed to pay after the cigarettes crossed the border. Of course there was the little problem of the IEPS duty to the tune of almost $8,000,000 pesos, or $700,000 USD. The solution: We arranged for the cigarettes to be imported into...

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Canadian cops accused of aiding U.S. cheese smugglers

Posted by on 9:43 am in News | Comments Off on Canadian cops accused of aiding U.S. cheese smugglers

        Canadian authorities say two police constables helped smuggle more than $200,000 worth of cheaper U.S. cheeses and other foods across the border from Buffalo to sell to pizzerias and restaurants. The Niagara Regional Police Service announced today that the pair, one of whom has been fired, were arrested and charged, along with a third man. Charges against the three, all from Fort Erie, Ontario, include smuggling and other customs violations. Constables Scott Heron, 39, and Casey Langelaan, 48, were suspended in June amid the investigation. Langelaan was subsequently fired. The “large-scale” cheese-smuggling operation emerged from the April arrest of another NRPS constable in Buffalo on charges of trying to smuggle more than $1 million in anabolic steroids and other drugs into Canada, the CBC reported earlier this week. The police service says “the network” bought cases of cheese and foods on the U.S. side of the border, then drove them into Canada without declaring the goods or paying duty. The products were then sold at discounts to pizza parlors and other restaurants in southern Ontario, netting the smugglers a profit of about $165,000. Dairy regulations and import controls on U.S. products can mean Canadian cheese costs up to three times more than across the Niagara River. A Canadian border agency spokeswoman told the BBC that only $20 worth or 44 pounds of dairy products can be brought into Canada duty free. Source:...

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Companies in Mexico Find Healthier Packaged Foods a Tough Sell

Posted by on 9:39 am in News | Comments Off on Companies in Mexico Find Healthier Packaged Foods a Tough Sell

Government Cracking Down on Junk Food Through Taxes and Advertising Restrictions MEXICO CITY—Companies trying to launch healthier snack options in Mexico, where the government has been cracking down on junk food through taxes and advertising restrictions, find that the products are often a tough sell.Carmela Rivero, vice president of product research and development at PepsiCo Inc.PEP +2.34% ‘s Mexican operation recounted tales of several recent misfires at an industry conference this week. One product was a baked snack called Nutritas that involved more than $30 million of technology to cook fresh vegetables. That didn’t take off.Nutritas was one of 42 products the company designed with school children in mind. Practically all of the products in the school line were returned unsold to the company, she said. “The bar for acceptance by the consumer is very high,” said Ms. Rivero. But a Quaker cookie line packed with oatmeal and fiber that began rolling out in 2009 has been such a hit in Mexico, that PepsiCo exported it to several countries in Asia and South America.Mexico is the world’s ninth biggest market for packaged food. But, seven out of 10 adults in the country and a third of children are overweight. Facing daunting public health bills, the Mexican government has undertaken a series of measures this year, ranging from taxes on food it deems unhealthy to restrictions on junk food advertising aimed at young children. Mexico slapped a tax on full-calorie sodas, teas and juices in an effort to trim waistlines and prevent Type 2 diabetes. Products like PepsiCo’s Sabritas potato chips were also hit with an 8% levy on calorie-dense packaged foods, with the aim of discouraging consumption.PepsiCo is determined to create healthy alternatives. “We want to be part of the solution,” said Ms. Rivero. In Mexico, the company’s third-biggest market by revenue, U.S.-based PepsiCo said in January it would invest $5 billion over five years, including in a baked goods development center in Monterrey. Companies such as Danone SA BN.FR -1.57% also say they are working to reformulate products to offer Mexicans less calories, salt and sugar in their snacks.However, light products are generally shunned in Mexico, said José Daniel Pérez, an account director at consumer research firm Kantar Worldpanel. Four out of five Mexicans won’t buy a product labeled as light, said Mr. Pérez, because they don’t like the flavor. They also are skeptical that products claiming to be healthy will actually benefit their health. “The light category is very underdeveloped compared with other countries. There’s a negative connotation for light here in Mexico,” he said, offering Chile as an example of a country where consumers embrace low-calorie and diet products. Early results show that Mexico’s soft-drink tax may have curbed soda consumption this year, with the country’s biggest bottler, Coca-Cola Femsa, KOF +2.40% reporting a 6.4% annual slide in carbonated beverage sales in its Mexican territories for the first half of 2014. PepsiCo doesn’t break out its Mexico revenue. Kantar research shows little impact on sales from the tax on snack food in Mexico.Soft drink industry executives say that soda drinkers in Mexico are merely trading down to cheaper brands, or spending less on personal care items like toilet paper to offset the higher price they pay for soda. By some accounts, Mexico is the world’s biggest...

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Second Sample Blog Post

Posted by on 8:47 pm in Blog | Comments Off on Second Sample Blog Post

It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy. Various versions have evolved over the years, sometimes by accident, sometimes on purpose (injected humour and the...

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Sample Blog Post One

Posted by on 7:01 am in Blog | Comments Off on Sample Blog Post One

Sample Blog Post One

Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum. It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy. Various versions have evolved over the years, sometimes by accident, sometimes on purpose (injected humour and the...

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