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Spain, a rising star of coffee.

Spain, a rising star of coffee

To draw the landscape of coffee in Spain, one needs to capture three dominate features: Spain is first and foremost a price market in both green and roasted coffee; Spanish trade and industry sectors are controlled by a variety of international companies; coffee is the growth market in Spain as to actual green coffee imports, transit coffees and domestic consumption.

Spanish trade and roasters deal in some of the cheapest coffees available. One major factor in this is that Spanish consumers can buy the cheapest roasted coffee to be found in Europe. Despite official reports showing Spain with about 41 percent of imports in Robusta coffees, the nation is actually importing about 50 percent of its green coffees in Robusta. After Italy and France, Spain is third in EC consumption of Robusta. Although there are quality Arabicas and Robustas to be found in Spain, the old adage holds true here--one gets what one pays for--and the quality of coffee as a drink has suffered.

The problem with quality in in fact the number one topic among coffee people in Spain. This problem is sourced to lingering effects of the Franco period, to the `torrefacto' tradition (roasting coffee with sugar), which allows some roasters to mask defects in coffees, amd, most importantly, to the devastating price war that has held sway for almost five years in Spain. Reportedly, no one has won the price war, and roasters in sum have been the losers. Certainly there are fewer roasters now in Spain, and the big three that hold the majority of market share remain extremely close in competition and market control.

That Spain is closely linked to the international coffee scene is abundantly clear. The big three roasters are subsidiaries of Nestle, General Foods (Saimaza) and Douwe Egberts (Marcilla). In green trade you have the Spanish affiliates of Raynor, Volkart, J. Aaron (Ibercafe), Neuman-Rothfos (Coprocafe) and Esteve (Consorzio). Added to the strong flavor of international business, is the enduring cultural and economic significance of Spain for many coffee producing nations. Madrid is the coffee capital in more ways than one. An important rule for doing coffee business in Spain: never underestimate the people you deal with, although relatively new to coffee trading and large-scale industrial roasting, Spanish coffee people are of unusually high calibre as to professionalism and expertise.

Three men have central positions for acquiring coffee for Spanish roasters, and together take about half of the nation's green imports. They are 'Paco' Jurado, chief coffee buyer for Nestle Espana, Joaquin Sainz de la Maza, chief coffee buyer for the General Foods affiliate Saimaza, and Jose Mariade Miguel, the director of Comercial de Materias Primas, which buys on behalf of a group of several smaller roasters. Marcilla is not included here because coffee buying has recently been centralized at Decotrade in Switzerland.

A key attribute to coffee in Spain is growth. The yardstick for expansion is difficult to find, however. Statistics vary widely. Market surveys are closely guarded. But in general it can be ascertained that domestic household, ground coffee consumption has been consistently inching upward during the 80's. Yet it is commonly believed that the market is not developing as quickly as it could, and the quality problem is blamed for slowing growth.

Meanwhile, throughout the 80's, Spain has seen a meteoric rise in green coffee imports. Imports have apparently expanded by 25 percent since 1984. Now a member of the EC, Spain has ridden a wave of intense coffee movement. To explain this, Spain is believed to be something of a coffee bank as well as conducting an ever-larger volume of transit business. One reason for the large stocks in Spain is said to be the traditional caution of Spanish roasters. As one trader in Madrid describes the scene, "for many roasters here 'spot' means the coffee is in the kitchen."

It is important to note that Spain's official coffee trade figures are chronically low. For example, the official tally for 1988 green imports is placed at 141,000 tons, or 2.35 million bags, while the most knowledgeable sources place 1988 imports at 160,000 tons and 2,5 million bags.

Trends and News

There seems to be a new strategy in Spanish coffee circles for greater unity and organization. Roasters have just recently been showing signs of trying to ease the price war, with part of the initiative taking place through the national organization under the energetic auspices of the new president, Jose Luis Baque. Stable and fair prices, improved quality, growth through increased consumption rather than market cannibalism are emerging as communal goals.

Importers too have been closing ranks in recent months, although in part due to a serious concern over client relationships. When prices plummeted this past summer, a few roasters reportedly refused receipt of coffee purchased previously (at much higher prices). Needless to say, this sent alarms ringing throughout the offices of Spanish traders. A meeting of the importers was called in July in Madrid at which the procedures were initiated by which Spain will have an arbitration system and a coffee contract, in full agreement with the ECC, but designed specifically to protect fair coffee trading in Spain.

On other fronts, the international interest in Spain continues with Segafredo, the aggressive Italian espresso company, opening offices in Madrid as part of their entry into the domestic horeca sector. In trading, it has been reported that E.D.&F. Man has purchased 11 percent of Cia. Gral. de Tabacos de Filipinas, the large Barcelone trading company whose coffee department is known as `Hispacafe.'

A new import company has opened this summer in Madrid, `CMC' stands for Cia. Mercantil del Cafe. The man in charge is Carlos Lasvignes, formerly of Rayner Espana. The director at Rayner is now Juan Antonio Martin.

Several established Spanish importers are marking their 10th anniversary this year, having been established at the dawn of liberalized trading in Spain. Two of these include Coffee Agency Ltd. and Commercial de Materias Primas.

PHOTO : Nestle Espana combines national roasted (Bonka) and soluble coffee brands with those by

PHOTO : its regional subsidiaries to create a formidable presence in Spain. Although neck-and-neck

PHOTO : on the roasted household market with Saimaza (General Foods) and Marcilla (Douwe Egberts),

PHOTO : in sum, including soluble, the company is most likely first in volume of green coffee

PHOTO : acquisition. Chief buyer is Francisco `Paco' Jurado.

PHOTO : Carlos Lasvignes, in new Madrid offices for a new trading company, CMC, or Cia. Mercantil

PHOTO : del Cafe.

PHOTO : A Basque roaster and man of many coffee titles in Spain, Jose Luis Baque is trying to

PHOTO : bring peace and prosperity to the troubled market. He is president of the Spanish Roasters

PHOTO : Association.

PHOTO : Jose Maria de Miguel is general manager of Commercial de Materias Primas, the buying

PHOTO : authority for 14 Spanish roasters. `Commercial' celebrates its 10th anniversary this month

PHOTO : and is now importing about 400,000 bags per year.
COPYRIGHT 1989 Lockwood Trade Journal Co., Inc.
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Copyright 1989 Gale, Cengage Learning. All rights reserved.

Article Details
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Author:Bell, Jonathan
Publication:Tea & Coffee Trade Journal
Article Type:column
Date:Oct 1, 1989
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