Australian meat industry wins better access to lucrative Chinese market

By Lucy Barbour and Sarina Locke

Published on 24 March 2017, on

Australia’s beef industry has been bolstered by China’s decision to increase market access for chilled meat products.

The number of processors permitted to send chilled, or refrigerated and vacuum-packed beef cuts to China will more than triple, Prime Minister Malcolm Turnbull has announced.

“Australian chilled beef exports to China are already worth $400 million a year,” Mr Turnbull said.

“And more companies will also be eligible to export frozen beef. Total beef exports, overall, are worth around a billion dollars a year,” Mr Turnbull said.

While the Chinese Free Trade Agreement has already reduced tariffs on Australian beef and improved market access, the chilled beef market has been a major sticking point.

China suspended the trade in 2013, citing ‘food safety’ reasons but the sudden halt was believed to have been due to a disagreement over import protocols.

The joint statement between China and Australia means the number of meat processors permitted to export chilled beef to China will increase from 10 to 36, with another 15 expected to have pending approvals fast-tracked.

Mr Turnbull announced the agreement alongside visiting Chinese Premier Li Keqiang.

PHOTO: Wang Yi (L-R), Li Keqiang, Malcolm Turnbull and Barnaby Joyce at the signing of a deal to grow agricultural trade. (Supplied: Government of Australia)

PHOTO: Wang Yi (L-R), Li Keqiang, Malcolm Turnbull and Barnaby Joyce at the signing of a deal to grow agricultural trade. (Supplied: Government of Australia)

Processors delighted with access

The beef sector described the agreement as a “huge win,” saying South American countries have been squeezing Australian processors out of the frozen market in China.

The deal has been welcomed by processors who have been working for the past four years to gain better access to the Chinese market.

David Foote, managing director of one of Australia’s largest privately owned beef businesses, Australian Country Choice, says it’s great news for the industry.

“It’s something that’s been wanting since August 2013 when its rights for chilled beef exports were taken away.”

Mr Foote said in 2013 chilled beef had accounted for 18 per cent, or around 154,000 tonnes, of total beef exports to China, but since the ban only 11 of 160 Australian processing plant had regained licenses to supply chilled beef and exports had dropped to just 90,000 tonnes, or seven per cent of total exports.

“It puts us back to where we were in 2013, we had great presence on the supermarket shelf,” Mr Foote said.

“The local preference is for fresh food and fresh beef gives Australian beef the opportunity to better leverage its clean and green image, not only in food service, but also back down to modern retail.”

China is Australia’s biggest market for agricultural exports, with the trade accounting for about a fifth of all products heading overseas.

Farmers are regularly told China’s growing middle class has an insatiable appetite from Australia’s “clean and green” products like dairy, meats, fruits and vegetables and beef is popular among wealthier consumers.

The industry expects the announcement will not lead to an immediate spike in imports because Australia’s national cattle herd is still at a record low.

The agreement does, however, give producers a big opportunity to capitalise when the herd rebuilds, most likely over the next four to five years.

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