Australian meat industry wins better access to lucrative Chinese markets

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, 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, 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.

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

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, said that 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.

Harvey Beef is based in Harvey, 140 kilometres south of Perth, and is owned by Andrew ‘Twiggy’ Forrest’s pastoral company Minderoo. Minderoo head of investments John Hartman said the deal was hugely significant for the WA processor and for the Australian cattle sector more broadly.

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