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Clear timeline needed for China chilled access deal

by Jon Condon, 27 March 2017

HIGH quality Wagyu beef is just one of the likely winners out of Friday’s historic announcement over chilled access for Australian beef into China, but a clearly-defined timeline will be critical for the agreement to provide any tangible value for industry.

They are just two of the messages to emerge from industry stakeholders following last week’s access announcement by Prime Minister Malcolm Turnbull and Chinese Premier Li Keqiang.

As much as it may horrify true beef lovers who think high quality product should be treated with due respect, there’s been numerous examples of Wagyu beef produced in Australian export processing plants which have not to this point had chilled access to China, being frozen-down in order to qualify for shipment.

Under unfettered trade access conditions, virtually no Wagyu beef – perhaps with the exception of a bit of trim – would normally be sold in any other form than chilled, to best preserve its integrity.

Just one of a number of Australian processors which up to now has had to freeze Wagyu beef for export to China is JBS Australia. First consignments of Gina Rinehart’s new 2GB Wagyu beef brand produced in Queensland were also frozen before shipment to China in February.

JBS chief executive, Brent Eastwood

JBS Australia chief executive, Brent Eastwood

“Chilled access will give every company producing Wagyu the chance to improve their revenue, for the hard work being putting into this high quality Wagyu meat,” JBS Australia chief executive Brent Eastwood said.

“Freezing high quality meat like this is sacrilege, but it’s what’s had to happen in order for many plants to gain access to Wagyu customers in China,” he said.

JBS processes Wagyu, and other high quality product like grainfed Angus, at its Riverina Beef facility in NSW, which to this point has had frozen-only access to China.

“We put all this hard work into producing what is arguably some of the best beef in the world, and then we go and freeze it, in order to get it into a market. It’s not giving China the best Wagyu eating experience it could have had, if it had come in, in chilled form,” Mr Eastwood said.

Clear timeline needed

Mr Eastwood welcomed Friday’s announcement as a significant step forward for Australian market access, but suggested that establishing a clear timeline for implementation would be an important part of the process.

“Such agreements can tend to drift on, meandering indefinitely unless nailed-down with an implementation date,” he said.

“We’ve seen it happen in overseas trade deals before. The announcement is an important step in the right direction, but we need a dateline for implementation. There’s no reason not to have a deadline in mind, for improved access to China, now that the protocols are in place. The China-approved plants should have access immediately – they should not have to wait for the other 15 to get approved – that’s a separate deal. The other 15 should get approval for frozen and chilled at the same time,” Mr Eastwood said.

JBS currently has just one Australian meat processing plant with chilled access to China – the company’s Dinmore beef facility near Brisbane. Two other plants have no access to China whatsoever – Rockhampton for beef, and Cobram for lamb.

Three year crusade for Oakey Beef

Friday’s access announcement effectively draws to a close a three-year campaign for Queensland’s Oakey Beef Exports to secure chilled access to China.

Like 14 or so other Australian red meat processors, Oakey Beef inexplicably lost its China chilled access three or four years ago, and has been pro-actively campaigning for restoration of trade since then.

Oakey GM Pat Gleeson engages with a Chinese delegate during the conference in Shanghai yesterday

Oakey GM Pat Gleeson engages with a Chinese delegate during the TSBE conference in Shanghai last year

General manager Pat Gleeson joined last October’s TSBE Access China trade delegation to Shanghai as part of that crusade (click here to view earlier story).

None of parent company, NH Foods’ three Australian export beef plants – Borthwicks at Mackay, Wingham Beef in NSW or Oakey Beef west of Toowoomba – have enjoyed chilled access to this point.

For a plant like Oakey Beef, which relies heavily on quality grainfed cattle supply out of NH Foods’ Whyalla Feedlot neat Texas – the single largest feedlot in Australia – chilled access was a particularly acute issue, from a quality perspective.

“To this point, it has kept Oakey out of some of those premium markets for chilled beef in China,” Mr Gleeson said.

Oakey has for some time produced a no-HGP 200-day premium Angus product, and conducts a large EU-eligible grainfed program (also HGP-free), which under other circumstances would have aligned nicely with chilled supply into Chinese premium markets.

“Friday’s announcement certainly came as a great incentive for us, in terms of broadening our market base for such products,” Mr Gleeson said.

“But we don’t think this market will explode overnight. For us, it will be steady, incremental growth. We’ve seen too many times before where a market opportunity emerges, and exporters flood the market, or something goes pear-shaped.”

“We’re just going to creep up on the China chilled opportunity, essentially, growing it steadily, once it opens,” he said.

“We need every market we can get, when we are competing globally with competitors with very low cost structures. I’ve got to say that Minister Keith Pitt and the Australian Meat Industry Council have both been very supportive, right through this process. There’s been an awful lot going on behind the scenes, outside the public realm.”

“Oakey is ready to go with our first chilled consignments, once the trade officially opens,” Mr Gleeson said.

Access to the new Toowoomba international airfreight service out of Wellcamp was another strong attraction for Oakey’s future chilled beef trade plans into China.

 

 



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