PROSPECTS of beef being produced in Asian countries from live cattle imported from Australia, only to be re-exported in cartons to other countries have raised concerns within the red meat industry.
Clear references have been made to the possibility of re-export of beef produced from Australian live exported cattle in three Asian markets in the past 12 months.
Concerns raised within the industry are twofold:
- Such a move would produce direct competition against Australia’s own beef exports into countries like Japan, Korea and China, and
- Re-export has the potential to damage Australia’s clean, green and safe brand reputation, especially if the beef fed and slaughtered in Asia attempts to maintain some Australian identity, as the source of the livestock. What happens if such product is found to contain chemical residue or bacterial contamination, for example.
Beef Central has seen evidence of three clear examples of intention to re-export beef produced from Australian live cattle, stemming from China, Thailand and Cambodia. It may already be happening out of Vietnam.
As recently as last week, China’s Dashang Group signalled its interest in exporting some beef from Australian live export cattle, fed and slaughtered in China, into other Asian markets.
Dashang has spent $60 million on grazing properties in the NSW Hunter Valley, an elite Fullblood Wagyu cattle breeding herd, and holds a monopoly live cattle import license into the northern Chinese port city of Dalian.
In an article in the Australian newspaper last week, Dashang’s Australian chief, Michael Wang, was quoted as saying that in addition to supplying beef for the Chinese domestic market, the company’s ‘grander plan’ was to sell beef on to other markets such as Japan and Korea.
“Our customers prefer Australian beef because it has a good reputation and is healthy and safe to eat,” Mr Wang said.
Australian Meat Industry Council chairman Lachie Hart agreed that there was considerable reputational risk to Australia in such re-export activity.
Mr Hart said a similar issue emerged recently where hides from Australian cattle were being exported from Australia, only to be re-branded and re-exported to other countries.
“Those hides still had the Australian identity attached to them, yet we had no control over how they had been managed,” Mr Hart said.
“AMIC was very concerned about the potential risk, and how it might reflect badly on Australia, if a problem with those hides emerged. In this case, concerning hides, there was obviously no direct food safety risk, but nevertheless there was a reputational risk to Australia,” he said.
Re-export of beef produced from Australian live cattle would be “a lot more serious, and of much greater concern,” he said.
“It’s a free market over whether Australian cattle are exported to Asia live, or in a box, but obviously AMIC would support more cattle processed in Australian plants, where we can have direct control using our world-leading standards in animal welfare, hygiene and food safety.
“We have no control whatsoever in the case of re-exported beef, especially if some effort is made to maintain an Australian connection on the carton lid.”
“We’d be absolutely concerned about the prospect of having to compete in prized boxed beef markets like Japan or Korea, against beef produced in another country, with nothing like Australia’s regulatory requirements, using Australian cattle.”
“It’s an area where the broader industry must exercise some caution. Protecting Australian beef’s reputation has to be absolutely paramount,” Mr Hart said.
Similar plans emerging in Cambodia, Thailand
Two of Australia’s other emerging live cattle export markets have also floated the prospect of re-export of beef produced from Australian live cattle to other markets.
Following the first shipment of Australian live cattle to Cambodia in June last year, the customer, SLN Meat Supplies, said the cattle would be fed and processed for domestic consumption within Cambodia, and also for export to other countries within the ASEAN region, such as China, Japan, Vietnam and Thailand. Earlier reports clearly indicated SLN’s intention to market the product as ‘Australian beef.’
Elsewhere, a feasibility study backed by the Western Australian Government last year recommended the development of a supply chain to export feeder cattle from northern parts of WA to Thailand for lotfeeding and processing, to supply beef both for the Thai domestic market and for re-export to other ASEAN markets and the Middle East.
The report said Thailand represented significant potential as an end-market and regional beef processing and distribution hub within southeast Asia and China for WA cattle. Such a supply chain would access Thailand’s low-cost lotfeeding and processing labour, and potentially utilise Thailand’s trade agreements into third-party export markets.
The report, endorsed by Thai cattle importers, produced this map to illustrate possible destinations for the beef:
Live exports to Thailand are currently in voluntary suspension, until the country addresses ESCAS animal welfare assurance requirements.
“The Thai beef industry is strategically placed in order to service growing Asian demand over the coming years. The development of a significant new supply chain utilising modern processing and best practice management has the potential to drive significant industry development,” the report said.
Thailand possessed preferential access to regional beef markets through the impending ASEAN Economic Community (including Vietnam, Malaysia, Cambodia, Laos, and the Philippines) and the ASEAN/China Free Trade Agreement.
“In addition to preferential trade agreements, Thailand is well positioned logistically to service regional export markets. Numerous potential feedlot/abattoir sites are available including freehold land, industrial estates and parks offering close access to both the Thai population base, major deep-water ports (Bangkok, Laem Chabang, Map Ta Phut), and alternative cross-border export routes to key markets including Vietnam, China and Malaysia,” the report said.
Precedent in Indonesia
There is a clear precedent for current beef re-export proposals discussed above, using Australian live export cattle. A similar concept was floated in Indonesia in the 1990s by importer AustAsia, under the proposed brand name, “Aus-Indo Beef”, using Australian cattle fed and slaughtered under USDA-certified Halal conditions in Indonesia and sold to other countries.
That plan, which never got off the ground, drew a torrent of criticism from Cattle Council of Australia and the broader Australian beef industry at the time, concerned that Australia’s hard-won reputation for health & hygiene and quality standards might be compromised.
In other Australian live export customer countries in Asia, it is a commonly-held view that some beef produced from Australian live export cattle in feedlots in Vietnam already finds its way across the border into China.
Live Exporters Council response
During a recent industry gathering, Beef Central asked Australian Livestock Exporters Council chairman Simon Crean about ALEC’s views on beef ‘re-export’ programs using importing Australia cattle, and whether it could potentially damage Australian beef’s hard-won ‘clean, green and safe’ reputation.
Did he answer the question? Here are his comments, in full, to allow readers to make their own judgement:
“We have to be absolutely focussed on not damaging Australia’s brand – that I agree with,” Mr Crean said.
“But it’s not the intention for Australian involvement in Indonesia, for example, to be part of a re-export of processed product. That’s not what the investment there is about.”
“Cambodia and Thailand we are not essentially exporting to at the moment, because they have run into difficulties. If they want to be part of the live trade out of Australia, they are going to have to embrace the combination of ESCAS and LGAP schemes. There was too much leakage occurring in Thai cattle across into Vietnam at one stage, so those industries still have a long way to go.”
“Indonesia is a different equation, because the President is committed to the notion of self-sufficiency in foodstuffs. All of the academic work shows then cannot be self-sufficient in beef, but they can achieve food security. We’ve been trying to change the language in that sense, to say you can only achieve that food security if you do it in partnership with us. Because while Indonesia has growth in demand for beef, and an emerging beef industry, it does not have the same capability to produce beef that Australia has.”
“Indonesia is a case in point where cattle are not exported for direct slaughter, but go in for lotfeeding in the main, and there is a lot of pressure on to insist on a mandate on a breeding cattle component.
“So Australia has to be conscious of what it is that they are trying to seek, but position ourselves not to expose Australia to competition unnecessarily, but to show the indispensability of our industry to them, in different forms. The demand exists to Indonesia and other markets in Asia and the Middle East, for the live product.
“The challenge for the Australian industry is to respond to that demand, but do it in a quality way, that reinforces the brand – that Australia is not only a reliable and safe provider, but increasingly one that is committed to leading the debate on animal welfare standards.
“That’s a hard task, because some countries do not come at it the same way, and are not under the same public pressure in terms of animal welfare standards.
What I hope we are doing, through our commitment to this, is reinforcing Australia’s brand – not diminishing it.”