A supply chain connecting grassfed cattle producers in Central Australia with millions of online customers in China is being developed, building on the long-term opportunities created by Australia’s recently-signed Free Trade Agreement with China.
The ‘ChAFTA’ agreement will make Australian beef more competitive in China by phasing out price-inflating 12-25% tariffs on imported Australian beef and 10% on offal over the next 10 years.
With the ink barely dry on the ChAFTA paperwork late last year, the Northern Territory Cattlemen’s Association travelled to China as part of a trade mission led by NT chief minister Adam Giles.
Dialogue initiated during that visit with Chinese e-commerce platform Sino-Australia Top Beef (SATB) has since developed into advanced discussions around the formation of a new partnership to supply the online retailer with grassfed beef from Central Australia.
Sino Australia Top Beef has over 100 million online members and already sources meat from NSW and Victoria. It says demand for good quality beef is growing daily and it is looking to expand its online sales.
A delegation from SATB visited Central Australia in January to visit properties and meet producers and then again in late March to learn more about the industry at the Northern Territory Cattleman’s Association annual conference.
They returned to Darwin again last week for further discussions.
NTCA chief executive officer Tracey Hayes said a recent meting of Central Australian cattle producers in Alice Springs expressed strong interest in developing a supply chain partnership with SATB.
“A lot of pastoralists came along, there were producers representing about 150,000 cattle in the room,” Ms Hayes said.
Discussions are currently looking at the processing options that will allow the supply chain to deliver the individual packaged steaks Chinese customers typically buy online for delivery to their door.
“In an ideal world the processing would happen in a northern abattoir and then go out through the port of Darwin and the entire supply chain stays within the Northern Territory,” Ms Hayes said.
“There are also numbers being crunched around setting up a small plant to handle the product locally.”
Ms Hayes said a possible joint venture partnership with SATB is also being discussed.
She said the supply region is seen as being from the Barkly south, which is below the Bluetongue possible transmission zone.
The Central Australian region ‘ticked a lot of boxes’ for the Chinese representatives, she said.
“They are very keen to source our product for all of the reasons that give us a great competitive advantage,” Ms Hayes said.
“The traceability and our safety systems are incredibly attractive to them.
“And the thing they particularly like is the grassland, natural pasture production system.
“Putting together a story about rangeland production systems, family properties, wide open spaces is important for them.
“The northern Australian beef production story is an interesting one and something they think their consumers would be interested in, in a marketing sense.”
SATB is also interested in sourcing other products for its online members including beef jerky.
Ms Hayes said the ChAFTA had opened up “enormous opportunities” for local producers of product for export.
“It all started with a delegation up to China and talking about beef late last year, and we thought there is no point having a delegation and nothing coming of it.
“We have been able to develop the relationship (with SATB) further.
“They have since been out to meet our producers, have a look at the product and the landscape and get a feel for what we do, then they came to our conference to learn more about the industry, and they are back again now.
“That tells me they are serious.
“This is the opportunity that is out there with the FTA, it is just a matter of going after it and trying to facilitate access for our members to venture into commercial relationships and grow their businesses.”