Beston beats import prohibition through Chinese distribution deal

05-Apr-2016 - Last updated on 06-Apr-2016 at 05:26 GMT

South Australia’s Beston Global Food Company has signed a manufacturing and distribution agreement with Hondo Agricultural Company of China for the production, marketing and distribution of its range of allergen-free, ready-to-eat meals.

Roger Sexton, Beston’s chairman, said the agreement was an important stepping stone in BFC’s strategy to build its market share in China, especially as local import regulations currently prohibit the import of foreign processed meat products.

“We have been working with Hondo for some time, together with Chinese and Australian authorities, to find a way of taking our ‘no numbers’ range of meat products to consumers in China, who are increasingly looking for healthy, nutritious, high-protein foods for their families,” he said.

The ready-to-eat meals, which are free of preservatives, colourings and artificial additives, will be sold to retailers and food service businesses under the Yarra Valley Wholesale Meat brand owned by Scorpio Foods, a BFC investee.

The agreement with Hondo, one of China’s biggest meat processors, will allow Scorpio to export frozen boned-out meat to China, where it will be processed into ready-to-eat meals in the Chinese company’s facilities in Henan province.

Scorpio will provide the recipes for the meals under a proposed licence to Hondo, said BFC chief executive Sean Ebert.

“The proprietary sauces and other key natural ingredients in the meals will be supplied by Scorpio to Hondo for manufacturing of the final products under technical and QA supervision by Scorpio,” Ebert said.

Under the terms of the proposed licensing agreement, Scorpio will earn a royalty on its intellectual property in addition to revenue on its sale of raw materials and fees for services rendered.

BFC will provide Chinese consumers with product provenance and anti-counterfeiting verification on the products through Oziris and Brandlok technologies.

Using its established network, Hondo anticipates the manufacture and distribution of 15,000 tonnes of the Yarra Valley products in the first year, followed by a 5,000 tonne increment in the second.