Australia defends Japanese beef position

By Aidan Fortune contact

- Last updated on GMT

Australia and the US are both looking to take control of the Japanese beef market
Australia and the US are both looking to take control of the Japanese beef market

Related tags: Beef

Australia is ready to do battle with the US for the lucrative Japanese beef market.

As trade talks between the US and Japan take place, Australia is looking to consolidate its hold over certain sectors of the market.

Andrew Cox, Meat & Livestock Australia’s international business manager for Japan, explained why Australian beef remains popular in the country.

“We’re the most popular among Japanese consumers in terms of key perception measures. We’re highly trusted and considered the highest quality compared to other importing nations,”​ he said. “It’s critical we maintain this status.”

Japan is Australia’s largest market on a volume and value basis, worth more than AUS$2.4bn. It shipped more than 300,000 tonnes in 2018, up 8% year-on-year. However supply constraints in Australia and pressure from US exporters has contributed to a 9% decline so far this year, but Cox said Japan was a “highly valuable and very large market that would always be a key destination for Australian beef”​.

According to US Meat Export Federation figures, US beef exports to Japan in April were down 6% from a year ago in both volume (24,149 mt) and value (US$156.8m) terms, largely attributed to the higher tariff that the US is subject to compared to its competitors.

The US and Japan are in discussions on a Trade Agreement on Goods, with US beef lobbying for action from their Government on the Japanese market in light of the signing two years ago of the Trans-Pacific Partnership Agreement (TPP), which includes Australia.

Australian beef has been on a tariff depreciation schedule since 2015, when the Japan-Australia Economic Partnership Agreement – the first deal Japan signed with a major agriculture nation – commenced.

The more recent TPP saw the decline steepen, with the eventual level of tariffs on beef imports to settle at 9% within 16 years. Countries like Canada, New Zealand and Mexico have the same schedule, with the US at 38.5%. Australia is currently subject to a 26.6% tariff in Japan.

Cox said that the US is looking to take over the Japanese market quickly. “While it’s impossible to say exactly what’s being negotiated, clearly beef is a big ticket item, and the US is looking to reach a deal fast,”​ he said.

According to Cox, there are some areas where Australian and US beef don’t compete in Japan however the restaurant and retail sector are up for grabs.

“Australia supplies most of the large hamburger chains, while the US supplies large food service chains with certain cuts like short plate, for example. However, on restaurant menus and supermarket shelves, millions of Japanese consumers are making a choice every day between Australian and US beef.”

Related topics: Markets, East Asia, Oceania, Supply chain, Meat

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