World beef eyes off lucrative UK market

World beef eyes off lucrative UK market

Beef
Aa

UK to become one of largest beef-importing countries once outside the European bloc.

Aa

POST-BREXIT trade deals could serve up a wealthier beef customer with a taste for many of the attributes Australian steak boasts but there will be plenty of competition lining up to supply the lucrative United Kingdom market.

Just how much of Australia's beef exports are likely to be diverted to the UK should a more liberalised red meat trade be negotiated hinges on many factors - consumer acceptance for a food far less local being one.

That point was made by big agribusiness lender Rabobank in the feature article of its latest Beef Quarterly, released this week.

Rabobank expects the UK to become the fifth or sixth largest beef-importing country in the world once outside the European bloc.

Australia-United Kingdom Free Trade Agreement negotiations kicked off in June and the next round of talks are scheduled for this month.

Australia has disproportionately low-volume quota access coupled with above-quota tariffs, which has stifled its ability to respond to growing UK consumer demand for high quality beef, sheepmeat and goatmeat.

Even under the High Quality Beef Tariff providing Australia a 7000t volume - which is not much given Australia exports more than a million tonnes - the 'special' tariff rate is still 20 per cent.

In 2019, less than one per cent of Australia's beef exports went to the UK.

Australia's beef industry is pushing for an end to the quota and tariff construct and a move towards liberalised trade.

That would put the UK on the same page as international markets where Australia has free trade agreements, which have become significant beef customers.

The UK attraction is in price-per-kilogram, not volume.

As an indication, the average price commanded in the European market last year was $15 a kilogram, compared to an $8.70 average across all of Australia's export markets, although that figure is influenced by the type of cuts sent to different markets.

Still, the demand is certainly for premium beef in the UK, Rabobank senior animal protein analyst Angus Gidley-Baird said.

Australian beef was in a good position to meet UK beef demand, with things like traceability requirements already in place, business relationships established and supply chains set up, he said.

"We are certainly in as good a position as any other non-European beef country to supply the UK," Mr Gidley-Baird said.

The Rabobank report says Ireland is currently the major supplier of beef to the UK and even if new trade deals level the playing field, the Irish may have advantages in other forms.

All major beef processors in the UK are Anglo-Irish companies, for example. Irish beef is deeply entrenched and has strong relationships with food retail and foodservice companies.

On top of that, 'buy local' is a growing trend in the UK, as it is in many developed protein markets.

Australian exporters are confident in their product and their ability to forge the business relationships required.

Chair of the Australia-UK Red Meat Market Access Taskforce Andrew McDonald said UK businesses had a long history of working with Australian beef and consumers understand its attributes.

Australian beef was well suited to the UK market and it had only been the quota and tariff system holding it back, he said.

"Consumers will always have different preferences but there is certainly a place for Australian red meat on UK shelves," Mr McDonald said.

Prior to the UK joining the EU, it was one of Australia's principle red meat export markets and while much has changed since then, including the development of markets closer to home, longstanding commercial relationships have prevailed, he said.

An Australia-UK trade deal was being described as a 'comfortable FTA' because the two countries know each other and are a close cultural fit, he said.

Australia's beef industry was strongly advocating for open trade, which allows market conditions to dictate where product goes.

For Australian beef, this represented a 'once in a lifetime opportunity' to reset trade arrangements, Mr McDonald said.

Negotiations were in the early stages and timelines are always hard to predict but what was encouraging was that even in the current COVID environment, all parties are participating and keen to push forward, he said.

"We want it to be as fast as a good negotiated outcome takes," he said.

ALSO IN BEEF:

Start the day with all the big news in agriculture. Sign up here to receive our daily Farmonline newsletter.

The story World beef eyes off lucrative UK market first appeared on Farm Online.

Aa

From the front page

Sponsored by