Beef steps up pressure in Europe for better access

Part of the job will be correcting the perception Australia is a mammoth beef producing nation with the ability to flood overseas markets.

Meat and Livestock Australia managing director Richard Norton said the United Kingdom’s vote to leave the European Union presented a “once in a lifetime opportunity to correct the inequities” Australian exporters have faced in the region.

The EU has a highly restrictive import regime punctuated by low volume import quotas and high out-of-quota tariffs, in stark contrast to the majority of Australia’s other export markets.

It’s a very attractive market for us, particularly given the expected consumption growth this year on the back of improved economic conditions.

Despite limited access, the EU last year was Australia’s highest value export market on a per tonne basis.

Mr Norton said both grain and grass fed Australian beef was grossly under-represented in the EU’s total imports.

This week’s visit will include meetings with national farmers unions, ministers and government agriculture department officials.

Brexit was only two years away so the need was critical to make sure as many people as possible were aware of Australia’s position, Mr Norton said.

Certainly, our competitors are making regular visits with the same intent.

A major aim this week will be alleviating European concerns.

“The issue is unless we are talking about what their concerns are, no one addresses the fact they think Australia is a mammoth of a beef nation that will flood their markets - that is a perception that has been reflected in all our Free Trade Agreement negotiations,” Mr Norton said.

“Maybe it was the food bowl of Asia statement or the fact we are the third largest beef exporter even though we have a relatively small turnover.”

The reality, he said, was Australia’s high production costs, high currency and the strength of our domestic markets meant we can’t flood other markets.

Australia also has, in Asia, very valuable export destinations for its red meat.

“But we certainly want the ability to participate in the high end of new markets,” Mr Norton said.

“China has 7.9m people making US$35,000 a year (considered the threshold for beef consumption), compared to Europe which has over 200m.

“Market forces will make it difficult for Australia in the near term given big beef exporters like Brazil have a currency sitting at 30 to 35 real to the US dollar and ours it at 75 to 80c and rising.

“Those forces still dictate what happens but you do need to have the right, and the quotas, in the first place.”

Australia was not asking for a greater share but simply equal footing with other importing nations into both the UK and the EU, he said.

Deputy Prime Minister Barnaby Joyce spent time in June in the region in high level talks and emerged confident of securing a post Brexit trade deal between Australia and the EU that he said would be about quality not volume.

Mr Joyce said a scoping study had already been done and the next phase of the free trade agreement process was for the EU to appoint a mandate to a negotiating Commissioner.

Negotiations could be underway before Christmas.