In a make or break bid to win back our previously weighty share of the British meat market, the industry is recruiting help from UK investors in Australian agriculture.
The rush is on to get British politicians and trade officials to take serious notice of the unfair roadblocks applying to Australian beef, lamb and mutton exports, and open the gates to less discriminatory access deals.
That may include deploying some big name overseas-base landholders to help champion Australia’s export case against quota restrictions and non-quota barriers, including bans on hormone growth promotants in beef.
Of the 13.6 per cent of farmland owned by foreign investors in Australia, just over half (27.5 million hectares) is held by UK-based individuals and investment funds.
They include big name northern beef producers such as Consolidated Pastoral Company (CPC) and the UK Pension Protection Fund’s investment in North Australia Pastoral Company; the British-Australian businessman Michael Hintze’s Premium Farms’ holdings in NSW and Queensland; Romani Pastoral Company in southern and North West NSW, and the London investment group Southern Agricultural Resources with property in the NSW Riverina.
Almost another 1 million hectares is owned by companies registered in the British Channel Island tax haven of Jersey.
“We’re trying to cover all our bases and get as many people as possible talking and thinking about non-discriminatory Australian export access to the UK, and Europe,” said Meat and Livestock Australia (MLA) managing director, Richard Norton.
“We particularly need to be active in any debate on trade access during the British election campaign and in the critical period in the next six months or so.
Britain was Australia’s largest red meat market 50 years ago, taking up to 200,000 tonnes of our beef and sheepmeat annually in the decades before until it joined the European Economic Community in 1973.
Today the UK, with a bigger 64m population, buys only about 16,000t a year from Australia.
CPC’s chief executive officer, Troy Setter, believed investors in Australian agriculture, including his company’s London-based Terra Firma private equity parent group, wanted free access to markets everywhere, “particularly to their home country”.
However, no beef from CPC’s 20 cattle properties currently sells in Britain.
This is largely due to quota restrictions and tariffs, plus non-tariff trade barriers targeting a range of production and age specifications.
“I know we can certainly match the quality and suitability of product currently sent to Britain and Europe from South America,” Mr Setter said.
“Non-tariff barriers make access difficult for us.
“I think there’s potential to improve access considerably by tackling the non-tariff restrictions and specifications.
“The northern beef industry would be keen to diversify its market options to include Britain – a lot of cattle would be suitable.”
MLA has fast tracked lobbying efforts to re-balance the European trade disparities hobbling Australia, believing a post-Brexit trade agenda will start being drawn up within weeks of the UK’s June 8 general election.
Australia currently exports a relatively modest $412m or 37,000t of red meat to the European Union (EU), with about 37pc of those beef consignments and 74pc of sheepmeat shipments eaten in Britain.
New Zealand and South America dominate the two categories.
Brazil leads the beef charge with 32pc of EU imports, followed by Uruguay (18pc) and Argentina (16pc), while Australia’s 20,800t stake represents just 11pc.
EU quota limits include a 20pc tariff on the Australian-specific exports of about 7150 tonnes for high quality grain fed beef, which last year represented a healthy 35pc of Europe’s high quality beef imports.
Australia’s 16,500t of sheepmeat exports run well behind the 228,300t shipped from NZ in 2016, although NZ’s tighter supplies are reducing this year’s volumes slightly.
“We don’t want more access or better agreements than anybody else, we just want to compete with other countries on an equal footing,” said MLA’s Mr Norton.
“And I doubt if Australia’s relatively small beef production capacity is much threat to the big South American exporters who currently enjoy generous access to Europe and very competitive exchange rates.”
Recently in Britain, Mr Norton returns in August to lead further lobbying efforts, including talks with UK investors and others with vested interests in getting more Australian product on supermarket shelves.
“Any large UK companies or others connected with Australian red meat production could be valuable in helping get our message through,” he said.
“Australian beef and sheepmeat producers – no matter what their ownership background – need to be thinking about new future free trade agreements or we’ll be left no better off than we have been since the 1970s.”
Annually Britain imports about 250,000t of beef and 90,000t of sheepmeat from around the world.
While the UK is itself a solid red meat producer, about two thirds of all EU beef production comes from cull dairy cattle.
MLA research suggests within the next decade Europe will need 100,000t more imported beef to satisfy domestic requirements.
In London, Mr Norton also met with George Abrahams, Managing Director of the George Abrahams Group, a major import/export business based in the capital.
“It was reassuring to hear from Mr Norton that the Australian red meat industry is proactively seeking change as we move to a standalone UK trade partnership,” Mr Abrahams said.
“Australian beef is in strong demand in the UK, however current trade agreements and European Union Cattle Accreditation Scheme (EUCAS) restrictions are undoubtedly a source of frustration. Small quota volumes and a 20% duty on Australian product make it very difficult to compete.
Trade outside this restrictive quota regime is stifled by a 12.8% tariff plus an additional static duty of €3.03/kg (AUD $4.38/kg).”
The story UK investors urged to help fight meat export battle first appeared on Farm Online.