UK red meat industry worries about Australian FTA
The Free Trade Agreement that is about to enter in force between Australia and the UK may hide some dangers for the red meat sector. The value seems to be the problem, as BMPA analysts are claiming. To measure the impact of increased Aussie beef imports, we need to look at the value, not the volume of what’s coming in, said the association in a press release.
"As an example, a 20-foot container load of beef with 17,000kg with a full range of meat cuts might represent the meat from just 60 animals. A similar shipment containing only boneless sirloins (high value) would have come from over 1000 animals. If it were fillet steaks it could be three times that number. It’s not the amount of meat by weight that matters it is the amount of high-end, high-value cuts that will have a disproportional impact on the marketplace," warns Peter Hardwick, Trade Policy Advisor at BMPA after hearing a statement made by the former Australian Foreign Minister, Alexander Downe, in an interview for Times Radio.
"The key to understanding this lies in how the value from each animal is made up. Products like mince, stewing joints and even roasting joints, while they represent the bulk of the volume of what’s produced, are the least profitable and, in some cases, are sold at less than the cost of production.
Where value and profit is made up is in the high-end cuts like sirloins, rumps and fillet steaks. Without these higher-value products, beef production, regardless of where in the world it happens, wouldn’t be viable.
The kind of sustained competition from overseas imports for the products that make up the profitable component of Britain’s meat production will inevitably impact both processing companies and farmers, forcing some out of business and weakening the UK’s domestic food security. It’s also likely that this lost trade will not be fully replaced by trying to compete in export markets further afield with the likes of Australia," argues BMPA.
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