Posts Tagged ‘Japan’

Overseas markets holding up

April 30, 2020

In a recent conversation, Alliance CEO David Surveyor described world red meat markets by comparing them to traffic lights. Contrary to the evidence earlier in the year, when buyers stopped buying because of Chinese New Year closely followed by the Covid-19 shutdown, China has emerged as the brightest light with the traffic lights firmly set on green. The composition of Chinese orders has changed since the virus outbreak with retail and online sales growing considerably, while there are signs of hot pot outlets starting to reopen. (more…)

Japan a country of contrasts

October 11, 2018

After three weeks on holiday in Japan, I am still reeling from the enormous contrast to any other country I have ever visited. When I first went there on business 40 years ago, I was getting used to life in New Zealand after immigrating from the UK, so probably didn’t register the size of the contrast, apart from the total lack of any street signs in English and the politeness of the people. All these years later the differences in lifestyle and behaviour have become even more apparent, especially when set against the huge progress in infrastructure and technology around the world, a lot of it invented by the Japanese. (more…)

Future of red meat promotion under threat

September 17, 2014

Next year’s Commodity Levy Act referendum is one of the factors concentrating meat industry minds on the question of red meat promotional investment. B+LNZ is currently conducting a consultation round with individual meat companies to find out how this critically important, if contentious, topic should be agreed for the benefit of all industry participants.

 

B+LNZ Chief Executive Scott Champion told me it’s too early to make any predictions about the outcome, at least until after completion of the consultation round at the end of September. With the referendum about 12 months away, the process is geared to providing time to gather enough detail for promotional strategy development before taking this out to farmers to test it in advance of the vote.

 

The purpose of the discussions with meat companies is to ensure market expenditure is aligned with what the meat industry wants while enabling B+LNZ to fund its essential activities which must now confront new pressures such as environmental constraints. Any new proposal will also have to satisfy levy payers or risk derailing the success of the referendum, although improved sheep and beef returns if maintained should make a Yes vote more certain.

 

The present mix of promotion funded by the farmer levy includes two main strands – the first is country of origin marketing for lamb in the UK, Europe and North America and for beef in China, Japan, Taiwan and Korea, supplemented by some jointly funded variations that support individual exporter programmes; the second comprises campaigns with matching contributions from participating exporter groups across a range of markets and products.

 

For example since 2011 exporting companies have put $1 million a year into sheepmeat promotion in UK and Europe to supplement B+LNZ’s budgeted expenditure. Equally a group of exporters has shared in a campaign to promote New Zealand grass fed beef in China.

 

This strategy has resulted in a move away from generic mass marketing and advertising to more tightly focused campaigns based on research and analysis. This has reinforced the importance of educating consumers on how to cook beef and lamb. In addition to the website, social media is becoming an increasingly important weapon in reaching the target market.

 

While many years’ brand development investment in the UK has resulted in 90% top of mind consumer recall of New Zealand lamb, research has identified the need for exporters to target consumers closer to the point of purchase because of lamb’s premium price position. A large part of the promotional work in Asia to support New Zealand beef has focused initially on the benefits of grass fed beef – low calorie, low cholesterol and low fat – for the premium restaurant trade as the most effective way to reach consumers.

 

Spending limited funds wisely, whether contributed by farmers or meat exporters, is a crucial issue for New Zealand’s red meat sector, both internationally and domestically. Withdrawal of promotional support as a result of failure to get agreement between meat companies and B+LNZ would effectively mean the industry has chosen to shoot itself in the foot.

 

An immediate issue is whether it will be remotely possible to obtain agreement of all MIA members to contribute funds for the purpose of country of origin promotion and, if so, how much. Of the larger meat companies, Silver Fern Farms’ CEO Keith Cooper has indicated a strong preference for company brand promotion as opposed to the generic alternative. Instead of glossy marketing in traditional markets, he would be prepared to consider some funding for educational promotion in emerging markets. Other companies are still in favour of country of origin New Zealand promotion in specific markets.

 

Since it often seems there’s as much chance of getting an agreed meat industry position as there is of formulating an agreed United Nations resolution on Syria, I suggested to Champion this might be a challenge. However he said he was ‘reasonably optimistic’ of getting an industry agreement.

 

The big question farmers and companies alike must consider is what the long term impact of ceasing all country of origin promotion would be. There will obviously be some changes to the current promotional mix to make better use of available money, otherwise B+LNZ would not be in discussion with the meat companies on developing a promotional strategy that better matches its objectives.

 

The unanswered questions are how much B+LNZ is willing to spend on country of origin promotion as against jointly funded activities and what the companies are willing to contribute to the general rather than individual good.

 

In my opinion the New Zealand brand is an umbrella under which individual company brand activity should function, but it isn’t realistic for any one company to achieve consumer recognition for its brand in one, let alone several, markets without that support.

 

It is obviously important for meat exporters to support their own branded programmes in selected markets, while the New Zealand industry maintains its competitive nature.

 

But levy paying farmers have both an obligation and a right to support their product both in New Zealand and overseas. B+LNZ is farmers’ vehicle for coordinating their investment by investing their levy funds to the best effect. The meat companies have an obligation to reach an agreement which will support this investment constructively. If not the red meat sector will be in danger of completely losing its way.

India’s massive buffalo exports reflect different approach to food safety

July 9, 2014

India has exported well over 500,000 tonnes of buffalo to Vietnam in 10 months of the latest July to June year. This figure easily exceeds the total of New Zealand’s beef exports to all countries. (more…)

Changing beef outlook

April 12, 2014

There have been some interesting beef market developments in recent days.

 

Of immediate interest is the news of a forecast excess of US exports over production in the second half of the year as against a relatively small increase in production, reported in the USDA livestock supply and demand report which was released yesterday.

 

This leads to a prediction of firmer prices for lean beef, although this will coincide with the seasonal downturn in New Zealand production. Australia is expected to be in a good position to take advantage of this situation.

 

The other item of interest is the bi-lateral trade agreement between Japan and Australia which will reduce the tariff on frozen beef from 38.5% to 19.5% over 18 years and on fresh beef to 23.5% over 15 years.

 

While this may appear to be unduly slow, all other countries’ beef tariffs will remain at the 38.5% rate, until or unless the TPP agreement is concluded. It would be difficult for Japan to expect to negotiate a less favourable deal with signatories to the TPP, and if more favourable the terms of the Australian FTA would be amended to match it.

 

In the meantime New Zealand’s beef exports to Japan will have to compete with Australian product at gradually decreasing tariff rates.

 

What is significant here is that the FTA has taken seven years to negotiate, but indicates an increasing willingness to open up the fiercely protective Japanese agricultural sector under pressure from Prime Minister Shinzo Abe. Cheese has also benefited under the terms of the FTA with Australia permitted to export a further 20,000 tonnes.

 

Japan has a highly protected and subsidised farm sector, particularly in the areas of rice, beef, pork, dairy, and sugar and its powerful farm lobby has long resisted any efforts to liberalise trade in those products. It will be fascinating to see how successful Abe is in encouraging more concessions in pursuit of the TPP.

 

Equally he could find himself going down the path taken by all Prime Ministers of recent years which has seen Japanese trade policy stagnate in the face of opposition and an inability to get reform measures through the Japanese parliament.

Comparison of NZ and Australian red meat export markets

January 14, 2014

Normal
0

false
false
false

MicrosoftInternetExplorer4

st1\:*{behavior:url(#ieooui) }

/* Style Definitions */
table.MsoNormalTable
{mso-style-name:”Table Normal”;
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-parent:””;
mso-padding-alt:0cm 5.4pt 0cm 5.4pt;
mso-para-margin:0cm;
mso-para-margin-bottom:.0001pt;
mso-pagination:widow-orphan;
font-size:10.0pt;
font-family:”Times New Roman”;
mso-ansi-language:#0400;
mso-fareast-language:#0400;
mso-bidi-language:#0400;}

A cursory analysis of beef and lamb exports from New Zealand and Australia shows some similarities as well as some significant differences between them. (more…)

ANZCo’s published result confirms anticipated loss – but could have been worse

April 8, 2013

ANZCO’s financial result to the end of September 2012 was posted on the Companies’ Office website on Friday in compliance with the statutory requirement for private companies. ANZCO reported losses of $25.6 pre-tax and $19.2 million after tax. We now have the details for the big three meat companies which publish their results and, as anticipated, none makes pleasant reading – total pre-tax losses of $140.4 million and post-tax $102.2 million. (more…)

American sheep farmers suffering even more than New Zealand

January 15, 2013

An article headlined ‘Drought, high feed costs hurt sheep ranchers,’ appeared last Friday in the Northern Colorado Business Report. It makes the problems being experienced currently by New Zealand sheep farmers look comparatively pretty small. (more…)