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NZ Beef Exporters Recover Lost Market Share in Japan

28 May 2019

NEW ZEALAND - Beef and sheepmeat exporter ANZCO says sales in the Japanese frozen beef trade are recovering, thanks to tariff reductions for New Zealand produce under the Comprehensive and Progressive Trans-Pacific Partnership that allows local producers to compete again in the lucrative markets against Australian beef farmers.

Since Australia signed a free trade agreement with Japan in 2015, ANZCO had seen tonnages of frozen beef to Japan halve to around 4,000 tonnes a year, ANZCO Japan president Makoto Kinjo told BusinessDesk on a visit to a Hokkaido sheep farm earlier this month. But those volumes were now recovering and the company was aiming to get back to volumes of five years ago, at between 7,000 and 8,000 metric tonnes in annual frozen beef sales.

"With removal of the price gap (versus Australian beef), we can press for more volume because there's more margin to play with."

However, ANZCO's ambitions for an increased share of the higher-margin chilled beef market are being realised through the recent creation of deeper relationships with key consumer cooperatives, which control parts of Japan's highly fragmented retail supply chain, rather than through the opportunities created by the CPTPP, Kinjo said.

"CPTPP is useful in the sense that we are to regain lost volume. We are on a level playing field with Australia now, though ANZCO has been successful in keeping trade away from price-driven competition.

"Chilled beef is a different story," Kinjo said. "The trade is growing because of what we have done with cooperatives and other retailers."

The trade pact, which was assumed dead after newly inaugurated President Donald Trump withdrew the US from the agreement in January 2017, left 11 countries in the deal, of which Japan was by far the largest market for New Zealand producers.

In its National Interest Analysis on the hotly contested trade and investment agreement, the Ministry of Foreign Affairs and Trade estimated savings on Japanese tariffs would amount to some $203.8 million once the CPTPP was fully implemented, comprising the lion's share of an estimated total tariff savings of $222.4 million from all 10 other signatories to the deal.

New Zealand's primary interest in concluding the CPTPP was gaining improved trade access to both Japan and the US, but the US leg of the opportunity now awaits US appetite for negotiating such an agreement with New Zealand.

President Trump is in Japan this week pressing for a bi-lateral free trade agreement with Tokyo, which he hopes will offer better terms than the CPTPP, although Japan would be obliged to offer any such terms to other CPTPP signatories if a separate US-Japan deal were signed.

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Source: Scoop

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