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Food and Fibre: Capitalising on Asian Market Opportunities

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Australian Business Forum helps Australian SMEs and businesses to understand the Chinese market and refine their China strategy.

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ABOUT THE PRESENTATION BELOW

Anthony Plummer of Trade and Investment Victoria, presents on opportunities for food and agriculture in the Asian Century, the fast-growing meat and dairy sectors, the China Australia Free Trade Agreement and finally how the Victorian Government is combining all of these opportunities to drive agribusiness in coming decades.

Originally presented at Australia-China BusinessWeek 2015 Melbourne

Published in: Economy & Finance
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Food and Fibre: Capitalising on Asian Market Opportunities

  1. 1. Food and fibre: capitalising on the market opportunities in Asia Anthony Plummer Trade and Investment Department of Economic Development
  2. 2. 31% 18% 13% 9% 9% 5% 5% 4% 3% 2% 1% 0.1% 0% 5% 10% 15% 20% 25% 30% 35% Food and fibre Manufactures - ETM Education Tourism Business services Fuels Manufactures - STM excl Nickel Other merchandise Transport services Business travel services Minerals Government goods and services Share of Victorian exports, 2013-14 Combined export value = $11.6 billion Source: Australian Bureau of Statistics (ABS) catalogue numbers: 5368.0 and 5368.0.55.003 Victorian food and fibre exports
  3. 3. Impressive growth Five-year growth for key Victorian export commodities (A$ million)
  4. 4. 4 Diversity is a strength 2.34 2.3 1.96 1.43 0.91 0.89 Meat Dairy Grain Animal fibre Prepared foods Horticulture 2013-14 exports in AUD$ billion
  5. 5. South East Asia 22% -- $2.3 billion • Meat 45% -- $379 million • Dairy 36% -- $761 million North Asia 8% -- $4.4 billion • Meat 57% -- $772 million • Dairy 16% -- $919 million South Asia 10% -- $598 million • Horticulture 118% -- $135 million • Dairy 82% -- $90 million MENA (Middle East and North Africa) 14% -- $1.5 billion • Horticulture 148% -- $96 million • Grain 13% -- $511 million Total exports 12% -- $11.4 billion • Meat 36% -- $2.3 billion • Horticulture 48% -- $894 million Consistent growth in 2013-14
  6. 6. 6 Competitiveness underpinned by productivity Dairy productivity growth of at 1.2% per year over the last 30 years
  7. 7. Volume, and increasingly value…
  8. 8. A populous, diverse and growing market
  9. 9. ... Growth in key markets is still relatively strong
  10. 10. 11 ... a big and growing ‘consumer’ class 0.5bn 1.3bn 1.7bn 3.2bn Asia Rest of the world Projected middle class populations 2009 and 2030 2009 2030 Source: ANZ Greener Pastures; Kharas 2010
  11. 11. - Higher value, premium products (food service ingredients, baby formula) - Long-life/UHT and fresh milk - Leveraging world-class food safety systems - Premium chilled cuts, especially in food service - Specific consumer requirements (e.g. Halal) and ‘co-products’ - Leveraging world-class food safety and traceability systems - Developing containerised (as well as bulk) supply - Tailoring products for specific markets (e.g. noodles in Asia, flat breads in the Middle East) - Fresh fruit e.g. citrus, table grapes, summerfruit and pome fruits - Nuts, especially almonds - Exploiting counter seasonal products - fresh and clean - Retail-ready consumer products, convenience foods and health products - Luxury goods, including wine and specialty cheese PREPARED FOODS, BEVERAGES AND WINE HORTICULTURE GRAINS BEEF AND SHEEP DAIRY Key opportunities
  12. 12. Particular demand for protein… 0 5 10 1980 2010 0.5 5 0.5 3.5 Sheep Beef Consumption per capita Kilograms
  13. 13. Relationships matter
  14. 14. …your consumers are connected
  15. 15. … and consumers want to know more • About where their food comes from • How its produced • Who has produced it • Shorter supply chains • Connection with producers (agri-tourism?)
  16. 16. ... Provenance matters to many consumers
  17. 17. Differentiation key • Premium quality • Reliability • Product innovation • Production/product attributes • Brand • Strategic partnerships • Customer service
  18. 18. Bottom line: consumers expect food safety and quality Robust food safety regulation • PrimeSafe • Dairy Food Safety Victoria • Federal Government Well regarded biosecurity systems • Mandatory tracking of livestock through the National Livestock Identification System Industry quality assurance systems • Contemporary industry-led QA systems
  19. 19. 20 Free Trade Agreements
  20. 20. Wine - 15% tariff on wine eliminated immediately Horticulture - Tariffs of between 8 – 24% on cherries, almonds and dried grapes eliminated immediately - 45% tariff on potatoes, oranges, mandarins, table grapes halved immediately, then phased out over 5yrs Dairy - 36% tariff on cheese and 89% on butter eliminated between 13-20 years - Growing duty free quota for cheese, butter, infant formula Korea-Australia Free Trade Agreement Grain - Growing duty free quota for malt and malting barley Red meat - 40% tariff on beef eliminated over 15 years - 22.5% tariff on sheep and goat meat eliminated over 10 yrs
  21. 21. Dairy - Duty free quota for cheese - Duty free access for protein concentrates, lactose, casein - New opportunities for dairy desserts Japan-Australia Economic Part. Agreement Beef - 38.5% tariff reducing to 19.5% over 18yrs - Reducing to 23.5% over 15yrs for chilled beef Wine - Elimination of 15% tariff on bottled wine over 7 years - Tariff on bulk wine eliminated immediately Horticulture - Fast tariff elimination on most fruits, vegetables and nuts Grain - Duty free access for feed grains Seafood - Duty free access for lobster, shellfish, crustaceans
  22. 22. Sheepmeat - 12-23% – 8 yrs - 10% live sheep – 4 yrs Skins and hides - 5-14% - 2-7 yrs Horticulture and wine - Tariffs as high as 30% eliminated over 4yrs Grains - 3% tariff on barley and 2% tariff on sorghum eliminated immediately - 10% tariff on wheat gluten and malt eliminated over 4yrs Dairy - Tariffs as high as 20% phased out over 4-11yrs - 15% tariff on milk formula phased out over 4 yrs China-Australia Free Trade Agreement Beef - 12-25% on beef – 9 yrs - 5% on live cattle – 4 yrs
  23. 23. 24 Victorian Government
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  26. 26. Avalon International Airshow 国际航展 Jean Paul Gaultier 让 保罗·高缇耶展 White Night 白夜节 AFC Asian Cup 亚洲杯足球赛 Australian Open澳网公开赛 Cadel Evans Road Race 卡德尔·埃文斯公路自行车赛 ICC Cricket World Cup 板球世界杯 Superbikes世界超摩赛 Formula One Grand Prix 一级方程式赛车 Festival of Racing 赛马节 Flower & Garden Show 墨尔本国际花卉园林展 Fashion Festival 时装节 Food & Wine Festival 美食美酒节 Comedy Festival 喜剧节 Chinese New Year 中国春节 9 January – 29 March 2015 2015年1月9日-3月29日 墨尔本的80天 2015年1月9日-3月29日
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