January 18, 2006

Australia and US to compete for South Korean beef market
 

US beef exporters returning to South Korea can expect a tough fight for market share as Australia intends to hold onto gains it made since 2003. 

Australian beef exports to South Korea hit record levels in 2005 but the re-entry of the US beef will cause levels to fall, Glen Feist, South Korea regional manager for Meat & Livestock Australia Ltd (MLA) said Wednesday.

Feist hopes Australia can hold onto the 50 percent market share it gained since December 2003, when US beef was banned and South Korea turned to Australia and New Zealand to fill the shortfall.

Australia's share of South Korean beef imports jumped to 70 percent by the end of 2005 from 21 percent in 2003.

US beef exporters suffered a major setback even though South Korea has lifted the ban for boneless beef as imports of US bone-in beef, variety meats and offal were still in effect. Bone-in short rib cut accounted for about 60 percent of its exports to South Korea in 2003.

Thousands of South Korean restaurants serving US bone-in cut in 2003 have closed or now serve other meat products, including pork, according to Feist.

To add insult to injury, MLA's research in South Korea showed 76 percent of South Koreans won't eat US beef when the import ban is lifted.

South Korea's final checks on the safety of US beef should be finished by the end of March and trade should resume in early April.    

MLA spent millions of dollars promoting Australian beef in South Korea with safety as the primary focus, resulting in general brand awareness among consumers. These efforts will be reinforced by additional funding in April when MLA will shift its marketing theme to emphasize the taste and nutrition in Australian beef, according to Feist.