April 14, 2006

US and Australia court Thailand's beef market

Sales of US beef in Thailand is making great headway and may overtake Australian beef just two months after Thailand partially lifted a ban to allow the re-entry of US beef. 

Thailand, along with a number of other countries, closed its market to US beef in December 2003 after the United States confirmed its first case of mad cow disease and limited US beef imports to boneless beef.

Nick Reitmeier, vice-president of international food and wine, Central Food Retail Co, which owns a chain of supermarkets in Thailand predicted that sales of Australian beef would decline as the US beef enjoys a solid reputation.

US beef would be welcomed after a 2-year hiatus, he said, adding that the company expects sales volume to return to levels before the ban by the end of this year.

The company was one of the first Thai outlets to start distributing US beef again and received a good response from consumers with sales of about a third of its first shipment of 300 kilogrammes in ten days, Reitmeier said.

Sales of US beef at the company should top 2 tonnes this year, returning to levels before the ban, Reitmeier said.

However, it still has some way to go before it catches up with Australian beef.  Sales of Australian beef at the company jumped to nearly three tonnes last year, compared to less than one tonne before the ban. 

US beef exports to Thailand were worth US$3 million before the ban, an impressive figure considering most of the nation were devout Buddhists who frowned on eating beef.

Although Australian beef might face tough competition from US beef, it would be unlikely to fall out of favour anytime soon. Under the recent Thailand-Australia free-trade agreement, the import duty on Australian beef is supposed to fall from 40 percent last year until its abolishment in 2020, making its price increasingly attractive to consumers.