July 3, 2023

Australian beef producers benefit from UK free trade agreement

Australia's recently established free trade agreement (FTA) with the UK has entered its second month, and prominent figures in the Australian beef industry are already reaping the rewards, the Australian Broadcasting Corporation reported.

Gina Rinehart, one of Australia's leading beef producers, celebrated the arrival of tariff-free beef from her cattle enterprises at a high-end restaurant in London's Mayfair district.

Adam Giles, the chief executive of Rinehart-owned Hancock Agriculture and S.Kidman & Co, expressed his excitement about the opportunities presented by the FTA. He believes that the agreement will benefit not only their company but also numerous other producers in the industry. Giles mentioned that JBS Australia, another major meat and food processor, has already started shipping its beef to the UK, setting the stage for more producers to follow suit.

Hancock Agriculture had previously exported its high-value 2GR Wagyu products to the UK despite tariffs. But the new FTA opens up access for their Kidman Santa Gertrudis products. Giles acknowledged that the tariff had posed challenges for Australian producers looking to enter the UK market, but the FTA's removal of tariffs over the next decade provides an opportunity for them to refine their products and tap into the UK market more effectively.

Giles highlighted that companies with prior experience exporting beef to the UK have a kind of "first-rights" access under the new agreement. He said that the Rinehart companies prioritise serving Australian clients first, and if they can achieve 5% to 10% market share in the UK, it would be a significant achievement supporting their business moving forward.

JBS Australia, the country's largest meat and food processor, has also made its first shipment of Australian beef under the new FTA. The initial consignment included various cuts of JBS Aberdeen Black beef products, and the company has established a weekly program to ship beef to the UK. CEO Brent Eastwood expressed the company's enthusiasm for expanding trade with the UK, citing JBS's ability to meet the increasing demand for prime cuts and premium beef products.

The new trading agreement provides for an initial quota of 35,000 tonnes of Australian beef to enter the UK tariff-free, gradually increasing to 110,000 tonnes over the course of ten years. In 2022, Australia exported 741 tonnes of beef and veal to the UK, making it the country's 27th largest export market, with Japan as its largest customer, importing 214,000 tonnes.

The FTA between Australia and the UK is set to enhance trade opportunities for the Australian beef industry, allowing for increased market access and the establishment of valuable relationships with UK customers.

-      Australian Broadcasting Corporation