China has imposed an import ban on meat from four Australian abattoirs amid escalating tension between the two countries.
Kilcoy Pastoral Company; Dinmore and Beef City (owned by JBS), all of which are based in Queensland, as well as Northern Cooperative Meat Company at Casino in NSW, were suspended temporarily.
The latest move comes after China threatened to slap an 80 per cent tariff on Australian barley.
Australian Meat Industry Council (AMIC) has indicated that the suspension is down to labelling issues.
AMIC said that the organisation and its members are well-versed on China’s strict requirements with regards to technicalities such as labelling, which they take seriously.
“While not desirable, we have dealt with issues of this nature before and are working closely with the Commonwealth. This is a trade and market access issue that is being led by the Commonwealth,” said Patrick Hutchinson, CEO of AMIC.
China is Australia’s top market for beef by volume, accounting for around 29 per cent of total beef exports.
“China is a valued export market for Australian beef, and we have created strong commercial relationships, linkages and supply chains to supply Chinese consumers with high quality Australian product,” said Hutchinson.
IBISWorld said that China is a crucial market for Australian meat exports, which accounts for almost 18.6 per cent of total revenue. The research agency expects the meat processing industry to decline by 6.3 per cent in 2019-20, to $21.1 billion, as the COVID-19 outbreak suppresses demand.
“This meat export ban is symptomatic of a worsening trade relationship between China and Australia. The meat supply chain, including livestock farmers and meat processors, is at a significant risk of being caught up in a larger trade war that would represent a threat to the agricultural sector,” said IBISWorld senior industry analyst, James Thomson.
Inside FMCG has contacted the suspended abattoirs for comment.