Free trade agreement boosts high-end Aussie beef, wine imports to China

Global Business

Free trade agreement boosts high-end Aussie beef, wine imports to China

One of Australia’s largest Wagyu beef producers, Mayura Station is trying to open up the Chinese market. This comes as China Australia Free Trade Agreement brought down tariff of beef imports to less than 10 percent. Chinese demand for beef continues to rise, pushing up beef prices above 60 yuan (about $9) per kilo at the end of last year. The prices are still hovering at high levels now, but have eased slightly. 

The free trade agreement has boosted business relations and people-to-people exchanges between China and Australia. Australia was already a major food bowl for China, and Chinese demand for Australian goods continues to expand rapidly.

CCTV’s Laura Luo talked to leading Aussie brands that are tapping Chinese stomach.

One of Australia’s oldest farms is bringing a premium tasting experience to China.

“Mayura Station was first established 1845. It is regarded as one of Australia’s most iconic beef producing companies,” Scott de Bruin, managing partner of Mayura Station, said.

Mayura produces Wagyu, a type of Japanese beef with a marbling of fat throughout the meat.

“We’ve seen very strong demand in food items, and items which are very safe. Australia beef is very, very safe, and we have a clean processing environment. There’s great synergies between Mayura’s product and the growing demand for luxury items in China,” de Bruin said.

Rabobank said China consumed about 8 million tons of beef last year- 10 times more than in 2010. Analysts expect to see that rapid growth continue, especially among mid to high-end customers.

Experts said the CHAFTA, which took effect in December, will help Aussie products gain more traction in the Chinese market.

“With the signing of the FTA, it means Australian companies in the next decade will have an opportunity to play on a more level playing field,” Peter Cai, research fellow at the East Asia Program in the Lowy Institute for International Policy said. “For example, beef. Within the next 10 years, the tariff on beef will be removed; we are talking about 12 to 25 percent.”

Gourmet food is always paired with fine wine. Ewan Proctor is a wine ambassador for Penfolds.

“Chinese consumers love those wines because they are premium wines,” Proctor said. “They represent the best of South Australian Cabernet-Shiraz. We have a new style of consumer in China that is really interested to discover new styles of wine. Wines good value for money.”

The competition in the wine market is fierce. French wines have long dominated the Chinese market with a 43 percent market share. Australian wine came in second with a 24 percent share, followed by Chile, Spain and Italy. The intense business environment has played an important role in improving relations between China and Australia.

“Australians now believe the relationship with China is just as important as their relationship with the U.S. Many Australians regard China as best friend in Asia,” Cai said.

China now has the world’s largest middle class with more than 100 million people. But they account for just about 10 percent of China’s population. That leaves large room for growth as the Chinese middle class strives to live and eat better. This is only good news for those hoping to sate their appetites.