Australian cut-price lamb threatens N.Z. sales in Japan
By
BRUCE ROSCOE
in Tokyo
New Zealand lamb appears to be doomed in Japan now that Australia is conducting a concentrated sales drive and offering prices that New Zealand is unable to match because of the Meat Board’s rigid price-fixing system. Some Japanese buyers are dissatisfied with the board’s price mechanism, others have claimed that the quality of the lamb is deficient, and on the island of Hokkaido, a traditional New Zealand stronghold for lamb sales, more and more buyers are switching to the Australian product. “New Zealand has had Hokkaido all to itself but that is changing,” said Mr John Schumacher, a Tokyobased director of the Australian Meat and Livestock Corporation. “It is only in the last six months that we have got actively involved in promoting lamb on Hokkaido,” he said. “It is a fact that a lot of buyers, particularly since August, have been importing the Australian produce instead,” said Mr Tadaaki Ogane, who manages lamb imports for Ogane Chikusan Co, Ltd, in Sapporo, Hokkaido.
“Australian lamb shipments have been rising, New Zealand is selling less, and we are one of the few companies still handling New Zealand lamb, but we are doing so at a loss,” he said.
Mr Ogane said some of the buyers who had changed to Australian lamb had earlier filed claims with the Meat Board against New Zealand shippers for sending sub-standard lamb.
Mr James Leach, the Meat Board’s Asian director in Tokyo, said the board had fixed the lamb carcase price at USB4c a pound. Tokyo meat dealers, however, say Australia is offering carcases for at least 10c a pound less. “The Meat Board is just guaranteeing farmers an in-
come,” said Mr Yoshiaki Tamaru, manager for Borthwicks’ Tokyo enterprise, “whereas in Australia it is up to the farmers to decide. “Australian farmers need cash, and that is why they are selling low. That is totally commodity market behaviour. In New Zealand there is a lot of artificial intervention in the business.”
Mr Tamaru said the Australian Meat and Livestock Corporation and the Meat Board should “combine their efforts to develop the Japanese market to mutual benefit instead of fighting each other.”
Mr Schumacher, however, believes both countries’ industries are too incompatible for co-operation.
“New Zealand has elected to subsidise its farming industry and that does not take into account market forces,” he said. “It is not that the Australian lamb price is low. The Australian price is what the market is taking.”
Mr Leach claimed that “the Australians don’t know what they are doing. They have dropped the price through the floor.
“The. wool side of the Australian sheep industry is much bigger, and so they can afford to throw the lamb away,” he said. “But they see us at the other side of the spectrum and say our industry is too controlled.”
In New Zealand a spokesman for the Meat Board said yesterday that total shipments of lamb to Japan during 1983 would be 1000 tonnes more than the previous year, about 17,000 tonnes.
Mr Barrie Saunders said it was true that Australian exporters had recently gone into Japan and reduced prices for lamb but it was not the Meat Board’s intention to “chase Australia down.”
The Australian prices were much lower than necessary and there were better prospects for New Zealand lamb elsewhere at
present. The board had recently declared Japan a development market and was having talks with exporters to develop a strategy which would promote lamb more as a quality product.
This would insulate to some extent New Zealand lamb from the effects of a move on prices such as had recently occurred.
Mr Graeme Harrison, assistant general manager, marketing, was last Friday appointed Asian director, succeeding Mr Leach. Mr Harrison will take up his appointment early next year.
Mr Akinori Yanagimoto, lamb import manager of Zenchiku Company, Ltd, Tokyo, believes New Zealand lamb is fated not so much for its price but because its quality lets it down. “There is a lack of management control over quality in New Zealand,” he said.
“If the quality of the New Zealand and Australian product is about the same, naturally buyers will import from Australia at the lower price, and that is what they are doing. “But the price is not the real problem. If the New Zealand product had real quality appeal, you could almost ask your own price,” said Mr Yanagimoto.
“In the case of Australia, I say, ‘Make this to my specifications,’ and they make it,” says Mr Tamaru. “But in New Zealand, they just show you a price list for what they have got.” Mr Kyuichi Takenaka, managing director of the Tokyo Metropolitan Meat Traders’ Association, says buyers are “just comparing Australian and New Zealand prices. “There has not been enough promotion of lamb here as a quality table meat,” he said. “Consumers are not deciding on lamb for quality reasons, because they do not know what is good quality. So you might expect buyers to prefer the Australian product.”
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