Direct meat trading to stay

Press, 28 August 1984, Page 22

Direct meat trading to stay

From

BRUCE ROSCOE

in Tokyo The Meat Board has no plans to abandon its direct sheepmeat importing for Japan in spite of opposition from some Japanese trading companies, according to the board’s chairman, Mr Adam Begg. Mr Begg, after a week of trade talks in Tokyo, said that he did not think there was any possibility of reverting to the previous situation where Japanese trading houses freely imported New Zealand lamb and mutton. He had told this to the Japanese A.A. Meat Traders Association, which in March suggested that its 38 member companies would boycott New Zealand lamb unless free trading resumed. The board’s own company, Tokyo-based Asian New Zealand Meat Company, Ltd, now controls all impiorts of New Zealand lamb and mutton. “I made it quite clear to the A.A. Meat Traders that to go back to the fragmented (selling) that existed before was not going to offer a solution to the problems of this marketplace,” said Mr Begg. New Zealand had “done remarkably well” in sales to Japan so far this year, he “Traditionally, Australians have dominated this market while total sales have been dropping. Only once in the past nine years has New Zealand outsold Australia in sheepmeat to

Japan,” said Mr Begg. “But our share is moving back up. We’ve turned the situation around compared with last year. It gives the lie to the thought that we’re being boycotted.” In the January-July period, New Zealand has sold 27,577 tonnes of sheepmeat to Japan, against Australia’s 20,770 tonnes. Mr Begg said New Zealand, however, had to “relaunch” lamb in Japan. “We have got to go through a development phase, and it is a long haul, but the potential is 4 there.” “We accept that’ in the future if we are going to succeed here, the promotional expenditure has got to be beefed up, and we’re not just talking about doubling or trebling. It’s got to go up substantially,” he said. “But there’s no point in spending money on promotion until we’ve got the product right.” Mr Begg said that there had been some improvement in the quality of lamb recently sold to Japan but “not enough.” “We’ve got quite a long way to go. It takes a long time. As a board we’ve spoken about it for many years but despite our best efforts we haven’t been able to achieve it. “We are in a position now when we can be much more positive about that, and clearly, unless we can get a quality product and consistency in it, then we’re not going to make inroads into

this market.” Mr Begg said that meant more highly skilled knife work was needed in the New Zealand industry, which he said might be difficult to get from some plants where “traditionally they have been geared to volume rather than, shall we say, perfection.” No date had been set for New Zealand Lamb Marketing Japan, Ltd’s Tokyo functions to begin. The board was still looking with consultants at the types of lamb product that should be developed for Japan. Mr Begg agreed that New Zealand lamb had an “image problem” in Japan. “The tendency of New Zealand and Australia with exports has been to sell down to the lowest common denominator in the world, without looking at what (prices) individual markets will stand,” he said. “Increasingly we are using differential pricing around the world according to what different markets will stand and according to the type of product that is put in. “With lamb that is certainly our objective with the research we are doing with New Zealand Lamb Marketing, Japan, Ltd, to lift the image of lamb and the price.” Mr Graeme Harrison, the board’s Asian director and the managing director of the Asian New Zealand Meat Company, Ltd, said Australia was looking at “substantial price reduc-

tions”. for the AugustNovember period when its seasonal kill would increase. Australian prices would drop, therefore, for “completely non-market related reasons.” “The unfortunate aspect from our point of view is that we have just carried out a major summer sales campaign — only for Hokkaido — which has been very successful.” Mr Begg said there was room for “greater co-opera-tion” with Australia in marketing in Japan but there was no chance of carteltype exports under the Closer Economic Relations Agreement which provides for bilateral co-operation in exporting to shared thirdcountry markets. Mr Harrison, in response to recent criticisms of the board’s performance in Japan, said it had to be appreciated that the board was in the process of trying to develop product forms for Japan. “The criticisms that can

be levelled with us are of the past This is the whole basis of what the changes are about” • On recent North American lamb sales to Japan, Mr Harrison pointed out that in July the United States had sold only three tonnes of lamb to Japan. It was not correct that only “minute” quantities of New Zealand iamb were sold on the Japanese mainland, he said. Eighty per cent of New Zealand lamb was shipped to Hokkaido, but 40 per cent was consumed on the mainland. This . was because some lamb was processed in Hokkaido for re-export. The Mitsui and Company, Ltd, purchase of about 700 tonnes of Icelandic lamb was not relevant to the Asian New Zealand Meat Company’s direct importing from New Zealand because Mitsui had contracted to buy from Iceland before the company was set up, he said.