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March 2008 |
The recent unbanning of exports of Irish beef to SA (they had been banned since late 2000 because of BSE (bovine spongiform encephalopathy)), prompted Ireland's Bord Bia (food board) to particularly emphasise the potential for importing Irish beef during a recent trade delegation visit to SA.
/~Currently, over 60% of Ireland's food exports to SA are of dairy products. SA's exports to Ireland, mainly of fruit, vegetables and more recently wine, totalling E42m (R470m), still far exceed Irish food exports to SA of E16m (R180m).
The Irish delegation was given strong support from the Irish prime minister, Bertie Ahern, who even addressed a seminar held by the bord for potential beef customers in SA.
Ahern's presence emphasised the importance which the Irish government places on its traditional agrifood industry. Ireland's agrifood production is still traditional in that most of it derives from smaller farmers, but it is highly sophisticated in its methods and safety and hygiene standards.
Nevertheless, because of the Irish attachment to agricultural land, it often costs around R500,000/ha. This and other high input costs generally mean that cheap imports cannot be expected from Ireland.
The Irish delegation therefore emphasised the high quality of its beef and its high food safety standards to the retailers and food service operators who attended the seminar. However, historically - before the ban - most of Ireland's exports to SA were of cheaper, industrial meat in frozen form for meat processors. Until 2000 SA was an important market for Irish beef - exports in the previous five years averaged 18,000t/year.
And, indeed, cheaper industrial meat is likely to be what Ireland will export in future to SA - if the price is right, that is. Prices will inevitably be much higher than before 2000.
Most of the processors at the seminar appeared to be looking for cheap cuts - mainly flank and forequarter beef.
Ireland currently exports 1,000t/month of pork products like trotters to China; these are competitive there but but have little value in Ireland. A similar considerations may apply in SA for certain beef cuts.
Ivor Queally of QK Meats, a major Irish meat-related company operating in SA, believes Irish beef forequarters will be competitive. "Unlike in SA, forequarters are half the value of hindquarters in Ireland," he said at the seminar.
The current agreement to allow resumption of exports of Irish beef does not cover offal, but veterinary negotiations are likely to result in it being extended to include offal soon.
With major source countries for industrial beef like Brazil being terminated because of foot-and-mouth disease outbreaks, local processors are always on the lookout for additional supplier countries. Much of SA's industrial beef supplies currently come from smaller South American countries.
The Irish beef industry is over 800% self-sufficient, so its exports far exceed local consumption (the population of Ireland is only about 4m). Its quality standards have to be very high because exports are primarily to Britain and other countries in the EU.
Safety standards are also high. For instance, Ahern commented that he was sometimes frustrated by the fact that the traceability of cows in Ireland far exceeded that of Irish citizens.
The emphasis of the Irish beef promoters on their grass-fed production, and its claimed superior taste, probably fell largely on deaf ears in SA.
SA is a net importer of beef, but also a small exporter of excellent-quality A2 beef.
Little SA beef is exported because "we generally like to eat our own excellent quality beef", said Manie Booysen, CEO of the SA Meat Industry Corp (SAMIC), at the seminar.
Beef imports into SA attract a 40% duty, so it is generally not economic to import beef besides very specialised types. SA beef exports into EU also attract a 40% duty.
The tariff on sheep meat is 40% and on pork is 15%.
Full rebates apply to "industrial" meat imported for processed meats production.
Throughout the world, beef is becoming more expensive.
The SA market for beef is growing strongly, as was seen last year and particularly at year-end.
Irish officials at the seminar pointed out that there is also no longer a beef mountain in the EU - in fact, the opposite. They said the EU used to have a surplus of 1m tons of beef per year in the 1990s, but it currently has a deficit of 0.3m tons per year. There is thus a natural market in the EU for beef from Ireland and other countries.
In the early 2000s BSE was a big problem in Ireland and Europe, and Ireland lost many of its markets.
Aidan Cotter, CEO of Bord Bia, said at the seminar that although there were still quite large subsidies for meat production currently in the EU, they are scheduled to be eliminated by 2013 and perhaps well before then, depending on the progress of World Trade Organisations negotiations (there will still be other subsidies for farmers, but they will be paid whether or not they are in production).
Bord Bia
Besides having over 800% self-sufficiency in beef, Ireland has over 300% self-sufficiency in lamb and over 800% self-sufficiency in milk.
Bord Bia is investing large amounts in food research and Ireland is generally "interested in discerning markets", according to the officials at the seminar.
Bord Bia, the state agency for marketing Irish food and drink products, was established in 1996. It markets Ireland as "The Food Ireland". Generally Ireland markets its food products on a "green" image, emphasising care for the environment and naturalness.
Despite huge economic success in non-food areas, food exports have held their own in the Irish economy due primarily to strong promotion.
Dairy products, mainly cheese, currently account for most of Irish exports to SA. Cotter said that Ireland does not have many large food companies or large food brands, but its companies can offer considerable supplies of inputs for the industrial sector.
Currently Irish food exports throughout the world are primarily of dairy, beverages (for instance, whiskies), meat and prepared foods (like pizzas and ready meals).
Patrick Ward, commercial manager of the consumer foods division of Ireland's Dairy Board, said the board is a commercial co-operative owned by dairy farmers which exports and markets its dairy products in over 100 countries.
Kerry Gold is its consumer brand but the company has two main businesses:
- Consumer foods. Kerry Gold has a significant presence in Africa, the Caribbean, South America, Asia and Russia.
- A range of dairy food ingredients.
Ward said that SA is an important strategic market for the Irish Dairy Board, particularly because it is sophisticated. The Kerry Gold brand has been marketed in SA since the mid-1990s.
In consumer goods the strategy is to market quality premium dairy products like butter and speciality cheeses (red cheddar, mature and vintage cheddar, Dublin cheese and blarney cheese).
Kerry Gold is well known for its soft butter, which has no vegetable oil. He says Irish butter fat is naturally relatively soft; also the cream used is specially tempered to make the butter soft.
In SA, the board supplies dairy ingredients - for instance butter - to certain high-end food processing companies, like National Brands Ltd. - Teigue Payne
Ward: Tel +353160-22266;
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Bord Bia: Tel +353166-85155;
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; Bord Bia meat division, contact Gerard Brickley:
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