Business

Buffalo meat a 'reality check' for industry

Buffalo meat has made it's way to wet markets in Indonesia. The alternative protein source has displaced some Australian beef products.
Buffalo meat has made it's way to wet markets in Indonesia. The alternative protein source has displaced some Australian beef products. ThinkStock

ANDREW Simpson had stern words for anyone who dismissed the potential of South East Asian markets.

"Anybody that tries to tell you southern Asia is the poor cousin of global markets, grab them by the collar and shirt front them,” he said.

He was joking, and guests at the Global Market Forum did laugh, but there was an underlying passion behind his remark.

The Meat and Livestock Australia South Asia and China regional manager highlighted the strong demand for Aussie beef.

Last year, 120,000 tonnes of boxed beef was exported to South East Asia, and a further 6000 head of cattle were shipped to Indonesia through live export.

However, while a solid market, and one with a demand that "will keep us busy for the next 100 years” 2016 had the introduction of a major competitor.

Political decisions in Indonesia, and market difficulties in Australia, opened the door for Indian buffalo meat to wet markets.

The cheaper protein has the power to undercut Aussie beef and has already displaced some products.

"We have had this market for 35 years and we are now losing ground because of a lower priced competitor,” he said. "This is a reality check.

"The two overriding factors that influence our Indonesian business are politics and price. The noble ambition of the Indonesian government is all around self-sufficiency and food security - and I can understand, absolutely, they want to feed their 260 million people.”

About 600,000 tonnes of meat is consumed in Indonesia.

"Local produce supports about 400,000 tonnes, or a little bit under, and that gap 200,000 tonnes is what (our) live cattle and boxed beef support into,” he said.

Mr Simpson said in 12 months about 12,000 tonnes of buffalo meat had been imported onto the Jakarta market.

"(Jakarta) is about 10,000 tonne per month market, so about 120,000 tonnes per year. Buffalo has taken out, we believe, 1000 tonnes per month,” he said.

When on display there was very little difference between buffalo meat and Aussie beef, he said.

"We are seeing light- coloured meat, looking the same as beef. The only thing different when you get up close is the price.”

To combat the issue, Mr Simpson said it was key for industry to "aggressively define their point of difference”.

"We have to keep the retailers responsible. We have to maintain our premium difference,” he said.

Topics:  buffalo meat indonesia live export mla


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