Russian flip flopping too fickle for business

08 Sep, 2014 05:15 AM
Comments
5
 
It just seems a lot more political than other markets we deal with

AUSTRALIA'S biggest kangaroo meat exporter has a message for Moscow: hooroo and hop off.

The general manager of Brisbane's Game Meat Processing, Rex Devantier, says he is fed up with the Kremlin flipping between suspending and ­resuming imports, often with very ­little reason.

His comments come as Russian President Vladimir Putin has banned a range of Western food products in ­retaliation for similar sanctions over Moscow's support for rebels in Ukraine.

While these sanctions have little direct effect on most Australian ­businesses, with total trade with Russia worth about $1.7 billion or year or 0.3 per cent of all exports, Russia is a key market for some companies.

Mr Devantier said numerous bans from Moscow in the past four years had crushed the kangaroo meat industry, shrinking it to about a quarter of the size it was four years ago. He said he would be reluctant to supply Russia again if his company regained access.

"It's too fickle. If our plants are running at capacity we are employing over 350 people, so you can't turn that off one week because someone says they don't want it, and three months later they do."

Tensions likely over Crimea

Mr Devantier's company processes about 800,000 kangaroo carcasses a year, more than 500,000 of which are sent overseas. He said about six years ago, Russia appeared a promising export market, buying about 40,000 tonnes of kangaroo meat a year. "They were able to consume relatively large volumes of kangaroo meat."

Australia's national fauna emblem was popular in Russian sausages and salami type products because of its low fat content, Mr Devantier said. But despite its appeal among ­Russian consumers, Moscow slapped several bans on kangaroo meat exports, which were worth about $180 million in 2008, after finding unacceptable levels of E.?coli bacteria. But Doug Jobson, the general manager of Adelaide-based Macro Meats, said the Russians were using the wrong testing protocols for the meat, which he said passed Australian and European Union standards.

He said the suspensions were ­politically motivated and did not only target kangaroo meat. The Kremlin also banned beef exports in May, ­claiming it had detected growth hormones. "It's a matter of fact that it [the hormone] wasn't used. The US is ­having the same issue," Mr Jobson said.

"It just seems a lot more political than other markets we deal with."

China market opportunity

The Australian beef industry and Agriculture Minister Barnaby Joyce dismissed Moscow's hormone claims at the time, saying the tensions over ­Crimea were more likely to blame.

"It's like saying, 'Oh we found roses growing wild in the hills'," Mr Joyce said back then. "Well you might have, but I doubt it."

Beef was Australia's most lucrative export to Russia, worth about ­$159 billion a year, in front of dairy which was worth about $112 million.

But meat processors are confident they'll find another home for the ­products. Mr Devantier said Germany, France and Holland were key export markets, and the kangaroo meat ­industry hoped to strike a deal with China, which had the potential to be a "far greater market" than Russia.

"We would be able to sell our ­complete production to China... for as long as I could see in the future," Mr Devantier said.

"We've had our plant audited twice by Chinese authorities and passed. We have taken delegations out in the field to harvest kangaroos. The demand is there," he said. "We have just to date been able to establish a protocol with the Chinese authorities."

The government hopes to strike such as deal as part of the free trade ­negotiations with China.

Page:
1
AFR
Date: Newest first | Oldest first

READER COMMENTS

Dorothy
8/09/2014 6:45:28 AM

I wonder if Russia thinks the same of Australia. It probably won't be too long before before we're told to put sanctions on China as well.
Archibald
8/09/2014 9:06:41 AM

Yep Its all Russia's fault!! Our governments and industry stance and talking without real proof on the Ukraine and MH 17 I think might have caused at least one of Russia's flip flops. But hell its easy to blame some one else for our own big undiplomatic mouths. Not to mention one sheep meat producer banning exports first as though he was running the country!!
scrite
8/09/2014 11:41:15 AM

Remind anyone of live trade to Indonesia?
wtf
9/09/2014 5:59:58 AM

u are spot on Dorothy, Europe will be broke and cold, that will be the motivation their supposed ally, wants to take them into war with the BRICS. They will be lambs to the slaughter, going into Russia in the winter is like shooting yourself in the foot. Aust will be told to do the same with the Chinese, imagine what that would do to us? The BRICS don't want war, its up to our public to educate themselves and reject the govt steps as they are being held to ransom and cannot do anything about it.
Frank Blunt
10/09/2014 8:43:03 AM

This Govt is fast becoming like the last one. Lots of bullet holes in their foot. Why make an enemy of Russia ? Just doing what Washington tells them to do. Bad idea.

POST A COMMENT


Screen name *
Email address *
Remember me?
Comment *
 

COMMENTS

light grey arrow
I'm one of the people who want marijuana to be legalized, some city have been approved it but
light grey arrow
#blueysmegacarshowandcruise2019 10 years on Daniels Ute will be apart of another massive cause.
light grey arrow
Australia's live animal trade is nothing but a blood stained industry that suits those who