Australian beef exporters concerned over Russia lifting US beef ban

By Lee Adendorff, in Byron Bay, Australia, and Eugene Vorotnikov, in Voronezh, Russia

- Last updated on GMT

Australia concerned that it could lose out to US beef in Russian market
Australia concerned that it could lose out to US beef in Russian market

Related tags: Australian beef, Russia

Australian beef exporters are nervous about a decision by the Russian government – confirmed directly to – that it is planning to lift the existing ban on imports of US beef.

Australian exports of high-value chilled beef to Russia have soared since Russia imposed a ban on US beef in February 2013 over the use of beta agonists in US beef production.

According to statistics provided by industry organisation Meat and Livestock Australia (MLA), Australia’s chilled beef exports to Russia reached 212 tonnes (t) in October 2013, with a year-to-date total of 2,210t, which is a massive 153% increase compared to the same period in 2012.

A market report by MLA, published in April 2013, pointed to the ban on US beef as the primary reason for this increase, as it had effectively knocked Australia’s principal competitor out of the high-end market segment. According to the report, prior to the ban, Australia and the US enjoyed a roughly equivalent market share, with the Russian imports of US chilled beef totalling 1,047t in 2012.

Sheldon Mumby, spokesman for the Pastoralists and Graziers Association of WA [Western Australia], told​: “We think the lifting of the ban would have a significant impact on Australian exports to Russia as we would be competing. If this proves to be the case, we would be taking steps to expand our market reach into Russia to cater for the influx of US beef.”

However, the Russian government is playing down the risk. Also speaking to​, an official at Russia’s agriculture ministry, Natalya Stepanova, argued the lifting of the ban would not significantly reduce imports of Australian beef. According to Stepanova, this year imports of Australian beef to Russia are expected to reach 30,000t (of the total volume of supplies of 600,000t), and are often sold as a niche product, and hence protected from the relaunch of American competition.

The majority of Australian beef is supplied to elite restaurants in Moscow and St Petersburg, which will continue purchases, argued Leonid Garbar, a well-known Russian restaurateur, who has developed chains such as the Stroganoff Steak House and Russian Vodka Room Number 1, which serve Australian beef.

“A significant part of Australian beef is supplied to Russia by air and is sold through a system of elite stores, HoReCa [hotels, restaurants catering]….The wholesale price of such meat is at least US$11-12/kg, while retail is US$50-70/kg. In this regard, it will not be in a direct competition with US imports,”​ he noted.

And while the high-end chilled Australian product is popular in Russian steakhouses, the great bulk of Australian beef (95%) exported to Russia is frozen, with overall exports in this sector declining 27% in the year to October, driven by the decrease in demand for frozen grass-fed beef, according to the MLA. The decrease in this demand has also been affected by the fierce competition from Australia’s South American competitors in the mid-range Russian market and the recently strong Australian dollar. According to the MLA it could also be the result of Australian product being diverted to other areas, such as Saudi Arabia and China, where Brazil is banned from exporting.

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