Scotland wasn’t formally represented at last week’s SIAL food show in Shanghai, China with the only UK representation through an AHDB stand that featured predominantly pigmeat businesses and traders. Of course with beef and sheepmeat access to China still some way off, it isn’t an immediate priority market but is there longer-term potential for Scotch beef and lamb in China?

AHDB Presence

The Farmers Journal spoke with Peter Hardwick who is head of exports with AHDB and he confirmed that news on formal lifting of the BSE beef ban on the UK was expected any day now following what appeared to be a successful visit to the UK by Chinese officials. This would give effect to the political announcement during the Prime Minister’s visit to China earlier in the spring.

China would appear to be a fertile market for products like Scotch beef and lamb. Research presented to the Farmers Journal in the margins of the SIAL show revealed a huge appetite in the fast-growing category of middle class Chinese consumers for branded products with particular attributes and proven authenticity. Food safety is the top Chinese priority in making food product choices and price, which is top priority in the UK is a much lower-ranked priority in China.

Volume

The other big prospect from China is for the volume of imports that are required and how they are expected to grow in the years ahead. In a briefing by Bord Bia, the Irish food board to the Irish industry they explained that Chinese beef imports are expected to grow from 700,000t in 2017 to 2.2 million tonnes by 2022, by which time it is expected the UK will have access if the approval path follows a similar pattern to the Irish one.

Per capita consumption of beef is also increasing as consumer affluence increases with continued economic development. Each extra kilogramme of per capita consumption means an extra 1.4 million tonnes of demand which would be serviced by imports. Current Chinese beef production is around 7.5 million tonnes but only around 80% of what is consumed. Therefore any further growth in demand will be serviced from imports.

Medium term potential

The bottom line for Scottish farmers and meat exporters is that while access to the mainland China market is out of bounds in the immediate future, it has considerable medium-term potential once approval is obtained. Even if approval takes a few years the projections suggest the market will be continuing to grow so it isn’t a case of missing an opportunity, it is an opportunity that will come around again. Whenever that does arrive, Scotland has one particularly useful advantage denied to Irish exporters. At present Ireland is considered a controlled risk BSE status country which means that they cannot export beef from over 30 months in many cases. However, Scotland – like Northern Ireland – has a negligible risk BSE ranking which means that there should be no need for a 30-month restriction.

Hong Kong

The Hong Kong market is currently available to Scotland and a Farmers Journal visit to top Hong Kong store City’super revealed what look like spectacular prices for a wide range of imported beef and lamb products.

One word of caution when looking at these figures, Hong Kong has among the most expensive land and property prices in the world and a high retailer margin is therefore a consequence.

Scotch beef at £200/kg

The main product offerings on beef were Australian and American with a smaller UK offering and a couple of smaller displays including South Korea. Branded Scotch beef was present but not in a form we associate with the mainstream Scotch beef industry! Wagyu, the intensively fed pampered beef is associated with Japanese production and the cut features a high level of marbling which gives its unique flavour and soft texture. The examples available in City’super were for Scotch Highland wagyu and rib eye which were retailing at the equivalent of £200/kg!

The store also featured a range of UK rib of beef cuts with various additions including whisky and truffle oil as well as a plain dry aged option. These retailed between the equivalent of £8/kg and £143/kg. There was also UK organic lamb chops on offer at the equivalent of £78.22/kg.