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MARKET SNAPSHOT

SHEEPMEAT

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© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.

MLA INDUSTRY INSIGHTS February 2017

ContentsAustralia 1

North America 5

Japan 9

Korea 11

China 13

South East Asia 17

European Union 21

MENA 25

MARKET SNAPSHOT SHEEPMEAT

Australia



MLA INDUSTRY INSIGHTS Australia February 2017 1

Australian consumers are increasingly cautious and price-sensitive. Disposable income has not kept pace with inflation, with wage growth stagnating. Growth in food sales, including in the meat category, is largely driven by population growth and price inflation. Sheepmeat consumption in Australia is facing some challenges and opportunities:• Australians remain the second-largest consumers

of meat per capita, and the third-largest consumers of sheepmeat in the world (Source: OECD).

• Changing demography – including increased migrations from Asian countries where pork is the dominant protein, and an aging population who are avoiding red meat for health/functional/price reasons.

• Increased competition from pork (marketing activity) and chicken (price pressure) will continue to challenge sheepmeat.

• Social factors such as increased consumer consciousness of environmental impact, animal welfare, health concerns, and increased demand for food integrity provide opportunities to consider in red meat messaging.

• Lamb value share remains steady as prices increase. Maintaining value share, and limiting decline in volume, remain a challenge.

Population

Households earning

Meat consumption

24.3 in 2016

25.6 in 2020

US$15000+ p.a.

Pork

0.57 0.62

1.10

1.27

0.70 0.71

0.25 0.23

Poultry Beef Sheepmeat

7.7kg per capita*

2016 2020 In million tonnes cwt

10.3 in 2016

11.1 in 2020

US$35000+ p.a.

9.1 in 2016

9.8 in 2020

In million Source: BMI Research, 2016 estimate & 2020 projection

In million households Source: BMI Research, 2016 estimate & 2020 projection

Source: BMI Research, GIRA, 2016 estimate and 2020 projection * 2016e per person per year ** excluding fish/seafood

Domestic utilisation/lamb (share of produced volume)

Retail fresh meat value share

Food Industry Growth

200

020

01

2002

200

320

04

200

520

06

200

7 20

08

200

9 20

10

2011

20

12

2013

20

14

2015

20

1620

17f

22

2 2

07

20

9 2

05

22

4

24

6

223

248

2

27

230

21

620

0

222

22

0 2

07

2

27

234

237

1

12 1

10 1

01

123

131

170

1

77

188

179

19

5

18

6

193

22

2

25

0

2

80

2

77

26

8

256

Domestic Consumption Exports ‘000 tonnes cwt

2016 2015

0

1

2

3

4

5

6

‘000

mill

ions

%

0

20

40

60

80

100

120

2013

2014

2015

2016

f

2017

f

2018

f

2019

f

2020

f

Food sales Food, sales% growth Meat and Poultry sales Meat and Poultry % growth

Beef – 36.7% Chicken – 26.0% Lamb – 13.4% Pork – 11.9% Other – 2.1% Seafood – 8.6% Turkey – 0.9% Veal – 0.4%

Beef – 36.5% Chicken – 26.6% Lamb – 13.2% Pork – 11.3% Other – 2.1% Seafood – 8.8% Turkey – 0.9% Veal – 0.6%

Source: ABS, MLA forecast f = forecast Source: Nielsen HomeScan MAT to 3/12/2016 vs. year ago Source: BMI Research f = forecast

Price Sensitivity in Australia (all categories)

Australian retail meat price

Per Capita Disposable Income

20

30

40

50

20

07

200

8

200

9

2010

2011

2012

2013

2014

2015

%

0

500

1000

1500

2000pork

chicken

lamb

Beef

Sep-

00

Sep-

04

Sep-

08

Sep-

12

Sep-

16

Beef Lamb Chicken Pork

6000

9000

12000

15000

199

0

1995

200

0

200

5

2010

2015

Per capitaSource: KANTAR Millward Brown BrandZ 2007-2015 Source: ABARES/ABS Source: ABS

92.7kg per capita* total meat protein**

2 MLA INDUSTRY INSIGHTS Australia February 2017

Consumers • Consumer demand for lamb is affected by many factors, such

as demographic change, and changes in attitudes and beliefs towards food from family, friends, and the media.

• Consumers are increasingly challenged to cut back on sugar, and eat more natural, fresh and unprocessed foods (Source:

IPSOS Food CHATS 2016). Consumers claim to want to see more food products that are “All natural” (Source: Nielsen – Eliminating the Unnatural 2016). “All natural” product claims doubled between 2009 and 2014 (Source: Mintel, quoted in Australian Food News October 2014).

• Regarding animal products, 60% of consumers claim they want to avoid antibiotics/hormones – the number one ranked concern (Source: Nielsen, ibid).

• MLA research has shown that, when consumers are choosing meat, the attributes most closely associated with frequent consumption are that it is a “family favourite” and that it is “easy and convenient to prepare”.

• When consumers are shopping for lamb, the key information they look for on pack relates to freshness and price.

What things do consumers look for on pack/on shelf when buying lamb?

What are attributes that are important for Australian consumers? (all protein)

What key strengths does lamb have?

Colour of meat Is my/my family’s favourite meat Tastes delicious

Price per kgIs easy and convenient to prepare

I am willing to pay a bit more for this meat

Date packed Is the most superior meat

Guaranteed safe to eat

Freshness Tastes delicious Is the most superior meat

Use by date Consistent quality standards

Is my/my family’s favourite meat

Source: MLA Global Consumer Tracker, 2016

• Concerns over price are the biggest barrier to red meat consumption, and price is a weakness for lamb.

Main reason for eating less red meat

Feb’

10

Dec

’10

Jun’

12

Jun’

13

Jun’

14

Jun’

15

Jun’

16

%

05

1015

202530354045

Other reasons

NET Environment

I don’t like the taste anymore

I am concerned about the red meat industry’s treatment of animals

I am concerned about the e�ects of eating red meat on my health

I �nd red meat too expensive for my budget

Too expensive Health concerns Concerned about treatment of animals Don’t like the taste anymore Environmental concerns (any) Other

Source: MLA/Pollinate annual tracker 2010-2016

• However, lamb is a meat consumers are willing to pay more for, due to its advantages in flavour, safety, and being a family favourite.

• Consumers generally feel very positive about the sheepmeat industry – when asked, 73% couldn’t name anything negative about the industry at all (Source: MLA/Pollinate, 2016).

Vegetarianism• Vegetarianism is reportedly on the rise, with Roy Morgan

reporting in August 2016 that 11.2% of the population reported as vegetarian, up from 9.7% in 2012. However, the definition was somewhat flexible, with the actual claim being “The food I eat is all, or almost all, vegetarian” – a group more closely aligned to the term ‘flexitarian’.

– MLA/Pollinate research suggested the number of pure vegetarians is closer to 7%.

– 13% of current meat eaters claim to have been a vegetarian at some stage in the past.

– There is some interest in meat substitutes but the market remains small.

Protein Image Profiles

+/-5 indicates relative strength or weakness

FreshnessCheaper

High nutritional valueThe animal is well-cared for

The industry is environmentally sustainableConsistent quality standards

Tastes deliciousCan be used in many different meals

Is easy and convenient to prepareLow in fat

Guaranteed safe to eatEssential part of a healthy diet for growing children

Is my/ my family’s favourite meatIs becoming more popularIs the most superior meat

I am willing to pay a bit more for this meat


Single person households

Australians born overseas

Median age in Australia

2015

2.2 million2.5 million

3.0 million

2020 2030 2011

24.6%28.2%

2015Source: ABS Source: ABS Source: ABS

34 years

37 years

1995 2015

of which over ¼ are from Greater China and

South-East Asia

-1 -4 3 0 -3 6 5 8 5 -19 3 10 2 -15 11 2

-5 41 -11 -9 -5 -2 1 12 17 5 -8 3 13 -13 -10 -15

3 -7 -2 4 1 5 7 -3 -2 -15 6 -2 5 -1 5 7

6 -8 10-7 -2 -4 2 -8 -5 23 -9 8 -1 -1 0 14

-2 0 -1 0 0 4 -1 -1 -1 5 3 -4 -2 11 -3 -5

0 1 1 6 4 -4 -9 -8-7 6 3-7 -4 12 0 0

MLA INDUSTRY INSIGHTS Australia February 2017 3

Retail • The grocery retail industry is robust, with turnover totalling

$123 billion in 2016, forecast to rise 5.7% in 2017 (Source: IGD).

• Food and beverages comprise the majority of grocery sales, however the trend is towards lower growth, with non-food retail sales growth outperforming food sales for the first time in 10 years(Source: Citi Research “Looking across the supermarket horizon” October 2016).

• With the average grocery basket value worth $45, a basket with fresh meat/seafood jumps up to around $80 (Source: Nielsen HomeScan).

• Shopper research suggests fresh meat is a “Hero” category for supermarkets – a driver of both traffic to store, and extra spend when in store, and also acting as a ‘price beacon’ category by which shoppers generally judge the level of value provided by a retailer (Source: Shopper Tracker 2016).

• Supermarkets are also increasing their ready-to-eat meal range, targeting shoppers looking for a convenient meal option that might otherwise come from foodservice.

Grocery retail market sharesMajor organised retailers – 2016

Woolworths – 36% Wesfarmers (Coles) – 26% Aldi – 6% Seven & I Holdings – 3% Other – 28%

Source: IGD

Where do consumers typically purchase lamb from?

Supermarket – 68% Butcher – 31% Online – 1%


• Competition remains aggressive at grocery, especially at the discount end with all retailers engaging in visible price wars, particularly within staple categories. These are set to escalate, with speculation that other discount retailers (e.g. Lidl) may launch in the near future.

The changing face of food retail• The retail sector is progressively adopting disruptive

technology. The major retailers are building online sales, with Coles reporting a 25% increase YOY (Source: IGD 2016).

• Fresh Logic forecast that online sales of Australian food & grocery may lift from 3.8% share of the Australian grocery market currently to 7-8% similar to current levels in the UK & US markets (Source: FreshLogic.com.au).

• Non-traditional grocery chains (e.g. Google, Amazon, Uber) may be looking to bring new online grocery shopping solutions to Australians in 2017.

Mini-resurgence of independent retailThe independent meat retail sector has seen a modest resurgence, with 23% of butchers surveyed in 2015-16 saying their business is “Thriving” – up from 21% in 2014-15 (Source: MLA NFS telephone survey).

Place of fresh-meat purchase by average weekly customer spend and market share

Place of purchase Average customer spend

Value market share ($)

Butcher $37 23.5%

Market/Delicatessen/Other

$34 9.4%

Woolworths/Safeway $27 26.4%

Coles $25 23.2%

ALDI $22 7.6%

IGA $22 5.4%

Source: Roy Morgan Jan-Dec 2015, quoted in press release Feb 2016

Key things to know about major grocery retailers• Competition remains aggressive at grocery, especially at the

discount end with all retailers engaging in visible price wars, particularly within staple categories. These are set to escalate, with speculation that other discount retailers (e.g. Lidl) may launch in the near future.

• Woolworths: Food, liquor and petrol sales were down – 1.7% YOY in FY2016 (Source: IGD). Woolworths has been opening new shopfronts, offset by the gradual closure of Thomas Dux outlets. In FY17 they will slow down new store openings to focus on 80+ store refreshes (Source: IGD), potentially including the butcher counters being trialled in some stores now. Citi Research estimate that successful refurbishments can add roughly 1.0% to like-for-like sales growth.

• Coles: Food & liquor sales were up +5.1% YOY in FY2016 (Source:

IGD). Coles are continuing with an Every Day Low Price (Source: EDLP) strategy – by the end of June, Coles had increased the number of SKU’s at ‘Every Day’ prices to 3,100, up from 2,000 at the start of 2016 (Source: IGD).

• IGA (Metcash): Experiencing low growth with food & grocery sales up 0.5% YOY (Source: IGD).

• Aldi: Rapid expansion, as Aldi has opened 36 stores in 2016 (to October), and is forecast to operate 590 stores nationwide by 2021 (Source: IGD). +13.3% sales YOY in 2015 (Source: IGD). Aldi has the highest level of customer satisfaction of any supermarket, according to Roy Morgan (Jan-Dec 2015).

• Costco: Continue to announce record sales – +50.6% revenue YOY in FY2015 (Source: IGD). Costco are set to launch a new Sydney store in 2017 and Melbourne store in 2018. The focus is on high quality meat products, often sold in bulk.

© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.4

Foodservice Quarterly turnover in millions & Growth Quarter vs Quarter YACafes, restaurants & takeaways

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

’000

mill

ions

0

3

6

9

12

15

%

-5

0

5

10

15

20

Gross (LHS) Growth (RHS)

Source: ABS. Represents approx.. 75% of the foodservice industry

• The Australian foodservice sector is large, and competitive,with over 85,000 places to eat out, dominated Quick ServiceRestaurants (QSR), cafes, and casual dining restaurants.

• Australians eat out an average of two to three times a week,spending $45 billion per annum (nearly $100 per householdper week) (Source: Intermedia – Eating Out in Australia, quoted in press release Nov 2016).

• The foodservice channel is highly fragmented, with many individualcompanies having small market share. Exceptions include QSRsand institutional channels such as hospitals and aged care.

• Shifting consumer attitudes and behaviour drive innovation andevolution from foodservice providers and these are responsiblefor some of the volatility seen in the market. Foodservice growthis also impacted by tourism and therefore by internationalmarket dynamics, and by the fluctuating Australian dollar.

• The eating out behaviour of Australian consumers over recentyears has seen slower rates of growth, and this is set tocontinue, with only 17% of Australians saying they are eating outmore now than they were a year ago – with 36% saying lessand only 11% say they are intending to eat out more in future(Source: MLA Domestic Consumer Tracker 2016).

Favourite international cuisine types

%

0

10

20

30

40

50

60

70

80

Chi

nese

Italia

n

Thai

Indi

an

Mex

ican

Japa

nese

Gre

ek

Oth

er A

sian

Leba

nese

Fren

ch

Source: Roy Morgan Jan-Dec 2015, quoted in press release May 2016

Average number of meals out of home per week by age

Dinner

Lunch

Breakfast

18-34

0.9

1.8

2.0

0.8

1.5

1.6

0.5

1.6

1.5

0.5

1.1

1.6

35-44 45-54 55+

Breakfast Lunch Dinner

Source: MLA Domestic Consumer Tracker 2016

Average number of meals out of home per week by household composition

Dinner

Lunch

Breakfast

Children in household No children in the household

0.9

1.8

1.9

0.5

1.3

1.5

Breakfast Lunch Dinner

Source: MLA Domestic Consumer Tracker 2016

• There are many factors that contribute to the choice to eat outor not, mostly occasion-based i.e. where and when the mealtakes place, and with whom. Having children in the householdindicates a higher level of eating out, as well as influencingchoice of venue and choice of meal. When it comes to whereto go, convenience, value and familiarity are key, which partlyexplains the rise of QSRs, supermarket meals-to-go, and othercasual dining options.

• Other foodservice trends to watch are menu customisation(for example, McDonalds’ “Create Your Taste”) and increaseddemand for integrity (e.g. Guzman Y Gomez’ switch to 100%free range chicken). Authentic eating and personalisationare amongst the “Top 10 Global Consumer Trends for 2017”,according to Euromonitor International.

Meats eaten when dining out – lunch and dinner

%

0

5

10

15

20

25

30Dinner

Lunch

Bee

f

Lam

b

Chi

cken

Seaf

ood

Pork

No

mea

t

Oth

er

Dinner Lunch


A trend to watch for 2017: tech-driven food delivery by aggregators such as Deliveroo,

Foodora, MenuLog and UberEats


North America



MLA INDUSTRY INSIGHTS North America February 2017 5

Population

Households earning US$15000+ p.a.


324.1 in 2016

333.6 in 2020

113.6 in 2016

118.7 in 2020

75.0 in 2016

83.5 in 2020

In million In million households In million householdsSource: BMI Research, 2016 estimate & 2020 projection Source: BMI Research, 2016 estimate & 2020 projection Source: BMI Research, 2016 estimate & 2020 projection

Australian sheepmeat exports – volume

Australian sheepmeat exports – value

Estimated usage split of Australian sheepmeat

Chilled lamb – 44% Chilled mutton – 0% Frozen lamb – 41% Frozen mutton – 15%

Lamb – 89% Mutton – 11%

Retail – 40% Foodservice – 60%

Total 64,562 tonnes swt Total A$ 666.8 millionSource: Department of Agriculture and Water Resources (DAWR) Source: ABS/GTA. 2016* = Moving Annual Total (MAT),

November 2015 to October 2016Source: MLA

Australia’s share of imports

Meat consumption 119.9kg per capita* total meat protein**

74% Australia Other Countries 0.39 per capita

Pork

9.9 10.3

17.418.8

11.5 12.0

0.14 0.13Poultry Beef Sheepmeat

2016 2020

Source: MAT 2016 (November 2015 to October 2016).

In million tonnes cwtSource: BMI Research, OECD * 2016e per person per year ** excluding fish/seafood

For the majority of US consumers, lamb continues to be an unfamiliar protein resulting in low consumption levels. Lamb is still perceived as a niche product primarily appealing to higher disposable income earners residing on the east coast of North America.Challenges and opportunities in the US for Australian Sheepmeat:• In the US, an increase in migration of ethnic

populations that have lamb as part of their stable diet is slowly creating further demand for the protein.

• Households earning a higher income are on the rise creating new market opportunities with an estimated 28.5 million households (income over USD75K pa). This is expected to increase by 17% by 2020 (Source: BMI Research).

• Increasing consumer health concerns poses a threat to red meat consumption.

• New food package labelling that aims to reflect new scientific information will be a key issue in the US in the coming years.

6 MLA INDUSTRY INSIGHTS North America February 2017

Consumers • Lamb is the least consumed protein in the US at an average

of 0.4kg per person per year (Source:OECD-FAO) with 49% of US consumers having never purchased lamb (Source: MLA Global Consumer

Tracker, 2016).

• The majority of Australian lamb consumers in the US earn over US$90k p.a. However 25-34 year-olds make up the largest proportion of consumers who dine out on Australian lamb (Source: MLA Global Consumer Tracker, 2016).

% by age of people who choose Australian lamb when eating out

3% (18-24yrs) 45% (25-34yrs)

37% (35-49yrs) 16% (50-64yrs)Source: MLA Global Consumer Tracker, 2016

• As ethnically diverse millennials in the US seek more ethnically diverse cuisines and more exciting ‘non-traditional’ flavours, lamb is being recognised as a viable option. Around 15% of people in the US aged 20-34 were born in a foreign country (Source: The Council of Economic Advisers, ’15 Economic Facts about Millennials’ 2014).

• Out of the 8 cities surveyed, lamb consumption varied with above national average consumption in Florida and New York City.

Past 7 days Australian Lamb Consumption

Florida

New York

Los Angeles

Washington DC

Boston

San Francisco

Chicago

Houston

18%

13%

12%

12%

11%

10%

9%

8%

National Average 12%


What attributes are important for US consumers? (all proteins)

Main reasons haven’t bought lamb

Family’s favourite Not familiar

Most superior Don’t know how to cook it

Guaranteed safe to eat Don’t like the taste

Part of healthy diet for kids

Consistent quality standsSource: MLA Global Consumer Tracker, 2016

Foodservice • The availability of lamb on US restaurant menus has grown

steadily over the years, featuring on 42% more menus than 10 years ago (2005-2015).

• Historically lamb has been more popular in foodservice in the US with a reputation of being a niche product appealing to the higher end consumer.

• Lamb maintains its position as a core protein at fine dining restaurants however strong growth is occurring in other segments such as QSR/family/casual.

Lamb at US Chains & Independents – Penetration by segment

QSR

Midscale

Casual

Fine Dining

Total

25%

17%

60%

20%

7%

Source: Datassential – Lamb Menu Trends 2015

• Growth in these segments has been driven by changing demographics and the shift in demand for more convenient and affordable lamb options such as lamb burgers, meatballs and kebabs.

Growth by segment – 10 year% change (2005-2015)

QSR

Casual

Fine Dining

Midscale

26%

51%

23%

56%

Source: Datassential – Lamb Menu Trends 2015

Fastest growing popular lamb cuts and formats on menus – 2015 Penetration

%

0

5

10

15

20

25

Lam

b C

hop

Rack

Of L

amb

Gro

und

Lam

b

Gyr

o

Kebo

b

Shan

k

Bur

ger/S

lider

Leg

Saus

age/

Mer

guez

Loin

Source: Datassential – Lamb Menu Trends 2015 Top 10 listed only.

MLA INDUSTRY INSIGHTS North America February 2017 7

Other suppliers • Imports make a significant contribution to the lamb and mutton

supply in the US.

• In 2016* imports accounted for approximately 65%** of total sheepmeat consumed in the US. ** Calculated based on OECD-FAO

consumption and total sheepmeat imports sourced from GTA.

• New Zealand sheepmeat imports to the US decreased by 5.5% during the year ending November 2016 compared to the same period in 2015. Conversely, Australian imports increased by 7%.

Sheepmeat imports by major supplier

2010

2011

2012

2013

2014

2015

2015

YTD

*

2016

YTD

*

‘000

tonn

es s

wt

0

200

400

600

800

1000OtherCanadaIcelandChileNew ZealandAustralia

Australia NZ Chile Iceland Canada Other

Source: GTA * YTD Jan-Nov

In 2016* 44% of Australia’s sheepmeat to the US was chilled, compared to New Zealand at 32%.

% of chilled sheepmeat imports to the US

2016

2015

2014

2013

2012

43%

42% 38%

46% 35%

46% 33%

31%

60%

44% 32%

Australia NZ

Source: GTA

Retail • Consumers mainly shop at supermarkets when buying lamb

however club warehouse channels such as Costco attracts the young affluent consumer.

Where do shoppers go to buy Australian lamb

Supermarkets – 46% Club Warehouse – 33% Butcher – 10% Supercentre – 5% Online – 4% Other – 3%


Where do high income earners shop when purchasing lamb (income over US$90K p.a)

%

0

10

20

30

40

50

60

ButcherCostco Whole FoodsMarket

Trader JoesOther


What things do consumers look for on lamb retail packs?

All Natural/100% natural 46%

Colour of meat 43%

Date packed 43%

Freshness 40%

Use by date 28%


• 2.8% of households purchase fresh lamb at retail and make 2.6 trips a year to buy it, up 7.2% from the previous year.

• Fresh lamb consumers are premium shoppers, spend more in stores and prefer healthier, home-cooked items (Source: Nielsen

shopper behaviour analysis, 2015).

Value share of fresh lamb

Lamb Chops – 52% Lamb Roasts – 22% Leg of Lamb – 16% Ground Lamb – 7% Lamb Shanks – 3%

Source: Nielsen, shopper behavior analysis, 2015


Market Access Overview Trade agreements Import tariffs Competitors Volume restrictions Technical access Technical accessAustralia-United States FTA (AUSFTA, EIF* 2005)

Australia to US – 0% To Canada – 10%To Mexico – 2.5%

New Zealand has a tariff of US 0.7 cents per kg for lamb and US 2.8 cents per kg for mutton.

There are no trade restrictions on Australian lamb and mutton exported to the US.

USIssues include point of entry inspection, label approvals and port mark compliance.

Mexico No protocol for the export of flat stacked sheep carcases prevent further shipments to Mexico.

Best access Major challengesSource: Trade agreements, DFAT, MLA * Entry into force.

Australian sheepmeat exports to US – summary table volume – in tonnes swt 2016 % out

of total2015 % out

of total5 year average

(2011-2015)% out

of totalchange 2016 vs 5-yr av.

% in tonnes swt

Total 64,562 100 62,875 100 50,678 100 27 13,884

by storageChilled 28,376 44 26,261 42 22,799 45 24 5,577

Frozen 36,185 56 36,613 58 27,878 55 30 8,307

by meat typeLamb 54,545 84 49,904 79 41,262 81 32 13,284

Mutton 10,016 16 12,971 21 9,416 19 6 600

by storage/ meat type

Chilled lamb 28,365 44 26,261 42 22,661 45 25 5,705

Chilled mutton 11 0 - 0 139 0 -92 -128

Frozen lamb 26,180 41 23,643 38 18,601 37 41 7,579

Frozen mutton 10,005 15 12,971 21 9,277 18 8 728 Source: DAWR

value – in A$ 000 % in A$ 000

Total 666,799* 100 690,383 100 461,454 100 44 205,344

by meat typeLamb 590,567* 89 597,579 87 409,756 89 44 180,811

Mutton 76,232* 11 92,803 13 51,698 11 47 24,534 Source: ABS/GTA. 2016* = Moving Annual Total (MAT), November 2015 to October 2016.

Australian lamb exports to US – by major cut (in tonnes swt) % in tonnes swt

Carcase 19,303 35 14,612 29 8,499 21 127 10,804

Leg 14,906 27 14,982 30 13,179 32 13 1,728

Shank 5,348 10 4,104 8 3,952 10 35 1,395

Shoulder 4,767 9 5,931 12 5,421 13 -12 -654

Shortloin 4,374 8 4,027 8 4,198 10 4 176

other 5,847 11 6,249 13 6,013 15 -3 -166

Total 54,545 100 49,904 100 41,262 100 32 13,284 Source: DAWR

Australian lamb exports to Canada – by major cut (in tonnes swt) % in tonnes swt

Leg 3,034 43 2,991 42 2,286 42 33 748

Shortloin 1,243 17 1,308 18 1,126 21 10 117

Rack 816 11 714 10 699 13 17 118

other 2,030 28 2,085 29 1,367 25 49 663


Australian lamb exports to Mexico – by major cut (in tonnes swt) % in tonnes swt

Neck 619 57 638 51 526 52 18 93

Shoulder 373 34 583 47 434 43 -14 -62

other 96 9 18 1 58 6 66 38

Total 1,088 100 1,240 100 1,018 100 7 70 Source: DAWR


Japan



MLA INDUSTRY INSIGHTS Japan February 2017 9

Population



126.3 in 2016

125.0 in 2020

49.6 in 2016

52.3 in 2020

24.5 in 2016

33.5 in 2020




Reasons not to buy lamb

Chilled lamb – 40% Frozen lamb – 26% Frozen mutton – 34%


Not familiar

47%

35%31%

Can’t cook Not availableTotal 13,222 tonnes swt Total A$ 105.6 millionSource: Department of Agriculture and Water Resources (DAWR), CY 2016

Source: GTA, MAT (Moving Annual Total) November 2015 to October 2016



Meat consumption

48.3kg per capita*total meat protein**

68% Australia Other Countries

Pork

2.6 2.72.3 2.4

1.2 1.2


200g per capita* 2016 2020

In million tonnes cwtSource: Ministry of Finance (Japan), MAT December 2015 to November 2016

Source: BMI Research, GIRA, 2016 estimate and 2020 projection * 2016e per person per year ** excluding fish/seafood

Sheepmeat is a minor protein in Japan, yet Australia supplies 68% of imports into Japan, making it the largest export market in Asia for Australian chilled lamb. While Genghis Khan sheepmeat barbecue restaurants are the major outlet for sheepmeat overall, there is a trend emerging in modern foodservice to incorporate Australian lamb on menus as a point of difference.Challenges and opportunities in Japan for Australian sheepmeat include:• Competition from other proteins remains strong.

However, any increase in sheepmeat demand will need to be met by an increase in imports, as the scale of Japan’s local sheepmeat industry is limited.

• There is rising lamb awareness among businesses and consumers but overall awareness remains low compared to other markets.

• Japan has a highly sophisticated and competitive foodservice sector. In order to demonstrate their point of difference, innovative chefs in Japan are experimenting with Australian lamb in diverse cuisine styles including Italian, middle-eastern, Chinese and Japanese.


Market Access Overview Trade agreements Import tariffs Competitors Volume restrictions Technical access

JAEPA (Japan-Australia Economic Partnership Agreement)

NIL(for all countries)

NZ(same access conditions as Australia)

N/A No major hurdles

Best access Major challengesSource: Trade agreements, MOF, MLA

Australian sheepmeat exports to Japan – summary table volume – in tonnes swt 2016 % out

of total2015 % out


(2011-2015)% out


% in tonnes swt

Total 13,222 100 11,711 100 12,235 100 8 987

by storageChilled 5,289 40 5,176 44 5,214 43 1 75

Frozen 7,933 60 6,534 56 7,021 57 13 912

by meat typeLamb 8,640 65 7,977 68 8,174 67 6 466

Mutton 4,582 35 3,733 32 4,061 33 13 521


Chilled lamb 5,241 40 5,119 44 5,150 42 2 90

Chilled mutton 48 0 57 0 64 1 -24 -16

Frozen lamb 3,399 26 2,858 24 3,024 25 12 376


value – in A$ 000 % in A$ 000

Total 105,587* 100 99,044 100 95,558 100 10 10,029

by meat typeLamb 74,794* 71 72,929 74 69,103 72 8 5,691


Australian lamb exports to Japan – by major cut (in tonnes swt) % in tonnes swt

Shoulder 4,882 57 4,483 56 4,136 51 18 746

Manufacturing 1,864 22 1,837 23 2,458 30 -24 -593

Rack 714 8 624 8 650 8 10 64

Leg 626 7 492 6 534 7 17 91

Carcase 201 2 192 2 151 2 34 51

other 352 4 349 4 244 3 44 107

Total 8,640 100 7,977 100 8,174 100 6 466 Source: DAWR

Australian sheepmeat exports to Japan

2011

2012

2013

2014

2015

2016

‘000

tonn

es s

wt

0

4

8

12

16frozen mutton

chilled mutton

frozen lamb

chilled lamb

chilled lamb frozen lamb chilled mutton frozen mutton

Source: DAWR Genghis Khan sheepmeat barbecue


Korea



MLA INDUSTRY INSIGHTS Korea February 2017 11

Urban Korean consumers are developing a taste for Australian sheepmeat, largely driven by Chinese-influenced lamb barbecue (BBQ) /skewer outlets. Seeing increased interest in sheepmeat, Genghis Khan style (tabletop sheepmeat BBQ from Japan) restaurants are also opening up in the market.Challenges and opportunities in Korea for Australian sheepmeat include:• Australian lamb exports to Korea grew from only

1,639 tonnes swt in 2006, to 8,970 tonnes swt in a decade. Steady growth in demand indicates there is an emerging appreciation for this protein, albeit from a small volume.

• Sheepmeat is a minor protein in Korea. Growth in demand almost solely depends on lamb skewer outlets with no other significant end-users to build further volume. Increasing lamb awareness and promoting usage by other restaurants, remain a challenge.

• Lamb sales in the retail sector remain largely untapped. A large number of consumers with middle to high incomes, and an appreciation for high quality protein (originating from its domestic Hanwoo beef) provides opportunities for creating demand in this segment.

• An increase in sheepmeat demand will have to be met by a rise in imports, as the scale of the local sheepmeat industry is limited.

Population



50.5 in 2016

51.3 in 2020

19.4 in 2016

20.8 in 2020

12.1 in 2016

15.7 in 2020




Chilled lamb – 17% Frozen lamb – 68% Frozen mutton – 15%


Total 10,597 tonnes swt Total A$ 59.5 millionSource: Department of Agriculture and Water Resources (DAWR), CY 2016





Pork

1.86 1.93

0.95 1.020.76 0.77


200g per capita* 2016 2020

In million tonnes cwtSource: GTA, MAT (Moving Annual Total) December 2015 to November 2016

Source: BMI Research, GIRA * 2016e per person per year ** excluding fish/seafood



KAFTAKorea-Australia Free Trade Agreement

15.75% in 201613.5% in 20170% in 2023Under KAFTA

NZImport tariff – 15.75% (2017) under NZ-Korea Free Trade Agreement*

N/A No major hurdles

Best access Major challengesSource: Trade agreements, DFAT, MLA * Under KNZ FTA (Korea-New Zealand Free Trade Agreement), import tariff on NZ sheepmeat will be eliminated in 2024

Australian sheepmeat exports to Korea – summary table volume – in tonnes swt 2016 % out

of total2015 % out


(2011-2015)% out


% in tonnes swt

Total 10,597 100 7,775 100 5,145 100 106 5,452

by storageChilled 1,770 17 851 11 318 6 457 1,453

Frozen 8,827 83 6,924 89 4,827 94 83 4,000

by meat typeLamb 8,970 85 6,267 81 4,005 78 124 4,965

Mutton 1,627 15 1,508 19 1,140 22 43 487


Chilled lamb 1,769 17 845 11 316 6 460 1,453

Chilled mutton 1 0 6 0 1.4 0 -37 -1

Frozen lamb 7,201 68 5,423 70 3,689 72 95 3,512


value – in A$ 000 % in A$ 000

Total 59,539* 100 50,808 100 28,884 100 106 30,656

by meat typeLamb 52,059* 87 42,327 83 23,085 80 126 28,974


Australian lamb exports to Korea – by major cut (in tonnes swt) % in tonnes swt

Shoulder 4,581 51 3,207 51 1,840 46 149 2,741

Breast & Flap 2,087 23 1,097 18 770 19 171 1,318

Manufacturing 883 10 811 13 632 16 40 252

Rack 704 8 376 6 184 5 283 520

Intercostals 286 3 247 4 171 4 67 115

other 428 5 530 8 408 10 5 19


Australian sheepmeat exports to Korea

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

‘000

tonn

es s

wt

0

2

4

6

8

10

12

Lamb Mutton

Source: DAWR


China



MLA INDUSTRY INSIGHTS China February 2017 13

Population



1,382 in 2016

1,403 in 2020

61.8 in 2016

102.9 in 2020

7.9 in 2016

15.4 in 2020




Proportion of key cuts

Frozen lamb – 66% Frozen mutton – 34%


Breast & flap – 67% Rack cap – 11% Neck – 7% other – 15%

Total 59,449 tonnes swt Total A$ 233 millionSource: Department of Agriculture and Water Resources (DAWR), CY 2016


Source: DAWR, CY 2016




Pork

554.7630.4

130.1 149.6 74.7 82.2 48.2 50.8


3.0kg per capita* 2016 2020

Source: GTA, MAT October 2015 to November 2016

In million tonnes cwt Source: BMI Research, GIRA, 2016 estimate and 2020 projection

* 2016e per person per year ** excluding fish/seafood Source: FAO-OECD

China is a large, complex country with significant regional cultural variation, and a mixed demand outlook for imported sheepmeat. A sophisticated market segmentation approach to identifying and developing opportunities for Australian sheepmeat is required.Challenges and opportunities in China for Australian sheepmeat:• Despite slowing economic growth, consumer demand

for premium imported meat generally is expected to continue to grow, driven by increasing urbanisation, disposable incomes, premiumisation and health awareness.

• Sheepmeat typically contributes around 3% of dietary protein and most consumers don’t yet differentiate between lamb and mutton but consumption is forecast to continue to gradually increase.

• Sheepmeat is traditionally used in a variety of stew, soup and hot pot dishes, and is a popular street food in the form of spiced grilled kebabs.

• China sheepmeat import demand is strongly impacted by domestic production, particularly at the commodity end of the market.

• China’s retail sector is the largest globally (based on retail sales) but is among the world’s most fragmented.

• Whilst ChAFTA* is reducing tariffs on Australian sheepmeat, improving market access remains a priority, particularly for chilled lamb.

* China-Australia Free Trade Agreement

14 MLA INDUSTRY INSIGHTS China February 2017

Consumers • China is a country of great regional cultural diversity and

variation in consumption habits and preferences, particularly in the context of discretionary items. Considering cuisine alone, there are at least 8 official Chinese cuisines.

• Sheepmeat consumption is generally higher in the cooler northern areas of the country and traditionally has a strong seasonality, as it is considered to generate “internal heat”, with consumption increasing during the cooler months.

Consumed in the past year

%

0

10

20

30

40

50

60

70Mutton

Lamb

Bei

jing

Shen

yang

Tian

jin

Xia

men

Shan

ghai

Qin

gdao

Han

gzho

u

Dal

ian

Shen

zhen

Nan

jing

Wuh

an

Che

ngdu

Cho

ngqi

ng

Gua

ngzh

ou

Cha

ngsh

a

Mutton Lamb Northern Cities

Source: MLA/Canadean China Attractive Cities Study, 2016

• Despite being the most populous country in the world, the proportion of consumers that can afford to regularly buy imported sheepmeat is comparatively small, although their number will double over the next 5 years.

Number of households earning >U$35,000 p.a.

mill

ions

0

20

40

60

80

100

2020

2015

Vie

tnam

Indo

nesi

a

Taiw

an

Chi

na

Aus

tralia

Sout

h Ko

rea

Japa

n

Ger

man

y

USA

2015 2020f

Source: BMI Research

• In 2016, 21% of consumers surveyed from the four tier 1 cities of Beijing, Shanghai, Guangzhou and Shenzhen said they had never bought lamb.

• Per capita consumption of sheepmeat in China is small compared to other proteins but is forecast to increase 23% over the next decade from 3.0kg in 2015 to 3.7kg in 2025 (Source: FAO-OECD).

• Whilst pork and chicken appeal for their low price, versatility and convenience, lamb is perceived to have strengths in being a superior protein of high nutritional value.

Perceptions of lamb vs average of all other proteins

The most superior meat

Has high nutritional value

It's becoming more popular

Willing to pay more for it

+10%

+6%

+6%

+6%

+6%Source: MLA Global Consumer Tracker, 2016

• Sheepmeat and sheep offal has traditionally been used in stew, hot pot and soup recipes and is a popular street food in the form of grilled spiced kebabs.

• The bulk (over 80%) of Australian sheepmeat exports to China are breast and flap, carcase and manufacturing, with rack and loin cuts comprising less than 1%.

Foodservice • As a less familiar protein, many Chinese consumers are more

likely to eat sheepmeat out-of-home than cook it at home themselves.

Reasons Chinese consumers don’t buy lamb

Don't buy/cook but eat it out

Don't know how to cook

Not available at shop

Don't like the taste

Not familiar

Too expensive

Too fatty

30%

29%

23%

22%

18%

12%

8%


• Imported Australian lamb can be found on menus in high-end western style restaurants and 5-star hotels. The bulk of Australian sheepmeat is further processed in-market and goes primarily into the hot pot restaurant sector. Some reputable high-end hot pot restaurant chains offer Australian sheepmeat, where it features for its quality.

• Eating lamb at restaurants is also seen as an opportunity to try different cuisines.

Cuisine of last lamb dinner meal eaten out

Local – 75% Foreign – 25% Unknown/other – 1%


MLA INDUSTRY INSIGHTS China February 2017 15

Retail • MLA estimates that currently a very small proportion of

Australian sheepmeat is directly sold through retail channels.

• Whilst Australian lamb does have a presence in some specialist high-end supermarkets that service expatriates and affluent Chinese who have lived overseas, more of it is sold as packaged hot pot rolls, and not necessarily with country-of-origin labelling.

• Despite its size – ranking globally No. 1 in total retail sales (U$1,231.3bn in 2017f) – China’s grocery retail sector is very fragmented (Source: IGD).

Market share of total grocery retail – 2017f

%

0

20

40

60

80

100Other

Organised Retail

Vie

tnam

Indo

nesi

a

Chi

na

Sout

h Ko

rea

Taiw

an

Japa

n

UA

E

USA

Sing

apor

e

Aus

tralia

Organised retail Other

Source: IGD f = forecast

• E-commerce is a well-developed channel in China, particularly for apparel, personal care and electricals and through which a variety of frozen and manufacturing sheepmeat products are being sold. Challenges with cold chain management remain significant for fresh food, including higher-end lamb product.

Other suppliers • China has the world’s largest sheep flock, estimated at 315

million head in 2015. Domestic sheepmeat production is expected to grow, though moderate, in coming years (Source: GIRA).

• China is a comparatively small exporter of sheepmeat now, as domestic demand has grown.

• Imports comprised only around 6% of the sheepmeat consumed in China in 2015.

• In 2016, Australia supplied around a third of China’s total sheepmeat imports.

• Key competitors: – New Zealand has long been China’s largest imported

sheepmeat supplier, in 2016 supplying 110,443 tonnes swt from Jan-Oct.

– Uruguay and Chile are smaller suppliers.

China sheepmeat imports

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2015

YTD

*

2016

YTD

*

‘000

tonn

es s

wt

0

50

100

150

200

250

300Other

Uruguay

Australia

New Zealand

NZ Australia Uruguay Other

Source: GTA, China Customs *YTD Jan-Oct

Trade access • Market access work is complex, time-consuming and

challenging and is a high priority for Australia.

• Australia has made some significant market access gains in the China sheepmeat market since 2012.

• The key issues that remain a priority for Australia to resolve relate to the limited number of plants approved to export to China (particularly for chilled sheepmeat) and restrictions on offal exports.

Live exports • China has been a significant market for Australian breeder

sheep exports. Some 6,456 head were exported in 2016, a significant decline of 61% on 2015 (Source: DAWR, ABS).



ChAFTA China-Australia Free Trade Agreement (entered into force 20 December, 2015)

Under ChAFTA:2017: • Chilled bone-in/

boneless meat: 10% • Chilled carcases/

half-carcases: 10-15.3% • Frozen bone-in/

boneless meat: 8-10% • Frozen lamb carcases/

half carcases: 10%• Frozen mutton carcases/

half carcases: 15.3%• Sheep offal 11.3-14%2023: Meat: Zero2024: Offal: Zero

NZ import tariffs: Zero from Jan 2016

Uruguay, Chile & Mongolia import tariffs: • Frozen bone-in/boneless

meat: 12-15%• Frozen lamb carcases/

half carcases: 15%• Frozen mutton carcases/

half carcases: 23%• Frozen sheep offal: 18%

N/A Restrictions on the number of approved plants, chilled plants and restrictions on edible offals.

Best access Major challengesSource: Trade agreements, DFAT, MLA NB: China also applies a 13% VAT on most items (muscle cuts, offal) and 17% on processed

Australian sheepmeat exports to China – summary table volume – in tonnes swt 2016 % out

of total2015 % out


(2011-2015)% out


% in tonnes swt

Total 59,449 100 60,220 100 63,746 100 -7 -4,297

by storageChilled 2 0 - 0 24 0 -91 -22

Frozen 59,447 100 60,220 100 63,722 100 -7 -4,275

by meat typeLamb 39,096 66 31,326 52 32,092 50 22 7,005

Mutton 20,353 34 28,894 48 31,654 50 -36 -11,301


Chilled lamb 2 0 - 0 15 0 -86 -13

Chilled mutton - 0 - 0 9 0 -100 -9

Frozen lamb 39,094 66 31,326 52 32,077 50 22 7,017

Frozen mutton 20,353 34 28,894 48 31,645 50 -36 -11,292 Source: DAWR

value – in A$ 000 % in A$ 000

Total 232,987* 100 248,943 100 264,488 100 -12 -31,500

by meat typeLamb 148,748* 64 141,242 57 142,787 54 4 5,961

Mutton 84,239* 36 107,702 43 121,701 46 -31 -37,462 Source: ABS/GTA. 2016* = Moving Annual Total (MAT), November 2015 to October 2016.

Australian lamb exports to China – by major cut (in tonnes swt) % in tonnes swt

Breast & Flap 24,635 63 21,744 69 20,082 63 23 4,553

Manufacturing 7,486 19 5,289 17 5,721 18 31 1,765

Neck 3,914 10 3,293 11 2,429 8 61 1,484

other 3,061 8 999 3 3,858 12 -21 -797


Australian mutton exports to China – by major cut (in tonnes swt) % in tonnes swt

Breast & Flap 15,072 74 16,001 55 12,662 40 19 2,410

Carcase 2,091 10 6,976 24 11,129 35 -81 -9,038

Leg 1,393 7 3,467 12 3,196 10 -56 -1,803

other 1,797 9 2,451 8 4,667 15 -61 -2,870

Total 20,353 100 28,894 100 31,654 100 -36 -11,301 Source: DAWR


South East Asia (including Indonesia)



MLA INDUSTRY INSIGHTS South East Asia February 2017 17

South East Asia (SEA*) is a diverse region with vast differences in wealth, religion and economy across countries. Meat consumption is steadily rising in line with the region’s economic development and population growth. Key sheepmeat importing countries in SEA are Malaysia, Singapore, and Indonesia.Challenges and opportunities in SEA for Australian sheepmeat include:• Sheepmeat is a minor protein in the region, and some

markets do not distinguish between lamb and mutton.• Lamb awareness varies across countries with up to

55% of target consumers being aware of lamb in Malaysia vs only 11% in Thailand.

• Unlike pork or beef, sheepmeat is consumed across a range of religions – an ideal protein for multicultural consumers in SEA, as well as international visitors to the region.

• The period of strong demand for red meat is Ramadan.• Tourism is significant in the region and growing in

some areas. High end foodservice tends to follow this growth, which bodes well for chilled lamb growth.

* In this report, SEA includes the following countries – Indonesia, Malaysia, Thailand, Singapore, the Philippines, and Vietnam, as well as Brunei, Cambodia, Laos and Myanmar.

Population



639.5 in 2016

666.4 in 2020

16.0 in 2016

34.6 in 2020

3.5 in 2016

7.3 in 2020

In million In million households In million householdsSource: BMI Research, 2016 estimate & 2020 projection, total of 10 countries

Source: BMI Research, 2016 estimate & 2020 projection, total of 7 countries – Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam and Cambodia

Source: BMI Research, 2016 estimate & 2020 projection, total of 7 countries – Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam and Cambodia



Reason not to buy lamb



Total 41,262 tonnes swt Total A$ 220.2 million Malaysia, Singapore, IndonesiaSource: Department of Agriculture and Water Resources (DAWR), CY 2016




Meat consumption

Malaysia

72%90%

99%

Singapore Indonesia Pork

6.888.14

6.176.90

2.23 2.560.26 0.28


2016 2020

In million tonnes cwtSource: GTA, based on MAT volume of Malaysia, Singapore and Indonesia

Source: BMI Research, 2016 estimate and 2020 projection, total of 6 countries – Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. Singapore data are GIRA 2016 & 2021 forecasts, sheepmeat data except Singapore are OECD and includes goatmeat

#1 Don’t know how to cook

18 MLA INDUSTRY INSIGHTS South East Asia February 2017

Consumers • The SEA region is diverse in many aspects, and there is a vast

difference in wealth (Singapore’s GDP per capita is almost 40 times Cambodia’s), in religion (Buddhist, Muslim, Roman Catholic and Hindu) and economic/political systems.

• Sheepmeat awareness and consumption vary across the markets in the region. In Malaysia and Singapore, sheepmeat is a common part of diets, although consumption volume is still low in comparison with other proteins.

Lamb – awareness

Malaysia 55%

Singapore 46%

Indonesia 39%

Philippines 24%

Vietnam 13%

Thailand 11%


• In some markets, sheepmeat and goatmeat are not clearly differentiated. Similarly, there is little distinction between lamb and mutton among the majority of consumers in Malaysia, while lamb is an established protein category in markets such as Singapore, Thailand and Indonesia.

• Lack of knowledge/confidence in cooking is the major obstacle for consumers who haven’t bought lamb, rather than taste.

I don’t buy lamb because…

% A

gree

d

0

10

20

30

40

50

60

70

Indonesia

Singapore

Malaysia

Don’t knowhow to cook

Notfamiliar

Don’t buybut eat out

Don’t likethe taste

Not availablewhere I shop

Malaysia Singapore Indonesia


• Sheepmeat demand surges during festive seasons, including Ramadan month. In Indonesia, serving imported lamb is becoming more popular than local goatmeat.

• Ramadan dates are based on a lunar calendar, and migrate throughout the seasons. Subsequently, the timing of the demand spike for red meat changes with it every year.

Ramadan schedule

Year First day Last day

2016 7 Jun 6 Jul

2017 27 May 25 Jun

2018 16 May 14 Jun

2019 6 May 4 Jun

2020 24 Apr 23 May

2021 13 Apr 12 May

2022 3 Apr 2 May

Note: Ramadan start day may vary by country as it depends on when the new moon is first sighted

Foodservice • Lamb is a minor protein but consumed in a most diverse way

in the SEA foodservice sector – from western style cuisine, to Malay, Chinese, Indian or Middle Eastern flavoured dishes.

• In Malaysia, sheepmeat is a popular protein when dining out during the annual Ramadan month banquets.

• In Singapore, there are over 15 million people who visit the country every year, and more than one third of these visitors come from countries where sheepmeat is commonly consumed – such as China, Australia, the US, Europe and the Middle East. Demand from Singapore locals, as well as these international visitors makes Australian sheepmeat indispensable on restaurant menus.

Total number of arrivals into Singapore, by country

15.5million arrivals

in 2016*

ASEAN Greater China Australia and NZ India US and Canada Europe (inc Russia) Middle East Other

Source: BMI Research, 2016 estimate

• In SEA, demand for chilled Australian lamb in the high-end foodservice sector is expected to grow steadily, underpinned by a rising number of tourists into the region.

Australian chilled lamb exports to SEA

2010

2011

2012

2013

2014

2015

2016

tonn

es s

wt

0

200

400

600

800

1000

1200

1400other

Loins*

Shoulder

Carcase

Leg

Rack

Rack Leg Carcass Shoulder Loins* Other

Source: DAWR. * Backstrap, shortloin, bone-in and bone-less loins

MLA INDUSTRY INSIGHTS South East Asia February 2017 19

Retail • A large proportion of the retail sector in South East Asia is

still dominated by traditional and locally owned businesses. That said, the modern retail format is quickly expanding, with imported lamb readily available at supermarkets in Singapore and urban Malaysia.

MalaysiaWhere do consumers in KL buy Australian lamb?

Supermarket – 46% Hypermarket – 46% Butcher – 4% Wet market – 2% Online – 0% Other – 2%


Key retailers

Supermarket Cold Storage, Jaya Grocer

Hypermarket Jusco, TescoSource: MLA Global Consumer Tracker, 2016

What things do consumers look for on lamb retail pack?

Freshness 56%

All natural 52%

Date packed 50%

Colour of meat 42%

Country of origin 42%


Meat sold at a local market (Vietnam)

Modern retail counter in Malaysia (Maxvalue)

• When buying lamb, consumers in both countries seek freshness and naturalness cues on a pack. In terms of image, Australian lamb is seen by these consumers to have good taste, consistent quality, and produced in an environmentally sustainable manner (Source: MLA Global Consumer Tracker, 2016).

SingaporeWhere do consumers buy Australian lamb?

Supermarket – 69% Hypermarket – 17% Butcher – 8% Wet market – 5% Online – 0% Other – 1%


Key retailers

Supermarket NTUC FairPrice, Giant, Cold Storage

Butcher Hubers, CulinaSource: MLA Global Consumer Tracker, 2016

What things do consumers look for on lamb retail pack?

Freshness 49%

All natural 47%

Date packed 44%

Colour of meat 42%

Country of origin 42%


Other suppliers • Australia is the largest supplier of sheepmeat to the SEA region,

followed by New Zealand.

• For New Zealand, Malaysia is the 9th largest export destination of sheepmeat (in volume, the 13th in value). New Zealand’s export volume to the region has been relatively stable, in comparison to its growth in exports to China.

Sheepmeat exports – Australia and New Zealand

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

YTD

*

‘000

tonn

es s

wt

0

20

40

60

80

100

120

140

160Australia to SEA

NZ to China

NZ exports to SEA

NZ exports to SEA Australia to SEA NZ to China

Source: GTA. SEA = total of 10 ASEAN countries (Indonesia, Singapore, Malaysia, the Philippines, Thailand, Vietnam, Laoc, Cambodia, Brunei and Myanmar) * YTD Jan-Oct



AANZFTA* ASEAN-Australia-New Zealand FTA

0%**Except Indonesia, Cambodia, Laos and Myanmar

NZImport tariff – same as Australia under AANZFTA

N/A Indonesia, Malaysia and Brunei maintain import regulations in accordance with Halal

Best access Major challengesSource: Trade agreements, DFAT, MLA* Australia also has independent free trade agreements (FTAs) with Singapore, Malaysia and Thailand** Tariff will be 0% in Myanmar (2020), Cambodia and in Laos (2021). Cambodia will maintain 35% tariff on bone-less products. Indonesia = 5% for chilled bone-in and all frozen products, including goatmeat.

Australian sheepmeat exports to SEA* – summary table volume – in tonnes swt 2016 % out

of total2015 % out


(2011-2015)% out


% in tonnes swt

Total 41,262 100 40,195 100 31,517 100 31 9,745

by storageChilled 1,583 4 1,495 4 1,306 4 21 277

Frozen 39,679 96 38,699 96 30,211 96 31 9,469

by meat typeLamb 15,336 37 14,401 36 12,160 39 26 3,176

Mutton 25,926 63 25,793 64 19,357 61 34 6,569


Chilled lamb 1,222 3 1,145 3 1,041 3 17 182

Chilled mutton 361 1 350 1 266 1 36 95

Frozen lamb 14,113 34 13,256 33 11,119 35 27 2,994

Frozen mutton 25,566 62 25,443 63 19,091 61 34 6,474 Source: DAWR. * Includes SEA 10 countries – Indonesia, Malaysia, Singapore, the Philippines, Thailand, Vietnam, Brunei, Laos, Myanmar and Cambodia

value – in A$ 000 % in A$ 000

Total 220,179* 100 229,285 100 169,262 100 30 50,917

by meat typeLamb 97,161* 44 98,236 43 82,038 48 18 15,123


Australian sheepmeat exports to Singapore – by major cut (in tonnes swt) % in tonnes swt

Lamb

Leg 730 34 667 33 608 33 20 122

Carcase 357 17 353 17 289 16 23 67

Shoulder 319 15 269 13 213 12 50 106

other 735 34 738 36 714 39 3 21

Total Total 2,141 100 2,027 100 1,824 100 17 316

Mutton

Carcase 5,057 54 4,615 52 3,867 53 31 1,190

Leg 2,879 31 2,766 31 2,185 30 32 694

Manufacturing 1,102 12 960 11 917 13 20 185

other 295 3 542 6 304 4 -3 -9

Total Total 9,333 100 8,883 100 7,273 100 28 2,060 Source: DAWR

Australian sheepmeat exports to Malaysia – by major cut (in tonnes swt) % in tonnes swt

Lamb

Shoulder 7,332 75 6,427 72 4,391 67 67 2,941

Carcase 883 9 1,058 12 855 13 3 28

Leg 445 5 524 6 526 8 -15 -81

other 1,081 11 891 10 812 12 33 269

Total Total 9,741 100 8,901 100 6,584 100 48 3,157

Mutton

Carcase 8,138 54 8,875 59 5,274 52 54 2,864

Manufacturing 2,743 18 2,578 17 2,396 23 14 347

Shoulder 2,470 17 2,304 15 1,495 15 65 974

other 1,583 11 1,206 8 1,051 10 51 532



European Union



MLA INDUSTRY INSIGHTS European Union February 2017 21

Population



505.9 in 2016

508.2 in 2020

196.7 in 2016

218.9 in 2020

104.9 in 2016

129.0 in 2020

In millions In million households In million householdsSource: BMI Research, 2016 estimate & 2020 projection includes EU-28 countries

Source: BMI Research, 2016 estimate & 2020 projection includes EU-28 countries

Source: BMI Research, 2016 estimate & 2020 projection includes EU-28 countries






Leg – 58% Manufacturing – 15% Shank – 15% Chump – 7% other – 6%

Total 16,471 tonnes swt Total A$ 119.6 millionSource: Department of Agriculture and Water Resources (DAWR),



Australian sheepmeat exports by country

Meat consumption

United Kingdom – 75% France – 13% Other – 12%

Pork

20.9 21.0

13.7 14.1

7.9 7.71.1 1.2


2016 2020


In million tonnes cwtSource: European Commission, Prospects for EU agriculture markets and income 2016-2026, OECD-FAO

The European Union covers 28 European countries with the population size of some far greater than others. Consumption of red meat is expected to increase on the back of slightly improved economic conditions and lower meat prices. Ireland, Greece, Spain, France, Romania and UK accounted for 72% of sheepmeat consumption in EU in 2016. The UK is the largest destination in the EU with sheepmeat exports accounting for approximately 75% of Australia’s total exports.

The challenges and opportunities in the EU for Australian sheepmeat include:

• A growing population and an increase in private consumption are expected to continue. Consumer demand for lamb is expected to remain steady driven by lamb consumption within the Muslim community.

• Tightening supplies are expected to support Australian lamb prices this year with New Zealand sheep meat production also set to slightly decline.

• Social factors such as health concerns for an ageing European population, animal welfare and environmental issues will be challenges for the red meat industry.

• Market access restrictions will continue to hinder exports and therefore improving market access remains a priority.

This report covers EU28 unless otherwise stated. EU28 – Austria, Belgium, Bulgaria, Croatia, Cyprus Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom.

22 MLA INDUSTRY INSIGHTS European Union February 2017

Consumers • There is growing importance of social concerns and the source

of origin of meat products among European consumers. Strong interest in lamb from ethical production systems which is raised with a high degree of animal welfare, sustainable carbon footprint and of reliable eating quality is a high priority amongst EU citizens.

• Sheepmeat consumption in countries such as UK, Ireland and Greece is traditionally linked to production cycle. In other EU countries, purchasing decisions are motivated by consumer demand at culturally significant times and food trends in emerging markets.

• Total EU meat consumption has shown a recovery since 2014 attributed to improved economic conditions and growth in population.

EU meat consumption by meat types

201

0

2011

2012

2013

2014

2015

2016

f

2020

f

‘000

tonn

es c

we

0

10000

20000

30000

40000

50000Poultry meat

Pig meat

Sheep and goat meat

Beef and veal meat

42,013 41,913 41,451 41,038 42,059 43,374 43,756 43,992

Beef & Veal Sheep & Goat Pork Poultry

Source: European Commission

• Sheepmeat is the least consumed protein in the EU (in comparison to Beef, Pork & Poultry) with sheepmeat consumption in some countries greater than others. The protein accounts for only 3% of total meat consumption at 2.1kg per capita in 2016.

• EU sheepmeat consumption per capita has declined more rapidly than consumption of other meats, down 26% between 2005 and 2016, compared with -10% for beef, -5% for pigmeat and +16% for poultry due to decreased supply and affordability. Among important consumers of sheepmeat, only Romania registered a rise in consumption per capita. (Source: GMC 2016).

• Ireland, Greece, Spain, France, Romania and UK accounted for 72% of sheepmeat consumption in EU in 2016 (Source: GMC 2016). Overall sheepmeat consumption in EU is forecast to increase slightly over the next few years.

Sheepmeat Consumption 2016

‘000

tonn

es c

we

0

50

100

150

200

250

300

Aus

tralia

Irela

nd

Gre

ece

Spai

n

Fran

ce

Rom

ania UK

Source: Gira GMC16, FAO-OECD EU countries include goatmeat.

• United Kingdom is the biggest consumer of sheepmeat in the EU, consuming 26% of EU’s total sheepmeat in 2016. The majority of Australian lamb exported to the United Kingdom primarily goes into foodservice.

Production • The EU produced 929,000 tonnes of sheepmeat in 2016

(Source: European Commission). The United Kingdom remains the largest sheepmeat producer in the region, accounting for over 30% of total EU sheep production in 2016.

• EU sheepmeat production registered a slight 1% increase in 2016 compared to 2015 (Source: European Commission). Increased numbers were processed by France, Romania and Spain whereas poor seasonal conditions affected turnoff from the UK, Ireland and Greece. (Source: GMC 2016).

• The EU is not self-sufficient in sheepmeat production as demand outstrips domestic production capabilities. By 2026 the EU will require an additional 229,000 tonnes from overseas markets to meet domestic requirements.

• In the next five years, the EU sheep flock and production rates are expected to rise marginally with a higher concentration in fewer countries. (Source: GMC 2016).

EU Sheepmeat Production by country – 2016

UK – 32% France – 12% Ireland – 6% Romania – 10% Spain – 14% Greece – 10% Other – 16%

Source: Gira GMC16, Incl. estimated unofficial production

EU Sheepmeat Production and Consumption

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

‘000

tonn

es c

wt

0

260

520

780

1040

1300Imports

Exports

Consumption

Net Production

Net production Consumption Exports Imports

Source: European Commission Prospects for EU agriculture markets and income 2016-2026

MLA INDUSTRY INSIGHTS European Union February 2017 23

Opportunities • European consumer confidence is improving with private

consumption* within the EU forecast to increase from USD8.8 billion in 2016 to USD9.6 billion in 2020, up 9% (Source: BMI Research).

Across key member states, economic growth and household spending on meat is expected to increase. * Private consumption is the sum of all household spending on goods and services within the economy.

Annual meat sales, USDmn

‘000

USD

mn

0

10

20

30

40

50

Australia France Germany Italy Spain UK

2016 2020

Source: BMI Research

Macroeconomic variables

Country GDP Per capita

2016

GDP Per capita 2020

% growth

Population (millions)

Population 2020 % growth

Germany 42,260 3% 80.7 0%

UK 40,192 12% 65.1 2%

France 37,747 1% 64.7 2%

Italy 30,043 -1% 59.8 0%

Spain 26,021 6% 46.1 0%

Source: BMI Research accessed January 2017, estimates

Market Access • Australia’s current red meat access is limited by the EU’s highly

restrictive import regime – involving low volume import quotas and high out of quota import tariffs. The EUs regime is in stark contrast to the majority of other Australian export markets.

• Current trading arrangements between Australia and the EU (including the UK) will remain unchanged for the next two years (until April 2019) while Brexit negotiations are carried out.

• It has been announced that Australia and the EU will begin procedures to secure a closer bilateral trade partnership – the precursor to launching formal free trade agreement (FTA) negotiations between the two parties.

Sheepmeat quota allocation by country

New Zealand

Australia

Argentina

Uruguay

Chile

Iceland

Others

228,254

19,186

23,000

5,800

7,600

1,850

1,020

Source: European Commission

Other suppliers • Australia’s sheepmeat competitors have a distinct market

access advantage in the EU.

• New Zealand has the largest share of EU sheepmeat imports under a 228,254 tonne quota.

• As a consequence of tighter New Zealand meat supplies expected in 2016/2017 and the weak pound against the New Zealand dollar, New Zealand sheepmeat exports are likely to be impacted in 2017.

Imports by major supplier

2010

20

11

2012

2013

2014

2015

2015

YTD

*

2016

YTD

*

‘000

tonn

es s

wt

0

500

1000

1500

2000OtherArgentinaFalklandsIcelendUruguayMacedoniaChileAustraliaNew Zealand New Zealand Australia Chile Macedonia Uruguay

Iceland Falkland Islands Argentina Other

Source: GTA * YTD Jan-Oct



EU FTA currently being scoped.

In quota: 0%; above quota: 12.8% + 90.2-311.8 euro/ 100 kg

New Zealand has a quota of 228,254, far greater than Australia’s quota.

Access remains limited to 19,186 tonne quota (carcase weight equivalent; calendar year).

Technical barriers to trade for the sheepmeat in Europe largely derive from Member States differing interpretation of EU legislation. These are not as prevalent barrier to trade as the economic barriers facing Australian sheepmeat exports to the EU.

Best access Major challengesSource: Trade agreements, DFAT, MLA * European Commission also applies a 13% VAT on most items (muscle cuts, offal) and 17% on processed

Australian sheepmeat exports to EU – summary table volume – in tonnes swt 2016 % out

of total2015 % out


(2011-2015)% out


% in tonnes swt

Total 16,471 100 16,195 100 16,800 100 -2 -328

by storageChilled 5,145 31 5,910 36 5,848 35 -12 -704

Frozen 11,327 69 10,285 64 10,951 65 3 376

by meat typeLamb 11,512 70 10,656 66 12,301 73 -6 -789

Mutton 4,959 30 5,539 34 4,499 27 10 460


Chilled lamb 5,145 31 5,910 36 5,848 35 -12 -703

Chilled mutton - 0 0 0 1 0 -100 -1

Frozen lamb 6,368 39 4,746 29 6,453 38 -1 -86


value – in A$ 000 % in A$ 000

Total 119,537* 100 140,286 100 130,874 100 -9 -11,337

by meat typeLamb 88,315* 74 98,990 71 99,774 76 -11 -11,459

Mutton 31,222* 26 41,296 29 31,101 24 0 121 Source: ABS/GTA. 2016* = Moving Annual Total (MAT), November 2015 to October 2016.

Australian lamb exports to EU – by major cut (in tonnes swt) % in tonnes swt

Leg 6,689 58 6,170 58 7,069 57 -5 -380

Manufacturing 1,676 15 1,182 11 1,223 10 37 453

Shank 1,673 15 1,829 17 2,372 19 -29 -699

Chump 749 7 882 8 811 7 -8 -62

Boneless Loin 211 2 148 1 242 2 -13 -31

other 513 4 445 4 584 5 -12 -71

Total 11,512 100 10,656 100 12,301 100 -6 -789 Source: DAWR


MENA (Middle East & North Africa)



MLA INDUSTRY INSIGHTS MENA February 2017 25

MENA* (Middle East and North Africa) is a large, complex region with varied consumer markets. Consumer confidence and spending are impacted by factors such as oil & gas prices and conflict but long-term socio-economic drivers bode well for imported sheepmeat demand in a number of countries. Challenges and opportunities in MENA for Australian sheepmeat:• Sheepmeat is an important protein in the region,

with consumption and import demand forecast to increase in a number of markets, particularly GCC** countries.

• Whilst imported mutton goes mostly into the lower tier foodservice sector, regional growth drivers of imported lamb demand are: increasing disposable incomes, urbanisation, westernisation, a young population, large expat professional populations and a developing tourism sector.

• The retail sector remains fragmented, even in GCC countries, but retail development growth is expected to increase, accompanied by growth in chilled red meat sales.

• Markets with developing tourism sectors are experiencing growth in demand for premium lamb cuts in the high-end foodservice sector.

• Technical barriers to trade are significant and differ between countries.

Population



430.0 in 2016

459.8 in 2020

16.8 in 2016

31.4 in 2020

3.8 in 2016

7.3 in 2020

In million In million households In million householdsSource: BMI Research, 2016 estimate & 2020 projection *Countries: Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, UAE, West Bank And Gaza, Yemen

Source: BMI Research, 2016 estimate & 2020 projection*Countries: Bahrain, Egypt, Iran, Jordan, Kuwait, Morocco, Qatar, Saudi Arabia, Tunisia, UAE, Israel, Iraq

Source: BMI Research, 2016 estimate & 2020 projection*Countries: Bahrain, Egypt, Iran, Jordan, Kuwait, Morocco, Qatar, Saudi Arabia, Tunisia, UAE, Israel, Iraq






Carcase – 67% Leg – 15% Shoulder – 6% other – 12%

Total 111,016 tonnes swt Total A$ 636.6 millionSource: Department of Agriculture and Water Resources (DAWR), CY 2016




Meat consumption

Saudi Arabia

62% 69%

UAE

10.88

4.172.42


2016

In million tonnes cwtSource: GTA, based on MAT volume per country Source: GIRA, 2016 estimate and 2020 projection (20 countries: Morocco, Algeria, Tunisia, Libya, Egypt, Saudi Arabia, United Arab

Emirates, Bahrain, Kuwait, Qatar, Oman, Yemen, Jordan, Palestine, Lebanon, Israel, Turkey, Syria, Iraq, Iran.)

* Unless otherwise stated, in this report MENA includes 29 countries: (Middle East) Afghanistan, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Pakistan, Palestinian Auto Zone, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates, Yemen; (North Africa) Algeria, Ivory Coast, Gambia, Guinea, Liberia, Libya, Morocco, Nigeria, Senegal, Sudan, Tunisia. ** Gulf Cooperation Council countries are highlighted above in blue.

26 MLA INDUSTRY INSIGHTS MENA February 2017

Foodservice • In some markets that are developing their tourism sectors, such

as Dubai, Saudi Arabia and Qatar, demand in the high-end foodservice sector is expected to continue to grow for chilled lamb cuts such as boneless loin, rack and shank.

• The bulk of Australian frozen mutton imports, which are chiefly carcase and leg, is used in the lower-tier catering sector.

• In Bahrain, lamb carcases go from butchers into the foodservice sector. However, since the lifting of government subsidies from late 2015, mutton has replaced lamb.

Australian chilled lamb exports to MENA – selected cuts

2011

2012

2013

2014

2015

2016

tonn

es s

wt

0

1000

2000

3000

4000

5000SHOULDER

RACK

BONE-IN LOIN

SHANK

BONELESS LOIN

Shoulder Rack Bone-In Loin Shank Boneless Loin

Source: DAWR

Consumers • Although economic growth prospects in the MENA region are

strongly impacted by external factors, such as oil prices and conflict, increasing urbanisation, growing disposable incomes, westernisation, a young population and large expatriate population are key growth drivers for imported red meat demand.

• Sheepmeat is an important part of MENA diets, though per capita consumption in some countries is higher than others.

Per capita sheepmeat consumption, 2016f

kg/h

d/pa

0

4

8

12

16

20

24

28

Bah

rain

Qat

ar

Kuw

ait

UA

E

Om

an

Jord

an

Aus

tralia

Alg

eria

Saud

i Ara

bia

Tuni

sia

Liby

a

Isra

el

Source: GIRA, FAO-OECD

• Demand for sheepmeat imports also varies, with greatest demand from Saudi Arabia and UAE, followed by Jordan and Qatar. Australian lamb has a high profile and is well-regarded in these markets.

• Sheepmeat is the most loved protein in the hearts and minds of Gulf States consumers, although actual consumption is dominated in volume and frequency by chicken due to its price advantage.

“I feel very positive about…”

UAE

SaudiLamb

Chicken

Beef

65%

65%

50%

46%

42%

32%

Saudi Arabia UAE


• Along with a traditional regional preference for lean meat, some consumers are developing a stronger health awareness, which may impact on their meat and lamb consumption.

• Utilisation of Australian sheepmeat varies somewhat by country. In UAE, our product goes into both retail and foodservice, whilst in Oman and Saudi Arabia, a significant proportion (especially frozen mutton) goes into foodservice, particularly low end catering. In Qatar and Bahrain, carcases go into butchers, where they are cut up for sale to consumers.

Trade access • For Australian sheepmeat exporters, tariff barriers are generally

not onerous but there are significant technical barriers to trade. Those associated with product age and expiry dates have the biggest impact on Australian red meat exports.

• The majority of Australian sheepmeat exported to MENA is to GCC countries, which generally have zero tariffs on chilled meat and 5% on frozen and processed meat and offal. Some countries (Morocco, Israel, Egypt, Jordan) have more severe tariff barriers for some product categories.

• Religious slaughter is an official requirement for import of meat and meat products into most MENA countries.

• There are currently no protocols for green runners (except with Jordan, Bahrain, Egypt and Lebanon), casings (except Lebanon), edible tallow, gelatine and collagen, skins, hides or rendered products for most MENA countries.

Key technical barriers to trade: • There are regional inconsistencies for shelf life expiry dates.

• The GSO sets GCC standards for shelf life which limits vacuum packed sheepmeat to 70 days, 21 days for chilled, 9-12 months for frozen meat and 4-9 months for frozen offal. However, UAE and Jordan recognise a 90 day limit for vacuum packed meat.

• There are onerous document legalisation requirements and inconsistent labelling and packaging requirements across the region.

• For Jordan, the net weight of sheep carcases must not exceed 20kg.

MLA INDUSTRY INSIGHTS MENA February 2017 27

Retail • MENA lamb product imports are primarily sold through the retail

channel, with chilled lamb carcase being most in demand, as well as smaller but significant volumes of leg and shoulder. Small volumes of premium cuts are available in tier 1 retail with demand expected to grow.

• Apart from the few wealthier GCC markets, the MENA region’s mass grocery retail sector is quite fragmented, with only a small proportion classified as organised.

Organised retail as a proportion of total retail, 2017f

%

0

25

50

75

Aus

tralia

Qat

ar

Bah

rain

UA

E

Om

an

Isra

el

Saud

i Ara

bia

Leba

non

Mor

occo

Source: IGD

• Reflecting their differing levels of development and cooking preferences, consumers in Saudi Arabia are more likely to buy lamb from butchers and wet markets, whilst more UAE consumers use hypermarkets. They are also somewhat different in their sheepmeat purchase decision-making.

I mainly buy lamb from…

Saudi Arabia UAE

Hypermarket – 40% Wetmarket – 30% Butcher – 27% Convenience – 4% Supermarket – 4%

Hypermarket – 52% Wetmarket – 26% Butcher – 11% Convenience – 5% Supermarket – 5% Other – 1%


Influences me when buying lamb…

Saudi Arabia UAE

Display/leaflet in store TV show/cooking show

Friend/relative word of mouth Celebrity chef endorsement

An advert on TV Radio show/cooking segement

Newspaper, magazine article Friend/relative word of mouth

Radio show/cooking segement An advert on TV/Radio


• Key food retailers in the region where consumers purchase Australian sheepmeat from include Carrefour, Lulu, Panda and Sultan Centre.

• In the MENA region, home-cooking of sheepmeat dishes like stews and slow cooking, grilling of cubes for kebabs and mince as a filling for pastries and kofta are widespread. Grilling of prime cuts is also popular in the region.

Other suppliers • Sheepmeat import demand in MENA is expected to continue

to grow as urbanisation, desertification and conflict negatively impact domestic sheep rearing.

• Australia has traditionally been the region’s main source of sheepmeat and live sheep, accounting for around two-thirds of imports in 2016 (Source: GTA).

• Other key suppliers: – NZ: export significant volumes of lamb, particularly

forequarter, mostly to Jordan and Saudi Arabia and smaller quantities of mutton.

– India and Pakistan: India supplies mostly chilled but also some frozen mutton to carcase UAE, Saudi Arabia, Qatar and Kuwait.

Sheepmeat exports to MENA by supplier

2007

2008

2009

2010

2011

2012

2013

2014

2015

2015

YTD

*

2016

YTD

*

‘000

tonn

es s

wt

0

50

100

150

200Other

India

NZ

Australia

Australia NZ India Other

Source: DAWR, GTA *YTD Jan-Sep (NB: Includes Lamb and Mutton; Excludes ovine offal and goat meat)

Live exports • In 2016, Australia’s key live sheep export markets in MENA

were Kuwait and Qatar, both seeing significant growth on 2015. Other important markets were Jordan, UAE, Israel and Oman.

• In 2016, Australia exported just over 1.85 million head of live sheep to the region (Source: DAWR, ABS).

• Live sheep imports generally increase in the second half of the year as an important element in festival celebrations.

• Australia’s key competitors in the live export market are India, Somalia and Sudan, as well as Romania, Georgia and Spain.



Australia-GCC FTAUnder negotiation since 2007. Four rounds of negotiations have been held to-date, the last one in 2009.

GCC countries generally:• 0% for chilled meat,

5% for frozen• Average of 2.5% for

chilled carcases/half carcases, 5% for frozen

• 0% for chilled ovine offal, 5% for frozen

Morocco: • 200% duty on sheepmeat,

54% on offalTurkey: • 225% duty on sheepmeat

and offal

• NZ & India access currently same as Australia

• NZ announced late 2016 re-newed efforts to verify, ratify & sign the NZ-GCC FTA, after negotiations concluded in 2009. This would result in 0% duty on frozen meat.

Quota restrictions in Tunisia and Palestine are not currently significant impediments

• Numerous technical barriers to trade that vary by country

• Key barriers relate to: shelf life, importer labelling, product coding, document legalisation and quality inspections

Best access Major challengesSource: Trade agreements, DFAT, MLA

Australian sheepmeat exports to MENA – summary table volume – in tonnes swt 2016 % out

of total2015 % out


(2011-2015)% out


% in tonnes swt

Total 111,016 100 119,954 100 105,113 100 6 5,903

by storageChilled 59,250 53 56,059 47 45,773 44 29 13,477

Frozen 51,766 47 63,895 53 59,340 56 -13 -7,574

by meat typeLamb 62,853 57 69,805 58 57,541 55 9 5,312

Mutton 48,162 43 50,149 42 47,572 45 1 591


Chilled lamb 52,053 47 54,166 45 40,866 39 27 11,187

Chilled mutton 7,197 6 1,893 2 4,907 5 47 2,290

Frozen lamb 10,801 10 15,640 13 16,675 16 -35 -5,875

Frozen mutton 40,965 37 48,255 40 42,665 41 -4 -1,699 Source: DAWR

value – in A$ 000 % in A$ 000

Total 636,643* 100 710,382 100 544,961 100 17 91,681

by meat typeLamb 421,819* 66 465,401 66 343,446 63 23 78,373


Australian lamb exports to UAE – by major cut (in tonnes swt) % in tonnes swt

Carcase 12,877 62 12,123 64 9,814 63 31 3,062

Leg 3,651 17 3,198 17 2,566 16 42 1,085

other 4,376 21 3,713 20 3,205 21 37 1,171


Australian lamb exports to Qatar – by major cut (in tonnes swt) % in tonnes swt

Carcase 15,240 96 13,196 95 7,179 91 112 8,061

Leg 278 2 272 2 308 4 -10 -30

other 386 2 472 3 405 5 -5 -19


Australian lamb exports to Jordan – by major cut (in tonnes swt) % in tonnes swt

Carcase 8,487 69 10,058 68 7,139 56 19 1,348

Shoulder 1,534 13 2,053 14 1,801 14 -15 -266

other 2,235 18 2,627 18 3,785 30 -41 -1,550

Total 12,256 100 14,738 100 12,725 100 -4 -468 Source: DAWR

Documents

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