Canada Beef is closing its office in South Korea and downsizing in Hong Kong. By realigning its operations, it will be better prepared for emerging markets, which are poised for growth
Calgary – Canada Beef is realigning its operations in the Asian market to better capitalize on export markets.
Canada Beef is the cattle producer-funded and run organization responsible for domestic and international beef and veal market development. It has offices in Canada, Mexico, Japan, China, Hong Kong and Taiwan.
Canada Beef works to foster loyalty to the Canadian beef brand and build strong relationships with trade customers and partners.
Changes in Asia
In response to changing market access and demand trends and opportunities, a number of changes are being made to Canada Beef’s Asian operations to position the Canadian beef industry for future success and growth.
Canada Beef recently adopted a “hub approach” in the Asian markets with senior leadership in Asia overseeing coordinated marketing efforts across the entire region. This has allowed the regional offices to increase efficiencies, market intelligence and program alignment, and program execution.
Canada Beef is also working with the federal government to better use existing in-market resources such as embassies, consulates and the Canadian trade commissioners to promote and market Canadian beef more effectively.
Added staff, resources
Additional staff and marketing resources are being added to the Canada Beef Japan and mainland China offices. With the acceptance of beef from cattle under 30 months of age, Canadian beef and veal market opportunities in Japan have increased significantly.
As well, strong economic growth in China with additional Canadian processing plants approved for export has seen exports double over the past year.
In order to support the increased investment in Japan and China, resources from other markets will be redirected as needed.
Resources in the mature Hong Kong and Taiwan markets will be reallocated to support growing Canadian beef and veal marketing efforts in southern China and Southeast Asia.
Canada Beef’s office in Hong Kong will be downsized, representing a significant cost savings. Canada Beef’s office presence in Taiwan has also been reduced to reflect the shift of trade towards other Asian countries.
While the South Korean market reopened to Canadian beef exports last year, the effects of the South Korean/U.S. free trade agreement has led to an accelerated reduction of tariffs on U.S. beef which has severely impacted the competitiveness of Canadian exports in the market.
While Canada has actively engaged with South Korea over the past 18 months to negotiate a Canada-South Korea free trade agreement of its own, unfortunately the negotiations have not progressed.
With Canada unable to secure a free trade agreement of its own, future market prospects for Canadian beef are extremely limited in South Korea due to the higher tariff barriers it faces.
Consequently, Canada Beef’s office in South Korea will be closed immediately and future market development work will be conducted with the help of the Canadian Embassy and trade commissioners.
“Based on projected cattle marketing and the wind-up of industry development funds, Canada Beef knows that revenues for industry marketing and promotion activities will be significantly reduced in the next few years,” adds Canada Beef President Rob Meijer.
“Therefore, we are taking proactive steps to ensure Canada Beef’s limited resources are targeted in the right markets and with the right customers to bring the greatest return on producers’ investment.”
In 2012, Canada exported 37,816 tonnes of Canadian beef and veal valued at $175.6 million to Asian markets.
From January to July 2013, Canadian export volumes are trending up 54% and value is trending up 95%.
Canadian beef and veal exports to all markets outside of Canada in 2012 represented 30% of the total carcass value or about $462 per head on average.