Assurances of quality and authenticity are the foundations of long-run value creation. That’s BeefLedger’s core ethos.
As we begin our next Market Roadshow through China, we remain committed as ever to demonstrating the high quality of Australian beef (and complementary products), and the centrality of credentialing technologies to bolstering value (and pricing).
Premium Pricing Deserves Authenticity
Premium imported beef (or what is sold as imported beef) commands a premium price in China’s supermarkets. This applies whether it’s in “bricks and mortar” stores or online. As consumers pay premium prices, they rightfully expect to get what they pay for. Unfortunately, so far, this is difficult to be confident about.
In this first image, we see product labelled as Australian 270-day grain fed eye fillet being sold in a Guangzhou supermarket for 696RMB per kilogram. That’s about US$145 / kg.
Another illustration of premium pricing is the market price for Australian M7 Wagyu. It’s shown below priced at 1,276RMB / kg (AU$266).
Counterfeiting Risks and Value
Recent analysis from PWC estimates that every second kilogram of beef sold in China as Australian isn’t Australia. That’s costing Australian producers an estimated AU$2 billion. China’s leading academic expert on the nation’s beef market, Professor Cao Binhai, has recently observed that beef counterfeiting remains a significant problem. He describes the use of pork and duck breast as common substitutes. His research estimates that fake meat is 3-5 times greater in volume than the genuine article.
Discussions with Ian Lahiffe, a cattle sector analyst based in Beijing, indicates that as much as 90% of beef in the China market is counterfeit in one way or another. About 30% isn’t from the country it claims to be from. Another 30% isn’t the cut of meat advertised – unsurprisingly cheaper cuts are sold as expensive cuts to an unsuspecting and naive consumer. The last 30% just isn’t beef at all.
Healthy China 2030
There’s zero tolerance from Chinese authorities on the question of food fraud and safety. In 2016, the National Government launched the Healthy China 2030 Strategy, which seeks to place the health of the national population at the heart of all policy actions.
Article 15, reproduced above (with key passages translated), shows a comprehensive root-and-branch approach from the China National Government to use digitalisation as a central plank in supply chain transparency, supervision and the building of systemic trust.
BeefLedger is fully aligned with this policy commitment, and is working with Chinese partners and authorities to build a first version “Standard” that can deliver on the objectives of Healthy China 2030.
Showcase Dinner at the Crowne Plaza, Shanghai
BeefLedger Beef was prepared 6 ways by 3 executive chefs – one from Crowne (shown in image 1: Mr Bill Shen), one from the Intercontinental and the last the head chef and owner of 3 top-end restaurants in Shanghai.
