AUSTRALIA -FTA WITH SOUTH KOREA.
Thursdays announcement by Prime Minister Kevin Rudd and the President of the Republic of Korea H.E. Lee Myung-bak that negotiations on a Free Trade Agreement (FTA) are to begin marks an exciting new phase in the already strong relationship between the two countries, according to Meat & Livestock Australia (MLA).
Given Korea’s importance as an export destination, the Australian red meat industry strongly supports the launch of negotiations aimed at concluding an inclusive FTA according to MLA Managing Director, David Palmer.
"A comprehensive FTA that further facilitates trade to one of our most important beef customers, presents a unique opportunity," Mr Palmer said.
"Securing a stable trade platform will be of direct benefit to Korean consumers who are demanding reliable, safe, quality product which our industry supplies.
"Our relationship with the Korean industry is already strong, and closer bilateral cooperation will further strengthen this relationship."
During 2008, Australia exported 127,206 tonnes of chilled / frozen beef, 1987 tonnes of lamb, 1181 tonnes of mutton, 241 tonnes of goat meat and 19,423 tonnes of offal to Korea.
These export volumes reaffirmed Korea as Australia’s third largest beef export market - capturing 13 percent of the volume of Australia’s global beef exports. Together, red meat products exported to Korea generated over A$750 million in returns to the industry.
"MLA will continue to liaise closely with industry peak councils and the Australian Government now that FTA negotiations are to commence," Mr Palmer said.
All beef imported into Korea, including that from Australia, currently faces a 40 percent tariff.
The issue of an FTA between Australia and Korea has gained significant importance since the formalisation last year of an FTA between Korea and the US.
Although the Korea/US FTA was signed last April, it is yet to be ratified by either government.
Under the proposed Korea/US FTA, the tariff on US beef into Korea will be reduced from 40 percent to zero over 15 years. Prior to the discovery of BSE in the US herd four years ago, the US was the largest exporter of beef to Korea, a position since taken by Australia.
"An FTA with Korea is an imperative for the Australian beef industry especially in light of the FTA Korea negotiated with the US, which will obviously make Australian beef comparatively less price competitive when it is implemented," Mr Palmer said.
Ends
Released by: Nigel Gosse, MLA Media Affairs Manager – 02 9463 9360.
Background
In cooperation with the Australian Embassy in Seoul and the Department of Foreign Affairs and Trade (DFAT) in Canberra, MLA’s office in Korea has been working on an FTA advocacy programme to position Australian beef for at least parity of access given the outcome from the Korea/US FTA.
MLA has bolstered its marketing efforts in Korea following the recent large-scale return of US beef to that market.
US beef was banned from the Korean market immediately after BSE was discovered in the American cattle herd in late December 2003. Soon after, Australia gained a 75 percent market share of the Korean imported beef market. Prior to the US ban it was 21 percent.
Two recently launched campaigns are aimed at generating long-term loyalty to Australian beef and focusing on families with children.
In a first of its kind in Korea, MLA partnered with Korea’s largest supermarket chain, E-Mart to provide free 2009 calendars to customers that purchase Australian beef in its stores.
Incorporated into the calendar are discount vouchers enabling customers to purchase discounted Australian beef for two weeks in every month during 2009. The calendars also feature recipes for Australian beef.
The partnership with E-Mart was aimed at generating long-term loyalty towards Australian beef.
E-mart sells 600 tonnes of Australian beef each month. The calendar promotion is occurring in all 118 E-Mart supermarkets across Korea, and a total of 42,000 calendars are to be distributed to customers, with each calendar containing $36 worth of vouchers. MLA has covered the cost of printing the calendars, while E-Mart will fund the cost of the vouchers.
The other key campaign is the new Hoju Chungjung Woo ’Kids love beef’ marketing campaign.
The idea for a marketing campaign directed at mothers with young children came from the successful Australian "Kids love beef" marketing campaign.
With the success of the ’Kids love beef’ campaign in Australia, MLA is confident a similar campaign will work in Korea. It is an example of MLA using its marketing resources across markets.
Korean mothers are incredibly particular about what they feed their children and they want to be assured the food they prepare is safe and nutritious.
The new ’Kids love beef’ campaign will be reinforcing the safety and nutritional qualities of Australian beef.. The campaign also includes advertisements in Korea’s leading magazines and newspapers, online advertising, as well as in-store promotions.
MLA’s hugely successful Hoju Chungjung Woo subway station advertising, which is seen by millions of Korean commuters every month, will also be replaced with the ’Kids love beef’ advertisements.
The ’Kids love beef’ campaign was launched in Korea by MLA Managing Director, David Palmer and the former Australian Ambassador to Korea, Peter Rowe on Australia Day.
