OK, we think it might be time to re-visit the refrigeration questions people have in relation to the countries that receive live animals from Australia.
Firstly, let’s look at the GCC (Gulf Cooperation Council which includes the following countries: UAE, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait). It’s important to note that the GCC states (where most of Australia’s live sheep exports go) are:
- Highly urbanised – the average across them is 86% urbanisation;
- Young – approximately 28% of the population is in the under-15 age bracket;
- Rich – with an average GDP per capita in 2011 on a purchasing power parity basis of USD44,670. In Australia in 2011 it was USD40,800.
- Growing – the population is expected to grow from some 600 million currently to 870 million by 2025.
A review undertaken in 2011 by Market Vision Research & Consulting Services, a company based in Dubai noted that in the UAE, Kuwait, Qatar and Bahrain there was near universal household ownership of refrigerators, at 99.5%. Freezers also have a high penetration (73%), among households.
Alpen Capital, an investment bank, largely GCC states focused, undertakes an annual survey of the GCC retail industry. It forecasts that by 2016 GCC state retail sales will be US$270 billion per annum (in Australia retail sales are currently about A$200 billion per annum). Food retail sales in the GCC states are expected to grow at a compound annual growth rate of 9 percent per annum between 2011 and 2016. This is a faster rate than is expected in Australia.
The MLA reported that “One of the key trends identified in the Middle East is the increasing popularity of western style supermarkets and hypermarkets in place of traditional markets, or souks.”
It is clearly nonsense to justify Australia’s live sheep trade on the basis of lack of refrigeration in the GCC states.
But what about Indonesia
In relation to Indonesia, it’s important to note that a lot of the beef from animals exported live, ends up in the restaurant and hotel market, not wet markets.
It’s also important to note that Indonesia would not be our only market for chilled and frozen beef if we transitioned away from the trade, but notwithstanding that, let’s look at the refrigeration status in Indonesia.
According to the Indonesian Association of Electronics Entrepreneurs (quoted in the Australian newspaper of 14 June 2011) about 60% of Indonesian households have “at least one refrigerator”. Others claim the coverage is less. For instance, Euromonitor International, a major international strategy researcher for consumer markets, estimates the household penetration rate of fridge freezers will have grown to 45% by 2017, a doubling of the penetration rate since 2012.
Whatever is the actual penetration rate, all analysts agree that whereas wet markets still play a role in beef retailing in Indonesia, as the economy grows and people enjoy rising personal incomes, and consistent with the pattern in other developing countries, they will demand higher quality meat products sold in convenient ways in modern retail outlets. We need to be ready for this.
The Indonesian economy is growing rapidly, at about 6% per annum over the last 10 years. As reported by the 2011 Handbook of Energy and Economic Statistics of Indonesia, sales of electricity to the household tariff segment of the electricity market grew by 96% in the 10 years from 2000/01 to 2009/10. Over the same period sales of electricity to the commercial sector grew by 157%
A 2012 report by the US Department of Agriculture, (Indonesia’s Modern Retail Sector: Interaction with changing food consumption and trade patterns), notes that notwithstanding the current traditional retail outlets and wet markets, there is increasing dairy and meat consumption in Indonesia and there is an increasing share of food products being sold through supermarkets, hypermarkets, and convenience stores.”
Take action and let the government know you want to see a transition from live exports to a chilled and frozen meat trade. Head to www.wspaliveexports.org.au and take one minute to sign up. Thanks!