Beef

Australian beef is constrained by a small High Quality Beef (HQB) quota in the EU. Australian beef in this market also faces competition from the domestic market (which has a marked preference for locally sourced product) and other more competitive South American suppliers, such as Uruguay, Brazil and Argentina.

Consumption in this region is expected to slowly fall over the long-term, while a larger decline in production is predicted as a result of the decreasing profitability and government support of the industry. Consequently, imports are forecast to rise.

Market access

Beef (includes beef and veal) from non-EU country suppliers can enter the EU in several ways including:

HQB tariff quota

Under the HQB, or 'Hilton Beef' quota, 65,250 tonnes (from seven nominated sources) can enter the EU on annual basis. The beef must be high quality and can comprise bone-in or boneless cuts of fresh, chilled or frozen beef from Australia, NZ, the US and Paraguay, but only chilled product from Brazil, Uruguay and Argentina. A customs duty of 20% ad valorem of the CIF value applies.

Australia's share of this quota is 7,150 tonnes. DAFF administers and distributes the quota to eligible exporters based on their export performance. Buyers who negotiate to purchase Australian beef are supplied with a Certificate of Authenticity, which provides the concessional 20% customs duty up to the 7,150 tonne limit.

EU product requirements in relation to Australia

Beef supplied to the EU from Australia must meet the following specifications under the HQB quota:

• Selected cuts obtained from steer or heifer carcases.
• Classified under one of the following official categories Y, YS, YG, YGS, YP or YPS as defined by AUS-MEAT.
• Beef colour shall conform to AUS-MEAT meat colour reference standards 1B-4.
• Fat colour to AUS-MEAT fat colour reference standards 0-4.
• P8 fat depth to AUS-MEAT fat classes 2-5.

Australian companies must have an in-house program to ensure all carcases are assessed to comply with the HQB requirements. Australian beef exported to the EU must come from cattle raised on properties where all cattle are individually identified and proven to have never been treated with hormone growth promotants (HGPs) (other than breeding bulls).

Outside the HQB quota arrangement

Importers may pay full import tariffs, which consists of a customs duty and a specific import customs duty. In total this is much higher than the 20% duty applied under HQB.

A reasonably large quantity of chilled beef has entered the EU, principally from Brazil (which only has a 5,000 tonne HQB quota) and importers have paid the full levy of 12.8% of the CIF value plus €3,034 per tonne.

GATT frozen beef and veal quota

Beef products entering under this quota (53,000 tonnes) incur a 20% ad valorem customs duty, but no specific import duty.

The quota is operated annually and the main difference between this quota and the HQB quota is tha it must be frozen boneless product. Also, the quota is distributed among member state importers/operators, with provision to accommodate new entrants.

Two sub-quotas also operate. The first is allocated to traditional importers of GATT - the second to operators approved in advance and who have lodged half-yearly applications with performance bonds, which are refunded when customs documents are tendered following an import.

An application security fee of €6/100kg and licence security fee of €12/100kg are also applicable.

Frozen beef for processing import tariff quota

This annual quota covers the manufacturing sector and is often referred to the 'System A/B' or manufacturing beef quota. It totals 63,703 tonnes of either frozen bone-in forequarters or frozen boneless cuts, thick or thin skirt.

It can be used in two types of processed products - 50,000 tonnes for A products and 13,703 tonnes for B products.

The scheme operates on an application system with a 20% duty rate for System A and a 20% pluce reduced base specific duty for System B. An application security fee of €6/100kg and licence security fee of €12/100kg are also applicable.

Frozen thin skirt quota

A quota of 1,500 tonnes may be imported free of specific import customs duty, but a 4% ad valorem customs duty applies. Of the 1,500 tonnes, 700 tonnes are reserved for Argentina and 800 tonnes for other non-EU countries.

HQB (grainfed) tariff quota

A 20,000 tonne (product weight) import quota for HQB was opened 1 August 2009. The in-quota import duty is 0% and is operated on an annual basis (via licences awarded to EU importers).

The quota applies to high-quality fresh, chilled or frozen beef that fulfils the following requirements:

• Beef cuts are obtained from heifers and steers less than 30mths of age, fed a diet, for at least that last 100 days before slaughter, containing not less than 62% of concentrates and/or feed grain co-products on a dietary dry matter basis that meet or exceed a metabolisable energy content greater than 12.26MJ/kg of dry matter.
• These heifers and steers shall be fed, on average, no less than 1.4% of live body weight per day on a dry matter basis.
• Carcases are evaluated by an evaluator employed by the national government who bases the evaluation, and a resulting classification of the carcase, on a method approved by the national government.
• The national government evaluation method, and its classifications, must evaluate expected carcase quality using a combination of carcase maturity and palatability traits of the beef cuts. Such an evaluation method of the carcase shall include, but not be limited to, an evaluation of the maturity characteristics of colour and texture of the Longissimus dorsi muscle and bone and cartilage ossification, as well as an evaluation of expected palatability traits, including a combination of the discrete specifications of intramuscular fat and firmness of the Longissimus dorsi muscle.

Australia's application for access to this quota was approved by the European Union on 20 January 2010.

Red Meat Market Report

Read more about the European beef market in the Europe Red Meat Market Report

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