Scoping study to strengthen Indonesian red meat supply chain traceability systems - full report

Summary

A report from Food Innovation Australia Limited estimates $272 million of fraudulent red meat products enter all export markets each year e.g. mislabelled or misleading products. This costs the industry 2% of the trade value of exports to Indonesia.

In 2019, MLA received an Australian Government grant as part of the Indonesia Australia Partnership on Food Security in the Red Meat and Cattle Sector. MLA used the grant to undertake a scoping study to strengthen Indonesian red meat supply chain authenticity and traceability systems to address food fraud.

The project studied an existing commercial Australia-Indonesia supply chain, which highlighted the complexity of supply chains in the market, as many parties are involved in the import and export of products from Australia to Indonesia and the market for authenticity and traceability systems is still maturing.

Objectives

The purpose of this project was to undertake a scoping study to strengthen Indonesian red meat supply chain traceability systems. The project reviewed the current situation to identify options to improve industry self-regulation and better support supply chain traceability and food authenticity systems.

Key findings

The scoping study identified challenges and opportunities regarding how the Indonesian red meat supply chain uses authenticity and traceability systems:

• Indonesia is placing increasing importance on the issue of food fraud, food security and there is a drive towards becoming self-sufficient in beef production.
• The Indonesian policy and regulation landscape is complex and ever-changing and service providers still have a lot to learn about the agriculture sector and how they can add value by reducing food fraud.
• Major retailers are driving the adoption of authenticity and traceability systems.
• Before implementing an authenticity and traceability system, businesses must have a thorough understanding of their consumer's willingness to pay for this additional service.

Benefits to industry

The drivers and benefits of mitigating food fraud in the Indonesia supply chain include:

• improved productivity gains
• risk mitigation and biosecurity
• recognised brand name protection that gives competitive advantage
• increased access to markets where traceability is mandatory.

MLA action

Since this report was published, market research has begun to determine which consumers and markets actually desire and are willing to pay for product integrity protection systems. Findings from this work will be available in September 2020.

Trials are underway using MLA Donor Company funding to implement customised data integration systems for three separate Australian exporters with supply chains into Singapore, Japan, the United Arab Emirates, China and the United States. Findings from these trials will assist MLA and industry in better understanding the real value these systems may or may not bring to the supply chain.

To help industry and service providers stay abreast of this topic, a Red Meat Traceability Info Hub has been established. Information has been collated on topics such as shelf life management, supply chain information and on-farm data. Resources include podcasts, webinars, media articles and project reports. Access to the Hub can be requested by emailing redmeattraceability@mla.com.au.

Future research

Australian red meat exporters are slow to adopt traceability systems because there is a lack of clear value gain. Further work is needed to communicate the clear benefits to supply chains.

Additional work is required to better understand the best way to incentivise cooperation across supply chains and sectors to improve data transfer, which is critical to documenting and tracking the authenticity of red meat products.

Indonesian case studies would be useful to validate the traceability system and improve the understanding of the associated social and commercial benefits.