Three-way fight for lamb share
British lamb exporters have been warned they will have to up the ante if they are to win European market share from an increasingly aggressive New Zealand marketing lobby.
Against the background of stalled WTO trade talks, both NZ and Australia are seeking increased quota allocations under the long-standing voluntary restraint agreements (VRA).
In the meantime, Meat New Zealand in particular is set on gaining market share in France by moving increasingly from frozen product to chilled cuts targeted at specific market opportunities and seeking to extend its season. It is also switching more of its product to Germany and Holland.
Speaking at last week's major producer event, Sheep 2006, at Malvern, Worcestershire, MLC and EBLEX export manager Jean-Pierre Garnier issued a blunt warning that, against recent rapid growth in lamb exports to Europe - partly on the back of resumed beef export trade - there were two "black clouds" hanging over the trade, notably Meat NZ's targeting operations and a reduced French consumer demand generally. The NZ moves were threatening to undermine the EU market, he warned.
This led Peter Morris, chief executive of the National Sheep Association, to suggest British operators needed to become "more sophisticated" in their schemes to increased added-value sales abroad. "There is a lot of potential in these markets. We already export around 85-90% of our lamb to the EU in the form of cuts. Maybe we need to become more clever in targeting these," he said.
The last thing the British market wants to see is a reduction in the prices paid for NZ lamb in UK and other EU markets. This would simply drag down the price of British lamb overall, he added.
Lamb exports to Europe last year amount to around three out of 10 animals and remained a key factor in underpinning the UK market.
Exports had risen by 16% to 32,000t in the first five months of this year on top of an 18% gain in the previous year, marking a significant swing back to pre-FMD crisis levels. In spite of the relatively weak consumer demand in France, which accounts for about 70% of the trade, Britain was steadily gaining market share there against, for example, Irish supplies.
Anne Berryman, European regional manager for Meat NZ, played down claims that it was intent on undermining British export opportunities and pointed out that it had undersupplied the VRA of around 228,000t last year by some 3,000t. She said NZ and UK were working together to achieve fairer prices for primary producers.
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