Embargoed until 00.01HRS Thursday 8 October 2009
Report reveals negative economic impact of Australia’s live sheep
export trade
Trade distortions stifle the more profitable sheep meat processing industry
A report launched today reveals that there are potential value adding opportunities
being lost in Australia due to trade distortions in the live sheep export trade.
The report, produced by ACIL Tasman, analyses the economics and policy settings
of the live sheep export trade from Western Australia and shows that a sheep
processed domestically is worth 20% more to the Australian economy than one
exported live. This is due to the capacity to add value in Australia.
For every $100 of output created by the Western Australian live export industry the
State’s Gross State Product (GSP) is $81 higher, but for every $100 created by the
Western Australian meat processing industry it is $101.50 higher.
However, the research illustrates that trade distortions benefit the live export trade
over the domestic meat processing industry. The import of live Australian sheep is
heavily subsidised by some Middle East governments, whilst frozen sheep meat
attracts a 5% tariff in most major Australian live sheep importing countries.
The research shows that a cessation of the live sheep trade could benefit the
Australian economy – through an increase in the level of substitution between
Australian live sheep and Australian processed sheep meat in the major importing
countries.
An increase in substitution would prevent importing countries seeking live imports
from elsewhere and ensure that full value adding opportunities can be captured by
the WA economy. In particular, this approach could benefit WA towns where sheep
meat processing plants are already located, such as Australind, Bunbury, Coolgardie,
Esperance, Geraldton, Gingin, Hyden, Katanning, Kellerberrin, Narrikup, Narrogin,
Tammin, Waroona and Woodanilling.
A number of strategies could be used to achieve this substitution, including: lobbying
to reduce the subsidies applied to live sheep or applying them to processed products
too; removing the 5% tariff on frozen sheep meat; greater dedicated marketing by the
Government and industry to promote Australian processed sheep meat products;
and/or vertical integration between the WA sheep meat industry and the Middle East.
The meat processing industry has backed the report’s findings. Grant Courtney of the
Meatworkers Union comments: “Our members are experiencing the negative impact
of the live sheep export trade firsthand. Over the last 30 years the meat processing
industry has suffered the loss of 40,000 jobs and 150 processing plants. We know
that many plants are currently working at only 50% capacity and that many workers
are only able to work three days a week. We urge the Australian Government to take
the findings of this report on board.”
The ACIL Tasman report was commissioned by the World Society for the Protection
of Animals (WSPA). Emily Reeves, Programs Manager, comments: “This research
demonstrates that, with a practical and rational approach, it is possible to create
benefits for both the Australian economy and Australian animals through the phasing
out of the live export trade.”
“It demonstrates that lobbying to reduce the current trade distortions between chilled
meat and live animals is in the interests of the WA economy. Meat processors,
unions, animal welfare groups and WA farmers could work together to improve value
adding opportunities in the WA sheep meat industry and achieve sustainable animal
welfare improvements.”
Ends
Mark Barber, Senior Consultant (Agribusiness), ACIL Tasman Pty Ltd, will be
available for interview on Thursday 8 October. Please contact Mark on 0427
603 433.
Notes to Editor
1.
For a full copy of the report - Australian live sheep exports: Economic analysis
of the impacts of ceasing the live sheep trade. ACIL Tasman, November 2009
–
2.
In 2007-2008, Australia exported around 4.1 million live sheep, valued at
approximately $280 million. Most sheep are destined for markets in the
Middle East. Saudi Arabia, Kuwait, Jordan, Bahrain and Oman together
account for 80 per cent of the total live sheep exports from Australia.
3.
For further information on Australia’s meat processing industry, contact Grant
Courtney of the Meatworkers Union on 0417 118 945.
4.
For further information on animal welfare, contact Louise Fitzsimons, WSPA
Communications Manager on (02) 9902 8013 / 0414 775 275 or at
louisefitzsimons@wspa.org.au.
NEWS 
