Reform In The Australian Dairy Industry Essay

Question:

Discuss about the Reform in the Australian Dairy Industry.

Answer:

Reforms in the Australian Meat Industry

The Australian meat industry is a reputable sector globally. For this reason, any reforms in the industry significantly affect the economy. Recently, two crossbench MPs proposed that Australian grown meat but proposed overseas should be banned from being sold as Australian. In the proposed reform, the MP for Kennedy Bob Katter and the NXT MP Rebekha Sharkie argue that the reform would safeguard investments in local production and maintain high quality standards (Vidot, 2017). Consequently, it would protect the country’s meat industry reputation as it would ensure only quality meat from the country is branded as Australian. For this reason, Anna Vidot explains the details of the reform in an article dubbed “Meat processed overseas, branded Australian faces ban in proposal by Federal crossbenchers”.

Primarily, the reform solicits the interests of various stakeholders in the meat industry. Firstly, the article is of interest to local livestock farmers who export their live animals overseas for processing. In addition, the article would be of significance to international companies that purchase Australian live animals for processing in their own countries. Notably, this lot would be considerably affected by the proposal as they would have to change their brand, something that would adversely affect their marketing and sales. Furthermore, the proposal would cost both Australia and its exporting countries a lot of revenue. For this reason, the article will interest agents from livestock exporters and importers council in the participating economies.

It is imperative to note that the issues arising from the article can be explained using various economic theories. As such, the rationale behind the proposal can be justified using economic concepts. Fundamentally, the main arguments raised in the proposed reform relate to the concept of nation branding. In economics, country branding plays a significant role in international markets. Profoundly, nation branding pertains to the tactical self representation of a state with the intention of developing reputational capital through economic interest promotion both locally and out of the country (Szondi, n.d.). Primarily, it involves the use of tools of imaging to alter the identity, behavior and image of a country in a positive manner. By so doing, the branded commodity has a better chance to compete in the international market because of the reputation associated with that particular country.


In many cases, a country engages in nation branding with the aim of gaining influence in the international market. So far, the Australian economy has branded its products as high quality goods and services. As a result, Australian livestock products have gained international credibility and have created investor confidence throughout the world. In addition, it has allowed for improvement in the ability to win against regional and global businesses (Nason, 2017). Today, Australian livestock products are recognized as superior and, thus, competitive in the international market. Owing to these advantages, the proposed reform seeks to detach from livestock products processed abroad (Daily Mail, 2017). As such, the MPs realize that processing meat products outside the country and branding them as Australian may lead to a compromise on quality. In turn, this may affect the country’s reputation in the international market, something that may lead to significant loss of revenue.

Additionally, the reform is based on the Bayesian model of reputation. According to the Bayesian updating process, reputation is a situation in which buyers have great belief on the ability of a particular seller to provide high quality products (Teacy et al., 2012). Thus, any uninformed party relies on the reputation of the seller to make informed decisions regarding whether or not to consume the product (Cleave et al., 2016). Therefore, branding foreign processed meat as Australian may significantly affect the country’s reputation if their quality is compromised during processing (Cleave et al., 2016). Tainting Australia’s reputation may significantly affect the price that consumers will be willing to pay for products from the country in the future. Consequently, it may affect the nation’s revenue from the global market.

Source: (ABS, 2017).

With regard to the theories stated above, one would support the rationale behind the proposed reforms. Fundamentally, Australian commodities are of high standard. Specifically, the nation has the highest level of food safety programs in the world. In addition, the nation boasts one of the highest levels of animal welfare globally. It is worth noting that allowing foreign companies to brand processed products outside the country as Australian would significantly affect the nation’s image and reputation. Over time, a consistent compromise on quality would permanently damage the status of the country’s goods and services in the international market. Eventually, it would adversely affect the country’s competitiveness. Furthermore, it would affect the level of exports from the country; thereby negatively influence the level of growth.

In this regard, it is crucial that the government implements the reforms as proposed by Sharkie and Katter. It is recommended that the country detaches itself from foreign processed commodities by banning the branding of Australian grown meat as Australian if it is not processed within the country (Vidot, 2017). However, during branding, the government may allow the processing company to mention that the meat originates from Australia, but processed in another country. This way, the nation can benefit from the fact that it has been mentioned as a producer of livestock, but detach itself from any complications that may arise during processing and marketing. Besides, it can maintain high reputation for its locally processed meat exports.

Meat export from Australia

Area

Chilled beef/veal

Total beef/veal

Buffalo

Mutton

Lamb

Goat

Pork

Fancy meats

Total

European Union (EU)

676382

730129

0

254547

205291

0

0

16599

1206566

Other western Europe

25229

25229

0

1967

58335

0

0

0

85530

Eastern Europe

0

0

0

19669

1161

0

0

3000

23831

USA East Coast

2280416

7782332

0

219652

1148949

337811

0

167227

9655972

USA West Coast

626606

3611614

0

198639

564781

88542

0

42457

4506033

Canada East Coast

18727

734327

0

110622

169500

71847

0

24489

1110784

Canada West Coast

54069

75458

0

0

292008

56164

0

18912

442542

Japan

4526612

13042930

0

124204

230033

10729

0

972433

14380328

Korea

1297736

6275583

0

52496

297038

96246

1319

1070967

7793649

Taiwan

283203

1519178

0

183453

70432

228512

0

110898

2112473

Other Asia

791809

8160812

0

1596332

1972370

624

711790

3159332

15601259

Middle East

470981

1317954

0

1404760

2346866

0

0

515120

5584699

Other destinations

85941

324900

0

374477

861175

93937

218917

1300355

3173761

Total Aus

11137712

43600446

0

4540818

8217938

984412

932027

7401789

65677429

Source: (Australian Government Department of Agriculture and Water Resources, 2017).

All things considered, the proposed reforms are consistent with economic policies pertaining to reputation and nation branding. Thus, the Australian government would be justified to implement the reforms as suggested by the two members of parliament. It is worth noting that the Australian government has invested a lot to maintain a nation brand that guarantees high quality and safe meat. In addition, the nation has a great reputation to uphold in the global market. For this reason, it should ensure that all products branded as Australian are of high quality to avoid losses in the future. This way, the Australian government would successfully safeguard the high quality standards and reputation that the Australian meat products command in the international market.

Reference List

7215.0 - Livestock Products, Australia, Jun 2017. (2017). [Online] Australian Bureau of Statistics. Available at: [Accessed 10 August 2017].
Australian red meat export statistics. (2017). [Online] Australian Government Department of Agriculture and Water Resources. Available at: [Accessed 10 August 2017].
Bid to ban beef from live exported cattle being sold as ‘Australian’ product. (2017). [Online] Daily Mail. Available at: [Accessed 10 August 2017].
Nason, J. (2017). Bid to ban beef from live exported cattle being sold as ‘Australian’ product. [Online] Beef Central. Available at: [Accessed 10 August 2017].
Szondi, G. The role and importance of country branding - how to manage the reputation of countries. [Online] Tunisia Investment Forum. Available at: [Accessed 10 August 2017].
Teacy, L., Luck, M., Rogers, A., and R. J., Nicholas (2012) ‘An efficient and versatile approach to trust and reputation using hierarchical Bayesian modelling’, The Australian Feminist Law Journal, vol. 193, , pp. 150-167.
Vidot, A. (2017). Meat processed overseas, branded Australian faces ban in proposal by Federal crossbenchers. [Online] ABC News. Available at: [Accessed 10 August 2017].

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