Question:
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.
