2018: Peloris featured in AFDJ “Local producers get China ready for tariff cuts”
With China extending tariff cuts at the end of the year to a range of Australian fresh fruit and vegetables, nuts, seafood and pork, local producers looking to access this lucrative market are being urged to start planning now.
Demand for selected Australian fresh food is expected to soar when tariff cuts of up to 30% on some products come into effect in 2019.
Peter Verry, director of leading Australian cold chain consultancy, Peloris, stressed the importance of allowing plenty of time to prepare for exporting to China.
“Typically it can take up to 12 months or even longer to receive the appropriate credentials and authority to export certain products to China,” he said.
“Failure to adequately understand China quarantine and customs requirements resulted in 160 Australian manufacturers being placed on a black list and 406 shipments dumped or returned in 2017 because of non-compliance. In some cases the mistake was as simple as a non-compliant product label.”
Mr Verry said demand within China for Australian produce, which is highly prized by the Chinese for its image of being green and clean, meant China was now Australia’s largest food export market.
“We have witnessed an unprecedented demand for products such as fresh milk (which sells for more than $10 per litre) and fresh beef over the past three years.
“The cuts in tariffs, which will come into effect in January 2019, can only benefit producers who are prepared to invest the time and effort to get their goods on the shelves.”
The China Australia Free Trade Agreement (ChAFTA), which came into effect in 2015, is a phased program of tariff reduction for goods and services.
Mr Verry said one of the greatest hurdles facing exporters was developing a market profile.
“There are 34 provinces, municipalities and territories in China and it is unlikely an Australian producer will have the resources to service demand in all those areas. We suggest looking at regions and cities where there is limited import competition and start to build a profile in anticipation of the tariff cuts, leveraging off Australia’s reputation for quality produce.
“Doing business in China is rewarding but requires significant advance planning and commitment, and there is a risk that if producers don’t start laying the groundwork now they will miss out altogether. Issues such as protecting intellectual property and cultivating appropriate partnerships can be time-consuming but are worth the effort.”
On January 1, 2019 the following cuts will apply to fresh food:
- Elimination of the 10 to 30 per cent tariff on fruit (except citrus) by 1 January 2019
- Pork Tariffs of up to 20 per cent will be eliminated by 1 January 2019.
- Elimination of the 10 to 13 per cent tariff on all fresh vegetables by 1 January 2019.
- Elimination of eight to 15 per cent tariff on selected seafood.
A full list of tariff cuts can be found here:
Information on import shipment failures and import watchlist can be accessed at the following websites (Chinese only – please call Peloris for additional information): http://jckspaqj.aqsiq.gov.cn/jcksphzpfxyj/jjspfxyj
To learn more about how you can benefit by working with Peloris, contact us.
*This article was first published in Australasian Farmers’ & Dealers’ Journal.