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Trump, Donald

Trump's Trade War Fails to 'Steak' a Win with Local Retail Giants

Strategic Insights

— 2 min read

Major Australian supermarkets and McDonald's have reaffirmed their commitment to sourcing beef from local producers, despite the federal government's decision to loosen restrictions on US beef imports. The retailers, including Coles, Woolworths, and Aldi, have stated that they will continue to source 100% of their fresh meat from Australian farmers, with no plans to change their current purchasing patterns. This move contradicts US President Donald Trump's claims that the US beef industry will sell "so much" in Australia after the government revised restrictions on US beef imports.

Key Takeaways:

  • Coles, Woolworths, and Aldi currently control over 75% of Australia's supermarket trade combined and have vowed to source 100% of their fresh meat from Australian farmers.
  • McDonald's, which accounts for 19% of Australia's fast food market, buys around 80 million kilograms of local beef every year and has no plans to change its purchasing patterns.
  • The federal government's decision to loosen restrictions on US beef imports, allowing the import of cattle born or raised in Mexico or Canada, is unlikely to significantly increase shipments, given that local beef producers offer high-quality products at competitive prices.
  • The revision of biosecurity settings has sparked controversy, with the Greens and Labor voting to block a Nationals-led Senate inquiry into the decision.
  • The US beef industry is struggling, with the country's cattle herd at a historically low ebb, and supply tight and prices high.
  • Australian beef exporters sold almost 400,000 tonnes of beef to the US last year, worth $4.1 billion, while only around 260 tonnes were sent the other way.
  • The loosening of biosecurity rules may lead to increased exports of Australian agricultural products, including red meat and red wine, as Trade Minister Don Farrell believes the new import duties could make Australian agricultural products more competitive in the US market.

Statistics:

  • Major Australian supermarkets and McDonald's control over 75% of Australia's supermarket trade combined.
  • McDonald's buys around 80 million kilograms of local beef every year.
  • The US beef industry is struggling, with the country's cattle herd at a historically low ebb of 94.2 million head.
  • Australian beef exporters sold almost 400,000 tonnes of beef to the US last year, worth $4.1 billion.
  • Only around 260 tonnes of US beef were sold to Australia last year.
  • The new US tariffs, which are set to take effect on August 7, will see Australia's trade with the US potentially become more competitive.
  • Australian red wine exports to the US are also set to benefit from the revision of biosecurity settings.

Sources:

  • "Trump's trade war fails to 'steak' a win with local retail giants" by Jason Gregory, Australian Financial Review (no date mentioned).
  • "Coles and Woolworths vow to keep buying local beef" by Jason Gregory, Australian Financial Review (no date mentioned).
  • "McDonald's to keep buying Aussie beef despite US trade deal" by Jason Gregory, Australian Financial Review (no date mentioned).
  • US Agriculture Department report (no date mentioned).

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