051219 Canadian Beef Back On Sale In Japan

December 27, 2005

Calgary, Canada - Canadian beef was back on some supermarket shelves in Tokyo on Tuesday following the lifting of a two-year ban on imports, but it may take years to rebuild Japanese consumer confidence in North American beef.

Wes Sawatzky, head of Alberta's economic development office, says the mad cow scare has left Japanese consumers wary of beef in general and that Canadian exporters may have to discount their prices to gain a foothold.

"Consumers will need something to attract them to the product," Sawatzky said recently from Tokyo. "We're not as well known as American beef, so special efforts will be needed to attract the interest of consumers given the natural hesitation there is in the market about food safety."

Hanamasa Co., a Tokyo-based operator of supermarkets and restaurants, said it had imported about eight tonnes of beef from Ontario to be sold Tuesday and Wednesday at its 10 outlets in the Tokyo area.

The meat was priced at about the same before the import ban, said company official Hiroko Abe, adding that Hanamasa plans to begin full-scale sales of Canadian beef in late January or February.

Canada's ambassador to Japan said he is confident that Canadian beef will regain its popularity following the easing of the ban.

"We are very confident that this market will strengthen as it did in the past and that the Japanese will again merit well from good quality Canadian beef," Ambassador Josef Caron said as he attended a ceremony at one of the Tokyo supermarkets.

"It will take a little bit of time, but it will come back," he said.

Canada was a small player in the Asian market before bovine spongiform encephalopathy (BSE) was discovered in an Alberta cow in May 2003.

Canadian beef began moving into Japan late last week, more than 30 months after international borders slammed shut. That ban was partially lifted Dec. 12, when Japanese officials agreed to allow beef from North America back into the marketplace - provided the beef came from animals under 21 months.

It's believed the youngest cattle are at lowest risk of developing BSE.

Officials warn that regaining sales could be a slow process.

"It could take for two to four years to rebuild our market share," said Sawatzky, commenting before the first Canadian beef went on sale again. "Particularly on the retail side it will take some time before retailers feel comfortable. But on a positive note, we're working with food service and some retailers who believe our beef is safe."

Entry into Japan is considered key to the long-term recovery plan of Canada's battered beef industry, which has suffered $7 billion in lost exports since 2003. Cattle officials have pinned their hopes on a growing appetite from Pacific Rim countries to help reduce the reliance on the U.S. market, which gobbles up the vast majority of this country's beef exports.

Canada hasn't had to resort to discount pricing when it moved back into other international markets, but Japan is a special case.

There have been 21 cases of mad cow disease reported in Japan since 2001, and consumers have been suspicious of the safety of beef after their own government officials covered up several cases. All domestic animals are now tested for BSE, but Japanese regulators have agreed to accept proof of age with North American meat.

Robert Meijer of Cargill Foods, which shipped 3.4 tonnes of beef to Japan on Dec. 23, says regaining the trust of consumers will take time.

"We're going to have to prove ourselves yet again," said Meijer. "I think we'll be able to do that. For the benefit of the industry, we're not going to give this product away, but we may have to get a little creative with our pricing, there's no doubt."

Japan historically imports up to 900,000 tonnes of beef a year and industry officials are hoping that regaining access there will influence regulators in China, Taiwan and South Korea to also accept Canadian beef.

U.S. producers expect to ship 100,000 tonnes of beef to Japan in 2006 - one-third of what they were exporting prior to the BSE ban. American officials expect rebuilding sales will take at least three years.

The Japanese market was worth up to $150 million per year to Canadian beef producers. Before the ban, Canada exported between 10,000 and 20,000 tonnes of beef per year to the country.

Export officials forecast $800 million in annual processed shipments to Asia by 2010 - a fourfold increase from 2002, the last full year for trade before the mad cow crisis.

Arno Doerksen, president of the Canada Beef Export Federation, agrees that there may have to be short-term discounts to gain ground in the competitive Asian marketplace.

"Over time I expect that would disappear," said Doerksen. "The indications we've had out of the Asian market is that there's been a real shortage because of North American product not getting in there. I would think any discounts that would be encountered going into the market will be gained back."


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