Beef and lamb have not been commonly available to Chinese consumers; the reasons for this include:
- China has no tradition of differentiating between lamb and mutton (mature sheep) or valuing high quality lamb.
- In the Chinese language, lamb, mutton and goat meat are all referred to as “yang rou” and lamb and mutton are both referred to as “sheep meat”.
- Cows have been traditionally used as a workhorse to plough fields, not for edible purposes.
- China may be home to the largest flock of “sheep” in the world, though more than half of these are in fact goats and most sheep are bred for wool, with little available for the dining room table, especially lamb.
- Consequently, the domestic price for beef and lamb remains almost double that of pork and chicken.
Despite the relatively high volumes of product in the market, consumers are unfamiliar with beef and lamb as a main menu item. The major consumption of sheep meat is found in western China where large Muslim populations exist and it is a traditional food of ethnic minorities such the Hui, Mongolian’s and Uighur group.
Getting your product into market
Distribution and sales of imported meat continues to be focused on the demand from relatively affluent first-tier and major cities on the eastern coast. North-eastern cities, such as Dalian and Harbin where low-end beef and lamb cuts are popular, are traditional ports of entry and remain the hubs for large volume importation.
Many distributors in China also act as importers. Effective distribution, especially outside of the main centres, is still an industry in which foreign suppliers struggle to compete and more often than not choose to partner with local entities for geographical coverage. The further afield a product travels, the more steps there are in the value chain, in which numerous sub distributors with local relationships become key. Ownership of product may change hands many times before it reaches the final client.
A number of distributors opt to supply retailers, hotels and restaurants directly in major cities and wholesale via sub-distributors to less developed regions. Few distributors have genuine national coverage, though many increasingly sophisticated operators service the major centres and a growing number of second- and third-tier cities and provinces.
China’s fragmented logistics industry has hindered cold-chain development for high-value temperature sensitive product, meaning the vast majority of Chinese people still buy fresh meat from traditional local markets.
Few food companies own or operate their own truck fleets, and most still tend to outsource this service to specialist providers with regional distribution centres. However, some food companies now have increasing investment and capability in cold stores and, in some cases, world class refrigeration.
Regulations
The New Zealand government negotiated protocols for sheep and beef imports in 2003. At the time, it was understood that these protocols included both frozen and chilled meat. However, AQSIQ is now referring to a clause that lists the temperature at which frozen meat should be stored, and suggesting that the protocols therefore only include frozen meat (no similar temperature is listed for chilled meat). The New Zealand Government is currently undergoing meetings with AQSIQ, hoping to address this issue.
In recent years, the Chinese government has enforced regulations, supervising standards and labelling for foods. It is critical for New Zealand exporters to understand the relevant rules if they are looking at a long-term position in China. There are numerous laws and regulations relating to imported food and beverage products in China, which are being continuously updated and revised. There are also documentation requirements that must be fulfilled in order for New Zealand exporters to reap FTA tariff advantages.
When negotiating supply contracts, and before beginning the export process, companies are advised to meticulously consult with their importer or distributor.
