Domestic firms seek to take bite out of imported meat

09:25 | 20/06/2018 Trade

(VEN) - The domestic animal husbandry sector, concerned about the low-cost of imported products flooding the domestic market, is turning to closed value chains models to increase competitiveness. 

domestic firms seek to take bite out of imported meat
Self-sufficient farming models enable businesses to reduce production costs and create competitive products

Increased imports

General Department of Vietnam Customs data show that Vietnam imported 24,570 tonnes of meat worth US$38.9 million in March 2018, a rise of 94.1 percent in volume and 67.3 percent in value compared with February.

Imported pork products are sold at about VND39,000 per kg; buffalo meat and beef at VND105,000 per kg; poultry at VND23,000 per kg. Meanwhile, domestically produced pork products are sold at VND80,000-90,000 per kg, double the price of imported pork.

Most restaurants and hotels choose imported meat over domestic products not only due to the major difference in price but also because domestic meat is yet to convince them in terms of quality. Meat products imported via official trade channels from the US, Australia, the Republic of Korea and the Netherlands attract consumers with the clear information about content and origin on their labels and brands, as well as quality commitments.

Competition pressure

In Vietnam, livestock farmers have to import most input materials, from breeding stock and feed to veterinary medicines, hampering their ability to compete with imported products in terms of price.

In addition, according to Nguyen Dang Vang, President of the Animal Husbandry Association of Vietnam, in other countries, livestock farming, as well as cattle meat and poultry processing, has been specialized and automated at a high level.

This competition pressure will increase further when import tax rates applied to meat products are reduced to zero percent under the terms of the free trade agreements (FTAs) that Vietnam has signed, especially the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which could flood the domestic market with livestock products of Canada, Japan, and Australia.

There is growing awareness that for the domestic animal husbandry sector to compete with imported products, it must build self-sufficient farming value chains, from the supply of feed and breeding stock to the construction of farms and processing facilities, and distribution networks.

The C.P. Vietnam Corporation has adopted such a model, investing strongly in the production of animal feed, which accounts for 65-70 percent of its meat production costs. Bel Ga Joint Stock Company, De Heus Company Limited and San Ha Company Limited have joined hands to create a self-sufficient chicken breeding chain, with De Heus supplying feed, Bel Ga supplying high-quality breeding stock, and San Ha responsible for sales. This cooperation model enables the three companies to create chicken products at reasonable costs to withstand competition with imported products.

In addition to competition with imported meat in terms of price, experts are advising domestic animal husbandry businesses to seek food safety certifications in order to win consumer trust. Many companies have taken the initiative in accessing international standards, such as GlobalGap and GMP+.

Ngoc Thao