Red meat rebound
The red meat sector is poised for a strong rebound this season, with export receipts forecast to top $10 billion and farm profitability to almost double.
He agrees that if BLNZ decides in the long term not to continue with its country-of-origin marketing there will be a ‘gap’ in NZ’s overseas promotion. But how that gap is filled would have to be discussed by the industry at large.
Meat processors and exporters decided not to contribute 50% of the $8m cost of country-of-origin marketing now sponsored by BLNZ. Traditionally, BLNZ and its producer board predecessors have undertaken the generic marketing of beef and lamb, which latterly has been funded by the BLNZ commodity levy paid by farmers.
Falconer says processors already spend at least $8 million on their own brand promotions and this will increase as new markets are developed.
“Considerable time was spent usefully exploring the possible content and cost of a country-of-origin programme.
“However, a solution could not be identified that would justify processors assuming 50% of the cost over and above the marketing investments they are committed to making and growing,” he says.
“Processors’ investment will continue to be directed to the product and consumer branded activities they develop with their distributors and retailer partners in existing and developing markets.”
John Mc Carthy, who said he could not talk as the Meat Industry Excellence chairman as they had not discussed the issue, but as a former Meat Board director, says the industry has had a lucky escape.
“Generic promotion does not work. Every study of generic promotion proves it is the least effective form of promotional activity there is. It is too bland and in this instance it would be too non-specific to make a difference.
“It is actually illustrates the destructive competitive model that is ruining this industry beyond the farmgate; why BLNZ is supporting this is beyond me.
“It belies common sense to imagine that where you’ve got a market model in which at least 50 different export licence holders, all competing against each other with basically the same product, all NZers competing against each other in a global market place – that any form of marketing using country-of-origin is going to make a blind bit of difference, let alone any profit to be attributed back to farmers.”
He says we currently don’t have a NZ provenance story; we have a number of players all trying to sell their stuff on the basis of individual company differentiation. “We’ve got the best provenance story in the world and we are wasting it through a destructively competitive model.
“This is what is driving the meat industry into oblivion.”
