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FOCUS: Japan to resume U.S. beef imports, competition to change again.

TOKYO, June 26 Kyodo

Japan is expected to resume U.S. beef imports in late July, intensifying competition in the beef market again, but at stake is whether consumer confidence, lost due to the outbreak of mad cow disease in the country, can be regained.

In fiscal 2002 before the outbreak of the disease, Japan's beef market was roughly divided into 40 percent domestic beef and 60 percent imported. Of the imported beef, Australian beef accounted for about 49 percent and U.S. beef some 45 percent.

But with the ban on U.S. beef imports, Australian beef now accounts for about 89 percent of total imports. Although Australia is the ''sole winner,'' Don Heatley, chairman of the Meat and Livestock Australia (MLA), is worried.

At a meeting of powerful beef dealers and experts from across the world held in Brisbane in late April to discuss the future of the beef market, Heatley said beef consumption in Japan is decreasing, and consumer confidence is lost whenever there is a problem.

Expressing concern over the dwindling beef market in Japan, he said the U.S. beef problem has had a very large impact as consumers are losing confidence in beef entirely.

David Hughes, a British expert well-versed in the world's meat situation, told the meeting that in Britain where the mad cow disease originated, more than half of the meat consumption is of white meat, such as fish and birds, and said it will take time before consumer confidence in beef can be restored.

Gary Johnson, director in charge of international procurement at McDonald's Corp. of the United States, said consumers are seeking confidence, and although traceability has technologically been established and is recognized as important, it has yet to be recognized as an imperative system.

For thorough traceability enabling quick reference of where a cow was raised, each head should be attached with its own number for individual recognition.

Not only Japan, Europe and Canada but also Australia and New Zealand where no mad cow disease has been reported have introduced the individual recognition system, but the United States is lagging behind.

Eastern Australia is one of the world's largest grazing grounds. One of the fattening grounds of Stockyard, a meat company based in Brisbane, can accommodate 7,500 heads of cattle. The area is about 150 kilometers from the Gold Coast, a tourist spot.

At its entrance are sign boards erected to welcome visitors with the names written in Chinese characters of companies and organizations under contract with the company, including the Japanese Consumers Cooperative Union.

Lachie Hart, top management executive of the company, said that to meet the tastes of Japanese consumers, their cattle feed is a combination of barleycorn and sunflower seeds.

''Aussie beef'' used to be chiefly lean meat from cattle fed only grass, but after Japan banned imports of U.S. beef, the company increased production on beef streaked with fat by raising cattle fed cereals. And now, about 50 percent of beef exported to Japan is this kind of beef.

New Zealand beef exports to Japan are also increasing, and their share on the Japanese market has jumped about four times to 9 percent. But the country does not have enough energy resources to raise cattle with cereals and increase exports to Japan.

Jeff Grand, chairman of Meat & Wool New Zealand, said beef with less fat is healthy and favored in Japan where the aging population is increasing. Its strategy is to increase chilled beef to maintain the taste of red meat.

For its part, the United States has been watching how its rival countries are tackling the tracking problem. Philip Seng, chairman of the American Beef Export Federation, said special production specifications for the Japanese market will be imposed in the future to make U.S. beef a reliable individual brand.
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Publication:Japan Weekly Monitor
Date:Jul 3, 2006
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