INTERNATIONAL

BUSINESS
ENVRIONMENT
ASSESSMENT 3A: TEAM REPORT

“Is Singapore an attractive market for

Australian beef?”

Team 3 – Lily Pfitzner; Lotus Stehr – Paleologoudias; Chase

May; Philip Peluso; Mackenzie Tape; Ngoc Khoa Nguyen
TABLE OF CONTENTS
Executive summary………………………………………………………………………pg 2
Introduction………………………………………………………………………………..pg 3
Strengths…………………………………………………………………………………..pg 3
Weaknesses………………………………………………………………………………pg 4
Opportunities……………………………………………………………………………...pg 5
Threats…………………………………………………………………………………….pg 7
Conclusion………………………………………………………………………………...pg 8
References………………………………………………………………………………..pg 9

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EXECUTIVE SUMMARY
Australian beef is an extremely high-quality product. It not only has succulent taste
but its cattle’s feeding regime produces leaner meat with added health benefits which
satisfies the needs and wants of consumers and government in Singapore. However,
one weakness is how expensive it is to maintain the high quality through the chilled
export process. In terms of the export environment for Australian beef, Singapore
and Australia have a long-standing close relationship with their bilateral political
relationship. In addition, the Free Trade Agreement and elimination of tariffs on
Australian imports in Singapore encourages trade between the two countries. The
market attractiveness of Singapore is increasing as their reliance on food imports,
development of new trade routes, and growing restaurant sector are promising
opportunities. Yet, with high demand comes lots of threats from competition,
especially Brazil who hold the majority of Singapore’s beef import market share.

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INTRODUCTION
In 2019, the Australian beef industry contributed $17.6 billion to the economy (Meat
and Livestock Australia Ltd, 2020a). The industry is essential to providing Australia
with the necessary funds to grow and develop in the future and therefore, expanding
is key. This report will highlight why Singapore is indeed an attractive market for
Australian beef exporters by conducting a SWOT analysis to outline the various
strengths, weaknesses, opportunities, and threats compatible to both the Australian
beef product and Singaporean market.

STRENGTHS
Australia’s beef product characteristics
Australia’s beef product has several strengths compatible with the Singaporean
market. With Australia’s agricultural land factor endowment, it produced
approximately 2.4 million tonnes of carcass weight in beef from 2018-2019 (Meat and
Livestock Australia Ltd, 2020a). Australia’s smaller population, however, means that
domestic consumption of beef is low, allowing for significant export volumes. Being
one of the three largest beef exporters next to America and Brazil, over 60% of
Australia's production is exported (The Australian Beef Industry, 2011). Australian
beef is a superior choice as its disease-free status and extensive traceability provides
a competitive advantage (Meat and Livestock Australia Ltd, 2021). Having one of the
world’s highest animal health statuses, most Australian cattle are grass-fed or grain-
fed (Meat and Livestock Australia Ltd, 2021). A grass-feeding regime produces lean
beef that is naturally low in fat and cholesterol, which lowers blood pressure and
reduces the risks of certain cancer types (Meat and Livestock Australia Ltd, 2021).
As obesity is an increasing issue for Singapore, these benefits of consuming
Australian beef are attractive to its government who are investing $15 million in
developing healthier foods (Rodgers, 2018). Grain-fed beef has enhanced marbling
which improves tenderness, juiciness, and overall flavour (Meat and Livestock
Australia Ltd, 2021). Recently, the market has shown a desire for innovative,
premium, functional foods and alternative proteins. It is this high quality of product
which Australia offers that is a major strength, appealing to Singapore’s expensive
taste. This is the result of the country having one of the highest per capita disposable
incomes in the world (Meat and Livestock Australia Ltd, 2020b).
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Australia and Singapore’s relationship

Elaborating on Singapore’s market strengths, it is classified as one of the world’s

most business-friendly economies for foreign businesses (Australian Trade and
Investment Commission, 2021a). Consequently, Singapore is Australia's largest
trade and investment partner in the ‘Association of Southeast Asian Nations’
(ASEAN), and our sixth largest trading partner overall (Department of Foreign Affairs
and Trade, 2021a). Politically, Australia and Singapore have a bilateral relationship
based on their long-standing Commonwealth, defence, education, trade, and tourism
connections (Australian High Commission, 2020). Along with the Australia-Singapore
Comprehensive Strategic Partnership the two economies are deeply integrated, and
their ties beneficially contribute to regional growth for both countries (Department of
Foreign Affairs and Trade, 2021b). Evidently, Singapore and Australia’s alliance and
similar interests in political stability and economic prosperity has built a strong
foundation of trust, creating a safer venture for Australia (Australian High
Commission, 2020). Singapore is generally a free port and an open economy
(Australian Trade and Investment Commission, 2021b), as the country imports over
90% of its food with no applicable tariffs or duties for agribusiness products
(Australian Trade and Investment Commission, 2021c). As stated in the ‘Free Trade
Agreement,’ (FTA) these tariffs have been eliminated for Australian imports, allowing
a more predictable business environment for Australia in Singapore. This consists of
easier trade, competition policy, government management, intellectual property, e-
commerce, customs procedures, and business travel (Department of Foreign Affairs,
2021c). In summary, it is evident that Australia’s beef quality, Singapore’s market
characteristics, their intimate political standing, and free trade relationship amount to
a major strength.

WEAKNESSES
Market share
The Singapore beef market is a large and highly competitive space. More than 30
nations supply beef to Singapore. New Zealand, the United States, Brazil, and
Australia, however, are the main providers (Meat and Livestock Australia Ltd, 2020b).
Furthermore, supply diversification is part of Singapore’s food security policy to

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ensure there is no supply disruption. Hence why it is important to note that while the
beef market presents little entry barriers for Australian exporters, their products will
be exposed and must compete with many global food and agribusiness brands in the
market (Australian Trade and Investment Commission, 2021c).

Chilled vs frozen

In terms of market share, Brazil controls almost half of Singapore’s total beef imports.
Mostly frozen, the imports from Brazil to Singapore have grown fiercely, with most
Brazilian products used in the lower end of foodservice and manufacturing.
Compared to Australian beef, which is predominately exported as chilled, Brazil’s
beef ultimately has a longer product life, hence its dominance (Condon, 2020).
Brazilian beef exports to Singapore are likewise in the lead of Australia and is
expanding its competition in chilled beef in the Singaporean market (Meat and
Livestock Australia Ltd, 2020b). To export the beef as chilled, Australia has had to
implement state of the art technology such as fridges with specific temperature
controls (NIT Ltd, 2021). A weakness of this is that the expenses to develop such
technology are very high and with most countries requiring inspection where
relatively small deviations will result in product rejection, there is little margin for error
(NIT Ltd, 2021).

Covid-19

Home cooking has become increasingly popular in South East Asian (SEA) countries
as a result of movement restrictions and health concerns about COVID-19. Many
consumers are now preferring to cook and eat at home rather than going out despite
the ease of restrictions and multitude of takeaway or home delivery options. With its
increased interest in home cooking, it has offset some losses in the foodservice
sector for Australian beef exports (Meat and Livestock Australia Ltd, 2020c).

OPPORTUNITIES
Export demand in Singapore
As previously stated, Singapore imports over 90% of its food because of limited land
available for agriculture. With 5.8 million people, the country primarily depends on
external sources for its food supplies, creating opportunities for international products

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and brands to export to Singapore. A variety of possible intermodal and re-export
business models are emerging, presenting opportunities for the Australian beef
industry. Due to Singapore’s location and connectivity to Asia, its attraction is
substantial as it has increased export speed to market and reduced the cost of
transportation (Australian Trade and Investment Commission, 2021c).

Sea-air freight

Singapore’s position has attracted public-private-partnerships and commercial

partners hoping to invest in the high-valued food trade in the region. Regarding the
process of exportation, there is huge potential in the value of sea-freighting beef into
Singapore. This consists of storing it in a distribution centre, and re-exporting it as
airfreight to other countries. For example, in 2018, 2.15 million tonnes of airfreighted
items, across 386,000 flights, went through Singapore’s airport. Contrastingly,
Australia only had the capacity for just 583,000 tonnes, across 102,000 international
flights. Using the sea-to-air freight route of trade via Singapore would significantly
reduce the cost of existing airfreight as well as expose additional, more remote
markets for Australian beef (Meat and Livestock Australia Ltd, 2019).

Trade routes

A new trade route to Western China has been under development by Singapore,
where fresh produce could be sea-freighted from Singapore to Qinzhou, and then to
Chongqing or Chengdu over the period of a week by rail, compared to the current
process taking 2-3 weeks. This new development, declared by Meat & Livestock
Australia (MLA), would be an utmost advantage for Australian beef as Chongqing
and Chengdu are two of the top five most attractive cities for Australian red meat.
This is because they both hold increasing numbers of wealthy consumers with the
tendency to purchase beef (Meat and Livestock Australia Ltd, 2020b).

Growing restaurant sector

On the other hand, the foodservice sector in Singapore is greatly established and
diverse, with restaurants spanning from casual take away to Michelin-starred.
Australian beef is generally utilised in the more sophisticated hospitality segments.
For Singapore, tourism is an extremely important source of income, especially in food
and hospitality. An average of 15 million international tourists travel to the country

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annually, with 6 million considered “sophisticated consumers”. Luxury-seeking
travellers create an intense competition for constant innovation in the food and
hospitality sector. Full-service-sit-down restaurants only account for 7% of
foodservices yet, provide 26% of the revenue, whereas quick-service take-away
restaurants account for 59%, but only 44% of the revenue. This fast-changing
environment of high-end food development therefore represents opportunity for
growth and demand for Australian beef (Australian Trade and Investment
Commission, 2021c).

THREATS
Competition within the Singaporean market
Despite the fact that beef in Singapore is outlined as the most superior meat and that
consumers demonstrate they have the purchasing power to exhaust, this additionally
presents threats for nearby markets and adjoining SEA nations. For instance, the
greater part of Australian beef exports to SEA consist of manufacturing beef. This
product faces solid rivalry from Indian Buffalo meat (in Vietnam, Malaysia, the
Philippines) and Brazilian beef (in Singapore). This competitive landscape is
anticipated to become more intense and complex as imports of European and US
beef grow across the region and become the main supplier particularly in most SEA
nations (Meat and Livestock Australia Ltd, 2018). In comparison to other
neighbouring SEA countries, such as China – which is the world's second-largest
economy and produces 9.3% of global GDP – Brazil reached a new global record for
beef exports in 2020. This is largely attributed to the strong demand in China as a
result of the protein deficit caused by the African Swine Fever (ASF) (Meat and
Livestock Australia Ltd, 2020d). Looking at the broader picture in 2021, total beef
exports into SEA eased 25% year-on-year for the month of February (Meat and
Livestock Australia Ltd, 2021). The ongoing trade war between Australia and China is
continuing to have an effect on the two nations trading relationship. By Australia
exporting its beef to Singapore, other countries are now stepping in to fill the void
trade with China, which in turn affects Australia. The effect is evident in China’s
suspension of beef imports from five major meat-processing plants and when the
China Australia Free Trade Agreement was introduced in December of 2015 it
enabled Australian companies to explore the country’s largest export market,

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broadening their influence on the international stage. Australia’s beef exports with
China was worth $2.67 pre – covid and with the current ban on beef importation it is
predicted to reduce the projected $3.5bn from exports to China by around 35% this
year (BT, 2020). Brazil, Canada, Spain, the Netherlands, and other surrounding
nations have also entered the Singapore beef market in recent years, bringing frozen
commodity pork at prices that Australian producers find difficult to match (Australian
Pork Ltd, 2020). Both Malaysia and Indonesia have increased their exports to the
Singapore market and are now established as reliable, high quality suppliers in direct
competition with Australia and our market share has declined accordingly (Australian
Trade and Investment Commission, 2021c). With all this Singapore is conscious of its
ongoing reliance on Australia for beef supplies and has been taking action to
facilitate entry of new, competing nations in the market.

CONCLUSION
From our research and developing this SWOT analysis, it can be concluded that
Singapore is an attractive market for Australian beef. Australia’s beef product has an
established strong reputation for quality, which is heavily sought after by Singapore’s
consumers. Although Australia does not currently own the majority of the market
share - as it belongs to Brazil - the opportunities present in the increasing restaurant
sector and new faster, cheaper trade routes is available for exploitation. Australia
must surmount the pressure from competition and recover from its trade separation
with China by leveraging its competitive advantages in Singapore. To optimise
success, it is recommended that Australia should execute this by getting in and
investing early. Australia should target and market it’s beef as a healthier protein
option which is trending among the needs and wants of Singapore’s population. If
Australia successfully does this, the strengths and opportunities will outweigh the
effects of potential weaknesses and threats.

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