Australia grabs Vietnam cattle market by the horns Traditionally, cattle were not reared for their meat in Vietnam but were principally draught animals, culled and used for food at the end of their useful working lives. Today however, the beef cattle industry is the third largest money maker in the livestock industry, after pigs and poultry, and as such, makes an important contribution to the rural economy.   According to the Ministry of Agriculture and Rural Development (MARD), the nation’s largest and more advanced beef cattle farms (with herds in excess of 100 head), are mainly located in the south eastern provinces of Binh Phuoc, Binh Thuan and Ninh Thuan and in the Central Highlands area. These commercial cattle fattening operations have largely been well funded and primarily aimed at servicing the strong demand for beef that exists in the Ho Chi Minh City market. However with the advent of Vietnam opening up its markets in line with World Trade Organization (WTO) commitments, the beef cattle market is today facing stiff competition with foreign rivals, particularly the Australian cattle industry. According to official statistics, Vietnam has on average imported about US$100 million of beef cattle for slaughter over the past three years. More specifically, the country imported 70,000 head in 2013, 150,000 head in 2014 and 115,242 head in first quarter of this year, with plans to import a cumulative total of 460,000 head for 2015. The government levies an import duty of 5% on live cattle imports as opposed to a much higher 15-20% duty on frozen beef. However, the sales price of Australian beef on the store shelves is generally about the same as Vietnamese beef. According to MARD, this has arisen because a change in demand from the urban area markets has resulted in better pricing for crossbred cattle of these advanced beef cattle farms that can meet specific purchasing criteria on minimum body weight, lean meat content and animal age.   MARD has also forecast this trend will continue and likely intensify into the long term, driven by more sophisticated demand of the food service industry, modern trade retailers and the modern domestic consumer (middle income and younger), who is more focused on food health, safety and quality.  Local cattle no longer are in demand in the lucrative urban area markets like HCM City as cattle traders will generally no longer buy their cattle or will only pay a very low price for them. Visan, a leading Vietnamese supplier of meat, began importing Australian beef in September 2013. “The biggest advantage Australian beef has over Vietnamese beef is consistency in both quality of the meat and size of the animal,” a representative of Visan recently told a reporter. “Australian beef is generally of a better quality,” he said adding on average the weight of domestic cattle is roughly 250 kg on the hoof while that of Australian cattle is twice the size at 500kg. Australian beef is also more widely available in the larger cities and can be found not only in the larger restaurants and supermarkets but also in smaller shops and traditional markets. Australian beef had a 60-70% share of the market in HCM City last year, according to a representative of Fresfoco Company, a major exporter to the Vietnam market. Fresfoco revealed that it will start supplying Vietnamese customers ‘speciality’ beef products like omasum (beef stomach) and open a chain of steakhouses featuring Australian beef in the coming time. Although no one knows exactly what the future will hold, it certainly appears that for now at least, Australian cattle ranchers have got a solid grip on the Vietnam live beef cattle market. VOV