Ruckus on the Australian Range. Cattlemen are protesting the growing Japanese ownership in Aussie ranches and beef industry

AUSTRALIAN cattle producers are hollering ``Whoa!'' to Japanese investment in beef properties, feedlots, and meatworks. Japanese trading firms have stakes in about one-third of Australia's feedlots. Last year, Japanese companies lassoed eight large cattle properties, for a price of $189 million. Japanese control of slaughterhouses rose in 1988 from 4 to 15 percent. And the dealmaking pace heats up.

``It's the hottest issue in the bush now,'' says Jock Douglas, a beef rancher and president of the 4,000-member Cattlemen's Union. ``People are saying, `They couldn't beat us in the war, so they're starting to buy us out.' It's not a racist thing,'' he adds. ``We just want a fair go.''

Liberalization of the Japanese meat market is supposed to give foreigners a fair go. Last June, Japan agreed to phase in higher beef import quotas and to open its import and distribution industry to foreign competition by 1991. Australian cattlemen saw a golden opportunity to get better access to Japan's $20 billion (Australian; US$16 billion) retail beef market.

But now that prospect seems in jeopardy. Japanese firms also see liberalization as a big opportunity. In November, for example, Marubeni Corporation, a Japanese trading house, bought one of Australia's largest cattle properties for A$10 million (US$8.1 million) as the first step in an A$30 million (US$24 million) expansion program. The Australian Financial Review reports that seven of the nine largest Japanese beef importers intend to buy chunks of the Australian beef industry.

Australian cattlemen are concerned that Japanese firms are integrating vertically - controlling the entire process from fattening the cow in Aussie pastures to delivering steak to Tokyo supermarkets. ``Liberalization may in fact mean Japanese firms reap all the profits,'' Douglas says.

The Cattlemen's Union says that unless there is stricter investment oversight the Japanese could soon monopolize sections of the industry.

``We're not opposed to foreign investment.... But it all seems to be happening with no oversight,'' a Cattlemen's Union researcher says.

Two weeks ago the union called for a halt to Japanese investment until the Australian federal government:

Tightens up guidelines on foreign investment.

Requires an economic impact statement for foreign purchases over A$1 million (US$810,000).

Nudges Japan into giving Australian investors equal access to buying into the Japanese beef import and distribution firms.

The Australian government is running a huge overseas trade deficit and needs the foreign investment. Thus, a ban on Japanese investment is unlikely, as it might fuel a recession.

Besides, Australia's cattle industry - the world's second biggest beef exporter - needs capital investment to stay competitive, says a spokesman for John Kerin, federal minister for primary industry and energy. ``It would be foolish to inhibit Japanese investment in the industry. If they don't invest here, they'll do it in the United States, Canada, or New Zealand,'' he adds.

But federal officials say they share producers' concerns about vertical integration. And Mr. Kerin's office is suggesting to the Foreign Investment Review Board (an advisory body run by treasury officials) criteria for reviewing industry purchases. The guidelines recommend the Australian government look most favorably on:

Joint ventures rather than sole-ownership deals.

Purchases which include funds for upgrading plants and equipment.

Joint ventures that provide access to Japan's beef marketing and distribution channels.

The cattlemen agree that, if adhered to, a policy of joint ventures would benefit them.

In Queensland, where most Japanese buying occurs, the state government plans to start a foreign investment land register. Cattle producers welcome this step. Now they're waiting for the federal government to yank the reins of what they see as a galloping Japanese investment horse.

You've read  of  free articles. Subscribe to continue.
QR Code to Ruckus on the Australian Range. Cattlemen are protesting the growing Japanese ownership in Aussie ranches and beef industry
Read this article in
https://www.csmonitor.com/1989/0313/ocatt.html
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe