New Market Opportunities for the Food Sector

Domestic Impediments to Industry Performance

Trade Policy Reform

Supply Chain Linkages

Policy and Institutional Analysis

Communications

Project Title	Some Asian festivals and customs: A food exporters’s guide
RIRDC Project No.:	AMR-3A
Researcher:	Mr Grant Vinning, Dr Kaye Crippen
Organisation:	Asian Markets Research Pty Ltd 157 Horizon Drive,  WESTLAKE QLD 4074 and Jakarta, Indonesia
Phone:	07 3376 2244
Fax:	02 3376 7264
Email:	avinning@ozemail.com.au
Objectives	To identify aspects of Asian festivals and customs that Australian food exporters could utilise to increase their exports into the region.
Background:	Festive seasons and special ceremonial events are important opportunities for marketing food products in Asia. The issues of universal product and marketing systems must be sensitive to the localisation of product offerings associated with these events. Cultural aspects of doing business in Asia continue to be important despite the vicissitudes of a number of the region’s economies. Seemingly small issues such as colours, numbers, and symbols can have a major impact.  In a number of cases the traditional emphasis placed on a product’s attributes by the Australia exporter, such as flavour, may not be as important locally as, say, size and colour.
Research	Three festive seasons were studied: the Chinese New Year, Islam’s Ramadam and Idul Fitri, and Christmas. Basic description of these festivals in Indonesia, Malaysia, and Singapore were provided. This helped identify issues such as location of activity associated with the festive season, the type of food activity, and the actors involved in that activity. In undertaking the case studies a large number of specific instances of cultural significance were identified. These were collected into an accompanying Compendium.
Outcomes	The research identified a large number of specific activities Australian food exporters could undertake to improve their penetration in the region. These related to the varying strengths during the different festive seasons of food outlets such as supermarkets, five-star hotels and restaurants, and wet markets; pricing; and packaging. Lessons were drawn regarding labelling, publicity, signage, and the use of halal certification. Micro factors such as auspicious colours, numbers and symbols were identified for specific cultural groups and cultural uses.
Implications	Australian food exporters have not always been as sensitive as they could be towards cultural aspects in Asia. The research highlighted a number of cultural issues that can be important to food marketing in the region. It illustrated how some of these customs can be utilised to provide a positive marketing impact.
Publications	"Festive Season in Asia: A Unique Marketing Opportunity". Australia New Zealand Journal of Agribusiness, December 1997 (with Scott Vinning).  "Food and festivals in Asia". Poster paper delivered at VIII World Congress of the International Food and Agribusiness Management Association, Indonesia, June 1997 (with Scott Vinning).

 
 

Project Title	Economic Developments in the Agrifood Sectors of Three Key Asian Economies (Indonesia, Malaysia and the Republic of Korea)
RIRDC Project No.:	STA-1A
Researcher:	Dr Brian Johnston, STA Ltd , Dr Ray Trewin, ANU; Dr Jong Soon Kang, ANU; Mr John Meyers, Meyers Strategy Group; Mr Brian Hall, Meyers Strategy Group
Organisation:	Supermarket to Asia Ltd 55 Blackall Street BARTON ACT 2600
Phone:	02 62721717
Objectives	To report on economic change and developments in three key Asian markets for agrifood which are undergoing rapid change as the result of the Asian crisis and To identify strategies for agrifood companies to pursue to remain or expand sales to these markets.
Background:	Asian agrifood markets are very important to the Australian agrifood industry. In 1997-98 Australia exported $10.4 billion of food to over 20 Asian countries. It is the goal of the Supermarket to Asia Council to significantly expand exports to these markets over the next five years. The Asian economies are, however, currently being adversely affected by the economic crisis and the scope for expansion in the short term appear limited.
Research	Research teams drawn from the Australian National University, Meyers Strategy Group and Supermarket to Asia Ltd were formed and data and information on each Asian economy collected and analysed utilising in-country contacts and expertise. Because each economy was undergoing rapid economic change care was taken to identify the underlying economic forces at work, drawing on background research underway in each country within the specialised agricultural economic and agrifood agencies. This work was supplemented by country visits and interviews with senior decision makers.
Outcomes	For each economy, the key economic factors at work were identified and their impact on the country’s agrifood sector documented. This allowed conclusions to be drawn regarding likely future directions for each agrifood sector and their implications for Australian agrifood exporters. Five key strategies for Australian agrifood companies were identified : Keep markets open Position Australian products Reduce costs through the supply chain Establish joint ventures and in-country investment Understand the markets and competitors.
Implications	While the agrifood markets in each country were undergoing rapid change and in some cases down-sizing in terms of food imports, there are opportunities for Australian agri-food companies that are prepared to be patient and build close and ongoing ties with their trading partners in the countries in question. On-going and more effective monitoring of developments is warranted because recovery, and hence new orders, may begin sooner than many Australian agrifood companies think. The research and market intelligence work required to provide timely and relevant information to Australian companies is relatively resource intensive and beyond the scope of many small to medium sized agrifood companies. Austrade and the Department of Foreign Affairs and Trade, in conjunction with State Government offices (all of which have staff on the ground in Asia) need to assume greater on-going responsibility for getting this information effectively back to potential agrifood exporters in Australia, if the emerging opportunities are to be maximised.
Publications	Economic change and agrifood developments in Indonesia: Report prepared by Supermarket to Asia Ltd, December 1998 Economic change and agrifood developments in Malaysia: Report prepared by Supermarket to Asia Ltd, December 1998 Economic change and agrifood developments in the Republic of Korea: Report prepared by Supermarket to Asia Ltd, December 1998 Economic developments in the agri-food sectors of Indonesia, Malaysia and South Korea: Background Working Papers, R Trewin (ed), RIRDC Publication 99/tba, July 1999

 
 

Project Title	An evaluation of the effectiveness of "Thinking of Asia": University of Queensland final year agribusiness undergraduates engaging in market research in Asia
RIRDC Project No.:	UQ-36A
Researcher:	Associate Professors Ray Collins and Tony Dunne
Organisation:	School of Natural and Rural Systems Management University of Queensland Gatton College,  LAWES QLD 4345
Phone:	07 54601328
Fax:	07 54601324
Objectives	To engage final year agribusiness undergraduates in market research in Asian countries for Australian agribusinesses.  To challenge students to apply knowledge and demonstrate proficiencies in a fully commercial, team-based, cross-cultural context.  To provide excellent market research outcomes for agribusiness clients.  To enhance the reputation of the University of Queensland’s agribusiness program.
Background:	Agribusiness employers around the world have consistently demanded business graduates with better developed commercial, interpersonal and communication skills. Universities have not always translated this challenge into appropriate educational strategies. The University of Queensland’s agribusiness curriculum integrates basic business training with practical subjects that apply that training in commercial contexts. The capstone subject of the curriculum, "Thinking of Asia", places groups of 4 to 5 students with a staff mentor, in a commercial relationship with fee paying clients. The task of each group is to engage in market research in an Asian country as required by the client. The project counts for half of each student’s final semester’s marks, 40 per cent of which come from the client, not the University. Over the last six years "Thinking of Asia" has involved 25 market research assignments in 12 different countries by 125 students on behalf of 19 clients.
Research	This report evaluates the processes and outcomes of the "Thinking of Asia" program over six years since its inception in 1993. It uses Bennett’s hierarchy as an evaluative framework. A total of 108 of the 125 past students of the program, 17 clients and all 9 staff were surveyed. The analysis matched each objective of the program against responses from stakeholders to determine at what level, according to Bennett’s hierarchy, the objective was satisfied. In the ideal situation, objectives are satisfied at the highest level, where the presence and activities of the program are directly responsible for a change in practice.
Outcomes	Results were overwhelmingly positive across the three groups of stakeholders (students, clients and staff). Past students reported that the program significantly improved their commercial, interpersonal and communication skills (three attributes most strongly desired by employers). Of 17 clients, all rated the program as a success and 10 stated that it directly resulted in changes within their organisation. Four clients employed students from the program. All staff mentors rated the program as worthwhile, largely because it built and maintained industry contacts, networks and links. We conclude that the program is achieving the desired results in terms of producing graduates who meet agribusiness employers’ needs, providing value for money market research that improves business practices, and assists the professional development of academic staff associated with the program.
Implications	Other developers of agribusiness curricula, as well as agribusiness firms, could learn a great deal from this approach. While it is demanding of time and organisational skills, the payoff is in an enhanced reputation for the University with the employers of its graduates, and quality research for firms that are also making a contribution to the education of future agribusiness professionals.
Publications	Collins, R.J. and Dunne, A.J., 1996, "Utilising multi-level capstone courses in an integrated agribusiness curriculum", Agribusiness, vol. 12, pp. 105-112.

 
 

Project Title	Structural Change in the Farm Inputs Industry
RIRDC Project No.:	SGH-4
Researcher:	Dr Selwyn Heilbron and Ms Fiona Roberts.
Organisation:	S.G. Heilbron Pty Ltd and Agri-Focus Pty Ltd. 832 High Street EAST KEW VIC 3102
Phone:	03 9810 9542
Fax:	03 9249 9600
Email:	heilbron@eisa.net.au
Objectives	To improve our knowledge and understanding of the structural changes currently occurring in the farm inputs industry.
Background:	The Australian farm inputs industry is currently valued at around $20 billion. The industry is of critical importance to the competitive position of Australian agriculture; with the materials and services used as farm inputs accounting for around two thirds of total Australian farm costs.  This publication investigates some of Australia’s key farm input sectors and examines the structural changes occurring in these sectors. The project reviews international literature on structural changes occurring in farm input sectors around the world and examines the drivers for change in the farm input industry. Implications of the changes identified in the research on the farm input industry and on Australian agriculture, are discussed.
Research	The methodology included a review of previous research on structural change in the farm inputs industry; a study of farm input suppliers in two particular geographic regions and an analysis of the structural development of two national firms. An analysis was also undertaken of structural changes occurring in the farm input sectors of wool and cotton marketing, farm consumables and rural finance. Drawing on the above research, an assessment of likely future directions for the farm inputs industry, and how these directions may impact on the competitive performance of the rural sector was made.
Outcomes	What is apparent from the research is that: There has been little research done in this area, and this report represents an important starting point for understanding these sectors and the industry.  A differentiating feature can be the level of service offered to customers; this and increasing demand for knowledge based inputs are encouraging closer customer contact.  Some sectors of the industry have grown rapidly while other sectors have declined. Differential trends in various sectors often reflect relative developments in end markets.  The sectors analysed are characterised by vigorous competition, relatively low barriers to entry and considerable competitive pressure to lower cost and improve services offered. Two contradictory trends have become evident, depending on the market examined. One trend is the contraction occurring in some segments; while in other areas there is significant expansion.
Implications	A continuation of current trends is likely in the future, on the basis that the rural industry will continue its long-term secular decline. Pressures towards fragmentation and rationalisation are likely to continue in the foreseeable future.
Publications	‘Structural Change in the Farm Inputs Industry’, by S. Heilbron, S.G.Heilbron Pty Ltd and F. Roberts, Agri-Focus Pty Ltd.

Project Title	The impact of Australian indirect taxes on the Australian farm sector
RIRDC Project No.:	AEC-1A
Researcher:	Mr Geoff Carmody
Organisation:	Access Economics Pty Ltd PO Box E347 KINGSTON ACT 2604
Phone:	02 6273 1222
Fax:	02 6273 1223
Objectives	To provide a comprehensive evaluation of the impact of indirect taxation on the farm sector and the major industries therein.
Background:	Indirect taxation arrangements can have a significant impact on the competitiveness of Australian agriculture. This research sought to quantify this impact.
Research	The project used an input-output based statistical framework as compiled by the Australian Bureau of Statistics (ABS) and the use of that in a computable general equilibrium model. The farm sector is defined as the sum of ABS input-output codes 0101 to 0107 (ie grass, sheep, beef cattle, dairy cattle, pigs, poultry and other agriculture).
Outcomes	The research found that the current set of indirect taxes on agriculture results in: an overall indirect tax burden (net of subsidies) that is somewhat lower than the burden faced on average across all Australian industries, as far as supply used for intermediate and domestic consumption purposes is concerned; an overall indirect tax burden (net of subsidies) that is significantly higher than the burden faced on average across all Australian industries, as far as supply used for export purposes are concerned, with primary industry levies helping to explain this outcome; a lower tax burden than the all-industry average in respect of the wholesale sales tax, payroll tax, and FID/BAD taxes; and the farm sector as a whole faces a total petroleum product excise burden slightly lower than the all-industry average, although the diesel fuel component of that burden is close to the all-industry average.
Implications	Given the current taxation treatment of farm inputs, the greatest benefit of any change in policy comes from a reduction in input taxes on petroleum products.