Australia's preferential beef safeguard for beef exports to Korea is nearing its limit - and while this has been happening each year, in 2024 it's in part due to a celebrity chef.
This year high-end foodservice and retail sales of Australian beef into the country received a notable boost from celebrity chef Yoon Nam-no, who is one of MLA's "Aussie Beef Mate" chefs.
His appearance on Netflix’s hit show Culinary Class Wars increased his profile, culminating in a rapid rise in his social media following after BTS member JHope endorsed him.
Nam-no's influence has led to the upcoming launch of marinated Australian beef products in more than 500 Korean supermarkets on October 23, further driving consumer interest in premium Australian beef cuts.
His connection with both high-end dining and mainstream retail has helped position Australian beef as a high-quality, trusted product in the Korean market.
However, meeting the demand for Aussie beef may be hindered due to a trade agreement with Korea nearing its end.
Australia's preferential beef safeguard for beef exports to Korea is nearing its limit, with 96.08% utilised as of October 14, 2024, according to a recent report conducted by Meat and Livestock Australia (MLA). Under the Korea-Australia Free Trade Agreement (KAFTA), Australia can export 188,437 tonnes of beef to Korea in 2024 at a 10.6% duty.
Once this safeguard is triggered, any further exports will be subject to a higher duty of 24%. This is expected to occur soon, leaving just 7,378 tonnes of beef before the higher tariffs kick in.
The safeguard mechanism, implemented in December 2014, increases each year and is triggered annually except for 2022, when the Korean government waived it to stimulate post-pandemic economic recovery.
The safeguard for 2025 will be set at 192,206 tonnes, minus any excess tonnage from 2024, with the tariff rate falling to 8%.
Any beef shipped before the safeguard triggers, but awaiting customs clearance, will still enter Korea at the lower tariff rate. However, this ‘excess tonnage’ will be deducted from next year’s quota.
The tariff disadvantage will widen between Australia and the U.S. (which exports beef to Korea under the U.S.-Korea Free Trade Agreement) from 5.3% to 18.7% for the rest of the year, making U.S. beef more price-competitive in the Korean market.
Despite these challenges, Australian beef exports to Korea have been strong, up 4% year-to-date compared to 2023, with chilled grass-fed beef sales up by 22%.
The third quarter of 2024 saw a 6% increase in beef shipments to Korea. A reduced supply of U.S. beef, combined with a shift in Korean consumer habits from dining out to home cooking, has increased demand for Australian beef, particularly lower-priced cuts.
The week-long Chuseok holiday from September 14–18, 2024, bolstered Australian beef sales, especially in retail, where demand for affordable cuts rose amid economic uncertainty.
Additional public holidays on October 1, 3, and 9, further helped stimulate domestic consumption, contributing to the overall strength of Australian beef exports during these periods.
Although Australia will face increased tariffs for the remainder of 2024, the long-term outlook is more optimistic.
The safeguard volume will continue to increase annually, and by 2029, the safeguard mechanism will be fully phased out, allowing Australian beef exports to enter Korea without tariff restrictions.
In the meantime, exporters will need to navigate the challenges posed by rising tariffs and competition from the US.