Beijing vows to break beef monopoly

Ministry will look into reform of HK's live cattle supply once industry and government agree

PUBLISHED : Saturday, 08 June, 2013, 12:00am
UPDATED : Saturday, 08 June, 2013, 4:16am

Beijing authorities have promised to study proposals to reform the live cattle supply to Hong Kong - including abolishing the Ng Fung Hong monopoly - according to a lawmaker who met mainland officials last week.

Agriculture sector legislator Steven Ho Chun-yin said the ministry would agree to breaking the monopoly - blamed by Hong Kong traders for pushing up prices - once there was consensus between the Hong Kong government and industry players.

Hong Kong-listed Ng Fung Hong is the only export agent endorsed by the Ministry of Commerce and the government is under pressure from legislators to open up the market.

Ho, who was in a delegation of agricultural bodies that visited ministries in Beijing last week, said the commerce ministry would also consider simplifying procedures in the mainland-Hong Kong supply chain. If there were more suppliers, competition could help lower the price of beef, he said.

Unlike live cattle sold on the mainland, those supplied to Hong Kong must be sourced from registered farms and comply with more stringent requirements on breeding, inspection and quarantine.

National People's Congress deputy Brave Chan Yung said the standards and costs for quarantine and checking Hong Kong beef were much higher than those on the mainland.

While the standards could not be lowered, "we hope that at least the price can be more reasonable, and will not fluctuate too much", Chan said.

Ho said transport costs, tax and quarantine fees added to the price of beef, as did any loss of condition of the animals on the way.

"A cow may lose at least 10 per cent in weight during the journey from Inner Mongolia to Hong Kong, and it could push up the price," he said. Buying from more farms in the southern mainland region or a shorter transport process could help lower the price, he suggested.

According to a government consultant's survey conducted in February and March, the average retail price of fresh beef sold in wet markets in Hong Kong was HK$146 a kilogram, while that in Guangzhou was HK$89.

Between 2009 and 2013, the wholesale price of marbled beef in Hong Kong rose from HK$44.40 to HK$77.50 a kilogram, an increase of 75 per cent.

During the same period, the wholesale price on the mainland went up 60 per cent.

The retail price of beef went up much more than for other food.

It increased 30.9 per cent year-on-year in February, whereas for pork and poultry the rise was 3.9 per cent and 20.8 per cent.

A Legislative Council panel last week passed a motion urging the government to "expeditiously" open up the imported live cattle market and to draw up a timetable for doing so.

The government earlier said it had "an open mind" on the suggestion of opening up the market.