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China has long been one of Australia’s largest markets, but the current trade war between the countries has turned that relationship on its head.
China, the world’s #1 beer market, has imposed an 80% tariff on Australian’s malting barley, a prized variety that brands such as Tsingtao consider essential to that beer’s taste.
Barley, the fourth largest grain crop globally, is along with hops, yeast and water, one of beer’s most important components. Although it is primarily grown to feed livestock, beer accounts for about 17% of worldwide barley production.
With the imposition of the Chinese tariffs, Australia’s barley farmers have been effectively locked out of its largest and most valuable market (the Chinese pay top dollar for Australian malting barley) and forced them to look for other international outlets for its grains.
On January 20, the CBH Group, an Australian farmer-owned grain marketing business, announced that it had found a huge new market for its crops and had already shipped its first cargo of malting barley to Mexico.
In a statement, CBH announced that the shipment of 35,000 tons of malting barley left the Western Australian port of Albany on Sunday.
The Mexican buyer was not specified but according to Forbes “it is likely to have been one of two companies which control 90% of Mexico’s beer market; Grupo Modelo which is part of the international group AB InBev and maker of Corona beer, or Cerveceria Cuauhtemoc Moctezuma which is part of the Dutch brewer, Heineken.”
CBH chief marketing and trading officer, Jason Craig, explained in the statement that following changes in the international trading landscape efforts to develop new markets for Western Australian barley were proving successful….
“While it is early days, this shipment to Mexico signals a potential new market for malting barley. However, this will need to be developed over time,” Craig said.
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