A suspension on Australian live cattle to Vietnam as called on by RSPCA Australia today in response to industry reports of welfare problems in market is not the answer, the CEO of the Australian Livestock Exporters’ Council Alison Penfold said today.

“The problems in Vietnam are serious but not universal and we do not need another knee-jerk ban like Indonesia in 2011, Ms Penfold said.

“The consequences of such a decision would be disastrous to a sector still in recovery.

“Exporters are heavily committing resources and personnel to this market to address the welfare issues for the livestock in our care and to ensure the market is sustainable for the sake of the many producers, stockmen, transport operators, and other supply chain participants and their families who rely in part or in total on this market.

“Exporters are taking decisive action to deal with the unapproved supply of Australian livestock to local abattoirs that do not have the infrastructure, equipment and knowledge to handle our cattle and process to our standards.

“To deal with any problems, exporters already have staff in the market actively undertaking a number of risk activities including reviewing and re-verifying traceability and control systems, stock re-auditing and re-checking stock reconciliation reports. Where breaches of ESCAS are found, exporters are isolating and suspending facilities and importers until corrective actions to meet their responsibilities are taken.

“The report of problems in the market has been made by industry, both through self-reports and corrective actions to the Department of Agriculture and I personally spoke out last week and publicly reported on the problems because I wanted to be upfront and highlight these and the work exporters are doing to fix them.

“We know full well the consequences of breaches of our supply chains and the horrendous treatment that cattle could suffer. We called out these practices such as flooding and stunning by sledgehammer publicly because they are abhorrent to us and we don’t want a bar of them. We do not send nor approve of any importer sending cattle to facilities that practice such barbaric slaughter and handling methods.

“Our in market investment and activities are making such practices redundant and so far we have done so in the over 80 facilities that we now operate in.

Ms Penfold said that exporters met as a collective last week in Hanoi with importers in a frank, open and non-holds barred discussion to directly confront together recent incidents where ESCAS requirements have been breached.

“Exporters made it clear that they will suspend facilities and importers for animal abuses and supply to non-approved facilities. A number of facilities have been suspended – both before and after the meeting – and further actions will be taken, including banning facilities that simply can’t or won’t meet the standards required.

“While there was general agreement that Vietnam is still a relatively new market and some facilities are still coming to terms with the ESCAS requirements, there was a clear understanding from all in the room that supply chains are on notice and underperformance will be penalised. Importers expressed a strong commitment to work with us to meet the standards.

“We believe that our actions to penalise poorly performing supply chains is a powerful reminder to our Vietnamese customers that failure to meet ESCAS obligations will result in withdrawal of supply. As Australia is increasingly relied on as a source of Vietnam’s protein needs and many importers have made significant financial investments in the trade, this is no small threat.

“We also believe that working with local abattoirs that currently do not meet our standards but could with investment, training and support is a further way of supporting the market and welfare improvement.

“There are of course a large number of importers and facilities that have embraced ESCAS and are demonstrating leadership within the Vietnamese industry by encouraging their peers to meet these higher standards when processing local and Australian cattle. Good performance should also be recognised and rewarded – not punished as RSPCA’s suggestion to suspend the market would do.

“For all concerned, Wednesday’s meeting was a clear line in the sand for exporters by which we will hold ourselves to account.”

Contact: Alison Penfold 0408 633 026

Extract of speech by Alison Penfold, CEO of ALEC to Northern Beef Producers Forum
Charters Towers – Friday 6 March

Alongside Indonesia, Vietnam has produced exceptional growth off a relative standing start. The market has run hot over the past 24 months from a relative meagre 66,000 head in 2013 to 181,000 plus head in 2014. Exports have averaged 17,900 since July- December 2014 and peaked at 37,500 head in January this year

Cattle exports are predominantly for slaughter – cattle are processed within approximately two weeks of arrival.

In recent months, an increasing number of feeder cattle have been imported as importers wish to add value in-market and have more control over delivery to market.

Feedlots have been developed around the major cities and several large feedlots have also been developed in regional areas. These feedlots have range from 1,000 head to 20,000 head and growing.

Feedlots and abattoirs service the major cities of Ho Chi Minh, Hanoi and Hai Phong. The largest consumer market being Ho Chi Minh City with a population of over 10 million.

Over 80 abattoirs are now accredited under ESCAS although there are substantial differences in abattoirs between north and south Vietnam.

In the north, abattoirs are small family owned operations with a small lairage and slaughter floor attached to the house. They tend to have an average nightly kill of 5 to 10 head.

In the south, abattoirs have a capacity of 50 – 100 head per night. They are often recently built, substantial facilities that supply butchers with boneless beef for sale through wet markets.

Those directly involved in the market have been astounded by the investment in improving and developing facilities to facilitate this market growth.

Those close to the trade say that they are yet to grasp the full extent of the market size but there is a big but. The market is likely to slow over the coming weeks and months due to the current supply issues with a large number of fat cattle in the system, price constraints and to deal with a number of facilities that have been suspended due to animal welfare and unapproved supply problems. It is no secret that there have been problems with Australian cattle moving outside of approved supply chains in Vietnam. A number of self-reports have been made by exporters and there are particular concerns about concentrated areas of slaughterhouses attracting black market activities. We are very concerned by these developments that show a failure to adhere to ESCAS requirements. We know that welfare outside of supply chains falls well short of suitable, appropriate and humane standards. I want to be direct and open with you of what practices you will see in local facilities that are not part of ESCAS supply chains. Despite an a government crackdown, cattle are regularly flooded, that is, forced to consume large volumes of water delivered to the rumen by hose several times in the hours prior to slaughter. It is done because it is believed that it will add weight to saleable meat but causes horrific impacts on the welfare and health of animals and reduces meat quality and safety.

Cattle outside of ESCAS supply chains are also likely to be subjected to stunning by sledgehammer. Subduing cattle in this manner to make them easier to handle is not intended as a cruel practice but it simply is. Cattle may be repeatedly beaten if the initial stun is ineffective caucing severe pain and distress. The use of this method of stunning reflects the very basic levels of infrastructure in many family run establishments where slaughter boxes and stunning equipment, even simple cash knockers, are too expensive to purchase. Industry sees an opportunity for an international community effort to support welfare improvements in these facilities but we will also work with our own customers in Indonesian to try to facilitate these facilities being upgraded to join ESCAS supply chains.

Only yesterday I returned from Vietnam where Australian exporters called an emergency meeting with importers to deal with leakage from supply chains. This was a frank, direct and no holds barred discussion on the consequences of failing to meet ESCAS requirements. We strongly reiterated that whatever the drivers are, the rules of ESCAS must be met. We outlined the risks and the responsibilities of all concerned to behave to the standards set and to ensure the long term sustainability of the trade. Exporters have made it clear that facilities and importers will be suspended for animal welfare abuses and leakage. Re-entry to supply chains will come only after corrective actions are taken and facilities are re-audited. Three times and facilities will be struck out. Australian cattle will not be supplied to facilities that do not meet the standards.

There was a clear understanding from all in the room that supply chains are on notice that poor behaviour and breaches will not be tolerated. There is too much at stake including millions of dollars in investment to jeopardise this market in its relative infancy and without it yet to realise its full potential. Wednesday was a clear marker for all of us by which we will hold ourselves to account.

The meeting in Vietnam also flagged the broader South East Asia challenges of new markets entering ESCAS supply chains. It does take time to bed down understanding of the requirements of ESCAS.

It is a complex and clunky system that does not recognise natural trade flows. There are no natural equivalents in these markets which are poorly resourced in terms of modern infrastructure and while not intentionally meant to be cruel, fail to meet our standards of humane care and treatment. Our investment much be rich in training and support to influence early practical, intellectual and cultural adoption of ESCAS requirements. Industry needs to take particular care with these new markets to ensure supply chains are robust. Ongoing support and oversight is critical as is training and we must be vigilant in our custodianship of livestock through the supply chain.