COPENHAGEN (Reuters) - The world’s largest pork exporter Danish Crown said on Friday its sales to China had fell in the year 2016/2017 after a temporary spike in Chinese supplies prompted by the forced closure of some farms due to tighter environmental rules.
But the firm said it expected to increase sales to China as demand returns from local consumers for Danish meat, which it said already offered high quality and safety standards. China accounts for about 5 percent of Danish Crown’s total sales.
Farmers who were forced to close farms due to the tougher environmental rules had to sell their produce, leading to a surplus in local supplies of the meat.
Danish Crown said it exported about 217,000 tonnes of the meat worth about 403 million euros ($480 million) to the Asian giant in the financial year 2016/17, saying this was lower than exports in 2015/2016. It did not give a comparative figure.
To boost sales in China, Danish Crown has partnered with Chinese e-commerce giant Alibaba Group to encourage consumers to order more costly cuts of pork online.
The Danish firms will start building a plant to process Danish pork near Shanghai in the first quarter of 2018 for online distribution in the city. If successful, it could expand to Beijing and other big cities.
“China is the most advanced market for e-commerce. It is way ahead of the U.S. and Europe, and we see an opportunity to develop a business model there and understand how to do this,” Chief Executive Jais Valeur told Reuters.
Unlike in Europe, feet, ears and tails are in high demand in China. Valeur expects online distribution to increase demand for cuts traditionally preferred in Europe, such as cutlets.
Danish Crown’s main export competitors in China are Canada and the United States, with Canada overtaking the United States in June as the top North American supplier.
Danish Crown’s other major markets are Britain and Japan.
($1 = 0.8394 euros)
Reporting by Julie Astrid Thomsen; Editing by Edmund Blair