The paper 'International Business as Current Topic in Exports' is a great example of a Business Case Study. This paper is going to explore the events that lead to the banning of live cattle export from Australian to Indonesia. The ban resulted in the short-term and long-term implications of the Australian cattle industry. It is evident that the highly affected group by this ban is Australian livestock producers. The paper has also explored general implications on the economy of Australia as a result of this ban. Some of these implications are worsening in the bilateral trade relationship, loss of lucrative market, and contravening principles of fair trade.
This ban will also have implications on wheat growers since Indonesia is the biggest importer of Australian wheat. Finally, the paper has discussed the implication on the side of Indonesia as a result of this ban. Introduction Recently, a journalist filmed the terrible deeds that were being done at Indonesia slaughterhouses after being exported from Australia. There were so abattoirs in Indonesia mistreated cattle before dying in a slow and painful death. After this inhumane mishandling was air on television, even the lover of meat admitted that the manner in which cattle were being handle was far from humane.
When the Australian authority observed poor handling of the cattle in Indonesia, they decided to put a ban on the exportation of live cows. In June 2011, the Australian federal government took a decision of banning the exportation of live cows to Indonesia after an outcry from the public and a threat of revolt from backbench (Farr 2011). Ludwig Joe, the Minister of Agriculture, put a sign on the order and elaborated that the ban would be in place until measures were developed to make sure that they are humane handling of cattle and other animals along the entire chain of supply (Coorey & Allard 2011).
The decision to ban the 318 million $ yearly sector was approved by cabinet and had a possibility of sending ripples across the Indonesia beef industry. The federal opposition and the cattle industry in Australia posed opposition to the ban decision. Julia Gillard, the prime minister indicated that the government would draw the map hand in hand with Indonesia to initiate radical changes on the way to handle cattle in abattoirs of Indonesia.
The absolute ban on live cattle export became apparent when 1900 heads of cattle being planned to be shipped to Indonesia were halted from loading at West Australia in Port Hedland. Objectives: -To analyze the impact on the Australian cattle industry after the ban on exportation of live cattle to Indonesia -To analyze the impact of live cattle exports ban on Indonesia Short-term and long-term impact on the Australian cattle industry Indonesia is the biggest export market for Australian live cattle accounting for 60% of the entire Australian cattle exports.
The Australian cattle industry currently supports Indonesia with 25 % of its needs of cattle meat and 20,000 were exported to Indonesia in 2010. The export industry of live cattle is worth more than 300 million $ annually (Daley& Sedgman 2011). The impact on the live cattle industry in Australia is expected to be huge. There are long term and immediate implications on this ban. Producers of livestock are more prone to the ban.
This is because such producers don’ t have other ways of obtaining income, such as crop farming. The ban has been imposed only after many of the producers have just recovered from the adverse draught and are still being faced by the high cost of production. Additionally, the hardest hit will be live cattle exporters. The immediate impact will affect live cattle that are either in transit elsewhere or already in ships. These will cause the return of the cattle to the producers. Exporters of live cattle, who mostly charter ships for almost 12 months, will be forced to remain in this contract until the end unless room existed within the agreement to cater to bans from governments.
Companies of road transport that specifically deal with the movement of cattle to various ports will also be affected (PPB Advisory Insights 2011, p. 3). Although, they might be able to change to ferrying cows to slaughterhouses located n the south. Additionally, cattle stations that specifically deal with exportations of live produces will be highly affected. There is dismal demand for the cattle products in Australia, hence reducing any options for processing beef locally and either exporting the meat or consuming locally.
This would result in a huge discount on these cattle to encourage domestic consumption. The other implication will be an unavoidable increase in cattle targeted for the domestic market in Australia will push up the supply, lowering demand for cattle. This will be worse since it will combine with the current delicate situation of the cattle industry in Australia that has arisen due to the effects of the strong Australian dollar and the toughness of capital for producers of cattle who are still struggling to regain after a severe drought in the recent history.
Due to saturated, market, producers will be forced to move cattle over long distances to slaughterhouses in the south that will lead to additional costs to farmers, further shrinking their margins (Demirdjian & Senguder 2010, p. 351). This will also result in additional stress to animals causing a negative effect on the quality of meat. There will be high supply to the abattoirs in the south that were recently affected by low supplies caused by floods.
However, it is not certain that abattoirs in northern territories and states will have the capability of coping with rising demand considering that there have been several closures of processing units in recent years.
Cameron, G 2009, Introduction to International Business, Blackwell Science, Oxford.
Coorey, P., & Allard, T 2011, Live Cattle Ban to Stay, viewed 31, July 2011,
Daley, G., & Sedgman, P 2011, ‘Australia bans live cattle exports to Indonesia’, The Star,
viewed 31, July 2011,
Demirdjian, Z, & Senguder, T 2010, ‘Perspectives in global beef consumption’,
Journal of American Academy of Business, Cambridge, Hollywood,
vol. 4, no 2, pp. 348-356.
Farr, M 2011, ‘Cattle industry reeling over live export ban to Indonesia’, Business, viewed 31,
July 2011, ban-to-indonesia/story-e6frfm1i-1226071368446>. Geoffrey, J 2009, The Evolution of International Business: An Introduction, London: Routledge. George, T 2011, Live Cattle Exports: Matter of Public Importance, pp. 3-15. Joshi, R 2009, International Business, Oxford University Press, Oxford. Permani, R 2011, ‘Moving beyond the blame game: the Ban on Australian Live Cattle Exports to Indonesia; Lessons to be Learnt’, Indo-Pacific Governance Research Centre: Policy Brief, vol. 1, no. 5, pp. 2-6. PPB Advisory Insights 2011, Agribusiness, pp. 1-5. Suzanski, O 2011, Live cattle ban threatens wheat exports to Indonesia, pp. 1-3.
Geoffrey, J 2009, The Evolution of International Business: An Introduction, London:
George, T 2011, Live Cattle Exports: Matter of Public Importance, pp. 3-15.
Joshi, R 2009, International Business, Oxford University Press, Oxford.
Permani, R 2011, ‘Moving beyond the blame game: the Ban on Australian Live Cattle Exports to
Indonesia; Lessons to be Learnt’, Indo-Pacific Governance Research Centre: Policy Brief, vol. 1, no. 5, pp. 2-6.
PPB Advisory Insights 2011, Agribusiness, pp. 1-5.
Suzanski, O 2011, Live cattle ban threatens wheat exports to Indonesia, pp. 1-3.