1. Question: Why is the ACCC running an inquiry into the Wagyu Industry?
Answer: The ACCC has had a focus on the food industry over the last two years. As Wagyu is the highest premium product in the beef industry and one of the highest value food items available it was only natural that the ACCC would look into the Wagyu Industry.
2. Question: Do you think this is a good thing/do you support this inquiry?
Answer: The Australian Wagyu Association supports the inquiry. The Wagyu industry is a premium food industry and so we are focused on integrity. The AWA is a member organisation and the peak body for the industry. The AWA supports truth in labelling and product integrity and has communicated this with our membership. Consumers are becoming more interested in the food they are eating and where it comes from. For example, whether a product includes gluten; or is produced in South Australia or NSW is very important. The same principle applies to the credence claims made regarding premium Wagyu beef products.
Answer: This is the ACCC’s responsibility to determine. The AWA promotes integrity and truth in labelling. The AWA has developed Trade Descriptors which cover all classes of Wagyu-type livestock in the industry. The Trade Descriptors cover the supply of both Wagyu Full-blood 100% and Cross-bred Wagyu classifications. These descriptors have been endorsed by the Australian meat industry peak body for national industry standards and processing, AUS-MEAT, under its Raising Claims protocol.
Answer: High quality Wagyu beef is easily identifiable from nearly all classes of beef available for consumers to purchase. High quality Wagyu beef has very high levels of intramuscular fat known as “marbling” which provides high levels of juiciness and flavour. This is what separates Wagyu from other breeds. When purchasing Wagyu at retail or restaurant level, consumers can ask to see the raw product and visually check the cut section. The marbling will appear as fine white lines like a road map across the meat surface. Also consumers can ask to see the carton the meat came in to check the processor’s description and seek any additional information regarding the source of the product and the credence claims made from the brand when they are purchasing Wagyu beef.
Answer: The Australian Wagyu Association represents individuals and businesses which make up most of the production and supply chain of Wagyu beef in Australia. So our members include most Wagyu producing beef farmers, feedlots and processors. Several of our most prominent members are entirely vertically integrated, producing and processing Australian Wagyu then delivering this beef to some of the most demanding consumers in the world – from Kingsley’s of Sydney and Harrods in London, to leading high end food service establishments across the Middle East, Asia and America. However, we have very few Australian retail butchers or restaurant owners in the membership.
We are a world leader in the use of DNA technologies to verify the parentage of all animals registered in our Herdbook to confirm their breed integrity and predict their genetic performance.
Answer. To do this you must consider the Japanese history and origins of Wagyu beef. Wagyu is a Japanese word where “wa” means Japanese and “gyu” means cattle. The term collectively covers several breeds considered native to Japan. By far the most prominent is the Japanese Black breed, from which most Australian Wagyu are descended, with Red Wagyu or Akaushi also used. But both in Australia and Japan, a high proportion of Wagyu beef products are produced by crossbreeding fullblood Japanese Blacks with other breeds. The Japanese consumer easily distinguishes between fullblood and crossbred Wagyu retail beef because higher value fullblood products are identified by unique grades in the official Japanese beef grading system and these higher grades cannot be applied to crossbred beef in Japan. There is no similar grading system in Australia, but the Australian Wagyu Association has now developed a specific Trade Descriptor labelling language to support local consumer purchasing decisions. Looking overseas, in the global market, this level of understanding has yet to emerge – but Australian bred beef from the Japanese Black breed is already considered to represent the very best in beef eating tenderness, flavour and overall quality. So we are now looking at ways of supporting our domestic and international consumers with clear Trade Descriptions. Wagyu is the most expensive beef in the world, reflecting not only exceptional eating quality but also very high cost of production.
Answer: Rapid evolution in the Australian Wagyu production system is a likely source of a lot of misunderstanding today, because Wagyu beef production in Australia has a short history – starting from the early 1990s. From start up to around 2005, almost all Wagyu beef produced in Australia was F1 – that is a cross between a fullblood Japanese Black bull and (usually) an Angus or Holstein cow. This was because the number of fullblood cattle was entirely insufficient to support a fullblood beef production industry. This has changed slowly in the last 10 years. Only now do we begin to have as diverse a range of Wagyu products in Australia as there is in Japan, with the accompanying need to be able to differentiate between different qualities at retail level. It is estimated that some 10% of Australia’s Wagyu production is Wagyu Fullblood 100% and the balance Crossbred Wagyu.
8. Question: What are the differences between Fullblood, Purebred and F1, F2, F3 Wagyu in terms of the livestock ?
Answer: Australian Fullblood Wagyu are 100% direct descendants of Japanese herdbook livestock, and these animals are directly comparable to those in today’s Japanese home herd. DNA parent verification has confirmed this direct linage for all animals registered in the Australian Wagyu Association Herdbook. Purebred , F3, F2 and F1 are crossbred Wagyu defined under the Wagyu Breed Trade Descriptions as:
9. Question: What are the differences between Australian Fullblood, Purebred and F1, F2, F3 in terms of beef quality and beef pricing ? How are these differences substantiated and how can consumers tell the difference?
Answer: Full-blood Wagyu 100% is the highest quality Wagyu beef available in Australia, producing beef that has a favourable ratio of fatty acids with soft melting fats. Full-blood Wagyu beef consistently achieves the highest scores in AWA Branded Beef Competitions.
F1, F2, F3 which is commonly referred to as Crossbred Wagyu is a very high quality product with abundant marbling.
Meat Standards Australia (MSA) is the Australian beef grading system for eating quality. MSA have reported that 50% of the Wagyu-type beef graded under MSA rank in the top 1% of the Australian national beef population which has been graded by MSA; and 75% of MSA graded Wagyu-type rank in the top 5% of the MSA graded national beef population.
With regards to pricing Wagyu Fullblood achieves a premium over Cross-bred Wagyu. However, this cost is a direct reflection of the additional effort and cost of production incurred by Fullblood production, where the animals are regularly feedlot fed for between 450 to 650 days. Crossbred Wagyu are usually fed for some 350 to 450 days.
10. Question: What is the role of the Australian Wagyu Association in the Australian Wagyu industry?
Answer: The primary role of the AWA is the management of Wagyu breeding herd integrity in Australia. We are a world leader in the use of DNA parent verification technology to confirm the integrity of Wagyu breeding. Our meticulous pedigree database in which we relies on DNA genotyping to verify the parentage of Herdbook registered calves. We were one of the first breeds to adopt this approach, going back to 2002. This registration system has also enabled the development of the purebred herd, and underpins sire selection for the production of F1 Wagyu. Very few livestock breeds in Australia can demonstrate such high integrity in livestock pedigree management. In addition, we are developing a Percentage Wagyu Content genomic test which will be included in our Wagyu Breed Verification Program to determine the level of Wagyu content in cattle throughout the supply chain. This simple test will underpin Wagyu content verification.
11. Question: When do you expect this test to be in place?
Answer: The AWA is currently working to develop the Percentage Wagyu Content genomic test with the University of Queensland Animal Genetics Laboratory. We expect the test to be in place within four months.
12. Question: What is AWA doing to protect the consumer and the integrity of Wagyu beef markets now?
Answer: The AWA has consistently promoted integrity and truth in product labelling. To enable the trade to carry this through the Wagyu supply chain, AWA has developed unique Trade Descriptors which cover each individual class of livestock in the industry, including both Wagyu Fullblood 100% and Crossbred Wagyu classes. These descriptors are officially endorsed by the peak body for national meat industry standards and processing, AUS-MEAT. The AWA also requires all members to abide by a code of conduct which is insistent on a similar high standard of integrity in labelling and describing their Wagyu products.
13. Question: How does this assist the consumer at retail level or in the food service industry – in high end restaurants for example?
Answer: Use of any of these Trade Descriptors by retailers or restaurateurs is discretionary – entirely voluntary on their behalf. We also have very few members in this category, but most high quality vendors in this part of the supply chain are meticulous in the maintenance of their own, very high QA standards. Consumers who remain uncertain about descriptions of Wagyu at retail level should seek explanation from the individual retailer or restaurateur, who should have this information readily available in his procurement records. Additionally, in many cases, consumers will be able to easily recognise Wagyu beef at retail by its visual signature – very high levels of white intramuscular fat known as marbling.
14. Question: What power do you have to police the use of proper descriptors or accurate labelling when Wagyu is being marketed?
Answer. AWA is a breed society, and has no regulatory or supervisory powers whatsoever in the governance of the retail beef market. The best we can achieve is the provision of detailed guidelines for good descriptors and accurate labelling, backed with encouragement that our members comply with these. Beyond that, market governance and the maintenance of labelling accuracy compliance across the retail food sector is the charter of the ACCC and related government bodies.
15. Question: What happens if you discover a member is breaching guidelines?
Answer. We would first discuss the matter with the member. If we were unable to achieve compliance, we would then be obliged to consider expulsion of the member from the association. Any such action, and any additional action would be considered on an individual case by case basis.
16. Question. Are you currently looking into any such cases?
Answer: We do not have any current non-compliance cases before the Association.
17. Question: Have you ever investigated such a case?
Answer: There are none that we are aware of.
18. Question: Why do you think the ACCC now proposes an inquiry in this area?
Answer: The ACCC has had a focus on the food Industry over the last two years. As Wagyu is the outstanding premium beef category and one of the highest value food items available it was only to be expected that the ACCC should examine the Wagyu Industry at some point. We will support the inquiry and have already urged our members to provide similar cooperation.
19. Question: What does the future hold? Is the situation likely to become more or less complex?
Answer: Research by organisations such as MSA is already revealing that Australian Wagyu is almost overwhelmingly superior in eating quality. As a result, over coming years we expect that Wagyu genetics will be infused in a very wide variety of beef products. As this situation evolves, it is possible that a national Wagyu standard becomes the best method for ensuring accurate retail description of Wagyu infusion in beef. This might then be a case for Standards Australia consideration, going along the path already adopted by the certified organic industry. We would welcome a Standards Australia definition for describing Wagyu products and Wagyu production, with full traceability.