Canada-Korea Free Trade Agreement: Olymel welcomes a return to competitive market conditions

MONTREAL, March 11, 2014 /CNW Telbec/ - The Olymel l.p. executive welcomes the announcement of the conclusion of a free trade agreement with South Korea and regards it as an important step toward the signing of other bilateral trade agreements in Asia, a very promising market for the Canadian pork industry. However, Olymel would hope that the provisions of the agreement be made known as soon as possible and that they serve to quickly restore a competitive position for the Canadian pork industry and its products.

"For the past two years the Canadian pork industry has suffered the adverse effects of the free trade agreement between the United States and South Korea that went into effect in 2012, including a steady decline in Canadian pork exports as a result of the gradual tariff reduction enjoyed by U.S. products compared to Canadian products. Together with its partners in the Canadian pork industry, for quite some time Olymel has been lobbying the federal government for a free trade agreement that would level the playing field for Canadian pork products, which are highly prized by Korean consumers. Olymel welcomes the fact that the Canadian government has finally reached an agreement with its Korean partners to eliminate unjustified trade barriers. Removal of these barriers will benefit the pork industry as well as the entire Canadian economy," noted Olymel CEO Réjean Nadeau.

In the absence of a free trade agreement between Canada and Korea, Korean tariffs currently levied on Canadian pork imports amount to 25% for frozen pork and 22.5% for refrigerated products. The tariff charged for U.S. frozen pork will be abolished completely in 2015, and tariffs on chilled pork will be eliminated gradually over a 10-year period. In the absence of the Canada-Korea free trade agreement, the Canadian industry faced a rapid erosion of its competitiveness and, in the very short term, the irretrievable loss of this market for the Canadian and Quebec pork industry.

Olymel has maintained close business relations with South Korea for over 20 years, and even has an office in Seoul. This market, comprising nearly 50 million people, is fond of fresh and frozen pork cuts, and Olymel has always held a significant share of a market which, before the free trade agreement with the U.S. went into effect, was valued at $300 million. The majority of the Olymel pork products exported to Korea come from Quebec farms. However Olymel believes it will take several years before the provisions of the free trade agreement with Canada enable its products to become competitive in this important market.

About Olymel l.p.
Olymel LP is a Canadian leader in the production, slaughtering, processing and distribution of pork and poultry meats, with facilities in Quebec, Ontario, Alberta, New Brunswick and Saskatchewan. The company employs close to 10,000 persons and exports nearly a third of its total sales, primarily to the United States, Japan, Russia and Australia, as well as some sixty other countries. Its annual sales are approximately $2.5 billion, with a slaughtering and processing capacity of 160,000 hogs and 3 million birds per week. The company markets its products mainly under the Olymel, Lafleur and Flamingo brands. www.olymel.ca

SOURCE: Olymel l.p.

Olymel:  
Richard Vigneault
Corporate Communications     
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