The Australian regional office of a large multinational company engaged FPL Advisory to develop a new export strategy after facing unusual and sudden trade barriers in their Chinese market.
Policy Analyst, Sam Perkins updates us on the challenges of diving into the unfamiliar in this case study profile.
A major food manufacturer in Australia that had been exporting their goods to China for many years were hit with a sudden export blockage. Their shipping containers were prevented from passing through ports and into the market due to a alleged phytosanitary risk. The company was both concerned and surprised as this had never happened to their previous shipping containers. Their in-country consultants reported that the blockage was due to the containers not being on an ‘approved list’ and it would take two years to return to their normal exporting process in the Chinese market. We were then engaged to provide a second opinion.
The research sources were largely written in Mandarin, which meant that we had to rely heavily on translating information in the early stages of the discovery process. These findings could not be definitive so we used the translated research to at least disprove some of our early theories about what the real problem could be. We also engaged the Department of Agriculture in Australia, which manages issues around phytosanitary risk and export certification and we were able to determine the consistencies and discrepancies with what was appeared to be happening on the Chinese Government side.
We were able to find a certification pathway that had not previously been identified. The company was able to use an official inspector from the Chinese authorities to approve each shipment by issuing the appropriate certification to demonstrate that there was no phytosanitary risk, which is a WTO standard practice. This solution was significant because a two year halt to the company’s exports would have threatened their supply chain partnerships and visibility in the Chinese market.