Australia's fourth largest meat processor has sold a 45 percent stake in its business to Chinese company Shan Dong Delisi Food Co Ltd, in an early test of the new free trade agreement terms.
News Corp reported on Wednesday that the deal, worth upwards of 105 million U.S dollars to Australian company Bindaree Beef Group, is likely to test the Chinese market for beef imports after the China-Australia Free Trade Agreement was struck in June.
Under the FTA, Shan Dong is allowed to supply cut-price beef to up to 700 million Chinese buyers.
Bindaree's chief financial officer James Roger said the FTA between China and Australia will bring "enormous benefits" to Australia's beef industry.
"With the benefits from the FTA flowing to the Australian beef industry, the opportunity to become a premium beef supplier to China is one that we expect will bring enormous benefits, not just to Bindaree but to Australia's broader beef industry," Roger said in a statement.
Bindaree's decision to sell nearly half its stake in the business to its Chinese-based rival would open up greater opportunities for China's middle class to access Australian beef, which would soon prove to be a win for both companies.
Last week, Australia's opposition agreed to terms of the FTA, meaning changes to Australian legislation have been approved to allow the deal to go ahead.
By the time the FTA is enacted and passed through Australia's senate, a number of two-way tariffs, including those against beef, will be removed.
