Indonesians’ love of beef put to test in price war

18 June 2016
A CNN poll in 2011 concluded that meaty and spicy beef rendang was the world’s most delicious food. Will the popular Indonesian dish top the list again if restaurants begin using frozen instead of fresh beef?

With beef prices remaining high over the past weeks, the Indonesian government is considering increasing the volume of frozen beef imports in an effort to tackle limited supply and cut the lengthy distribution chain of fresh beef in the domestic market.

Frozen meat can keep for up to 12 months if put in cold storage or a freezer. In Indonesia, frozen beef is mostly sold in supermarkets while traditional markets sell fresh beef.

While most Indonesians prefer to use fresh beef, frozen beef has been become widely used in many countries with reliable facilities that can support the distribution of the perishable product.

“Residents are used to fresh beef. However, the logistics and supply chain for fresh beef needs a lot of work,” Trade Minister Thomas Lembong told reporters recently, as he shared his plan to introduce frozen beef nationwide.

Frozen beef, Thomas said, not only could be stored for far longer, but was also more hygienic as the temperature at which it was stored killed bacteria.

Frozen beef could well serve as a solution to the beef supply shortage and as a price stabilizer, Thomas said. However, he assured that the products offered to the retail market would be different to those sold to factories.

He acknowledged that changing people’s habits would take time and money; not only would the government need to persuade residents to change their habits, it would also need to invest in developing cold storage facilities. The government and businesses will also need to develop and procure cold storage infrastructure and facilities at each link of the supply chain.

“This is just my personal idea. I still need to take it to internal and coordination meetings for approval,” Thomas said.

The Indonesian Beef Producers and Lot Feeders Association (Apfindo) said the country needed about 169,000 tons of beef for this year’s Ramadhan and Idul Fitri, the biggest holiday in the world’s largest Muslim-majority country. The stock of local beef, meanwhile, only stands at about 113,000 tons.

Earlier this month, the government announced that it would import 27,400 tons of beef in hopes of forcing the price down to Rp 80,000 (US$6) per kilogram, from around Rp 120,000 per kg at present.

Importer PT Indoguna Utama is among the companies tasked by the government to import frozen beef. The company has been tasked with importing 1,000 tons of beef over the next two weeks to be sold at subsidized-goods markets at government and police offices. The frozen beef, imported from Australia, New Zealand, the US and Japan, will be sold at Rp 70,000 per kg.

However, Indonesian consumers and restaurateurs might be hard to win over.

Restaurateur Longway Sanjaya, 59, said that fresh beef was important to ensure his dishes were of high quality.

“We’re worried about using frozen beef as we don’t know how long it’s been stored for. When it comes to fresh beef, we know that it’s only been a day or two [since the animal was slaughtered],” said Longway, who owns a Chinese restaurant on Jl. Hayam Wuruk, West Jakarta.

He, however, said he was willing to switch if frozen beef was cheaper. “But I have to make sure the meat is still in good condition.”

Institue for Development of Economics and Finance (INDEF) executive director Enny Sri Hartati said frozen beef could be a short-term solution, but traditional markets still lacked proper infrastructure to support the plan. For a long-term solution, she said, the government should instead focus on increasing production to minimize its reliance on imports.

“Frozen beef for industry and horeca [hotels, restaurants and cafes] is fine because they have cold storage facilities and refrigerator trucks. But traditional wet markets don’t have this luxury,” she said.