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Abstract
The Australian preserved mushrooms industry is one of a number of industries in the
horticultural sector that is under threat from cheaper imported products. The Australian
Customs Service is currently investigating the alleged dumping of Chinese imported cans
of preserved mushrooms that feature prominently on supermarket shelves. Evidence
exists that cheaper imported Chinese products have incurred injury in the Australian
market. These Chinese imports have penetrated the Australian preserved mushroom
industry and compete intensely on price, although the one remaining domestic producer
in the Australian market claims stronger brand loyalty. However, it is possible that
concentration on price competition might lead to a neglect of more damaging long-term
product competition from these imports. We highlight the nature and extent of this
competition by identifying demand, price and expenditure relationships between local
and imported preserved mushrooms.
Of four propositions tested in the analysis, two were supported but results of the other
two tests were contrary to expectations. It was expected that the Australian producer
competed more on brand recognition than price but evidence suggests otherwise. Also, it
was expected that consumers would prefer a domestic ‘lite’ product over other domestic
products with greater health-consciousness among consumers as incomes increase. Yet,
while this product has the highest expenditure elasticity of demand among domestic
products, it did not command a significantly higher proportion of sales with an increase in
the budget for preserved mushrooms. On the other hand, the proposition was tested that
consumers show greater preference for products in brine with an increase in the budget
for preserved mushrooms on the premise that these products are more versatile and
attractive to a younger and richer cohort of shoppers buying the products. Evidence
supports this proposition and thus an advantage lies with the Chinese producers who
supply mushrooms using the brine-preserving medium. Finally, significant and positive
cross-price elasticities of demand were confirmed between domestic and imported
brands, suggesting that Chinese imports do compete with domestic products on price.