Malaysia has declared some Australian beef no longer fit for Muslims to eat, saying slaughtering methods designed to ease an animal's suffering do not comply with Islamic strictures.
In mainly Muslim Malaysia, animals must die from a single slice to the throat for the meat to be deemed halal, or fit for Muslim consumption, but under Australian animal-welfare rules, cattle are sometimes "stunned" before their throats are cut.
Another method, in which a separate cut is made to the thoracic artery to speed up death, is also deemed non-halal.
Malaysia revealed its stance on Friday after bilateral trade talks in Kuala Lumpur, saying it had withdrawn halal certification from 15 Australian abattoirs and processing plants.
The issue has already riled the New Zealand meat industry, which says some of its abattoirs have also lost Malaysian halal certification despite meeting their own domestic halal rules.
Australia, a major beef exporter, is estimated to earn around A$20 million ($15.2 million) a year from halal exports, Australian Trade Minister Mark Vaile told Reuters after the talks with his Malaysian counterpart, Rafidah Aziz.
"We slaughter and sell an enormous amount of red-meat product under halal certification and supervision in Australia," he said.
Australian veterinary experts and Malaysia's halal certification body are looking at ways of meeting both Islamic strictures and animal-welfare considerations, Vaile said.
"I'm quite confident that we will be able to resolve it," he added.
New Zealand, which has similar animal-welfare rules on slaughtering, has also fallen foul of Malaysia's halal ruling, the New Zealand Meat Industry Association said in a statement.
A Malaysian Islamic Development Department official said that while it had withdrawn halal certification from 15 Australian abattoirs, it had extended certification for another 12 there.