Earlier this month, Beef and Lamb announced it was ''very close'' to landing such an entity, by partnering with meat processing and exporting companies.
But, this week, Beef and Lamb chairman James Parsons said processors had decided not to be involved the proposal.
Beef and Lamb had worked with the companies over the past two years to agree a 50:50 funded way of promoting sheepmeat and beef, and telling the ''country of origin'' story.
An initial budget of $7million to $9million a year had been proposed which would have been funded in an equal split half by Beef and Lamb, on behalf of farmers, and half by processors.
While the decision was disappointing, Beef and Lamb respected processors' preference for their own commercially focused marketing, Mr Parsons said.
By choosing not to be involved in joint market promotion, processors had acknowledged they were accepting responsibility for red meat promotion and would need to make additional investment.
Traditionally, Beef and Lamb and its producer board predecessors had undertaken the generic marketing of beef and lamb, which latterly had been funded by Beef and Lamb through its commodity levy from farmers, while processors and exporters invested in their own promotional programmes and customer-specific industry.
Meat Industry Association chairman Bill Falconer said processors already invested more than $8 million in their own brand promotions and that would increase as new markets were developed.
''Considerable'' time was spent exploring the possible content and cost of a country of origin programme.
But a solution could not be identified that justified processors assuming 50% of the cost, over and above the marketing investments they were committed to making and growing, Mr Falconer said.
Processors' investment would continue to be directed to the product and consumer branded activities they developed with their distributors and retailer partners, he said.
Mr Parsons said Beef and Lamb's board and senior management was now ''taking a deep breath'' and considering next steps before preparing its final proposition to be put to farmers for the 2016-22 commodity levy cycle.
