That was the view of Dairy Companies Association of NZ chairman and former trade envoy Malcolm Bailey, also a director of Fonterra, the largest exporter.
“We have the quotas, negotiated when Britain entered the Common Market, but we still face quite high tariffs and when world prices are low, other markets are preferred.”
The butter quota was nearly 75,000 tonnes annually and the cheese quota 11,000t.
In 2015 NZ sold 63,500t of dairy products in total, including 24,500t of butter, 19,000t of anhydrous milk fat, and 10,000t of cheese. Only 3000t in total went to the UK.
Sales to the EU were worth US$287 million and EU dairy sales to NZ, mainly lactose and whey permeate, were US$91m.
Bailey was asked if NZ would assume that the access agreement applied to the EU or UK post-exit, or both, but he said “that’s when it gets complicated”.
“There are some in Britain and Europe that will assume that when the UK leaves the EU all bets are off.
“We would argue for reallocation of our quota access.
“But both Britain and the EU will have bigger fish to fry before our access gets discussed.
“We don’t know where NZ will come in the queue.”
Fonterra’s director of global stakeholder affairs, Phil Turner, said currency movements and possible world market movements would mean more than EU-UK quota matters in the short term.
Federated Farmers dairy section chairman Andrew Hoggard said World Trade Organisation rules said existing access agreements couldn’t be downgraded.
“On the downside, we have lost an ally around the EU table in negotiating a free trade deal with the EU and with all the global uncertainty this may have a negative impact on demand.”
