The report, United Kingdom: Exporting Dairy to the World, recognises the gains the UK has made outside familiar European Union markets.
In the past five years, the volume of dairy exports has increased 91% to markets outside the EU, while only 28% within the EU.
This change recognises the need to target markets where demand is predicted to grow fastest. As stated in the McKinsey report, considered in AgriHQ Pulse last week, the DairyUK strategy notes that demand over the next 10 years will mainly come from developing economies in Asia, South America and Eastern Europe.
In addition to the familiar spurs for export growth – increasing innovation, productivity, ensuring a skilled workforce is equipped for the future and nutritional value of dairy products are promoted – the strategy singles out better regulation and certification as central to growth ambitions.
“Best practice from other dairy exporting countries provides a strong indication of the areas that the UK industry and the government need to get right to ensure we have efficient and cost-effective systems which support export growth while ensuring consumers, customers and global regulators remain confident in the safety and quality of UK dairy products.
“The industry requires the government and its agencies to take action in order to ensure relevant regulatory and certification systems are in place and that market access is improved.”
Among the aspects of certification the strategy believes the UK can learn from New Zealand are around streamlining the export certification process. The report cites the Ministry for Primary Industries’ verification regime and eCert system that reduces the total cost of verification, significantly reducing the risk of errors and fraud.
Among the export target markets cited in the strategy, China ranks number two behind Gulf states and North Africa. The report does, however, detail the advantage NZ holds with its existing free-trade agreement with China.
“FTAs can result in competitive disadvantage for UK exporters where the EU does not have an FTA.
“China is a major dairy importer that has an FTA with NZ, and provides for a phasing out of tariffs on major dairy products by 2019.”
The NZ-China FTA rate for whole milk powder is currently 3.3%, compared to 10% for the EU. The differential on cheese is more marked – 2.4% for NZ, compared with 12% for the EU.
