The New Zealand/EU free trade agreement (FTA) is “unlikely to pose a threat” to UK exports, the Agriculture and Horticulture Development Board (AHDB) has said.
The FTA, which came into force yesterday (Wednesday, May 1), improves access for New Zealand sheep meat, beef and dairy to the EU.
Analysis from AHDB revealed that, although the FTA will allow for increased volume of New Zealand sheep meat to the EU, it is “unlikely to displace UK exports to the region”.
The EU is the UK’s largest market for sheep meat, with 79,700t of fresh and frozen product shipped in 2023 valued at £524 million.
It is the second largest market for New Zealand sheep meat, with 54,000t of product shipped to the market last year.
AHDB senior economist, Jess Corsair, said: “There has been some concern aired in the industry that the NZ/EU FTA could result in a deluge of New Zealand sheep meat entering the EU market posing a threat to the UK export trade.
“However, our analysis has highlighted several factors to allay the concerns of UK sheep meat exporters.
“EU sheep meat production fell in 2023 and is expected to fall further this year, helping to consolidate the UK’s position as the major supplier to this market.
“Given the different products and markets of the UK and New Zealand, it would suggest that when the new FTA is in force, New Zealand product will not displace UK sheep meat exports to the EU.”
Dairy and beef
AHDB’s analysis also revealed that, while NZ/EU FTA will also provide for improved access for dairy products to the EU, the UK’s “strong foothold” in the market should ensure it remains a key exporter to the region.
Similarly, the UK exports much more beef to the EU than New Zealand, AHDB said.
“The UK’s market share in the EU for the main dairy products – milk powder, butter, cheese and dairy processed animal proteins and whey products – is strong at 65%, 70%, 64% and 66% respectively,” Corsair said.
“Butter is the only category where New Zealand has had a notable market share and this is falling. As such, the UK is likely to remain a key exporter of dairy products to the EU.
“About a third of New Zealand beef exports to the EU are fresh boneless cuts, but in a much smaller amounts than the UK. That said it will be an important area to keep an eye on as the trade deal comes into place.”
Corsair said the overarching feeling is that, based on AHDB analysis, sheep meat, dairy and beef exports from the UK to the EU should not be “adversely affected” by the NZ/EU trade deal.
“We will, however, continue to monitor trade as it evolves as any changes to New Zealand’s relationship with its other trading partners may have a knock-on effect on EU trade.”
