New Zealand trade deal to hit UK meat producers

By Rod Addy

- Last updated on GMT

If NZ lamb exports to China were banned, exports to the UK would increase by 29,000 tonnes, according to AHDB
If NZ lamb exports to China were banned, exports to the UK would increase by 29,000 tonnes, according to AHDB

Related tags Supply chain Meat & Seafood

UK meat producers will be 'negatively impacted' by its trade deal with New Zealand (NZ), particularly if the country's trade with China is disrupted, according to levy board AHDB.

The organisation's head of strategic insight Phil Swales, while acknowledging the impact would be modest, said: “It’s clear NZ farmers will benefit from this trade deal with UK farmers negatively impacted.”

AHDB, working in collaboration with Harper Adams University, conducted economic modelling of the impact of the new Free Trade Agreement on the UK and other major players. It used a trade network model to measure the impact of the deal.

The research revealed limited opportunities for UK exporters to NZ and a limited short-term threat to domestic supplies as NZ focuses on lucrative existing markets such as China.

Longer-term risks

However, the analysis highlighted the potential longer-term risks to the UK agricultural supply chain if future political relationships were factored in.

NZ could increase lamb exports by increasing production and diverting some existing exports, notably from China, the research indicates. A reduction of the current level of non-tariff barriers, in both directions, would lead to reduced costs for NZ exporters supplying the UK market. If China banned NZ lamb imports, its lamb exports to the UK would increase by 29,000 tonnes. 

In addition, AHDB highlighted a threat to UK beef producers. NZ could increase beef output and reduce exports to the EU and the US in order to send more to the UK. If China banned NZ beef imports, New Zealand exports to the UK would increase by 7,000 tonnes.

Cheese, butter and pork

However, AHDB claimed the potential impact on the cheese, butter and pork trade would be more subdued if NZ-China relations soured. From 2018 to 2020 an average of just 0.1% of the UK’s dairy imports came from NZ. 

For pork, NZ and the UK are both net importers, although the UK does export some pork products to NZ, the EU and China. The EU and US are significant global exporters and the model suggests any changes to trade flows for pork as a result of the trade deal will be minimal.

Swales was quick to point out the overall impact of the trade deal on meat producers would not happen immediately. “While our analysis does highlight the benefits to NZ farmers will far outweigh those for UK farmers, it’s important to remember implementation of FTAs takes time. As a result it is unlikely NZ red meat, for example, will start to flood UK supermarket shelves.”

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