UK-NZ FTA a ‘fantastic opportunity’ for Fonterra

The new UK-NZ FTA means the removal of all UK tariffs on Kiwi dairy for the next five years. File photo / Christine Cornege

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The new UK-NZ FTA has generated a lot of excitement in both countries and also provides a “fantastic opportunity” for Kiwi dairy farmers, Trade Strategy Manager for Fonterra’s Europe, Middle East and Africa regions, Mark Casey, says.

The agreement meant all UK tariffs would be removed from New Zealand dairy over the coming five years, Casey told The Country Sport Breakfast’s, Brian Kelly.

This gives the New Zealand dairy industry a chance to work closely with the UK, as well as seek new opportunities for growth across all dairy products; such as grass-fed butter and cheese.

It was also an exciting time for UK consumers, Casey said.

“The UK market is one of the biggest importers of dairy - and they love their dairy.”

The “Kiwi brand” also had a nostalgic quality for certain consumers, he said.

“Some of those folks actually still remember fondly New Zealand dairy when it went into the market many decades ago before they joined the EU and they certainly value that quality.”

Sustainability and animal welfare also appealed to the market, Casey said.

“So, for us, we see a real potential for our grass-fed farming credentials to fill that space.”

The trade deal came into effect at the end of May and Fonterra has wasted no time taking full advantage of it.

“I’m pleased to say we’re busy here at Fonterra - we’ve already got a bit of product on the water, heading over now,” Casey said.

While the removal of all dairy tariffs over the next five years sounded great, Kelly wondered if it was too good to be true.

He asked Casey if there was a catch.

“Yeah, there’s always a catch with these things,” he laughed.

He said it was a challenge entering any new market.

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“It takes time to build up these relationships again and you can’t just succeed at scale overnight - but we’ve had boots on the ground forming those solid relationships since we knew that this was going to come into force - we think that’s time well spent.”

One challenge was that, even though New Zealand dairy was known for its sustainability, products still had to travel all the way to the UK, Casey said.

“We’re getting that message to our customers and they’re starting to see that the transport footprint is minimal when it comes to the actual, behind-the-farm-gate stuff we’re doing at Fonterra and on our sites, that’s where the real carbon footprint benefits are made.

“So that point is starting to resonate, which is great.”

However, the competition was still going to be “hot” despite this advantage, but Fonterra felt confident it could win UK consumers over, Casey said.

“At the end of the day ... it’s a great market and we know we’ve got something really special to offer customers there.

“So, it’s a great opportunity for us and for New Zealand dairy.”