Opportunity Down-Under?

“I’m cynical and sceptical about the Australian trade deal, but it’s up to UK meat producers to adjust and target new markets and build on the fact that we’re one of the best producers of grass-fed beef and lamb in the world,” says Richard Williams-Bulkeley, Land Manager for Baron Hill Estate. Farming 1,000 acres in North Wales, this business manages 600 head of beef cattle and 2,000 sheep.

Richard’s words came in response to a meeting with His Excellency the High Commissioner for Australia to the UK, the Hon George Brandis QC – with farmers, landowners and local politicians in Anglesey – one or a series of engagement events.

Also representing the CLA, North Wales landowner and business-manager, Angharad Owen added, “Asking the High Commissioner how the Australian government consults its’ agriculture sector, it became clear that a close relationship exists between the sector and the administration. The farming lobby is powerful and it was able to set out some clear red lines to the Australian government and expect it to listen. UK Government: take note!”

Meat and Livestock Australia (MLA), the industry’s marketing body there, welcomed last December’s UK trade deal without reservation, stating that the Deal “will see Australian beef and sheep-meat/goatmeat access to the UK liberalised over a transition period…. This will mean that Australia will be better placed to help supply some of the UK’s import requirement for high-quality meat.” The MLA refers to the UK as a “loyal purchaser of Australian beef and sheepmeat, albeit in in small volumes..” They look forward to future trade being “more streamlined, removing burdensome costs that ultimately disadvantage British consumers and stifle opportunities for market development.” No concern is expressed about the impact of UK imports into Australia.

The Australian Government itself referred to the agreement making Australian exports to the UK cheaper, listing benefits, which include a tariff-free quota for beef expanding to 110,000 tonnes in 10 years, for sheepmeat to 75,000 in the same time. At the same time, Australians will save around Aus$200 million on imports from Britain “such as cars, whisky, confectionary, biscuits and cosmetics.”

Addressing North Welsh farmers, The Hon George Brandis QC, in his role since 2018, said, “The UK must accept Brexit has happened and one of the consequences is that it puts an imperative on the UK to reach out… and find new markets.”

“I don’t think Australia got a better deal out of it than the UK,” said the High Commissioner, formerly a politician and government minister. “What the deal has done is provide opportunities for both countries… the really big dividend for the UK is the stepping-stone into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).”

“What you want is markets,” he added. “This gives you entry to new markets in the fastest-growing region of the World economy.” Population growth, need for protein and, above all, the ambition in these countries to become more prosperous – will drive demand for high quality food.

The High Commissioner said that although there will be greater access for Australian product to the UK, Australia (like most of the Pacific-rim countries), consumes more than it produces. Already it’s a net importer of processed food. UK farmers must see great opportunity in downstream products, notably in dairy products such as cheese.

The Australian High Commissioner was challenged about the low cost-base for his country’s livestock products, associated with lower animal welfare and environmental standards. He accepted that compliance with UK market standards would certainly affect bottom-line. The Australian RSPCA itself has raised concerns about how the livestock sector will change. Questions were also raised about climate change. Australia has experienced 17 years of drought and faces further environmental pressure. While livestock production increased exponentially until the middle of the last decade, it has since levelled-off and that they may be struggling to meet increasing demand rings true. Finally, the increase in worldwide transport costs will nibble away at margins (for all parties).

“We left the meeting still sceptical about the balance of trade in volume,” Richard Williams-Bulkeley concluded. “But we command some of the highest welfare and environmental standards, and produce high quality products. It means that the best opportunities exist for premium meat producers and specialised products.”

“There are clearly lessons to learn for the UK from this, the first major trade deal. First: much depends on signatories meeting respective market standards and commitment to global issues. Secondly, while we focus on this commercial relationship, we must look over our shoulders at other low-cost producers like Brazil – even volume-budget producers, closer-to-home. Thirdly, the UK government must be closely focused on market development for the vital farming sector. Above all: we need confidence that the uncertainty created by this trade deal will not be repeated in a pattern in future international free-trade deals.”