£240 million UK-Chinese dairy deal to allow for third-country milk

International Trade Secretary Dr. Liam Fox today (Thursday, August 23) met with China’s General Administration of Customs to reach an agreement which would allow the import of UK dairy products made with milk from third countries.

 

The agreement is estimated to be worth £240 million over five years to the UK.

With demand for most dairy categories growing by more than 20% each year in China, it is one of the country’s fastest-growing areas of food demand.

The UK exported over £96 million of dairy products to China in 2017, and there has been significant interest in the market following the Prime Minister and Dr. Fox’s visit earlier this year.

 

This deal means that producers will have increased flexibility in sourcing the dairy they use for their products.

The UK Government is determined to open up agricultural opportunities to British businesses and follows the Chancellor’s visit to China where he announced a lifting of a two-decades-long ban on British beef. The deal was expected to be worth £250 million.

Speaking to the BBC earlier, Secretary Fox said: “Lakeland Dairies in Northern Ireland is likely to be the main beneficiary of this deal.”

A spokesperson for the Lakeland reportedly told the BBC it welcomed any trade agreements which “enhance the possibility of further export growth towards China”.

NI Reaction

Ulster Unionist agriculture spokesperson Robin Swann welcomed the trade deal breakthrough.

As Northern Ireland is a major importer of milk from the Republic of Ireland, the province is set to be one of the main beneficiaries from the deal.

Swann said: “China, with its population of 1.4 billion people, is currently experiencing a surge in demand and consumption of dairy products.

“Whilst China already is a major importer of British dairy products, the news that the UK will now also be able to export products containing third-party milk is a major step forward and a sign of confidence for the local dairy market.

The agreement is estimated to be worth £240 million over five years to the UK – and Northern Ireland will likely receive a good proportion of that.

“As we are little more than six months away from Brexit these major trade deals are worth their weight in gold,” Swann added.

“Dairy farmers and processors, especially those with a lot of movement back and forth across the Irish border, understandably are nervous about what the future may hold for them post Brexit.

“Deals therefore such as this Chinese agreement will come as a major relief to them,” he concluded.

Meanwhile, Democratic Unionist Party (DUP) MEP Diane Dodds also commented on the announcement.

She said: “I am delighted with today’s announcement by Liam Fox that UK dairy companies, and in particular those firms from Northern Ireland, will have greater access to the Chinese market.”