British dairy seeks Brexit benefits

The Irish hope that the British will again take a lenient stance towards the European Union (EU) after the British elections. This is, of course, about Brexit and its possible consequences. Meanwhile, the British dairy sector sees a golden opportunity to improve the position of its own sector. Is that a danger for the Dutch sector? 

A hard Brexit will have major consequences for the member states that do business with the British. That is now clear. The Irish therefore hope that after the British elections there will be room for a more lenient attitude. They are dependent for a significant part of the dairy sales, but also for the transit of dairy and for pricing. 

Little change with free trade
Not only the Irish do a lot of business with the British, the Dutch also register on this market. AHDB indicates that if a free trade agreement is concluded with the EU, little will change. 'It could be beneficial for the dairy sectors in various Member States. In 2015, the United Kingdom imported £2,5 billion worth of dairy. The British market is worth twice as much as what was lost in market share when the Russians introduced a ban on dairy imports in 2.'

The Netherlands is in slightly less danger than the Irish. This is because our country can fall back on a much larger customer base. Nevertheless, the British are still good for a 3 percent decrease in the Dutch milk volume. Ultimately, it is the last liters that can make or break the milk price.  

Securing raw material
Meanwhile, British retailers and food service companies are also facing uncertainty. For example, a free trade agreement means little change, but a tariff barrier of 50 to 60 percent can push the prices of imported products further. To prevent consumer products from becoming too expensive, the next 2 years will probably be devoted to securing the raw material. 

That is a golden opportunity for the British dairy sector. It still manages to remain profitable. In that case, however, the sector must be able to supply the volume that the retailers and food service are looking for. New competitors are also looming on the horizon, such as New Zealand and Australia. 

Fear of shrinking purchasing power
Brexit does not only bring opportunities. For example, there are fears of a downturn in the British economy. This also directly affects purchasing power. The Irish can also be dragged into this.

In fact, all options are still open. For all parties involved there is perhaps as much to gain as there is to lose. At first glance, there are certainly opportunities for dairy farming, but whether the British can stand up to competition from New Zealand and Australia remains to be seen.   

Herman van den Pol

Herma van den Pol has been with us since 2011 Boerenbusiness and has developed over the years into a market expert Milk & Feed. In addition, she can be seen weekly in the market flash about the dairy market.

h.vandenpol@boerenbusiness. Nl

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