Removal of Tariffs with UK – Food & Drink Business

Australian food and drink companies stand to benefit from the UK’s recent Free Trade Agreement (FTA). The deal will remove over 99% of customs duties on goods exported to the UK over the next 10 years.

The FTA will cover approximately 75% of trade, providing preferential access to nearly 3 billion customers.

Trade, Tourism and Investment Minister Dan Tehan signed the agreement on behalf of Australia in a virtual ceremony with UK Secretary of State for International Trade Anne-Marie Trevelyan.

Highlights of the agreement

Wine industry:tariffs worth about $43 million a year will be reduced.

Beef: a transitional duty-free quota of 35,000 tonnes currently, increasing to 110,000 tonnes in year ten, and eliminated thereafter.

Mutton: transitional duty-free quota of 25,000 tonnes now, increasing to 75,000 tonnes in year 10, and eliminated thereafter.

Sugar: tariffs eliminated after eight years, initial relief on 80,000 tons, increasing to 220,000 tons in year eight.

Dairy: tariffs eliminated over five years with immediate access to transitional duty-free quotas for cheese (24,000 tonnes rising to 48,000 tonnes), butter (5,500 tonnes rising to 11,500 tonnes) and other dairy products (20,000 tons per year.

Sea food: most duties were eliminated immediately, including fresh and frozen fish and lobster. The remaining tariffs will be eliminated over three years.

Fruits and vegetables: most tariffs eliminated immediately, including nuts, avocados, cherries, dried fruits, citrus fruits, carrots and table grapes. Tariffs on apricots, nectarines, peaches, strawberries, asparagus, beans, tomatoes, apples and pears will be eliminated over three years. The remaining tariffs on products will be eliminated over seven years.

Alcohol Beverage Australia CEO Andrew Wilsmore said Food and Beverage Company free trade brings many benefits to beverage producers and customers in both countries.

“It is estimated that the FTA will see $43 million in annual tariffs lifted from Australian wine when the deal comes into force, which will help strengthen Australia’s position in this key export market and help in party to meet the challenges imposed by China’s recent tariff increases.

“Australia is the eighth largest market for Scotch whiskey exports, so Australian Scotch whiskey enthusiasts will also benefit from the five-year phase-out of Australia’s 5% tariff on Scotch whisky,” Wilsmore said.

Meat and Livestock Australia (MLA) welcomed the change, saying it will liberalize access to Australian beef, sheep and goat meat.

Chairman of the Australia-UK Red Meat Market Access Task Force, Andrew McDonald, said the paper agreement strengthened the partnership between the two nations.

“Australia and the UK have a long trading history, with the UK being a loyal buyer of Australian beef and mutton, albeit in small volumes.

“Under the Australia-UK FTA, future trade will be more streamlined, removing onerous red meat supply chain costs that ultimately disadvantage UK consumers and stifle opportunities market development,” said McDonald.

MLA believes that the FTA paves the way for market diversification and echoes countries’ commitment to open, rules-based trade.

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