Dairy UK reveals export strategy

The strategy, entitled United Kingdom: Exporting Dairy to the World, identifies a raft of actions and recommendations that Dairy UK says will enhance the UK dairy industry’s export performance.

Launching the report, Dr David Dobbin, chairman of Dairy UK, said, “We have an outstanding British industry producing world-class products and the people in our industry have the ambition and the determination to succeed. To achieve enduring success, we must seize all the opportunities that lie ahead.”​

The export strategy’s 17 actions and recommendations include:

• Ensuring a skilled workforce is equipped for the future;
• Improving the export certification regime;
• Creating a one-stop shop for dairy exporters;
• Establishing world-class inspection and audit practices;
• Identifying market priorities;
• Removing barriers to dairy trade.

The report states that, “There are, of course, a number of areas where the industry needs the support of government and its agencies to address barriers and unlock new opportunities.​

We recognise and welcome the Government’s goal to increase the competitiveness of UK dairy exports by creating a regulatory environment that supports dairy export growth. ​

“We also welcome the establishment of the joint Defra (Department for Environment, Food & Rural Affairs)/UKTI (UK Trade & Investment) Great British Food Unit and look forward to working within this structure to improve our ability to export.”​

Minister looks to collaboration

Farming Minister George Eustice said, “UK food has an excellent reputation the world over and with a growing global demand for dairy, British producers should take the opportunity to promote their high quality produce at home and abroad.​

“Exports are a crucial part of growing and strengthening the dairy industry and a key part of our plan is to see new markets opened, so that the sector can become more resilient, competitive and profitable.​

“We welcome Dairy UK’s ambition to enhance the UK dairy industry’s export performance and we look forward to working closely with them to achieve this.”​

Experience from other countries

The report notes that other significant dairy exporting countries with a more established exporting presence have developed, or are developing, their systems and processes over time in order to ensure that they can meet the requirements of importing countries. There is also a need, it continues, to provide confidence that their products are safe while maintaining their international competitiveness.

Dairy UK’s report seeks to draw on that experience by looking at how some dairy exporting countries manage their export certification processes and third country inspections and audits.

It also notes that trade policy is also an important tool in achieving export growth. Trade barriers may directly restrict access to consumers in other markets (such as tariffs or quotas) or make UK dairy exports uncompetitive through the creation of additional unnecessary cost or complexity (non-tariff barriers generally of a technical nature).

Industry needs to take stock

Dr Judith Bryans, chief executive of Dairy UK, added, “Other dairy exporting countries have followed successful paths and set interesting examples in terms of industry-government cooperation to foster growth and develop exports. ​

“We can learn from these experiences and ensure that the UK has efficient and cost-effective systems that support export growth while preserving consumer confidence in the safety and quality of UK dairy products.​

“We have already increased our share of global trade in recent years but there is scope to do much more. To meet our goals, we need to take stock of and showcase how well the UK dairy industry is doing in terms of innovation and promotion, skilling our industry for the future, food safety and environmental credentials. Getting all of these elements right is essential in a highly competitive export market."​

Members outline targets

Dairy UK has surveyed its members regarding the target markets they wish to see opened. The report states that, in order of importance, the Gulf States and North Africa, China, Japan, the US, Australia and Canada should be targeted.

These were followed closely by Brazil, India, South Africa and South Korea as being either current or future important markets for the UK.

A review of export statistics by value for the year ending September 2015 would endorse the importance of China and the US, the report says. With 20% and 11% share of UK non-EU dairy exports respectively, they are currently the two most important dairy export markets for the UK by value.

They are followed by Hong Kong and Algeria, both with 6%, and the UAE with 5%. The situation with respect to the highest volume markets over that period is similar but would elevate the importance of South Africa (fourth highest by volume).

In terms of target markets, Dairy UK says in the report that it will provide Defra with a regular review of market priorities for the industry, and will develop a stakeholder map and engagement plan for key stakeholders that could support achievement of the industry’s export objectives.

Removing trade barriers

Removing barriers to dairy trade is also a key aspect of the report, and it states that the Dairy UK Exporters Group will build an inventory of tariff and non-tariff barriers to dairy export growth, starting with the priority markets identified, in order to inform the European Commission’s trade agenda.

Dr Dobbin said, "Our new export strategy will help steer our industry in the right direction and our efforts will need strong support from Government and its agencies to address trade barriers and unlock new opportunities.”​

At 14bn liters of milk output per annum, the UK is the third-largest milk producer in the EU after Germany and France. It plays a significant role in the UK economy employing around 80,000 people across farming and processing. In 2014, the total output of dairy processing was worth $10.65bn (£7.4bn).

According to available trade statistics from Her Majesty’s Revenue and Customs (HMRC), the UK dairy industry has increased its dairy exports outside the EU by 91% by volume over the last five years through to the end of 2014. During the same period, the industry has increased the volume of exports within the EU by 28%. In 2014, the value of dairy exports totalled $1.89bn (£1.3bn).