No-deal Brexit could shred UK mozzarella business
AHDB Dairy, a not-for-profit organization working for UK dairy farmers, says this translates to approximately 45% of the value of the product. The levy would mean most UK mozzarella would be unable to compete on EU markets.
The UK Government recently announced the no-deal tariff rates for imported products; for fresh mozzarella, it would be zero.
The UK is in a mozzarella deficit in both value and volume terms, in that the UK imports more than it exports, AHDB Dairy says. In 2018, 48k tonnes more mozzarella was imported than exported.
Trade in mozzarella has increased each year for the last three years. However, with exports increasing more quickly than imports, the trade deficit has gradually reduced. In monetary terms, the UK's trade position has worsened.
Over the last couple of years, the difference between the value of imports and exports has narrowed. In 2016, the average unit export price was £1,540/t ($2,004) more than the price of imports, however, by 2018, the difference narrowed to £300/t ($390).
Almost all UK mozzarella is sourced from the EU, with around 40% sourced from Denmark. Imports have declined from France, Germany and Ireland since 2015 and shifted towards Belgium, Italy and the Netherlands, AHDB Dairy revealed.
Despite tariffs on exported mozzarella only, a no-deal will still likely impact trade in both directions, AHDB Dairy argues, noting that some food service companies are already making changes in preparation for Brexit. ASK Italian and Zizzi’s, both part of the Azzurri Restaurant group, have switched sourcing from Italy to Wales over concerns of a disrupted supply chain.
AHDB Dairy said if trade stopped entirely, the UK would have a 48K tonne deficit of mozzarella, but lacks the processing capacity to do so. Also, to produce this domestically would need around 472m liters of milk; or 3% of national milk production.
Without an export home to go to, mozzarella that would have been exported could enter the domestic market, however, with competition from imports, domestic prices could be put under pressure.
AHDB Dairy provides products and services to improve the sustainability of British dairy farming. It provides independent information to British dairy farmers on feed and forage; genetic improvement; animal fertility, health and welfare; and business skills and market intelligence.
AHDB Dairy is funded by milk producers, via a statutory levy on all milk sold off-farm, at the rate of 0.06p ($0.08) per liter.