China deal opens door for Northern Irish dairy processors

Dairy processors in Northern Ireland will soon be able to send more of their products to China after the government ironed out a pinch point in export legislation.

International trade secretary Liam Fox announced on Thursday (23 August) an agreement had been reached with China to allow the import of dairy products made in the UK but using milk from third countries.

Existing rules required all raw ingredients to be sourced from the UK. This proved to be a barrier to Northern Irish dairy processors who have milk suppliers on both sides of the Irish border, said AHDB international market development director Phil Hadley.

See also: China: What are the dairy opportunities for UK producers?

Mr Fox said: “Lakeland Dairies in Northern Ireland is likely to be the main beneficiary of this deal.”

China is seeing meteoric growth in demand for dairy products, including probiotic drinks, yoghurts and cheese, with demand in most categories increasing by more than 20% each year as more and more people adopt a Western diet.

The government estimate the deal is likely to be worth £240m over five years to the UK and Dr Hadley says it is likely to come into effect quickly.

Although the agreement frees processors to take milk in from any third country, it is unlikely there will be any significant uptake of from other destinations as the only real trade of raw milk goes on across the Irish border.

However, Chris Gooderham, AHDB lead dairy analyst said other dairy products, such as bulk cheddar, mozzarella and lactose are imported for processing before being resold as other products, potentially for exporting.

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