How important are cheese imports under concessionary schemes?

Published 23 August 17

In general, non-EU imports have minimal impact on the European cheese market, with high EU import tariffs making most third country imports uneconomical. However, the EU does operate a number of preferential import quotas, which lower the duty on imported products. These quotas will need to be reallocated between the UK and the remaining EU member states post-Brexit. As such, the current utilisation of these schemes is of some interest.

The UK receives some third country cheddar directly, particularly from New Zealand. Therefore, the size of any cheese quotas allocated to the UK after Brexit could have some bearing our domestic dairy industry. In the 2015/2016 period*, the UK received over 2,500 tonnes of cheddar from New Zealand, which equates to around 20% of the non-country specific EU cheddar quota allocated for the period. At an EU level, this is the most frequently used scheme covering cheese imports, and reduces the tariff level on imported product from €167.10/100kg to €21.00/100kg.

However, UK imports of extra-EU cheddar have previously been much higher; over 10,000 tonnes was imported between July 2013 and June 2014, with 3,000 tonnes coming from the US. This accounts for around a third of overall EU usage of quotas covering cheddar during the period.

Similarly, at an EU level, uptake of the available quotas can vary significantly depending on market conditions. Quota applications for the primary cheddar scheme were oversubscribed in both 2011/12 and 2013/14, and as recently as 2015/2016 usage was as high as 90% (13,500 tonnes). New Zealand whole cheddar cheeses can also be imported under a smaller, exclusive quota and this was utilised in 2012 and 2014.

However, in the most recent 2016/17 allocation period, uptake was unusually low with only 11% (1,600 tonnes) of the 15,000 tonnes available being allocated. A significant drop in shipments from New Zealand, on the back of tightening supplies and better returns from the Asian markets, as well as expanding EU production, likely influenced this decline.

Despite the low usage so far this year, historic data indicates that New Zealand does have the capacity to export cheddar to EU, and will do so if market conditions allow. As such, the quota limitations can safeguard cheese import volumes. The degree of fluctuation in usage means the portion of EU cheese quotas that might be allocated to the UK after Brexit is somewhat uncertain at present, but will be an interesting watch point over the coming months.

*Period runs from 1 July- 30 Jun the following year