Improved access for New Zealand sheep meat, beef and dairy to the EU as part of the new NZ/EU Free Trade Agreement (FTA), is unlikely to pose a threat to UK exports.

That was the good news story from AHDB which claims that the FTA, which came into force last week, is not expected to harm UK shipments to the EU when New Zealand exports are of a different type.

The EU is the UK’s largest market for sheep meat, with 79,700 tonnes of fresh and frozen product shipped in 2023 valued at £524m. This compares to New Zealand, which shipped 54,000 tonnes of product to the EU last year. The largest cut exported from the UK is in the form of fresh lamb carcases, which accounts for 84% of total UK sheep meat exports to the EU.

In contrast, volumes of fresh/chilled sheep meat exported from New Zealand to the EU are much lower than frozen, given the length of shipping time to market. The largest cut exported from New Zealand include frozen bone-in lamb, assumed to be frozen sheep legs, at 47% of total exports.

Jess Corsair, senior economist at AHDB said: “There has been some concern aired in the industry that the NZ/EU FTA could result in a deluge of New Zealand sheep meat entering the EU market posing a threat to the UK export trade.

“However, our analysis has highlighted several factors to allay the concerns of UK sheep meat exporters. EU sheep meat production fell in 2023 and is expected to fall further this year, helping to consolidate the UK’s position as the major supplier to this market.

“Given the different products and markets of the UK and New Zealand, it would suggest that when the new FTA is in force, New Zealand product will not displace UK sheep meat exports to the EU.”

Analysis by the levy board also revealed that while NZ/EU FTA will also provide for improved access for dairy products to the EU, the UK’s strong foothold in the market should put it on a sound footing to remain a key exporter to the region.

Similarly, the UK exports much more beef to the EU than New Zealand.

Ms Corsair added: “The UK’s market share in the EU for the main dairy products – milk powder, butter, cheese and dairy processed animal proteins and whey products – is strong at 65%, 70%, 64% and 66% respectively. Butter is the only category where New Zealand has had a notable market share, and this is falling. As such, the UK is likely to remain a key exporter of dairy products to the EU.

“About a third of New Zealand beef exports to the EU are fresh boneless cuts, but in a much smaller amount than the UK. That said, it will be an important area to keep an eye on as the trade deal comes into place.

“The overarching feeling is that, based on our analysis, sheep meat, dairy and beef exports from the UK to the EU should not be adversely affected by the NZ/EU trade deal.

“We will, however, continue to monitor trade as it evolves as any changes to New Zealand’s relationship with its other trading partners may have a knock-on effect on EU trade.”