A free trade deal between the two countries has largely benefited the Australian dairy industry. Ever since the 2008 powdered milk scandal, many Chinese people have outsourced their milk powder demands to overseas producers.
For a while, New Zealand was Australia’s competitor in dairy products sold in China. However since the free trade agreement (FTA) between Australia and China was signed in November, we might just surpass our neighbour in powdered milk sales! Before the deal was made, Australian dairy products had a 10% – 15% tariff placed on them. After the deal, the tariff will disappear over a four year period.
Many believe that this trade agreement will see a boom in milk sales. Not only do Chinese consumers have more faith in overseas products, the baby boom stemming from relaxation of China’s one-child policy, the China’s growing middle class increased spending and a shift towards a more protein-heavy diet have all fuelled China’s demand for milk powder and other dairy products. With such a good food safety track record, Australian products are especially enticing to the Chinese consumers, who are willing to spend big bucks to save themselves from the horror of food poisoning.
How does this Australian dairy movement effect Aussie consumers?
My main concern is what kind of products will be on our market after all the ‘good’ products might be shipped over to China. With the raw milk issue still being discussed, would the authorities even have time to consider what this trade agreement would do to the Australian market? Until figures come out from dairy farmers, I guess we will have to remain in the dark.
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