New Zealand fears Brexit will ‘disrupt’ red meat trade

22-Jun-2016 - Last updated on 23-Jun-2016 at 12:26 GMT

A possible Brexit in the EU referendum may cause significant disruption to trade

Related tags New zealand International trade Eu Beef Lamb

Britain’s possible exit from the EU would mean two years of trade uncertainty for red meat importers to Europe, Beef + Lamb New Zealand has warned.

The levy board fears that a ‘vote leave’ result in the EU referendum on 23 June will pave the way for a two-year period of ambiguity, as the UK and EU thrash out new policy on trade quotas.

Beef + Lamb New Zealand said those who think Brexit won’t impact trade, because the UK takes just 2% of New Zealand’s exports, have been parochial. Meat trade to the whole of the EU is at stake, it suggested.

“Access for New Zealand’s biggest exports to the UK are tied to quotas to the EU. Unpicking the quotas if the UK were to vote to leave would also disrupt trade with the EU and cause major uncertainty,” said Beef + Lamb New Zealand general manager of trade policy Ben O’Brien.

Trade fear

His comments come as the UK votes on whether to remain a member of the EU in a national referendum.

Over NZ$2bn (€1.27bn) worth of beef, lamb and wool exports were sent to the EU last year, making it four times the largest market for meat and horticultural products for New Zealand. It is the biggest market for lamb, and the levy board is sweating over the impact it could have on the sector.

New Zealand exported 228,000 tonnes of sheepmeat to the EU last year, representing more than half of the country’s lamb and mutton produced for exports.

‘Impossible’ to plan

“The EU and UK markets have affluent and sophisticated consumers with Western tastes, and they see lamb as a high quality protein worthy of a premium price. Brexit could cause a significant disruption to supplying that market and if they can’t get the product they’ll go elsewhere,” O’Brien said.

“Under Brexit the trade would face two years of uncertainty, if not longer, while the EU and UK negotiate between themselves as to who is going to take what part of the existing quotas.”

O’Brien claimed it would be impossible for New Zealand’s beef and lamb industry to adequately plan how much meat to produce as it would be in the dark over what quantity of access it would have for the UK and the EU.

There is currently a single quota covering the EU, which gives businesses the flexibility to tweak export quantities to align supply where demand is highest.

The result of the EU referendum is expected to be announced tomorrow (Friday 24 June).
Separately, Moy Park issued a statement on Brexit warning that a breakaway from the EU could limit export opportunities.

Will the EU referendum impact trade?