The free trade agreement between Australia and United Kingdom finalised today will eventually allow Australian dairy products will enter the UK duty free.
It will take five years to get to the zero tariff but the Australian Dairy Industry Council, which represents farmers and dairy processors said substantial transition quotas would provide improved access.
The UK is a large dairy importer as well as exporter of dairy products.
According to UK customs data, it imported almost 1.5 million tonnes of dairy products in 2020, making the UK the second largest importer of dairy in the world.
Currently, European Union members supply 98 per cent of the UK's dairy imports.
ADIC chair and Australian Dairy Farmers president Rick Gladigau congratulated Trade Minister Dan Tehan and the Australian negotiating team for successfully concluding the FTA with the UK within a relatively short time frame.
"The Australian dairy industry has a long history of reliably servicing international markets with high quality dairy products," he said.
"Attaining improved access into markets such as the United Kingdom is important for farmer profitability and vital for our industry to continue to be successful."
Prior to 1973 when the UK entered the European Union, the UK was the Australian dairy industry's largest export market with around 55,000 tonnes of dairy being shipped there each year.
Since that time however, Australian dairy has been severely disadvantaged due to being subjected to high tariffs across all products entering the UK market - when compared with European dairy products entering the UK at zero tariffs.
ADIC deputy chair and president of the Australian Dairy Products Federation Grant Crothers said the agreement would once again reshape the opportunities for exporters.
"While the Australian dairy industry has no expectations of a return to levels of trade seen prior to the UK entering the European Union, what is envisioned are the emergence of high value, niche opportunities, leveraging our counter seasonal supply to the Northern Hemisphere," he said.
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