Australian bush foods heading for Britain: Removal of tariffs to boost imports

Mike Fewster’s family-owned Jarrah Honey in Perth has big ambitions.

“Our goal is to get our honey to Harrods,” he said.

Fewster’s Forest Fresh business is one of many operations in Australia hoping the UK is on the verge of becoming a lucrative market again – and is targeting the world-famous department store in London’s Knightsbridge as a potential customer.

More than 50 years after Australia was backed by Britain’s neck when it joined the European Economic Community, a free trade agreement between the two old allies and sparring partners will come into effect at midnight on May 31.

The deal was hailed by Boris Johnson as a “new dawn” in the relationship when it was agreed in principle almost two years ago.

Despite the hype, the economic impact will be negligible as Australia is the UK’s 19th largest trading partner.

Treasury economists estimate the pact will add about £2.3 billion to UK exports, representing less than 0.1 percent of the economy.

But as it is the first free trade deal to be rejected since the 2016 Brexit vote, it represents an important moment for Leavers who pledged that the UK would become a buccaneering global trading nation once freed from the shackles of Brussels.

In more practical terms, the elimination of swingeing tariffs on 99 per cent of exports should mean more of Australia’s products, from Wagyu beef to nuts, lamb chops and lobsters, are slowly making their way onto supermarket shelves.

Likewise, more British products, such as Scotch whisky, will be exported Down Under.

Some of these Australian products, such as Jarrah honey, will be unfamiliar to most UK consumers.

Derived from the Jarrah tree, a variety of eucalyptus unique to Western Australia, this expensive “superfood” has similar antimicrobial and antibacterial health properties to manuka, which is more widely made in Australia and New Zealand.

Honey exported to the UK is subject to a 16 percent tariff. This, coupled with the hefty cost of shipping or flying to the UK, has made Britain an unattractive market for Australian honey producers.

Fewster hopes this is about to change and that British consumers who source their honey from abroad will buy it from the Commonwealth rather than Europe.

“We still have the King as our head of state, so if anyone deserves a break, it’s us Australians,” he said.

In addition to honey, the Australian Trade and Investment Commission (Austrade) in London thinks that ‘bush foods’ may soon be on British plates.

It cites the example of lemon myrtle, a native Australian shrub that grows in the wetter coastal regions of New South Wales and southern Queensland.

Superfood: Jarrah honey has antimicrobial and antibacterial health properties

The herb, which has an intense citrus flavour, has long been used in Aboriginal cuisine and medicine.

Austrade has predicted an influx of products made from Australian seaweed – also prized for its health benefits – including pasta, muesli, supplements and skin care products. Inevitably, however, people are more preoccupied with Australian lamb chops than lemon myrtle.

British farmers have expressed fears that the UK will suddenly be inundated with cheap Australian meat produced on the continent’s sprawling cattle ranches and sheep farms. This helps explain why it took Parliament so long to sign the deal, which has been criticized for being skewed in Australia’s favour.

Farmers have reason to be a little nervous.

Before Britain joined the EEC in January 1973, the UK was Australia’s largest red meat market. The first shipment of frozen Australian red meat arrived as early as 1879, not long after Britain stopped sending convict ships the other way.

When trade peaked in 1959, Australia exported 153,000 tons of beef and 46,000 tons of lamb and mutton.

During the 2021 Covid pandemic, beef and veal exports to the UK had fallen to just 803 tonnes and mutton exports to 9,017 tonnes.

Tariffs of up to 12 percent closed the UK for many Australian meat producers, who have focused on more profitable markets closer to home, particularly Asia.

The trade deal has provided at least some protection for British farmers. While tariffs on products such as Australian lobster and fish will be removed immediately, they will not be removed for beef and lamb for the next ten years.

There will be a transitional period in which Australia will have immediate access to a duty-free quota of 35,000 tonnes of beef, rising to 110,000 after ten years.

A similar scheme has been introduced for lamb and mutton. This still means Australian farmers can dramatically increase exports to the UK without paying a penny in tariffs.

However, the reality is that they start with a very low base.

Andrew McDonald, chairman of the agricultural trade organization Meat and Livestock Australia, said: ‘Predictions that a tsunami of Australian meat will hit the shelves of UK supermarkets have been exaggerated. It will be more of a slow burn.’

The Australian wine industry has also expressed concerns that Prime Minister Rishi Sunak’s recent decision to increase excise duties on alcohol will negate any benefit of removing import tariffs.

The trade organization Australia Grape and Wine recently warned that the tax increase could make Australian wine more expensive for UK buyers and reduce the amount on supermarket shelves.