Dairy urges Parliament not to accept one-sided EU trade deal

The Australian Dairy Industry Council (ADIC) is calling for greater scrutiny of the proposed Australia-EU Free Trade Agreement as it is debated in Parliament, warning the sector has been forgotten.

In 2025-26, Australia imported $858 million of European dairy products – 71,912 tonnes – while exporting just $28 million, or 349 tonnes, to Europe.

That is an $830 million dairy trade deficit under the current trading arrangements.

ADIC Chair Ben Bennett said the imbalance demanded attention and called on government to reject the deal in its current form.

“The debate over this agreement has focused heavily on its implications for Australian agriculture, but the specific consequences for sectors like dairy need much greater scrutiny,” Mr Bennett said.

“We already buy $858 million of dairy from Europe and sell just $28 million back.

“The test for Parliament should be simple: does this agreement deliver fair and reciprocal outcomes for Australian dairy?”

Under the proposed arrangements, Australia’s remaining $1.22 per kilogram out-of-quota tariff on EU cheese – its most significant remaining dairy tariff – would be phased out over three years, while some Australian dairy exports to Europe would remain subject to quotas and above-quota tariffs.

ADIC argues that imbalance does not provide Australian dairy with sufficient reciprocal market access.

ADIC Deputy Chair John Williams said the consequences would not be confined to the specialty cheese aisle.

About 40 per cent of Australia’s milk is used to make cheese, meaning increased competition in the cheese market has consequences right through the Australian dairy supply chain.

“When people hear European cheese, they naturally think about specialty products on a supermarket shelf,” Mr Williams said.

“But that misses the real competitive pressure.

“This is also about the cheese on pizzas, in sandwiches and burgers, then we have UHT milk, as well as the dairy ingredients and nutritional products – high-volume markets where purchasing decisions can come down to price.

“Australian dairy farmers and manufacturers are competing in those markets while carrying some of the highest high energy, labour, transport and regulatory costs.”

At the same time, European dairy production and exports are growing.

“Further opening the Australian to subsidised European dairy risks putting additional pressure on Australian milk production, processing and regional jobs.”

At home, one in four dairy products consumed in Australia is already imported, while 26 Australian dairy factories have publicly announced closures during the past four years.

“When imported dairy displaces Australian-made product, that is not just a change in where the cheese comes from,” he said.

“It means less Australian milk being processed, less demand flowing back to dairy farms, and less investment in regional manufacturing.

“Once processing capacity disappears, it is incredibly difficult to rebuild.”

Mr Bennett said Parliament still had an important question to answer.

“Australia is being asked to open our market further, without securing fair and reciprocal outcomes for Australian dairy,” Mr Bennett said.

“Before supporting this agreement, Parliament should be satisfied Australian dairy farmers and manufacturers receive a commercially meaningful benefit in return.

“Dairy cannot be an afterthought in a trade agreement that will shape our relationship with Europe for decades.”