UK confectionery firms could gain from Australia and New Zealand trade deals

UK confectionery companies are set to gain from the removal of international trading tariffs ahead of Valentines’s Day 2024, through agreements struck with Australia and New Zealand, according to British government projections, reports Neill Barston.

Under latest official estimates, fresh export deals struck with the two Antipodean nations are expected to net a £2.3 billion and £800 billion boost respectively to Britain’s economy.

As part of the two deals brokered by the Department for International Trade and Department for Business and Trade in the wake of Brexit, confectionery companies are forecast to gain from removal of tariffs under new Free Trade Agreements (FTA’s).

Greg Hands, minister for Trade Policy, spoke in the UK parliament on unveiling the new bilateral agreements, which have also endured criticism from many across the political divide, are now in fact possible with the UK being outside of the EU.

He said: “The Australia and New Zealand free trade agreements are deals that will deliver for people, businesses and our economy. These are our first “from scratch” free trade agreements since we left the European Union, and they are deals of which this country can be proud. They demonstrate our ambition as an independent trading nation. They secure commitments that, in places, go above and beyond international best practice, and put us at the forefront of international trade policy.”

Notably, former Conservative environment minister, George Eustice, who previously led the Defra government department questioned the government’s position on the deals, asserting key issues with the Australia deal in particular.

He recently noted the Australia agreement as “not actually a very good deal for the UK- the truth of the matter is that the UK gave away far too much for far too little in return,” he noted in reference to agricultural concessions on imports of products to Britain as part of the deal.

Confectionery gains
Despite such concerns, the UK government noted that as far as confectionery is concerned, Australian and New Zealand consumers could now enjoy access to a wider range of British manufacturers within the category.

It cited a key example of London-based chocolatiers Seed & Bean, which is reportedly exploring opportunities to restart exports Down Under. The company estimated the FTAs could unlock a £100,000 export opportunity should they find a distributor, after its previous exports to both Australia and New Zealand ceased during the Covid-19 pandemic.

Seed & Bean’s Chief Chocolatier Oliver Shorts said: “The trade deals with Australia and New Zealand will help us reduce the landed cost of our organic chocolate bars into the two countries..

“One of the big barriers to entry are the costs involved in getting the goods in, and this will allow us to help any potential distributor margins and permit the product to be a more viable opportunity in the market.”

Significantly, the government added that with Valentine’s Day spending in Australia increasing year-on-year, British bakeries and chocolate manufacturers may experience a Valentine’s sales boom after the deals come into force. Seed & Bean say they already experience a 25% online traffic boost in the build-up to Valentine’s Day as lovers look to gift sweet treats.

Furthermore, the government also cited studies conducted by market research firm Roy Morgan on behalf of the Australian Retailers Association, which revealed Australian couples are set to splash an estimated £280 million on Valentine’s Day this year, up 16.9% from 2022.

According to the market research company Statista, the Australian confectionery and snacks market is worth £13.2 billion in 2023 and is expected to grow annually by 1.64% over the next four years, demonstrating the strong growth potential of this market.

In New Zealand, this market is projected to reach £61 million in 2023 and is expected to show an annual growth rate of 16.97% over the next 4 years.

UK food and drink exports to Australia and New Zealand have more than doubled in the last decade and, under the FTAs, UK businesses will benefit from the elimination of tariffs on all products. The agreement will also ensure food and drink products exit customs quickly, providing businesses with certainty when exporting products to Australia and New Zealand.

Minister of State at the Department for Business and Trade, Nigel Huddleston, said:  “Our new deals with Australia and New Zealand will allow our fantastic British confectionery businesses like Original Cake Company and Seed & Bean to become more competitive and export their top-notch products Down Under with ease.

“These landmark trade deals are expected to stimulate trade, drive economic growth and lead to better paying jobs, bolstering British businesses and empowering them to tap into significant markets in the flourishing Asia-Pacific region.”





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