14 Sep 2015

NZ stands firm on lamb export deal

6:50 am on 14 September 2015

New Zealand will not agree to a review of New Zealand's quota of lamb exports to Europe despite pressure from British farmers, the government says.

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Photo: 123RF

Livestock board chairs from Britain's farming unions, meeting in Brussels, have called for the review. They say New Zealand has moved from sending frozen lamb to chilled lamb and from carcasses to bone-in cuts, representing a substantive change to the original deal signed in the 1980s.

But Trade Minister Tim Groser points to later trade negotiations which changed that agreement.

Following the Uruguay Round of negotiations in the 1990s, the volume of lamb New Zealand could export increased to 228,000 tonnes, and there were no restrictions on the amount of chilled sheepmeat which could be sent.

Tim Groser

Tim Groser Photo: RNZ / Alexander Robertson

Mr Groser, part of the negotiating team at the time, said he recalled every single small bit of what were very difficult talks.

"The decision, as part of the deal, to abolish all restrictions on chill was absolutely foreseen, it's part of the deal there can be no question of that, and of course we're not going to reopen this deal again, it's twenty years old, it's served us very well and it's now legally binding."

Mr Groser said this happened every few years when the cycle of agriculture turned south, and what New Zealand was actually exporting was well below what was negotiated in 1994.

He said chilled exports were down more than 7 percent compared with last year and were down 14 percent compared with 2013.

"So the idea that we're sending more and more of this product as chilled is simply not factually correct and I'm sure responsible commission officials when they look at the request for a review will quickly turn to that data and come out with the same conclusion."

The Alliance Group accounts for about 30 percent of the country's sheep meat exports.

Chairman Murray Taggart said he had sympathy for the British farmers who were faced with a strong pound against a weak euro, compounded by a particularly good production season, meaning there was more domestic product in the UK market than there normally would be.

He said UK and New Zealand farmers were reliant on each other to ensure that they could keep supermarkets stocked with product year-round.

"If the UK farmer doesn't have a New Zealand product on the shelf in their off-season then they're [supermarkets] not going to hold the shelf space for the season when they're supplying," said Mr Taggart, adding the same thing applied for New Zealand.

New Zealand looks set to export about 75 percent of its quota this year, and the UK is one of the most significant markets.

Beef + Lamb New Zealand chief executive Scott Champion said New Zealand and UK producers needed each other.

"If you stand in front of a chiller cabinet in the UK, lamb is a very small proportion of that chiller cabinet, and so if you can't keep the product in front of consumers 52 weeks of the year all of us have an issue."

Mr Champion said the concerns of the British producers were not unusual in price downturns. He and the chair of Beef + Lamb will be in the UK and Europe next month renewing relationships with producers and discussing the market.

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