Red meat exports: potential administrative costs of trade under WTO rules

Appendix 7: Beef and Lamb Imports & Tariffs

Beef Imports and Tariffs

1. Around 70% of the UK’s beef imports come from Ireland, with other importers of note including the Netherlands, Poland, Brazil and Botswana. Imports are an important part of managing the seasonal supply of meat in the UK as well as ensuring the supply chains remain effective and competitive.

2. In March 2019, the UK Government published the import tariffs and quotas that would be applied to beef imports following Brexit, including tariff-free trade between the Republic of Ireland and Northern Ireland. The detail is summarized in the table below.

3. Analysis carried out by HIS Maritime, HMRC and AHDB, highlights that approximately 75,000 tonnes of beef imports will be subject to the new UK full tariffs.

4. Irish Trade Statistics report that in 2018, 50% of beef exported from Ireland went to the UK (around 270,000 tonnes), making the Irish the dominant importer into the UK. With historically higher market values, the UK is an important market for Irish beef, however the introduction of import quotas and tariffs could have a negative impact on Irish beef exports.

5. The new import tariff regime may dissuade current, or potential importers, from doing business in the UK. This presents an opportunity for Scotch Beef processors to seek out new market opportunities in the domestic market.

Sheep Meat Imports and Tariffs

6. The UK imports around a third of the sheep meat it consumes, with the dominant supplier being New Zealand, followed by Australia. In 2018, the UK imported 80,000 tonnes of sheep meat with the majority coming from New Zealand.

7. The UK will not be reducing the sheep meat import tariff from the current EU level following Brexit, meaning there is likely to be little change to the amount of sheep meat imported from non-EU countries to the UK following Brexit.

8. Following Brexit, the UK will see some pre-existing 0% rate quotas being split with the EU including the deals with New Zealand and Australia. In recent years New Zealand has not fully utilized its EU quotas due to other market opportunities and inability to supply lamb volume to satisfy the market demand for the product.

9. New Zealand exporters deal directly with their customers and will have an importer, or an employee, working on their behalf in key markets. The UK is a particularly important market and most exporters will have staff based in the UK to lead customer discussions and negotiations.

10. There are two key organisations who help the New Zealand red meat industry to develop their overseas markets - the New Zealand Meat Board and Beef and Lamb New Zealand.

11. The New Zealand Meat Board exists to help the meat sector achieve optimal returns on beef and sheep exports to international quota markets and one of its key functions is to operate the quota management systems.

12. There are two categories of quota recipients: ‘Qualifying Companies’ and ‘New Entrants’. Ninety-eight per cent of the quota is allocated as General Quota Allowance to Qualifying Companies and is allocated based on these companies’ production histories for the preceding three production seasons. The remaining two per cent is available as Reserved Quota Allowance to New Entrants, who can apply for quota for a period of three years, after which they become a Qualifying Company.

13. Beef and Lamb New Zealand (B&LNZ) is a farmer-owned, industry organisation representing New Zealand's sheep and beef farmers. They invest farmer levies in programmes that are aimed at growing the sheep and beef industry. It is funded by headage based levies for sheep and cattle. Abattoirs collect the levy on B&LNZ’s behalf. B&LNZ must ask farmers if they want to continue paying the levy every 6 years.

14. B&LNZ has four strategic priorities including unlocking market potential, facilitating trade access, including Free Trade Agreements, minimising the impact of Brexit, reducing non-tariff barriers and creating international alliances to enhance opportunities for trade.

15. Removing non-tariff barriers (NTB) which restrict trade and outstanding tariffs is also a priority. NTBs are often invisible and can include quotas, embargoes, sanctions and levies. These can be costlier than tariffs alone and can have significant commercial consequences. They have been estimated to have cost the beef sector more than NZ$1 billion/annum (£520m) in the Asia Pacific region alone.

16. B&LNZ have a team of people based in the EU (Brussels) whose role it is to develop their business (including progressing negotiations) in this region including the UK.