October 3, 2018

Better Australia-China ties will support milk exports, says dairy group director
 

China looks ready to cut down restrictions that hinder imports, but Australia should also seek to improve relations with the Chinese government, the managing director of food and dairy group Freedom Foods Group told The Australian Financial Review.

Such a engagement, according to Rory Macleod, would support accelerated sales of the country's dairy, cereals and other products to China due to friendlier Chinese policies for imports.

"Fundamentally  we may have lost a bit of that personal relationship into government. The thing Australia has to recognise is government-to-government is fundamental in China. Here, government pervades all life and it is important the two are in lock step," Macleod commented.

While he is optimistic about getting products into China following recent conversations, he believes its strained relationship with Australia may have delayed approval for Freedom Foods to bring milk into the Chinese market. He claimed that the company had been waiting for a year to obtain a license permitting the delivery  of milk from its plant in Ingleburn, New South Wales. 

However, Macleod thinks there would not be further, long-term delays in the export registration accreditation, as China is keen to promote quality foreign imports.

There is also a significant demand among Chinese middle classes for trusted Australian dairy products. This is especially true as Chinese consumers are more inclined to buy milk imports, while the government cracks down on fake products.

Yet, even with a breakthrough in China-Australia trade, regulatory risks would be a key challenge in the Chinese market, Macleod admitted.

For now, he foresees growth in China's "tier 3" and "tier 4" cities where consumers are less confident about local food safety and purchasing products online.