Australian Dairy Industry Eyes Growth in China Amid Shifting Consumer Preferences

Despite ongoing trade tensions between China, the US, and Europe, Australia’s free trade agreement (FTA) with China provides a strategic advantage for local dairy farmers. Unlike exporters fr om other regions facing tariff uncertainties, Australian dairy producers maintain preferential access to the Chinese market, positioning them as key suppliers in an expanding segment.

Peter Verry, managing director of China supply chain specialist Peloris Global Sourcing, highlighted the growing consumer shift towards Western-style dairy products as a major driver of Australian dairy exports.

“With China adopting tariffs on US dairy in response to trade policies, and potential restrictions on European imports, Australia is in a unique position to expand its market share,” he said.

China’s changing dietary habits, particularly among the growing middle class, are further fueling demand for dairy-based products. Traditional Chinese festivals, which historically featured locally sourced ingredients, are now incorporating modern dairy innovations.

“The Chinese have 24 festivals linked to the solar calendar, and each is associated with a specific type of food. Traditionally, Moon Festival treats like mooncakes were made with ghee (clarified butter), but today, leading brands are blending Western-style dairy ingredients into these products. For instance, Starbucks China recently introduced an ice-cream-filled mooncake, merging traditional customs with contemporary tastes,” Verry explained.

The increasing focus on health and nutrition is also contributing to rising dairy sales, with milk recognized as a valuable protein source. This aligns with broader consumer trends in China, wh ere nutritional value is playing a more significant role in food purchasing decisions.