Australian dairy urges Parliament to reject EU free trade deal in its current form

In 2025-26, Australia imported 71,912 t of European dairy products worth A$858 million, while exporting only 349 t worth A$28 million to Europe. This amounts to an A$830 million dairy trade deficit with the EU.

“The debate over this agreement has focused heavily on its implications for Australian agriculture, but the specific consequences for sectors like dairy need much greater scrutiny,” said ADIC Chair Ben Bennett. In his view, the test for Parliament should be simple: whether the agreement delivers fair and reciprocal outcomes for Australian dairy.

Under the proposed agreement, Australia would phase out its out-of-quota tariff on EU cheese of A$1.22 per kilogram over three years. This is the country’s most significant remaining dairy tariff. At the same time, some Australian dairy exports to Europe would remain subject to quotas and above-quota tariffs. ADIC argues that this imbalance does not give Australian producers sufficient reciprocal market access.

ADIC Deputy Chair John Williams said the consequences would not be confined to the specialty cheese aisle. About 40% of Australia’s milk is used to make cheese, so increased competition in the cheese market will affect the entire supply chain. “This is also about the cheese on pizzas, in sandwiches and burgers, then we have UHT milk, as well as the dairy ingredients and nutritional products – high-volume markets where purchasing decisions can come down to price,” he said. According to Williams, Australian farmers and manufacturers compete in these markets while carrying some of the highest energy, labour, transport and regulatory costs. He also noted that European dairy production and exports are growing, and that further opening the Australian market to subsidised European dairy would put additional pressure on milk production, processing and regional jobs.

One in four dairy products consumed in Australia is already imported. Over the past four years, 26 Australian dairy factories have announced closures. “Once processing capacity disappears, it is incredibly difficult to rebuild,” Williams stressed.

“Dairy cannot be an afterthought in a trade agreement that will shape our relationship with Europe for decades,” Bennett said.