Fonterra Advocates for Dairy Inclusion in New Zealand FTAs

Fonterra, a major player in New Zealand's dairy industry, has called on the New Zealand government to ensure that dairy remains a priority in all future Free Trade Agreements (FTAs). The company is targeting countries such as Sri Lanka, Bangladesh, and Nigeria for new trade deals. These countries are considered prime markets due to their existing dairy trade relations and anticipated growth in demand.

Justine Arroll, Fonterra’s General Manager for Trade Strategy, highlighted the importance of removing tariffs in these markets to provide significant commercial benefits to New Zealand exporters. This appeal follows statements from Switzerland’s State Secretary for Economic Affairs suggesting that dairy might be excluded from a prospective New Zealand-Switzerland trade deal. Arroll emphasized that such an exclusion would set a negative precedent, being the first time dairy would be sidelined in an agreement with a developed nation.

In addition to pursuing new deals, Fonterra is advocating for upgraded access in existing FTAs with incomplete coverage, particularly in CPTPP markets such as Canada, Mexico, and Japan, as well as with the European Union and South Korea.

Fonterra remains open to transitional measures, including phased quotas or safeguards for sensitive products, reflecting a pragmatic approach to negotiations. This stance is consistent with Fonterra's position on potential trade talks with India, where the company is against quick, low-quality agreements that do not offer real market access improvements.

The article also points out Sri Lanka's economic importance, being New Zealand’s 16th-largest export market and 6th-largest destination for whole milk powder in 2025, with an export value of $802.9 million. Simon Tucker, Fonterra’s Group Director of Global External Affairs, noted ongoing supply partnerships in Sri Lanka despite divesting consumer and foodservice assets to Lactalis.

In Bangladesh, a market worth half a billion dollars for New Zealand dairy exports, local exporters are facing increased competition after the United States secured preferential tariff reductions. Kimberly Crewther, Executive Director of the Dairy Companies Association of New Zealand, warned that failing to remove trade barriers could weaken New Zealand’s competitive position against US rivals.