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Friday, April 12, 2024

UK-Australia trade deal unlikely to affect food prices or supply, MPs told

The UK’s recently signed trade deal with Australia was unlikely to positively impact soaring food prices, nor displace British goods from the domestic market, MPs were told this week.

Addressing the Environment, Food and Rural Affairs Committee, BRC director Andrew Opie said the deal, which has not yet been ratified, would have a “completely negligible” impact on food prices as the UK imports “only a marginal amount” from Australia.

Even if the UK substantially increased food imports from the country, it would not dampen prices that were already high due to what Opie said were “underlying issues”.

The cost of food has soared worldwide in recent months as part of a wider surge in consumer price inflation and on the back of a steady climb in commodity prices since the start of the Coronavirus pandemic.

Russia’s invasion of Ukraine last month and punitive sanctions imposed by western nations sparked further increases and concerns about imminent shortages of grains and vegetable oils, with Australia touted as a possible alternative supplier of wheat and oilseeds.

Earlier in the week, the Centre for Economic and Business Research published a report warning the war could halve the UK’s GDP growth this year, send inflation to over 8% and cut disposable incomes by 5%.

Regardless of the UK’s trading arrangements, the consumer would be “under pressure”, Opie told MPs.

Surging inflation and falling incomes could force hard-pressed families to cut spending on higher-quality food, according to Sue Davies, head of consumer rights and food policy at Which?, even though maintaining food standards remained an “overwhelming priority” for British consumers.

“People want a lot more information about the environmental impact of what they’re eating,” Davies said. 

UK-Australia trade deal slammed again by meat sector

However, Anna Sands, trade policy specialist at the WWF, said the UK-Australia deal did not “put in place any [environmental] conditions for what we import”. 

Animal welfare standards in Australia were ”demonstrably lower” than in the UK, according to Orla Delargy, head of public affairs at Sustain, who said she was “very concerned” about the use of antibiotics in Australia’s food system.

The agreement was earlier criticised by the NFU and British meat suppliers for potentially opening the nation’s market to a flood of meat produced under less rigorous rules compared with Britain’s or those of supplier nations closer to home.

“It strikes us that Australian agriculture has the best of both worlds on this one,” said James Russell, senior vice president of the British Veterinary Association.

But Opie said the UK was unlikely to see an influx of Australian beef as Australia was “so far away” and its suppliers “have markets in Asia”. 

There remained “a strong preference for British beef” for steak and quality cuts sold in shops, Opie said.

In restaurants, “you may get some of those steaks from Argentina replaced with Australia”, said Kate Nicholls, CEO of UKHospitality.

Nicholls said the deal should see an increase in the UK’s imports of Australian wine – a development the hospitality sector would view as “welcome”.

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