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This is a new blow for the dairy industry, in an already tense agricultural context: China is raising its taxes on certain European dairy products. Temporary surcharges, which must increase from 21% to more than 42% on certain products. As the second cream supplier to China, France is particularly concerned.
This text corresponds to part of the transcription of the report above. Click on the video to watch it in full.
Benoît Gavelle is a milk producer in Eure: “We have around 130 cows milking, so we produce between 3,500 and 4,000 liters per day”indicates the farmer, deputy secretary general of the National Federation of Milk Producers (FNPL). It supplies a large dairy group which exports its products abroad. But the breeder is worried. China has just introduced new customs tax increases, from an additional 21 to 42% on imported dairy products.
Benoît Gavelle fears that there will no longer be any outlets for his milk and that its price will collapse: “If it drops any further, we will really be well below production costs. The first adjustment variable will be the breeder’s remuneration. And it’s a catastrophic message to have remuneration which is either falling or zero”he fears.
The companies most affected will be large groups exporting fresh and processed cheeses, blue cheeses, certain milks and even creams. A significant market worth 370 million euros, where French companies could be the big losers.
“We will no longer be able to be competitive on the market and other products, in particular those which come from New Zealand, which have a free trade agreement with China and therefore which pay 0% customs duties, will de facto be much more competitive than us, and therefore, we will no longer be able to supply the Chinese market as we did before”explains François-Xavier Huard, president and CEO of the National Dairy Industry Federation.
These new taxes are a further step in the trade war between China and Europe. On the one hand, the surcharge on Chinese electric cars decided by the European Union, on the other, an increase in customs tariffs on cognac, European pork, and now dairy products. A war which could well continue according to this expert.
“We cannot have it both ways, to use a dairy metaphor. As long as we put up customs barriers, which may be legitimate, we will have retaliation from China on our exports”points out Anthony Morlet-Lavidalie, economist at the Rexecode institute.
For now, these increases are temporary. They could apply definitively at the end of February.
