Milking the EU-Vietnam free trade agreement

Published 11 August 15

The potential free trade deal between the EU and Vietnam will allow EU dairy products to enter Vietnam tariff free, after a transition period of reduced tariffs.

Vietnam is currently the sixth largest importer of EU SMP, accounting for approximately 2% of European SMP exports in 2014 and, so far in 2015 (Jan-May), the country has imported 13,198 tonnes of product. As well as this, Vietnam’s cheese imports have been increasing by 17% annually in recent years.

With a population of 90 million people and a growing middle class there is potential for growth in the dairy sector. Per capita consumption of dairy products in Vietnam is currently quite low at 15kg/capita/year compared to 31.5kg/capita/year in China.

However, forecasts by Euromonitor suggest that demand for products such as cheese could grow 7% annually. This is expected to be driven by Vietnamese culture becoming more Westernised and an improvement in living standards and disposable income.