The opportunity for import displacement

Published 19 July 17

Over the next few weeks AHDB will look at different dairy products and identify those offering the greatest opportunity to the UK in the future.

The UK has the second largest dairy trade deficit in the world, and is seen as a key market for many exporting nations. Historically the UK’s trade vacuum has been predominantly filled by the EU, although the uncertainty of the trading relationship post-Brexit could make EU imports more costly.

That uncertainty means UK retailers and foodservice providers will be looking at the supply of their key dairy products, and asking how supply can be guaranteed without cost increases. The safest solution is to replace those imports with domestic produce, but is that realistic?

While trade barriers could bring an opportunity to displace imports they also bring the risk of exports being uncompetitive. The table below looks at the trade difference of some key dairy products.

 19.07.17 import displacement table

The UK already has the know-how to produce a number of these products, including cheddar, mozzarella, yoghurt and butter. However, there are other key factors to consider, such as the profitability of product displacement and processing capability.

Next week we will be focussing on the potential opportunities for cheddar.