Australia’s newly signed free-trade agreement (FTA) with the European Union (EU) will provide businesses in the food, beverage and agribusiness sector with a welcome increase in market diversity, according to ANZ’s Michael Whitehead.
After eight years of negotiations, Australian and EU officials unveiled a long-awaited FTA in March, a deal the Department of Foreign Affairs and Trade said would help Australian exporters better access Europe’s $A30 trillion economy, and 450 million consumers.
Speaking to ANZ Institutional Insights on video, Whitehead – Executive Director, Insights, FB&A at ANZ Institutional – said the improved access would help Australian exporters better diversify their supply chain risk.
“What this does do, which is great for FBA, is diversify the market that producers have,” he said. “Because you don't want to concentrate too much on one [market].
“It takes some work to create new relationships and get in there, but it means more options of where your products going.”
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The agreement will mesh well with Australia’s broader trade arrangements, Whitehead said, “across Asia, North America and other parts of the world, too”.
Element of the EU deal would support key export opportunities around grains, rice, wine, dairy products, he said, at a time when many supply chains are under pressure due to geopolitical conflict.
“Unavoidably, one of the biggest issues at the moment across food, beverage and agri in Australia is the impacts of the conflict in the Middle East,” he said.
Key current risks include fertiliser and diesel, he said.
“In simple terms, if you don't get enough fertiliser in, then you don't grow the amount of food that you did before,” Whitehead said. “And that's not just crops, but that's the feed that goes to animals for beef and for dairy as well.”
Producers will watch their access to fertiliser closely, Whitehead said. Watch the video above to find out more.
