The managing director of one of Australia’s biggest fruit producers says a free trade agreement with the United Kingdom would be a “crucial” victory for the nation’s horticulture sector.
UK Prime Minister Boris Johnson’s decisive election victory last week has lifted hopes that Australia could be the first nation to sign a post-Brexit trade deal with the UK.
Victoria-based apple grower Montague sends about 20 shipping containers of its Pink Lady apples to the UK each year, representing about one third of its total apple exports. The apples are sold at Marks & Spencer.
But under EU trade rules, the company’s apples are slugged with a 9 per cent tariff after their 35 day boat journey, before hitting the shelves in October and November. The company’s managing director Scott Montague said any trade deal that removes these tariffs would be a boost for the company, and the wider export sector.
“Anything that can help us be more competitive on a world scale is crucial,” Montague said. “9 per cent is a lot, it’s most people’s produce margins in Australia … So any sort of FTA would help us and our competitiveness, and with that would help our ability to grow the market”.
The UK market is not an easy one to crack, Montague said. But it is worth the effort and could prove lucrative for other exporters. “It’s consistent and profitable and sustainable,” he said.
“We send out the best fruit that we grow to the UK, and that’s the only way you can play in the international space, with our high cost of labour“.
Australia’s high commissioner in the UK, George Brandis, recently told The Age and The Sydney Morning Herald that a FTA between Australia and the UK was “probably less difficult than the other agreements the UK is looking to do, for instance with the United States”.
The Australian Fresh Produce Alliance, which represents 14 of the nation’s largest fruit and vegetable growers, says Australia has a chance to capitalise on a “first mover” advantage by striking a trade deal with the UK.
“If we’re one of the first countries to secure a trade agreement with the UK, we will be very well positioned to take advantage of any opportunities available, in front of our key competitors,” says the group’s chief executive Michael Rogers.
Montague said his company’s apples fill a gap in the UK market that cannot be met by competitors. “Our fruit goes to Marks and Spencer, they’re top end over there and they want the best fruit,” he said.
“With Pink Ladys so popular in the UK, they cannot afford to not have them on the shelf. So they need them 12 months of the year”.
