Australian Dairy Farmers (ADF) has called on the Australian Government to exclude the dairy sector from the proposed Australia–European Union Free Trade Agreement (FTA), warning that the agreement could expose domestic producers and processors to greater competition without delivering comparable export opportunities.
ADF President Ben Bennett delivered the demand to Trade Minister Don Farrell during a National Farmers’ Federation (NFF) Members’ Council meeting in Canberra. The organisation argues that the proposed agreement creates an imbalance in dairy trade, with Australia offering greater market access to European products while Australian dairy exports continue to face significant restrictions in the EU.
Bennett reiterated the organisation’s position that protecting the domestic dairy industry should take priority over accepting an unfavourable trade arrangement. “We’ve always said no deal is better than a bad deal – so cut us out,” he said.
ADF Seeks Dairy-Specific Exemptions
ADF is seeking a dairy-specific exemption from new tariff concessions on European dairy imports and restrictions affecting established Australian dairy product names.
The organisation argues that the European Union has protected sensitive agricultural industries through its trade arrangements and believes Australia should adopt a similar approach for its dairy sector.
ADF President Ben Bennett said the EU had secured protections for its own agricultural interests, making it necessary for Australia to safeguard domestic dairy producers and businesses.
The proposed exemption would address two major concerns: increased access for European dairy products to the Australian market and restrictions on the use of certain established cheese names by Australian manufacturers.
Significant Imbalance in Dairy Trade
ADF has highlighted the existing trade imbalance between Australia and the European Union as a key reason for opposing the dairy provisions.
During the 2025–26 financial year, Australia imported 71,912 tonnes of European dairy products valued at A$858 million. In comparison, Australian dairy exports to the EU totalled just 349 tonnes, worth A$28 million.
| Dairy trade indicator (2025–26) | Value |
|---|---|
| Australian dairy imports from the EU | 71,912 tonnes |
| Import value | A$858 million |
| Australian dairy exports to the EU | 349 tonnes |
| Export value | A$28 million |
| Dairy trade deficit | A$830 million |
The figures represent an A$830 million dairy trade deficit even before the proposed agreement comes into force. ADF believes that further reductions in import barriers could widen the imbalance unless Australian exporters receive meaningful access to European markets.
Cheese Tariff Removal Raises Domestic Concerns
Under the proposed agreement, Australia will gradually eliminate its A$1.22 per kilogram tariff on European cheese over a three-year transition period.
ADF is concerned that removing this protection could increase competition from European cheese manufacturers, placing additional pressure on Australian processors and domestic milk demand.
Meanwhile, Australian exports of butter, skimmed milk powder (SMP) and high-protein whey to the EU will continue to face restrictions through limited duty-free quotas and substantial tariffs on shipments exceeding those quotas.
This difference in market access is central to ADF’s criticism. While European cheese exporters would benefit from improved access to Australia, Australian dairy businesses would continue to encounter significant barriers when attempting to expand sales in the European market.
Geographical Indications Restrict Cheese Naming
Another major concern involves the protection of 56 European dairy geographical indications under the agreement.
These provisions restrict Australian cheesemakers from using certain established European cheese names, including businesses that may enter the market in the future.
ADF believes these restrictions could affect Australian manufacturers by limiting their ability to market products using familiar cheese names. The organisation is seeking an exemption from these provisions as part of its broader demand for dairy-specific protection.
European Agricultural Support Raises Level Playing Field Concerns
Bennett also questioned whether Australian dairy producers would be competing on equal terms with European farmers.
The European Union’s Common Agricultural Policy (CAP) has a funding allocation of €386.6 billion for the 2021–2027 period. ADF argues that this level of agricultural support provides European producers with advantages that Australian dairy farmers do not receive under comparable arrangements.
Bennett described the proposed agreement as an uneven arrangement, warning that increased European dairy imports could put additional pressure on Australian processors, farmgate milk demand and regional employment.
He also raised concerns about the potential implications for Australia’s domestic food production capacity and food security.
Wider Dairy Industry Opposition
ADF’s position follows earlier opposition from the Australian Dairy Industry Council (ADIC), which has called on Parliament to reject the EU agreement in its current form.
ADIC has argued that eliminating tariffs on European cheese could affect more than Australia’s specialty cheese segment because approximately 40% of Australian milk is used in cheese manufacturing.
The council has also highlighted the country’s existing dependence on imported dairy products, stating that one in four dairy products consumed in Australia is already imported. Additionally, 26 Australian dairy factories have announced closures over the past four years.
These developments have intensified concerns about the competitiveness and long-term sustainability of domestic dairy processing.
Trade Agreement Faces Growing Dairy Sector Opposition
ADF’s demand for a dairy exemption reflects broader concerns about the balance between international trade opportunities and domestic agricultural protection.
While the organisation has clarified that it does not oppose international trade, it believes the current agreement does not provide Australian dairy businesses with sufficiently balanced access to European markets.
As negotiations and parliamentary consideration continue, the treatment of dairy tariffs, export quotas and geographical indications is likely to remain a major issue for Australia’s dairy industry.
