Competition may put N.Z. butter out

Press, 24 June 1978, Page 23

Competition may put N.Z. butter out

NZPA London The total exclusion of ; New Zealand butter from the United Kingdom would be “the quickest and per- ! haps the only way of releasing the British butter market from the threat of continuing surpluses," according to a report, in ' “The Times.” T The newspaper’s reporter on agriculture, Hugh Clayton, said thqt -the British market remained the largest outlet in the world for dairy products. But competition was be-'-, i coming progressively • stronger and “ferocious competition” ensured that i actual shop prices were ■ well below the Govern-ment-imposed retail price ceiling. “The most remarkable I feature of the market is I the presence as brand- ; leader, five years after I British accession to the E.E.C., of Anchor Butter I from New Zealand. ’ By a strict reading of I Community rules New I Zealand has no business i to enter the E.E.C. under

its present contract.” Clayton said. “AU E.E.C. dairy lobbies, including that in Britain, intend to make sure that the contract does not continue for a moment after its expiry in 19801” The exclusion of New Zealand wcfuld perhaps be the only way of removing the threat of a surplus, he said. The Common Market’s butter mountain holds abqut 350,000 tonnes, of which some 16,000 tonnes are in cool stores in Britain. Consumption in Britain is not expected to exceed 400,000 tonnes a year in the foreseeable future, and New Zealand is entitled to supply about 100,000 tonnes of that until the end of 1980 under the present agreement. But Clayton said the butter market, which he called “the strangest and most politically sensitive in the food trade.” was settling into a pattern in which each trading year began with the main supplying countries’ pledging

to enlarge their sales, in in spite of a drop in consumption. British domestic production was al s o rising rapidly, Clayton said. The consortium producing the main British brand intended to increase production by 20.000 tonnes to 50. 00 tonnes this year. And an Irish Republic brand hoped to boost production from 30,000 tonnes to about 40.000 tonnes. The impact of higher production is expected to be complicated by the floods of imports late last year as foreign producers rushed to stockpile butter inside Britain before changes in E.E.C. levies and prices. “There is so much butter in Britain and so much designated for it from outside that there would be no shortage this year if all the creameries stopped production immediately," Clayton said. New Zealand Government and Dairy Board officials in London have taken issue with the suggestion that to New Zealand’s butter ' exports to Britain will end once the present quota runs out at the end of 1980. They point out that the Protocol 18, granting New Zealand access to the British Market for butter, recognised a set of special circumstances which still existed.