Top takeaways for exporting to Australia & New Zealand

There has never been a better time to consider exporting your food and drink products to Australia and New Zealand.

With the Free Trade Agreements (FTAs) well underway, there are more opportunities for British brands to expand their horizons and export into these two very affluent markets.

The United Kingdom’s Finest recent event hosted by Exemplas Trade Services Ltd (ETSL) on behalf of the Department for International Trade (DIT) in the East of England has given us all some food for thought when considering exporting to these markets.

Top things we learnt

1. Australia – Trends & Opportunities

• The supermarket industry in Australia is dominated by 4 grocery marketplaces, which hold 80% of the market share;
  • Woolworths – 37.4%
  • Coles – 28.4%
  • Aldi – 10.5%
  • Metcash – 7%
• It was advised not to solely concentrate on the large retailers, but also to consider the independent sector since they carry imported premium products as well.
• The Australian population is very health-conscious, so if you offer new and innovative products within this sector, there are likely to be opportunities.
• After the bushfire crisis and the recent COVID-19 pandemic, which exposed the vulnerability of the food supply chain, more Australians are looking for local produce. In spite of this, British companies can still enter and succeed in the market. In order to accomplish this, your company must conduct market research to understand the market potential. Additionally, your product must have a unique selling point and meet consumer demand.
• It was advised that one of the biggest obstacles is “routes to market”, so speak to your DIT international trade adviser for more information on which route is right for your business.
• It is important to find the right local partner to reach full market potential and not solely focus on the big retailers. “Be cautious, don’t put all your eggs in one basket” – Jayne Hunt – Hunt Export Advice.

Opportunity categories

• Free From products
• Vegan products
• Organic, healthy and natural products
• Alternative sources of protein
• Plant-based
• Meal kits
• Ready Meals
• Low or No ABV beverages
• Private label
• Healthy Snacking
• Premium soft drinks
• Premium spirits

If you would like more information on Australia’s opportunities and trends, as well as information on doing business in-market, get in touch with experienced consultant Jayne Hunt from Hunt Export Advice | Jayne.Hunt@huntexportadvice.com | www.huntexportadvice.com

2. Australia – Regulations

Keeping food safe and free from contamination is critical to public health. In Australia, both local food and imported food must meet strict legislation and regulations to ensure food is safe to eat.

Australian Border-Force (ABF) are Australia’s frontline border law enforcement agency and customs service. ABF enforce compliance with all customs-related laws and also are the collector of relevant customs duties, Goods & Services Tax (GST), excise and Wine Equalisation Tax (WET) as determined by tariff classification. Note: Many food products are exempt from GST.

All duties and taxes are collected before the release of goods from Customs control (unless goods are placed in a Customs warehouse).

All imported food must meet Australia’s biosecurity requirements (under the Biosecurity Act 2015) and food safety requirements of the Imported Food Control Act 1992. Biosecurity is the regulator tasked with protecting Australia from harmful pests, diseases and weeds.

You can read the guidance on food labelling from Food Standards Australia and New Zealand (FSANZ), click here.

If you require more information about regulations and imports within Australia, contact webinar speaker Steven Butler, a customs broker at Henning Harders (Australia) Pty Ltd

SButler@harders.com.au | www.harders.com.au

3. New Zealand – Trends and Opportunites

• 90% of the New Zealand grocery market is dominated by three major retailers
  • Foodstuff – 47%
  • Progressive Enterprises (owned by Woolworths) – 32%
  • Warehouse group – 12%
• New Zealand ranks among the top 10 most expensive markets, with an average weekly spend of $234.
• Product launches for supermarkets are popular and effective when promoting your products. For in-store demonstrations, you will need to provide your agent/distributor with promotional materials and products.

If you would like more information on New Zealand’s opportunities, as well as information on doing business in-market, get in touch with managing director Hamish Renton from HRA Global – The FMCG Experts | Hamish@hra-global.com | www.hra-global.com

4. New Zealand – Regulations

There are 2 monitors and regulators stationed at the border.

• New Zealand Customs – (Border Protection and Customs Clearances). –https://www.customs.govt.nz/​
• And MPI – Ministry of Primary Industries – (Biosecurity compliance) – https://mpi.govt.nz/ Under the Food Act 2014, you must be registered to be able to import into New Zealand. When registering as a food importer into New Zealand, make sure you use the application within the first year to keep the account active once assigned. In addition, you need The BACC (Biosecurity Authority/Clearance Certificate).
• Both processes above can be completed by your accredited New Zealand Customs Broker.

Goods and Services Tax (GST) is New Zealand’s Vat, which is set at 15%. This tax is not only applied to the value of the products but also includes the shipping fees, therefore please take this into consideration when processing your shipment. It is important to remember that GST & duties MUST be paid before the release of shipment.

Whatever your Logistics requirements are within New Zealand, contact webinar speaker Robbie Douglas at HGL for more information| www.hgl.nz |sales@hgl.nz

5. Free Trade Agreements for Australia & New Zealand 

Last year, negotiations for a Free Trade Agreement (FTA) with Australia and New Zealand began. While New Zealand is still in negotiations, Australia reached an ‘agreement in principle’.

What does the FTA agreement mean to you, and how will it help you export to these markets?

Australia

Both Australia and the UK commit to removing tariffs on goods traded between the two countries. ‘Australia has agreed to remove tariffs on all goods exports that originate in the UK.’

So what are Rules of Origin?

• Rules of Origin determine which products are eligible for tariff-free treatment. Australia and the UK commit to Rules of Origin which reflect modern production processes, as well as existing and future global value chains.
• These commitments will boost efficiency, reduce costs and cut red tape by making it simpler for traders and customs authorities to prove the originating status of goods.
• They will include rules for specific products that support each country’s economic and production interests.
• For example: If your company makes biscuits but you import your wheat from another market, as long as you make the final product in the UK you are still eligible for 0% tariffs.

The FTA will also bring with it a door to The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is a trade agreement among Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. To find out more visit: www.gov.uk

New Zealand

The FTA is still in negotiation, but once agreed should bring in the removal of tariffs, simpler processes for traders in the UK. If you would like to read more about the negotiations click here

For more information on Free Trade Agreements visit www.great.gov.uk or www.gov.uk alternatively you can contact the webinar speaker Jonas Burkhard at ANZengagement@trade.gov.uk

To conclude

1. Do your research to ensure your product is right for either market. Does your product offer something different and innovative that makes it appealing to customers, compared to the local competitors?
2. Ensure you have discussed all the possible routes to market with your DIT international trade adviser. They may be able to connect you with market experts, who can help you decide the best route, as this can often be the biggest hurdle.
3. Correct labelling is of the utmost importance, your products could be denied entry to the country and can be very expensive to rectify.
4. For New Zealand, GST (Goods and Services Tax) is set at 15%. This tax is not only applied to the value of the products but also includes the shipping fees, therefore please take this into consideration when processing your shipment.
5. In New Zealand, the GST & duties MUST be paid before the release in shipment and in Australia, all duties and taxes are collected before the release of goods from Customs control (unless goods are placed in a Customs warehouse).

Starting your exporting journey into these new markets entails a number of risks, but no more than you could expect from any other new market. With the right knowledge, labelling and support you can avoid the troubles many companies face during their first export.

Watch the recording

Interested in connecting with buyers from Australia and New Zealand? UK’s Finest currently has 5+ buyers on the marketplace from both markets, so log in below to start expanding your overseas network today. Login and connect with Australian and New Zealand buyers today