Dairy dash: China’s final tariff removals open new opportunities for New Zealand brands
China’s removal of tariffs on all dairy products from New Zealand earlier this year, including milk powder used for both general consumption and processing to infant formula, could spell huge potential for brands that have a strong focus on quality and sustainability.
China and New Zealand signed a free trade agreement (FTA) in 2008, but with regard to dairy it took 16 years to finally see all tariffs removed.
According to New Zealand Ministry of Foreign Affairs and Trade data, New Zealand was the first developed country in the world to enter into an FTA with China, since quadrupling exports there valued at over NZ$37bn (US$22.7bn) as of 2021, and seeing China become its biggest trade partner.
Various New Zealand dairy products have seen export tariff decreases over the years, but although many of these hit zero in 2019, duties were still in place for liquid milk, butter and cheese until 2021; and for milk powder until Dec 31 2023.
As of Jan 1 2024, all tariffs were officially declared to have been removed by the Chinese Embassy in New Zealand via a formal statement, which was warmly welcomed by New Zealand Trade Minister Todd McClay.
“All safeguard duties on milk powder [entering China] have been removed as of January 1 2024, which marks the final liberalisation of dairy access under the [China-New Zealand] FTA,” McClay announced via a separate statement.
‘Added sugar’ definition: FSANZ agrees to industry requests for longer transition, rejects low-energy sugar exclusions
Food Standards Australia New Zealand (FSANZ) has formally gazetted the definition of ‘added sugars’ to be used as part of its upcoming ‘no added sugars’ labelling policy, and allowed for a longer transition time based on proposals from the food and beverage industry.
The process to properly define ‘added sugars’ was started by the government back in September 2023 upon request from Australia and New Zealand ministers, sparking a call for public comment that saw FSANZ receive over 80 responses from the food and beverage industry and general public.
One of the most common requests made were to lengthen the transition period for classifying certain sugars or ingredients within the proposed ‘added sugars’ list from the initially proposed two years.
This included brands such as Mars Australia, which stressed that the agency needs to keep in mind the many changes that industry have had to face in this regard in recent times.
“Mars Australia does not agree with the two-year transition period and no stock in trade period - We strongly encourage FSANZ to consider a more pragmatic and longer implementation,” Mars Australia said via formal documentation submitted to FSANZ, which FoodNavigator-Asia has viewed. All submitters’ names, titles and contact information were redacted by FSANZ.
Consolidation concerns: Australian dairy sector highlights worries over Fonterra sale of local business
The dairy sector in Australia highlighted concerns of ‘yet another blow’ to the industry as a result of Fonterra’s strategy change including plans to divest its consumer brands.
Fonterra recently announced that it would be making a major change to its business strategy by both divesting its well-known consumer brands such as Anlene, Anchor and Fernleaf on a global level to concentrate fully on its B2B and ingredients business.
This was in addition to a complete divestment of its consumer and foodservice businesses in Sri Lanka, and these as well as its ingredients business in Australia – which would essentially equate a complete exit from the Australian market.
“The announcement by Fonterra that it intends to sell its Australian dairy processing assets is yet another blow to dairy farmers and a reminder about the precarious nature of our food security when staples like milk are passed around like commodities,” Australia’s Business Council of Co-operatives and Mutuals (BCCM) told FoodNavigator-Asia on behalf of local dairy producers.
“This move, if it results in greater concentration of ownership of Australian dairy assets, will impact not only farmers but also consumers at the supermarket checkout.”
Hassle-free healthy eating: Australia’s v2food eyes new avenues of growth through acquisition of ready meals brand
Australia’s plant-based pioneer v2food has been looking to strengthen its position in the category through the acquisition of ready meals brand Soulara, with portfolio expansion and broadening sales channels as growth drivers.
According to Tim York, CEO of v2food, one of the main reasons for this move is the common customer base shared by plant-based and ready meals categories.
“Most of our products are ingredients that go into meals, such as burgers, sausages, mince, crumbed chicken, etc. We’ve been exploring new avenues of growth and one category we are most interested in is ready meals because we see a big overlap with the consumer demographic for plant-based foods.
“Ready meals are typically sold to single-income or ‘dual income, no kids’ households, and consumers in the 20s to 30s age bracket, which are the core demographics interested in plant-based foods. The key motivation for consumers to adopt a plant-based diet is health, while the biggest driver of ready meals is convenience — plant-based ready meals address both, so it made a lot of sense for us [to acquire Soulara],” York told FoodNavigator-Asia.
Production and partnership priorities: Aussie cultivated meat firm Magic Valley details 2024 plans as regulatory approval nears
Australian cultivated meat firm Magic Valley has highlighted its plans to get products in front of consumers in 2025.
The company has been in discussions with various established wholesale and food producers in Australia who have displayed notable interests in cultivated meat.
Beyond domestic collaborations, Magic Valley has been fostering ties with overseas partners, specifically Biocell in the US and exploring other partnerships throughout Asia to contribute to various aspects of the cultivated meat processes.
“As a company, we recognise the impracticality of doing everything on our own. The intricacies of cell biology, bioprocess engineering, and cultivated meat production at scale require diverse expertise. Hence, we are looking at partnerships in those areas to propel us forward.” CEO Paul Bevan told FoodNavigator Asia.
Plain and safe: New Zealand launches new industry food allergen labelling guidebook and checklists
The New Zealand Ministry for Primary Industries (MPI) launched a new food allergen labelling guidebook earlier this year targeted at food and beverage manufacturers, importers and retailers to ease companies into newly-enforced regulatory requirements.
Requirements for the labelling of food allergens on related products recently came into force on February 25 2024 by order of Food Standards Australia New Zealand (FSANZ) after nearly two-decade long reviews and assessments into the subject since 2006.
The regulations were developed under the FSANZ Plain English Allergen Labelling (PEAL) proposal, and have mandated all related food firms to declare any potential allergen information in a specific format and location on food labels, and using simple, plain English terms in bold font.
“These are crucial changes to help people find allergen information on food labels more quickly and easily, so they can make informed and safe food choices,” FSANZ told us.
“Our assessment had regard to best available scientific evidence, stakeholder views, and costs and benefits [and] as part of this work, FSANZ undertook a literature review, safety assessment and two rounds of public consultation.”
Everyday Weekend seeks bigger share in RTD alcoholic beverages market through rapid expansion in SEA
New Zealand-founded hard seltzer brand Everyday Weekend has highlighted aims to seize growth opportunities in the ready-to-drink (RTD) alcoholic beverages category across Asia through affordable pricing and community marketing strategies.
Founded in 2020, Everyday Weekend’s footprint has since extended beyond its domestic market to China, Singapore, and Taiwan.
According to the firm, the global hard seltzer market size is expected to grow at a CAGR of 13% to US$15.65bn by 2030, with an annual growth of 16% across South East Asia (SEA).
“Growth opportunities for this category are exponential, especially in SEA. The surge in demand is primarily driven by evolving consumer preferences and escalating popularity of RTD alcoholic beverages. Within Asia-Pacific (APAC), hard seltzers are rapidly gaining favour among urban consumers, and those seeking novel drinking experiences.
“Low-ABV beverages, in particular, are well received in Malaysia, Indonesia, and China. Interestingly, Australian consumers are going the other direction and looking for products with higher alcohol content. There is a similar trend in Japan, where consumers want to get bang for the buck in terms of ABV,” Jeremy Maclaurin, founder and director of Everyday Weekend, told FoodNavigator-Asia.
‘Use it - or be made to’: ANZ ministers gives food firms 17 months to hit Health Star Ratings targets
Food firms in Australia and New Zealand have been told that that if current 70% Health Star Rating uptake targets are not hit by November 2025, it is likely to lead to mandatory implementation.
The Health Star Rating (HSR) labelling system was first implemented back in 2014 on a voluntary basis, which has been the subject of a great deal of controversy over the years.
The system underwent a Five Year Review in 2019, where the ministers had set uptake targets for the system namely: 50% uptake by 14 November 2023; 60% uptake by 14 November 2024; and the final target of 70% uptake by 15 November 2025.
Unfortunately, these targets are far from being met, even the first 50% interim one, as at the beginning of 2024 it was found that just 30% of New Zealand products and 32% of Australian products were using the HSR label – meaning the 2023 target has been long missed and both countries are around 50% away from the 2024 target which is just five months away.
“We already have evidence that there is consumer demand for HSR – New Zealand Food Safety’s Consumer Food Safety Insights Survey has found that 83% of people say they use HSR when buying a packaged food or drink for the first time [of which] 61% say they use the front-of-pack labelling system at least half of the time, and 22% use it occasionally,” New Zealand Food Safety deputy director-general Vincent Arbuckle said via a formal statement.
Pricing in trouble: Fonterra predicts volatile year ahead despite stellar China and consumer products performances
New Zealand dairy giant Fonterra predicted a volatile year despite stellar performances from its China business and consumer product portfolios in the first half of 2024.
Fonterra announced its H1FY2024 interim results, reporting a strong 23% year-on-year increase in profits after tax to NZ$674mn (US$385.5mn) despite a slight revenue downturn to NZ$11.25bn (US$6.7bn).
This increase in profitability was attributed mainly to an improvement in its consumer products such as Anchor, Fernleaf and Anlene; as well as its business in Asia, particularly China.
“A key driver for us this interim period has been China, where we are seeing a gradual rebalancing of domestic milk production and also a strong increase in demand,” Fonterra CEO Miles Hurrell told investors at a closed conference announcing the financial results, which FoodNavigator-Asia has viewed.
“UHT cream has been a particularly important import into China [and] a key indicator of recovery here will be post-Chinese New Year consumption and the extent of domestic milk production as it enters its own milk season.
“There is also increasing demand from several key import markets in the Asian region, particularly South East Asia, Middle East and Africa, particularly in the Consumer channel.”
New definition for GM foods in ANZ: Officials propose only those containing novel DNA be considered genetically modified
Foods that do not contain novel DNA will not be considered genetically modified, even though they may have been processed via new breeding techniques, according to proposals from Food Standards Australia New Zealand (FSANZ) earlier this year.
These proposals would affect how GM foods are defined in the Australia New Zealand Food Standards Code (the Code).
A new Code definition for GM foods would be necessary to ensure regulation keeps pace with new techniques for genetic modification, collectively referred to as NBTs, said FSANZ CEO Dr Sandra Cuthbert.
NBTs include genome editing, cisgenesis, and intragenesis. As genetic modification technology is still evolving, NBTs also include techniques that may emerge in the future.
NBTs can introduce a wide variety of genetic modifications, including changes that are like those from conventional breeding. This means a clear distinction between GM techniques and conventional breeding no longer exists based on current definitions.
Sugar tax support in Australia: Messaging needs to go beyond ‘concerns over practices in the food industry’ – Study
Targeted messaging based on personal characteristics and demographics might have more success in garnering support for controversial sugar taxes than focusing on the impact to the food industry, claimed researchers in Australia.
Several countries in APAC and the Middle East have implemented such policies in recent years in efforts to curb diabetes and obesity. However, they have often come under fire from industry and some consumers, especially in a time of economic uncertainty.
However, in Australia where sugar-sweetened beverage consumption per capita is high, and calls for a sugar tax are frequent, there is no such tax and policymakers are generally not supportive of it.
Researchers in Australia recently conducted a cross-sectional survey analysis and found that ‘persuasive message framing’ had minimal effect, and that support for policies like the sugar-sweetened beverage tax tends to depend more on the personal traits of the individuals involved.
Crucially, such messaging needs to go beyond concerns over practices in the food industry, they wrote.
“Message framing is a popular strategy used by health promotion advocates. However, we found it has a minimal effect on the level of support for a sugar-sweetened beverage tax,” wrote the researchers in Health Promotion International.
“Even though there may be concern regarding the practices of the food industry it is important for advocates to remember what messages may resonate with the public when communicating about public health policy.”
