By Ben Bennett, President, Australian Dairy Farmers
Now that we have seen the initial text of the Australia–European Union Free Trade Agreement, and worked through the detail, one thing is clear for dairy farmers: this is not a balanced deal.
It’s an unfair deal which Australian Dairy Farmers (ADF) has relentlessly sounded the alarm on – in the media and directly with government.
Despite the earlier goodwill and commitments “no deal is better than a bad deal”, dairy once again finds itself pinned underneath this bus … or, perhaps, cheaper European luxury car.
At its core, this once-in-a-generation agreement locks in a structural imbalance that already exists in the trading relationship.
Australia imports almost $1 billion worth of heavily subsidised dairy from the European Union (EU), while exporting just $29 million of unsubsidised product back to the EU. In volume terms, for 2025 that is around 76,800 tonnes imported versus just 134 tonnes exported.
That is not a marginal gap; it is a deeply negative balance of trade. It is further exacerbated by the imbalance in EU agricultural subsidies while Australia remains subsidy-free.
This agreement risks widening the gap further.
Under the deal, Australia has agreed to eliminate its remaining tariff on imported cheese – currently $1.22 per kilogram – over three years.
That tariff has been one of the last meaningful protections supporting domestic cheese manufacturing against subsidised imports. Its removal will directly benefit European exporters, particularly in high-volume categories that compete head-on with Australian products in what will be an uneven playing field.
At the same time, the European Union has maintained tight controls over its own market.
While Minister Farrell highlights that tariffs will be removed on a large proportion of dairy lines, actual access is still governed by strict quota limits. The agreement provides annual duty-free quotas of just:
- 5,000 tonnes for butter;
- 8,000 tonnes for skim milk powder; and
- 2,000 tonnes for whey.
Beyond those quotas, tariffs remain prohibitively high – around €1,900 per tonne for butter, €1,250 for skim milk powder, and €1,350 for whey.
These are not open market settings. They are controlled access arrangements that cap growth. This is the fundamental issue.
Australia is providing open market access, while Europe provides limited access.
On top of that, the agreement introduces a significant new constraint through an EU ‘geographical indications’ compliance regime.
Australia has agreed to recognise 396 EU product names, including 56 dairy-specific GIs.
While some existing producers will retain rights through grandfathering provisions, future use of common terms such as feta, gruyere and romano will be restricted or phased out.
This is not just a labelling issue – it directly affects how Australian dairy products are marketed, branded and understood by consumers.
So, when you step back and look at the full picture, the imbalance becomes even clearer:
- A $1 billion import flow into Australia versus minimal export access;
- Tariff removal in Australia, versus quota-limited access in Europe; and
- New regulatory constraints on Australian producers, with little in return.
Even within the domestic market, the pressure is already building. The EU is now Australia’s largest source of cheese imports by value, with imports worth $494 million.
Removing tariffs in that environment does not create opportunity.
This deal also comes at a time when dairy farmers and processors are facing rising input costs, including fuel and fertiliser, increasing regulatory pressure, and tightening margins.
Adding further import exposure without delivering meaningful export gains only compounds those challenges.
Safeguard industry before it’s too late
The focus now must be on how we respond.
ADF has been clear and consistent in calling out the risks in this trade deal.
We’ve appeared on the commercial and public broadcasters, in metropolitan and rural print media, ensuring the realities facing dairy farmers are understood beyond Canberra and the negotiating table.
This is about transparency, accountability and making sure farmers’ voices are heard.
Trade policy should not be something done to farmers. It must be shaped with them.
Strengthening domestic demand, improving labelling clarity, and backing Australian dairy in the marketplace will be critical in supporting the industry.
If this agreement proceeds, the focus must turn to how we protect confidence in Australian dairy at home.
That is why ADF is strongly backing the case for a national “Buy Australian Dairy” campaign and clear country-of-origin labelling.
A campaign like this is no longer a ‘nice-to-have’ option when it comes to protection from competition.
It’s urgently needed to drive home the message that if consumers value sustainable, nutritious Australian dairy produce, they need to make informed choices at the supermarket.
We know consumers overwhelmingly support local farmers when they’re given clear information.
Let’s not forget the responsibility doesn’t solely fall on the shoulders of consumers.
Food service businesses and procurement managers also have a role to play in supporting the ongoing availability of Australian dairy.
A coordinated campaign would help ensure shoppers can identify and choose local dairy, supporting local jobs, regional communities and a sustainable domestic industry.
Australian dairy farmers are not asking for protection from competition.
We are asking for fairness and policy settings that recognise the value of producing food locally, to world‑class standards, in an increasingly uncertain global environment. Trade agreements should create opportunity, not deepen imbalance.