Business Irish

Tuesday 22 October 2019

Dairy chief wants EU deal with Indonesia

Tara McCarthy, Bord Bia CEO, with Thomas Darmawan of Kadin Indoesian Chamber of Commerce at a dairy seminar in Jakarta
Tara McCarthy, Bord Bia CEO, with Thomas Darmawan of Kadin Indoesian Chamber of Commerce at a dairy seminar in Jakarta
Claire Fox

Claire Fox

Ireland must push for a free trade agreement with Indonesia if it wants to successfully compete in the south-east Asian market, according to the head of Dairy Industry Ireland (DII), Conor Mulvihill.

Mr Mulvihill said that a 5pc tariff Indonesia applies to most dairy products makes it more difficult to compete with New Zealand and Australia. "A free trade agreement (FTA) is a key piece of infrastructure," he said.

"We're already competing against New Zealand and Australia which have trade agreements with Indonesia. People will turn around and say that the tariff is only 5pc for most dairy products but we are a very low-margin industry, so 5pc plus the logistics and expenses really is a lot".

"Ireland needs to focus on driving that free-trade deal on the EU level," he said.

Mr Mulvihill was speaking as part of an Irish trade mission events to Indonesia.

Speaking at the Irish embassy in Jakarta, Agriculture Minister Michael Creed said building awareness of Ireland in the region was a challenge.

"We like to think that sometimes everybody knows all about us, but that's far from the case," said Mr Creed.

"If you walk down the main street of Jakarta levels of awareness might disappoint us.

"It's an ongoing endeavour to sell and market and promote Ireland," he added.

Raymond Li of Glanbia Shanghai said that this increase in demand is an aspect of trade that offers potential for the processor, but said getting registration to import to Indonesia could take some time to finalise.

"Indonesia is a potential market with 260 million people and we are seeing their domestic milk supply is not enough for its growing population, which is good for us," he said.

"We are facing some issues regarding registration to import to Indonesia, so we hope to get help from the governments in Ireland and Indonesia to help us sort this out. Indonesia is one of the most important markets for us."

Bord Bia's main objective for the trade mission is to raise awareness of Ireland as a source of sustainable dairy.

Indonesia is only 40pc self-sufficient in dairy, while Malaysia is just 5pc self-sufficient. Rising living standards in both countries is boosting demand.

New Zealand is the principal supplier.

At a dairy seminar with Indonesian buyers and members of the Irish dairy industry in Jakarta Bord Bia CEO Tara McCarthy explained that Ireland could help service the growing westernised dietary trends in both regions.

"The opportunity in these two markets is significant as Indonesian and Malaysian consumers increase the percentage of dairy-based food in their diet," she said.

Over the five-day trade mission more than 120 Indonesian buyers will meet 80pc of Irish dairy companies on the trade mission.

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