Australian dairy consumption: Demand for imported cheese, butter increases

Australians are buying more imported cheese and butter, new figures confirm, undercutting domestic produce. We break down the figures.

Cost-cutting consumers are driving demand for imported dairy over Australian-made produce, with more than 300,000 tonnes set to be snapped up by the end of the financial year.

Data from Dairy Australia has shown the import influx reached a peak in the 2022-23 financial year at 343,557 tonnes, with a slight easing this current reporting period of 316,000 tonnes by June 30.

The dumping of New Zealand-made cheese has received plenty of publicity, particularly the controversial Hillview brand sold by Woolworths with green-and-gold packaging.

But other supermarket items are increasingly using foreign dairy, such as Twix bars, which are made in Egypt, and Kinder chocolate varieties, made in China.

Dairy Australia economics, data and insights head John Droppert said approximately 316,000 tonnes of foreign dairy produce was set to be imported into Australia this financial year, based on March 2024 projections.

“With households now feeling the economic pressure of rising costs of living, retail products at lower price points – often imported – are increasingly preferred as a way of saving money,” Mr Droppert said.

“At the same time, recovering milk production in the 2023-24 financial year has displaced some imported product after the peak in 2022-23 financial year.”

Mr Droppert said lower milk production and higher domestic dairy consumption had increased the opportunity for imports since the early 2000s.

He said import demand was most notable in lower-margin operators such as quick service restaurants or where product availability had been restricted, with butter as an example.

“In these cases, customers have sought lower product prices or increased supply security,” Mr Droppert said.

“In other cases, imports have been driven by the opportunity to purchase ingredients for secondary processing and re-export as part of a finished product.

“In recent years, further contraction in the Australian milk pool, together with higher Australian farmgate prices relative to international competitors, have increased the incentive for businesses to import product,” he said.

“Particularly in an environment where operating costs are rising and end users are pushing back on price increases.”

Dairy Farmers of Victoria president Mark Billing said making consumers aware of the carbon footprint of foreign dairy was crucial.

“There’s been a lot of attention on the green and gold packaging by Woolworths of the New

Zealand made cheese. But highlighting the air miles, or air kilometres, and the carbon emissions that it entails is important,” he said.