With the future of exports to New Zealand’s most historically important lamb market up in the air as a result of Brexit, ANZCO sales and market general manager Rick Walker looks at what plans ANZCO has to manage the impending change.
The uncertainty around the impact of Brexit on the future of New Zealand lamb exports to the UK has been well-documented by industry commentators recently. The growing prospect of “no-deal” heightens the chances of trade disruptions in the short term and, longer-term, the possibility that New Zealand lamb is unable to be sold at a sustainable price into the important UK retail market. Therefore, it’s crucial that exporters such as ANZCO have plans for diversification away from what has historically been New Zealand’s most important lamb market.
One of the flow-on effects of disruption with the UK market will be new opportunities for New Zealand lamb on the continent. Currently 96 percent of UK lamb exports flows into the continent, but this trade could be materially impaired if third-party tariffs are applied after its departure from the Union. ANZCO has had a long-standing presence on the continent with an office in Belgium servicing retail and food service customers across the 27 member states and beyond, and is well placed to take advantage of any new opportunities for ANZCO lamb as they emerge in the new operating environment post-Brexit.
A cornerstone of ANZCO’s lamb business in Europe is its partnership with the Rewe Group.
Rewe Group is based in Germany, the largest economy in the European Union with a retail sector valued at EURO250 billion per annum. The Rewe Group is a co-operative, founded in 1927, which, over the past 30 years in particularly, has driven significant expansion in the retail sector. Today, Rewe Group employs more than 300,000 people and manages 15,000 stores in 11 markets across Europe, with annual turnover of EURO55 billion, making it Germany’s second largest food retailer.
Rewe’s core values around sustainability, innovation and integrity drive its relationships with suppliers, store-owners and end-consumers and have been at the heart of the relationship ANZCO has developed with it since 2016.
In the last three years, ANZCO’s lamb business with Rewe has developed to a position where Rewe Group is now ANZCO’s largest lamb customer in Europe with a formal partnership agreement signed in 2018 making ANZCO Rewe’s exclusive supplier of lamb into the future.
ANZCO works closely with Rewe Group to help manage its supply chain, which is a crucial area when supplying chilled lamb into Europe from half-way around the world, and this will continue to be an important part of the relationship as the impact of the final Brexit outcome is understood and becomes part of the new reality of doing business in this part of the world.
ANZCO’s commitment to partnership includes having an ANZCO sales person permanently located in Germany to ensure timely and regular contact between the two companies, focused on managing short-term needs and issues as well as working on future opportunities for collaboration.
Lamb is very small part of Rewe’s protein portfolio, reflecting the niche, premium position that New Zealand lamb has across the UK and the continent. However, Rewe Group has strong growth plans across the wider continent offering excellent opportunities for ANZCO to grow with it.
The potential disruption to ANZCO’s trade into the UK from an unfavourable Brexit outcome is being offset by ANZCO’s ability to support Rewe’s growth aspirations and work with Rewe on new product lines, brands and markets.