Competitiveness of the EU dairy industry

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Competitiveness of the EU dairy industry

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In the category of non-skimmed milk powder, the main product is unsweetened

non-skimmed milk powder. The EU is the biggest exporter (41% of total

exports) in this market, followed by Oceania (34%). Asia is market leader in

sweetened milk powders (43% of total exports). In this market the EU has 11%

market share. The most important importer of non-skimmed milk powder was

Algeria (ZMP, 2006).

Fresh milk and yoghurts are mainly produced for local markets. Fresh milk is

mainly produced and consumed locally. As far as it is traded between countries,

this trade is within the continent.

Germany and France are the most important producers of yoghurts. The

Netherlands are third at a distance. Poland is the number four in production and

growing very strongly.

EU-25, then, is the largest exporter of dairy products, but this is mainly intra-

EU trade and the global market share of the EU is decreasing rapidly. The EU-

15 countries in particular are losing market share fast, while the new EU countries

are slightly winning market share. The EU entrants and developing countries

are the fasest growers in the world market. The total market share of New

Zealand is slightly increasing and the market share of Australia is slightly decreasing.

Brazil is gradually emerging but still hardly visible from a world-market

viewpoint.

This country analysis cannot directly be translated to a company viewpoint.

Most European multinationals are investing in the new EU member states and

developing countries. This investment policy directly benefits the mother company

in the EU, but is not reflected in the export developments from the country

perspective.

Competition: Balassa Index and share of value added

The performance of an industry on the international market can be measured

firstly by the Balassa (Revealed Comparative Advantage) index and secondly by

the growth of the real value added compared to the rest of the industry. The

Balassa Index indicates the specialisation degree of the export portfolio, i.e the

degree of external orientation. A growth of the index indicates a better performance.

Dairy is an important food product for the EU food industry, with an emphasis

on intra-EU trade. In relation to the USA dairy is important, but in relation to

New Zealand it is unimportant. The level of the Balassa Index of New Zealand indicates

that dairy products are very important in New Zealand's exports. The

low value of the United States indicates that dairy exports are relatively unim-

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