CHEESEMAKERS FEAR BREXIT COULD HIT BOOMING HALLOUMI EXPORTS

Cyprus Mail - article by CNA News Service 1 November 2018

Exports of halloumi soared to 28,000 tonnes last year, but cheesemakers fear trade could slow down after Brexit and have called for government measures.

Halloumi’s growing popularity abroad is largely attributed to the increasing awareness of the health benefits of the Mediterranean diet. A hot summer across Europe also boosted sales as halloumi is a very popular barbecue item.

In the past five years, halloumi exports have increased by 20 per cent, a trade worth €13m in January alone, and making the cheese among the top three most important exports.

“Our exports have increased a lot. The last four years, there has been an increase to the tune of 4,000 tonnes per year,” head of the cheesemakers’ association, Giorgos Petrou, told the Cyprus News Agency (CNA).

The product is exported mainly to European countries such as the UK, Sweden, Germany and Austria but also to Australia.

“Halloumi has been recorded as a key ingredient in global consumer preferences and nutritional habits because of its origin as a key element of the Mediterranean diet, which has been a trend in recent years,” said managing director of Charalambides-Christis dairies, Marios Constantinou.

This upward trend, however, may be slowed down by Brexit, as the imposition of duties could mean rising prices, thus losing its competitiveness in the British market that absorbs a large chunk of overall exports.

For Cypriot cheesemakers, the worst-case scenario is for the UK to be considered as a third country.

“Based on official export figures for 2017, 44 per cent of halloumi was exported to the UK where the unstable socio-economic environment due to Brexit may affect the trade relationship in the future,” Constantinou said. He added that cheesemakers are already working on positive scenarios to defend their interests.

He also expressed concern that if duties were imposed, they would automatically be added to the price of the product.

“We hope that the state will try to find a formula so that there will be a separate agreement for the case of Cyprus. Over the years, the UK and Cyprus have had very good relations, due to the Commonwealth,” he said.

According to Petrou, if halloumi exports are hit by duties, this would allow other countries which produce what he described as imitation halloumi to enter the British market at much lower prices.

Already, he said, countries such as Hungary or Bulgaria are producing similar cheeses which they call ‘grilled cheese type’ at lower prices because they have cheaper raw materials.

Cheesemakers said that expensive raw materials are another problem that needs an answer as fresh milk prices in Cyprus are almost double those in the rest of the EU. The price of milk is probably the biggest challenge for cheesemakers, he said, and severely impacts competitiveness.

The registration of halloumi as a protected designation of origin (PDO), which has been pending before the European Commission since 2014, would give a further boost to exports, cheesemakers said. The government, however, would still need to make arrangements in terms of the UK, they said, as the PDO recognition concerns member-states of the EU only.

A source within the agriculture ministry told the CNA that the consequences of a Brexit deal with the EU or failure to reach one are still unknown.

The ministry is monitoring consultations concerning the Brexit deal and records possible consequences. Cyprus will have to adopt any agreement achieved between the EU and the UK. Any special agreement between Cyprus and the UK post Brexit will have to be approved by the EU.