Kiwi cheese producers say they can't compete with cheap European product flooding into the market and are calling for tariffs to be placed on imported speciality cheeses.
With imported cheeses often selling for around half the price of local ones, Simon Berry, managing director of Whitestone Cheese and spokesperson for New Zealand Specialist Cheesemakers Association, says New Zealand producers are struggling.
"It's been happening for a while," Berry told The AM Show on Tuesday. "They send it out frozen from the EU, fully subsidised, and they produce large bulk amounts of these cheeses with automated systems...so it's landing here basically half price in containers and we see it on the shelves now."
Berry called the country's current trade policy a "primitive border model".
"We're just saying 'hey, we're open so can we please be reciprocal at the other end and [you] be open to us?'. Well we've got to move on from that, we've got to evolve into a sophisticated model just like the EU border is," he said.
"We're small and we're young producers and we're really battling when it comes through to retail and competing with these guys. We need some protection."
New Zealand is currently in negotiations with the EU for a free trade agreement. Talks formally began in 2018 and the process is expected to take up to three years to be completed.
Last month David Parker, the Minister of Trade and Export Growth, accused the EU of a "worrying trend towards protectionism" after the block's initial offer on agriculture was leaked ahead of the eight-round of negotiations.
Parker said he was "disappointed" by what was being offered and said it was a "negative signal".
At the time, Parker hit out specifically at the EU's offer regarding cheese.
"I am advised that the EU domestic cheese market is growing at about 132,000 tonnes a year - but the EU's offer starts at 1500 tonnes. That's barely 0.02 percent of the EU's domestic market," Parker told Newshub following the leak.
"In 2019 the EU exported just under a kilo of cheese per Kiwi to New Zealand - without any tariffs being paid at all. The EU has offered us 3.3 grams per European citizen and has such a high tariff that it would practically restrict all trade."
'Two wrongs don't make a right'
When asked about the situation on Tuesday, Prime Minister Jacinda Ardern admitted the situation was "not fair".
"[That's] why we are in the throes of a negotiation with the EU on removing those barriers. And that's obviously why this has been a critical negotiation for us," Ardern told The AM Show.
"That's something that New Zealand has really entered into in good faith and now we have an expectation that we see some decent offers around our trade and the barriers that our trade experiences."
When asked whether the Government would consider placing tariffs on specialty cheeses imported into New Zealand, Ardern said that wasn't likely.
"We obviously have always stood against barriers to trade and so really you're going against your own values - two wrongs don't make a right," she said.
"We're not protectionist and this has been our whole point, this is the value set that New Zealand has - it's why we have been able to stand up within the WTO [World Trade Organisation] and make arguments for access for our products elsewhere because we do it on a principle basis. And so we will continue to do that and continue to negotiate in good faith."
The cheese industry's concerns come after similar complaints were raised by the potato industry, which has accused EU exporters - particularly Belgium and the Netherlands - of "dumping" surplus product in New Zealand's market and undercutting the price of local producers.
The sector has accused the countries of "anti-competitive behaviour" and said they were "acting against normal international trade rules".
Potatoes New Zealand (PNZ) said the dumping was a threat to the survival of local producers, and in a bid to protect the industry the group last month submitted an application to the Ministry of Business, Innovation and Employment (MBIE) calling for anti-dumping duties to be placed on frozen potato products through the Dumping and Countervailing Duties Act.
By using domestic legislation to combat the issue, PNZ said it would not affect the free trade negotiations between New Zealand and the EU.