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The European Union and Australia have finalised a long-anticipated free trade agreement (FTA), marking a significant shift in food and beverage trade flows.

The agreement, worth around €6 billion in trade, was negotiated over several years and announced yesterday (24 March 2026) by president of the European Commission, Ursula von der Leyen, and Australia's prime minister Anthony Albanese.

Notably, it will eliminate tariffs on the vast majority of goods traded between the two markets, including key food and beverage categories such as wine, chocolate, biscuits, bread and seafood. Nearly all EU exports to Australia and a large share of Australian agricultural exports to the EU are expected to benefit from reduced or zero duties, improving price competitiveness and market access.

For food and beverage manufacturers, the deal represents a major step toward liberalising trade between the two highly developed, but traditionally protected, agricultural markets. The EU alone offers access to a consumer base of nearly 450 million people, making it a key growth target for Australian exporters.

In the food and beverage sector, tariff reductions are expected to drive increased exports of European value-added products, including dairy, confectionery and beverages, into Australia. At the same time, Australian producers stand to gain improved access for categories such as wine, seafood, nuts and certain processed foods.

However, market access gains for 'sensitive' sectors such as beef, sheep meat and dairy will remain partially constrained by quota systems, reflecting ongoing protection of domestic agriculture in both regions.

One of the most significant implications for the food industry lies in the agreement’s provisions on geographical indications (GIs). Australia has agreed to recognise and protect hundreds of EU-origin product names, covering cheeses, wines and spirits.

This means Australian producers will be required to phase out the use of certain traditional European names, such as feta or gruyère, unless covered by transition arrangements. The move is expected to have a lasting impact on branding, labelling and marketing strategies across the dairy and speciality foods sectors. For EU producers, however, GI protections reinforce premium positioning and help safeguard product authenticity in export markets.

Beyond tariffs, the agreement is designed to streamline trade procedures, reduce technical barriers and improve regulatory cooperation, all of which are critical for multinational food and beverage companies managing complex global supply chains.

Industry response

Despite support from many sectors, the agreement has drawn criticism from parts of the agricultural industry, particularly in Australia, where some stakeholders argue that export quotas for red meat and dairy do not go far enough.

At the same time, European producers have expressed concerns about increased competition from Australian imports, highlighting the delicate balance required in liberalising agricultural trade.

EU farming association Copa-Cogeca said the deal "responds to the emergencies of the moment," but that its "medium-term consequences will be unsustainable for many sensitive farming sectors".

In a statement, Copa-Cogeca wrote that the significant concessions on highly sensitive agricultural sectors – particularly beef, sheep meat, sugar and rice, have "long drawn strong opposition and concern from the farming community".

"Farmers across the EU are facing increases on all input costs, persistent inflationary pressures, prices that don’t keep up, and increasing uncertainty linked to the developments in Iran and all the broader geopolitical context," said Copa-Cogeca. "Further openings of these sensitive sectors to free trade agreements would only worsen existing vulnerabilities and push many EU family farms to the breaking point."

Albanese called the deal a "win-win" for trade on both sides, describing it as a "comprehensive, balanced and commercially meaningful agreement that will reduce costs for Australian consumers and open new markets for Australian producers".

However, the Meat & Livestock Australia association strongly opposed the deal, calling it the "worst ever free trade agreement for Australian red meat industry to date".

“Australia’s red meat sector has been profoundly let down by this outcome,” Andrew MacDonald, chair of the Australia–EU Red Meat Market Access Taskforce, said.

"The agreement delivers just 30,600 tonnes carcase weight (cwt) of beef access over the next ten years, when a minimum of 50,000 tonnes (cwt) was required simply to be in line with what the EU has offered our competitors. On sheepmeat and goatmeat, the result is equally disappointing: 25,000 tonnes (cwt) over seven years, despite Australian industry requesting a minimum of 67,000 tonnes cwt."

“This stands in stark contrast to New Zealand’s access of 163,769 tonnes - which is an outrageous discrepancy."

European dairy association Eucolait welcomed the deal, commenting that the agreement marks "a significant and positive step in the EU’s ongoing efforts to strengthen strategic partnerships and diversify both supply sources and export markets".

"Eucolait particularly welcomes the elimination of tariffs on cheese under the agreement, combined with the protection of geographical indications," Eucolait said in a statement. "While Australian tariffs on most other dairy products are already set at zero, it remains crucial to ensure that EU exports are safeguarded against any potential future increases in Most Favoured Nation tariff rates."

Wine association Australian Grape & Wine welcomed "key elements" of the deal, including the removal of tariffs on Australian wine exports to EU member states, and the confirmation that Australian producers will retain the right to use the term 'Prosecco' as a grape variety in the Australian market.

"That provides certainty for a domestic prosecco market worth in the order of $200 million per year," Lee McLean, Australian Grape & Wine's chief executive, noted. However, he raised concerns over the agreement that producers will no longer be able to export Australian Prosecco following a ten-year phase-out period.

"We continue to maintain that Prosecco is a grape variety and that efforts to restrict its use are nothing more than protectionist measures used to distort trade to the advantage of EU producers," he commented. "This is clearly a blow for those Australian producers who currently export Australian Prosecco, who will need to transition to an alternative term for export market."