Long Clawson has been exporting to Canada for 25 years

British cheese exporters are facing millions in losses unless the UK government urgently reaches a trade deal with Canada that protects their market access.

Artisan cheesemakers can currently export to Canada under a temporary agreement that was implemented post-Brexit to safeguard British producers’ access to the country’s markets.

However, that rollover agreement – also known as the Cheese Letters – is expiring on 31 December this year, with no clear prospect of a replacement deal because Canada-UK trade negotiations are currently locked in an impasse due to a beef-related dispute.

Cheese exporters now say they are “running out of time” before they see their tariff-free exports quotas slashed significantly in the new year, which could lead to damaging losses.

“We have been exporting cheese to Canada for over 25 years and our partners there are tearing their hair out with frustration,” said Bill Mathieson, MD of Long Clawson Dairy, one of the six stilton makers in the UK.

“It’s worth over £1.5m of sales to us and comes at a time when we’re all trying to preserve and grow the artisanal stilton market.”

Canada and Britain are negotiating a new free trade agreement but there have been concerns this side of the Atlantic about whether or not the UK will accept hormone-treated beef from the country.

According to traders, it appears neither side is willing to give in by the end of the year, which could have knock-on effects on other sectors such as dairy.

According to the FDF, cheese exports to Canada in 2022 were worth £18.7m of the total £785.4m British cheese exported.

Without a deal, the UK will have to abide by stricter export quota allocation mechanisms, which means “all the cheese products in the UK are going to have to work on about half a shipping container versus what they’re at the moment, which is unsustainable,” according to Provision Trade Federation director general Rod Addy.

Groups such as Dairy UK, PTF and major cheese exporter Coombe Castle International have for months been urging the government to sign an additional two-year extension to the Cheese Letters.

But many are already planning for the worst-case scenario.

“Two things will happen without a deal – either we’ll face a super taxation of about 250% tariff tax or we’ll have to look at alternatives to ship to Europe and then into Canada from there to try and use some of the quota that they have,” Mathieson said – both of which threaten to make British cheese more expensive and far less competitive.