Hilton & Grain Fed Beef Quotas

The ‘Hilton Quota’ is another name for the High Quality Beef (HQB) Tariff Rate Quota whereby almost 67,000 tonnes of carcase weight equivalent can be imported into the EU at a 20% tariff*.  This reduced tariff compares very favourably with the regular import tariff on beef into the EU, with some cuts having a tariff of over 80% but it’s still not a 0% tariff and in the latest quota-year (1 July 2018 – 30 June 2019) 73% of this quota was used.  The HQB quota is allocated on a country by country basis, with over half allocated to South America.  Only hormone-free beef can be traded.

The ‘Grain Fed Beef’ quota is currently set at 45,000 tonnes and is shared between Australia, New Zealand, Uruguay, Argentina, Canada and the US on a first-come-first-serviced basis.  The tariff is 0% and, predictably, this quota is normally filled very quickly.  On 28 November 2019 the EU agreed a deal¹ with the US to permit them preferential access to this quota, commencing at 18,500 tonnes, rising to 35,000 tonnes after 7 years.  The overall volume of imports under the Grain Fed Beef quota won’t change but the US will increasingly command the lion’s share.  There are several sources of tension between the US and EU in respect of trade, the refusal of the EU to accept hormone-treated beef, and the US dissatisfaction with EU policy of providing subsidy support to EU airline manufacturer Airbus.  The agreement to increase US access to the Grain Fed Beef quota is intended to be a de-escalation measure.

Going forward neither the Hilton or Grain Fed Beef quotas will solve the problem of continuing tariff free access for UK beef into the EU:  the Hilton quota doesn’t automatically provide zero tariff access, whilst the grain fed beef quota available after the US share is only 10,000 tonnes for the rest of the world.

Inevitably the UK will need to take a share of the EU TRQ, including the grain fed beef quota which will soon comprise up to 75% US beef.  Arguably this could muddy the waters if the UK wishes to follow the EU in banning hormone-treated beef – will the consumer be able, willing (or even permitted, under pressure from the US around labelling) to distinguish between US beef which is or isn’t treated with hormones?

*Canada has a trade agreement with the EU giving it tariff free access to the HQB quota.