The International Trade Administration Commission (Itac), a regime that regulates the movement of goods across SA’s borders, on Friday placed provisional anti-dumping duties on frozen bone-in chicken pieces from Brazil, Denmark, Ireland, Poland and Spain to protect local chicken farmers.
The duties range from 6% to 265.1% for various poultry producers from Brazil, from 39% to 67.4% for Denmark, 158.42% for Ireland, 5% to 96.9% from Poland and 3% to 85.8% from Spain and will remain in place until June 14 2022.
The move, while welcomed by chicken producers, will lead to an increase in the price of frozen chicken, one of the more affordable meats for SA’s lower-income population.
The poultry industry is the largest segment of the agricultural sector, contributing about R50bn a year to SA’s GDP, and is responsible for at least 110,000 jobs.
The sector has in the past shed thousands of jobs and ascribed its struggles to cheap chicken imports from Brazil, the US and Europe. But SA meat importers argue that the lack of competitiveness of the local poultry industry is to blame.
Paul Matthew, CEO of the Association of Meat Importers and Exporters (AMIE) SA, said the decision to add duties to imported bone-in chicken will have a major impact on the struggling South African consumer as it increases the price of chicken.
He said imports force local chicken producers to compete and make their prices lower. If duties allow imported prices to rise or stop imports, then it is easier for local producers to increase their prices.
The extra duties are over and above the 62% duty on leg quarters that was imposed in March 2020.
Matthew said local producers who had asked the government for tariffs had agreed in return to export chicken breasts into the EU, but had not done so due to being unable to meet EU standards. “The government continues protecting the big five poultry producers — at the cost of smaller players, a more robustly transformed industry, and the consumer.”
Anti-dumping duties are already in place for bone-in chicken imports from Germany, the Netherlands, UK and US.
In February, the SA Poultry Association (Sapa) applied to Itac to impose anti-dumping duties on imported chicken from Brazil and Denmark, Ireland, Poland and Spain. Sapa argued that cheap imports from Brazil and the four EU states were unfair and created jobs in the producer countries while stifling economic growth in SA.
Earlier in 2021, trade, industry & competition minister Ebrahim Patel also instructed Itac to review the entire tariff structure for poultry.
Sapa said anti-dumping practices in the market include an underdeclaration of imports to reduce the percentage-based duties payable, or declaring a product that is liable for a tariff under a different product category that is exempt from tariffs. All this is done to evade paying tariffs, it claims.
Itac is still to make a final decision but has enacted provisional tariffs while it completes its investigation.
The tariffs vary not just by country but different exporters have been granted different tariffs. Companies that import into SA and co-operated with the Itac investigation were given lower tariffs than those that did not take part, said Matthew.
Sapa chair Aziz Sulliman welcomed the decision. “SA’s poultry industry has been plagued by the long-term impact and challenges posed by the dumping of chicken into our market.
“This has been devastating to SA producers. Our spirits are buoyed by this announcement as the industry has highlighted this problem for many years, and at least has now been vindicated by Itac’s findings.”
The FairPlay Movement — a not-for-profit trade movement that fights for jobs and is funded by SA’s biggest chicken producers including RCL, Country Bird Holdings and Astral — welcomed the move.
Founder Francois Baird said: “FairPlay has repeatedly called for speedier action on anti-dumping applications, and we are pleased with this decision. Moreover, this is another nail in the coffin for dumping and predatory trade denialists.”
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