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Consumers to bear brunt of dumped US chicken - Shoprite

Dec 22 2015 17:25

(iStock)

Company Data

SHOPRITE HOLDINGS LIMITED [JSE:SHP]

Last traded 210
Change 4
% Change 2
Cumulative volume 1595804
Market cap 0

Last Updated: 28/04/2017 at 05:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Cape Town – Shoprite, which sells 60% of all frozen chicken in South Africa, is concerned that the price benefit of the recently approved chicken imports from the US will not reach consumers.  

The largest seller of frozen chicken in the country said at least half of the 65 000 tonnes of the chicken quota, all of which will be free of anti-dumping duties, will be given to middlemen who don’t necessarily have the infrastructure or the distribution network.

This means the true price benefit will not reach hard-pressed consumers, who need it most in trying economic times, said Shoprite [JSE:SHP] in a statement this week.

While understanding government’s mandate  to  allocate  a  portion  of the quota  to  historically-disadvantaged  individuals , Shoprite said it can’t “comprehend  why a minimum  50%  must  go  this  route  as  the  benefits  of  these  imports   must  also reach  previously -disadvantaged  consumers  in the form of lower chicken prices in stores”.
 
Shoprite said that using “historical imports to determine the allocation of the quota is disingenuous since it by definition, penalises retailers who have supported the local producers for many years”.

Shoprite, which has the best footprint to reach the majority of SA consumers living below the bread-line, said it has committed itself to sell any of the imported duty-free chicken it imports at cost price to provide maximum relief to consumers.

This comes as Department of Trade and Industry Minister Rob Davies had a bilateral meeting with US counterpart Ambassador Michael Froman on the sidelines of the World Trade Organisation’s Ministerial Conference in Nairobi this weekend.

The meeting assessed progress made since the notice that was issued by US President Barack Obama last month of withdrawing duty-free treatment for South Africa’s agricultural exports under the African Growth and Opportunity Act (Agoa) if South Africa did not resolve the US concerns.

In the letter, Obama warned South Africa that if the negotiations on the outstanding issues related to the poultry issues are not resolved by 31 December, the US would suspend South Africa’s duty free treatment of SA’s agricultural goods into the US.

South African and US veterinarians have since then signed the “Protocol for Poultry Meat and Day-Old Chicks”, which will secure the continued exports of poultry from those areas in the US that are not affected by avian flu in the event of any new outbreaks of the disease.

Treasury published a notice in the Government Gazette on 18 December amending Schedule 4 of the Customs and Excise Act by inserting rebate item 460.03 that provide for a rebate of the anti-dumping duty imposed on bone-in chicken piece originating or imported from the United States for 65000 MT per annum.

“The International Trade Administration Commission  also published guidelines on the allocation of the quota and the issuing of rebate permits,” said Davies.

“A volume of 16 250 MT will be available for use on a first come first serve basis from 18 December 2015 until 31 March 2016 where after rebate permits issued by ITAC will be required for use of the rebate item.

“With these publications the government of South Africa implemented the agreement reached between the US and SA poultry industries in Paris in June this year,” he said.

Davies and Froman said the implementation of the Paris agreement signals a significant milestone in the process of finalising the market access issues raised in President Obama’s letter.

Both Ministers committed to working together to resolve the meat dispute. They said their officials will continue to engage constructively to finalise the last few outstanding issues.

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shoprite  |  rob davies  |  agoa

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