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Dire consequences if 'unconsidered' poultry tariff is approved, warn meat importers

Jul 19 2019 12:32
Khulekani Magubane, Fin24

The Association of Meat Importers and Exporters has warned government against announcing a 66% increase on tariffs for imported chicken products, saying such an increase would see prices skyrocket and jobs plucked from the meat industry.

According to a statement released by the association, government and its import tariff adjudication body, the International Trade Administration Commission, are showing signs of yielding to calls for a tariff increase on chicken product imports.

AMIE CEO Paul Matthew said in the statement that attempts to present accurate industry research to government were met with "refusal to reopen the debate on an issue of primary national importance".

"ITAC, the body within the Department [of Trade and Industry] that considers and approves the imposition of tariffs on imports, is being pressured to recommend a 66% price [increase] next week. Certain critical information was only made available by SAPA following an application to the High Court of Gauteng," said Matthew.

Last month it emerged that the South African Poultry Association (SAPA), a representative of local poultry producers, applied to ITAC for an 82% increase to the tariff, saying that local producers cannot compete with dumping from the international market.

Matthew said ITAC was about to make a decision based on outdated information, arguing that the inevitable result would be massive increases in imported chicken prices.

"There is no dumping of surplus international chicken products on our market. AMIE serves fundamentally different parts of the market and the entire output of the local product is used primarily by the fast-food market," Matthew said.

Protection from collapse?

ITAC spokesperson Thalukanyo Nangammbi told Fin24 that government's industrial and trade policy approach remained to protect strategic upstream sectors and industries from collapse which has the potential to undermine the agricultural and industrial base of the country.

"Care is taken not to harm downstream players and consumer welfare. Therefore, ITAC has to strike a delicate balance in applying its instruments in line with government’s industrial and trade policy objectives," said Nangammbi.

Nangammbi said decisions to amend tariffs were evidence-based and depended on the circumstances of each case, as opposed to being "rigid blanket determinations". In the commission’s investigations and recommendations careful consideration is given to the value chain for agricultural products, he said.

"Not only the profitability and interests of primary producers are taken into account, but also those of value added producers and the possible inflationary effects for the consumers of food, in particular the poor. These different parties across the spectrum of the value chain represent sometimes sharply opposing interests," Nangammbi said.

He said food security remained a central objective for the agricultural sector and in this regard the affordability of food cannot be ignored.

Skyrocketing prices

However, the South African National Consumer Union fears that, if approved, the tariff would raise prices of poultry products beyond what low income households can afford. They also fear that the local industry will not be able to meet the local market’s demands, which will further spike prices.

SAPA general manager Izaak Breitenbach previously told Fin24 that the application for the tariff increase was being misconstrued as an attack on imports, when it was, in fact a response to product dumping.

But at the time, Matthew of the Association of Meat Importers and Exporters said Breitenbach was using imports as a scapegoat for other issues affecting the local poultry industry. He denied that dumping was pervasive in the local market.

ITAC is expected to rule on the matter later this month or in August.

itac  |  sapa  |  amie  |  south africa  |  tariffs  |  poultry
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