The SA Poultry Association (Sapa) announced the move on Monday, saying that cheap imports from Brazil and the four EU states are unfair because they create jobs in the producer countries while stifling economic growth in SA.
This comes as various players in the manufacturing sector push for the removal of import duties, which they say are stifling production. Retailer TFG, owner of Foschini and Sportscene, which manufactures more than 25% of its clothing locally, has urged the government to speed up the planned removal of import duties on yarns and cotton threads used to make fabric.
The poultry industry's new application to the International Trade Administration Commission (Itac) — the organisation tasked with customs tariff investigations and trade remedies, as well as import and export controls — seeks anti-dumping duties based on the difference between what frozen chicken portions are sold for in the producer country and the lower export price of frozen chicken portions to SA.
Sapa said dumping margins of up to 201% had been noted.
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.
“We have proof that these countries have been dumping frozen chicken portions onto the SA market, which is unfair competition for local producers, big and small, and costs local jobs,” said Izaak Breitenbach, GM of Sapa’s broiler organisation.
“They are bringing frozen chicken portions into SA, often at prices lower than their production costs, and/or lower than they are selling the same product in their home markets. This not only constitutes dumping under World Trade Organization (WTO) and SA rules, it is unfair because it creates jobs in producer countries while stifling economic growth here,” he said.
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In 2020, despite objections by meat importers, the government moved to protect the sector, gazetting tariff increases to 62% on bone-in chicken portions while tariffs on boneless portions were raised to 42%. Local industry players wanted an 82% tariff hike on both categories, up from 37% and 12% respectively. Imports make up about 30% of chicken consumed in SA, with Brazil, the EU and US the major suppliers.The tariffs affected imports from all countries except the EU and Southern African Development Community members, because of existing free-trade agreements.
Sapa says the anti-dumping application to include four EU countries was necessary as dumped imports were causing “material injury to the domestic industry, despite the existing tariffs”.
Itac will investigate the complaint before making a recommendation to the trade, industry & competition minister. The process is expected to take about 12 months.
The Association of Meat Importers and Exporters in SA has previously warned that cash-strapped consumers are likely to pay more for chicken as a result of the tariff increases.
Breitenbach said that in the poultry sector master plan agreed to in 2019, the industry undertook to continue to produce affordable chicken for the local market, “and we are delivering on that commitment. In addition, there is extensive price monitoring under the master plan.”
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