In Government Gazette Number 48294 published on 24 March 2023, the Minister of Trade, Industry and Competition (the “Minister”) directed the International Trade Administration Commission of South Africa to investigate a request from Unique Selling Points (Namibia) CC for a reduction in the rate of customs duty on canned minced anchovies, classifiable under tariff subheading 1604.20.30, from 25 per cent ad valorem to a specific duty of 6c/kg through the creation of an additional 8-digit tariff subheading.
In arriving at its recommendation, the Commission considered the information at its disposal, including comments received during the investigation period.
The Commission found that:
• Canned minced anchovies are a ready-to-eat minced fish in airtight metal containers for human consumption. The product concerned is not a high value-added product like flat salted anchovy fillets and has a different production process that does not include salting or maturation. The species of anchovy forming the basis of the application is abundant and unique to Peru and provides an affordable source of a high protein, high omega content fish resource.
• There are no domestic producers of canned minced anchovies within the Southern African Customs Union (“SACU”) region given that anchovies from Southern Africa are mainly used for fishmeal production due to, amongst others, their small size and soft texture.
• Developing canned anchovy products for human consumption in the local fish processing industry poses challenges in terms of realizing an acceptable return on investment given the extent of capital expenditure required to enable local production coupled with low profit margins.
In addition, the declining average size of South African anchovies since 1980, the manual labor required to prepare each fish individually, and quality problems caused by high lipid content, oxidation and rancidity were also cited as reasons for the absence of anchovy production for human consumption in South Africa.
• Reducing the rate of customs duty on canned minced anchovies from 25 per cent ad valorem to 6c/kg would provide SACU consumers with a more affordable alternative, high protein content product when compared to other high value canned fish products like canned tuna or pilchards. The reduction will potentially offer regional consumers an additional choice for an affordable food product.
• Canned minced anchovies were only imported by the Applicant during 2019 and 2020.
• The Applicant is located in Namibia and not South Africa, therefore reciprocal commitments are not applicable as they only extend to entities within South Africa.
• Other canned fish products either have no duty or attract a 6c/kg duty, depending on the country or region of origin, hence a reduction would contribute to the alignment of the tariff structure for canned fish products.
• It is unlikely that reducing the customs duty on canned minced anchovies will affect the supply and pricing of other canned fish products such as tuna and pilchards as its target market is the lower LSM group.
In light of the foregoing, the Commission recommended a reduction in the rate of customs duty on canned minced anchovies, classifiable under tariff subheading 1604.20.30, from 25 per cent ad valorem to a specific duty of 6c/kg through the creation of an additional 8-digit tariff subheading.
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ISSUED BY THE INTERNATIONAL TRADE ADMINISTRATION COMMISSION OF SOUTH AFRICA