Duty on EU chicken 'too little, too late' for local poultry industry

16 Jan 2017

Food Review, 16 January 2017
By Staff Reporter

The South African commercial poultry sector has expressed its overwhelming disappointment at ITAC's recently announced "shocking" 13.9 per cent increase in duty for poultry from the EU, which up to now, has been entering the country duty-free.

Marthinus Stander, CEO of Country Bird, says ITAC’s original essential facts letter agreed with the local industry’s claim of severe distortion and material damage to our market.

‘This is a direct result of the huge volumes of dumped and unwanted bone-in chicken portions entering South Africa via the EU because of the unlimited access provided by the bi-lateral free trade agreement between the EU and SA,’ says Stander.

‘We know from bitter experience that the 37 per cent most favoured nation tariff that applies to all countries except the EU barely stems the tide of imports, so it is absolutely baffling how ITAC believes that 13.9 per cent could ever work.’

Chris Schutte, CEO of Astral Foods, says the duty applied is "ridiculous", and will do nothing to halt the job losses facing the industry, and is tantamount to "spitting on the graves of poultry sector workers."

It simply wasn't worth the considerable effort put in by the local poultry industry to protect businesses and jobs, and wasn't worth the time and effort expended by government either,’ says Schutte.

Scott Pitman, MD of Rainbow Foods Limited says that while any assistance from government is gratefully accepted, the 13.9 per cent tariff will be completely ineffective since it is way too low. He adds that tariffs and duties are no longer a solution for South Africa's poultry industry.

‘The reason for this is that exporters dumping leg quarters into South Africa have very few options open to them to dump it elsewhere, since the entire world has used technical barriers to protect their own poultry industries,’ Pitman says.

‘Therefore, they simply will lower their selling prices to South Africa by the extent of the tariff and take what they can get. This is an unfortunate reality in the poultry world these days, since other governments value jobs and food security more than South Africa seems to.’

 Schutte explains that compared with other countries' governments, South African legislators and policy makers are doing little to safeguard the agricultural sector and protect the nation's food security.

‘It is disappointing when you see how other governments, like the US' recent AGOA interventions, work to protect their industries, create and maintain jobs in rural areas, and ensure their country's food security into the future,’ he says.

Stander says even though President Zuma and Ministers Gordhan and Davies talk about collaboration between government and business, job creation, and industrialisation, as an objective of the DTI, ITAC’s disappointing “too little, too late” EU safeguard determination only further supports uncontrolled subsidised dumping of chicken portions into SA.