Provisional safeguard duties imposed on frozen potato chips

08 Jul 2013
On 05 July 2013, SARS imposed provisional safeguard duties of 61.42% on frozen potato chips. This follows an application by McCain Foods SA (Pty) Ltd to the International Trade Administration Commission of South Africa (ITAC) for a safeguard measure against the alleged surge in imports of frozen potato chips that was causing serious injury to the domestic industry.

Safeguards are used against an unforeseen surge of imports that causes and/or threatens to cause serious injury to the domestic producers. Safeguard investigations are conducted within domestic law and consistent with the WTO Agreement on Safeguards.

The applicant, a major producer of frozen potato chips in the SACU, supported by Nature’s Choice Products (Pty) Ltd and Lamberts Bay Foods Ltd, alleged that frozen potato chips were being imported into the domestic market in such increased quantities, thereby causing serious injury to the SACU industry.

After due verification of the information submitted by the applicant, the Commission considered that there was prima facie evidence that the alleged surge of imports of frozen potato chips was causing serious injury to the domestic industry. The investigation was initiated by ITAC on 08 March 2013.

Interested parties commented on the initiation notice. The Commission took all comments made by interested parties into account. In making its preliminary determination on 11 June 2013, the Commission found that the imports in 2010, compared to 2009, increased by 811.23 per cent, and that in 2012, compared to 2009, the imports remained at high levels and were 1 398 per cent higher, compared to 2009.

The Commission found that there was sufficient evidence of unforeseen developments such as the proliferation of Quick Service Restaurants; excess production capacity of frozen potato chips in the European Union; and the European Union not adhering to its export subsidy commitments made in the Uruguay Round of negotiations.

During the Commission’s examination of whether the SACU producers of frozen potato chips suffered serious injury as a result of the alleged surge in imports, the Commission found sufficient evidence to indicate that the serious injury in the form of a decrease in sales volume, a decrease in market share experienced by the SACU industry and increasing loss situation, was caused by the recent, sudden, sharp and significant surge in the volume of imports.

As the Commission considered that critical circumstances existed that justified the imposition of provisional measures, it decided to request the Commissioner for SARS to impose a provisional measure of 61.42% on the imports of frozen potato chips, classifiable under tariff subheading 2004.10.90, for a period of 200 days pending the finalisation of the investigation.

For further enquiries, please contact:
Mr Siyabulela Tsengiwe
Chief Commissioner
International Trade Administration Commission of South Africa
Tel: 012 394 3728
Cell: 082 454 8979