Chicken tariff hike ruffles feathers

20 Nov 2014


Cape Town - A tariff increase on imported chicken has left local producers and importers disappointed, while consumers are set to fork out more amid soaring living costs. Both local producers and importers are unhappy with the set of increased chicken import duties announced by Trade and Industry Minister Rob Davies on Monday. Davies raised the poultry import tariffs by an average 8.75%, saying the higher duties were necessary to raise local production and save jobs in the industry.

"The level of the tariff increases strikes an appropriate balance in limiting the price-raising effects on poor households while ensuring that domestic producers are placed on an improved competitive footing as compared to their foreign counterparts," Davies said. The sliding-scale increases, which come into effect immediately, should ensure a reasonable profit for producers and still encourage investment in a sector employing around 100 000 people, he added. He denied that the new tariff regime was directed at Brazil, which made an official complaint to the World Trade Organisation last year challenging anti-dumping measures imposed by Pretoria on Brazilian chicken imports, reported Reuters.

Welcome hike

The SA Poultry Association (Sapa) said it welcomed the decision, but was disappointed that the "full tariff increases as applied for have not been implemented". The Sapa applied to the International Trade Administration Commission (Itac) to increase tariffs for all categories to 82%. While the tariff duties for whole chickens rose from 27% to the maximum 82% allowed under World Trade Organisation rules, increases for other categories of chicken - specifically those usually consumed by lower income households - were much lower. "While any relief is to be welcomed, we remain concerned that this is insufficient to stem the massive amount of imports reaching our shores that amounted to more than 175 million chickens last year alone, and when mechanically deboned meat is included, equates to more than 260 million chickens," Sapa CEO Kevin Lovell said.



Cheap imports had already resulted in thousands of job losses, he said. The industry employed over 100 000 people directly and indirectly. "It is therefore unfortunate that the minister was perhaps not as bold as he could have been, and in the process, brought immediate relief to local producers on the scale required to make a sustainable difference," Lovell said.


Chicken importers were also left disappointed, saying the poor would bear the brunt of the duty increases. "On the other hand we are happy that duties have not risen to the highly inflationary and greedy levels proposed by Sapa, which, were they accepted, would have totally decimated consumers," the Association of Meat Importers and Exporters of SA CEO David Wolpert said in a short statement. The Democratic Alliance said it was equally concerned. "We oppose government's imposed tariffs that protect uncompetitive behaviour to the detriment of consumer," DA MP Wilmot James said. "The fact of the matter is that increased tariffs will result in more expensive chicken prices." James said the poor would be worst affected by the tariff duty hikes.