Consumers recruited for chicken tariff wars
Change to EU trade deal would hit food prices, say importers
THE battle over frozen chicken import tariffs is being played out on South Africa’s highways, in newspapers and on social media.
The Association of Meat Importers and Exporters said this week it would fight a call by the South African Poultry Association for a safeguard tariff of 37% to be imposed on frozen chicken imports entering the country from the EU.
It has spent more than R1.2-million on a media campaign that includes billboards on major highways in Johannesburg, Cape Town and Durban, reading: “Why are chicken prices going up?”
Association CEO David Wolpert said that should the International Trade Administration Commission of South Africa impose the proposed 37% tariff, the price of frozen chicken — whether imported or not — would increase by between 20% and 25% per kilogram.
The association is also hoping a video on Facebook alerting consumers to the price hike in chicken if the tariff is imposed will get its message across.
“The local poultry industry has now brought four different protectionist actions against the importers in the past five years. This is almost an annual event for them,” Wolpert said.
All that this showed, he said, was that there was something wrong with the local poultry industry’s business model.
In terms of the Trade, Development and Co-operation Agreement of 2004 between South Africa and the EU, frozen poultry products can be imported duty-free.
Wolpert said the importers would meet with the trade commission in the next 30 days to present their case.
“We are eager to present a strong case to them. The EU is also opposing [the poultry association’s] action, they are very angry about this,” he said.
According to the latest report on poultry meat imports, the contribution of EU chicken to total South African poultry imports increased from 30% in July 2014 to 60% in November the same year.
“The contribution on frozen bone-in portions originating from the EU is increasing, rel- ative to imports from other countries,” the report says.
Poultry imports for 2015 totalled 478 447 tons, with Brazil as the main contributor at 50.4% followed by the EU at 41.7%.
Wolpert said about 200 000 tons of bone-in frozen chicken products came from the EU in 2015.
Poultry association CEO Kevin Lovell said this had pushed the local industry to make an application for an agricultural safeguard duty of 37% on frozen poultry imports.
He said the 2012 trade agreement gave the EU a competitive advantage over other suppliers. “Our application is trying to undo that agreement.”
In 2009 the EU supplied about half a percent of South Africa’s bone-in portion imports — and in 2015 it supplied more than 80%, he said. “The high influx was simply because of the removal of the tariff and now we are starting to see a serious disturbance in the market. The application is to simply correct that,” said Lovell.
The trade agreement with the EU makes provision for South Africa to implement safeguard measures when an imported product threatens to cause serious injury to the national industry. The trade commission said the application by the poultry association had alleged that this was in fact the case.
“Based on the information submitted, the commission decided to initiate an investigation in accordance with the commission’s guideline. All comments will be taken into consideration by the commission in making its recommendation to the minister of trade and industry,” it said.
Lovell said the industry suffered a lot of competition from the bone-in products because they were widely considered waste products in other parts of the world. He said the 200 000 tons that arrived on the local market in 2015 were more than the total production of the third biggest producer in South Africa.
“No one should believe that imports are a small issue, they are a major player in the market. Collectively they have more sale value than some of the local producers.”
Lovell said the issue of imports was about market distortion, not competitiveness.
Protectionist action is almost an annual event for the local poultry industry