Fears tariffs will push chicken prices up 32%

Increasing tariffs on imported poultry products could hike chicken prices by up to 32%, according to a consumer body and an organisation of importers and exporters.

The SA poultry industry, under the auspices of the SA Poultry Association (Sapa), has applied to the International Trade Administration Commission of SA to increase tariffs on chicken to 82%.

But the Emerging Black Importers and Exporters SA (EBieSA) and the SA National Consumer Union (Sancu) on Wednesday slammed the local industry for seeking protection against imports.

“Their rationale is that imports are damaging the local industry, but EBieSA believes they are simply seeking to protect their profits to the detriment of consumers and emerging black importers,” said EBieSA, which represents 105 black businesses.

EBieSA chair Unati Speirs said the local industry had created an impression that the imports hurt local producers.

“This is not true. In 2018, some local producers posted bumper profits of more than R1.4bn for the year. This perception is being created in order to drive further protection for local producers, in an already concentrated and untransformed market,” Speirs said.

Sancu vice-chair Clif Johnston said increases in chicken prices would hurt consumers, because imports kept chicken prices in check.

Nontwenhle Mchunu, founder and director of Mkabayi Group, a black-owned importer of chicken, said the local poultry industry should take up export opportunities.

“Both imports and exports create valuable jobs and revenue, yet local producers continue to ignore export opportunities. For example, the EU has opened up its borders to our chicken at 0% duty, and we could be selling our chicken breasts in the US. Why is the local industry not doing it?” Mchunu questioned.

Izaak Breitenbach of Sapa said the two organisations’ claims were opportunistic and sought to protect the interest of importers “ahead of tens of thousands of people, including thousands of emerging black farmers who battle to survive due to predatory trade practices”. He said on Wednesday that Sapa welcomed fair competition and imports of whole chickens, but huge volumes of chicken portions were “dumped” in SA at prices that are under the cost of production in their countries of origin.

Breitenbach said it was a fallacy that the cheap imports benefited consumers, because the importers pocketed the profits. “You can see this by checking prices of imported chicken in any shop; prices are the same as local chicken or only slightly under.”