The Emerging Black Importers and Exporters South Africa (EBieSA) and the South African National Consumer Union (Sancu) say raising tariffs on imported chicken could hike local chicken prices by up to 32%, putting South African consumers under further financial strain and impacting on food security for the poor.
The South African Poultry Association (SAPA), a lobby group established to protect the interests of the large South African poultry producers, has applied to the International Trade Administration Commission of South Africa (Itac) for import tariffs on chicken to increase to 82%.
SAPA’s members include RCL, Astral Foods and Rainbow Chickens. The lobby group has previously stated that the dumping of chicken in South Africa is harming the local broiler industry.
It and other organisations, such as FairPlay – a global initiative that aims to halt dumping – have expressed concern about the impact of dumping practices, pointing out that many workers in South Africa’s broiler industry have lost their jobs as a result.
EBieSA, however, believes the domestic chicken producers are seeking to protect their profits to the detriment of consumers and emerging black importers.
Speaking at a press briefing, in Johannesburg, on Thursday, EBieSA chairperson Unati Speirs said it was untrue that chicken imports negatively impact on large local producers, as, in 2018, some local producers posted profits of more than R1.4-billion for the year.
She added that the proposed higher tariffs are aimed at protecting local producers, in a market she described as concentrated and untransformed.
She stated that the tariffs would allow local producers to further consolidate and tighten their hold on the market, which would continue to exclude small, black-owned businesses and importers in the local production market.
Speirs argued that, rather than hampering local producers, importers were filling a gap in the market, with South African producers only able to produce 70% of the chicken required to feed the country’s consumers.
Therefore, the remaining 30% is imported from other countries, except when the South African industry faces outbreaks of avian flu and drought, in which case South Africa has to import more chicken to meet local demand and ensure security of supply.
Meanwhile, in terms of job losses, Speirs said the import market was a considerable employer, with jobs ranging from clearing agents, employees handling processing and packaging, cold storage, transport and administrative staff.
“These jobs would be at risk if tariff increases were to effectively close off the import market to Brazil, or other markets.”
EBieSA represents the interests of 105 emerging black importers of chicken to South Africa. These are small South African businesses that each sustain between three and five employees and provide quality poultry to mainly the secondary economy.
EBieSA in December 2018 sent its response to the proposed tariff to Itac, presenting these arguments.
Speaking from a consumer perspective, Sancu vice-chairperson Clif Johnston highlighted that chicken was the cheapest, as well as the sole source, of protein for many consumers, which they can only afford to buy occasionally.
He emphasised that any price increases in chicken results in extreme hardship for consumers.
“Our experience is that the imposition of import tariffs or the increase of existing tariffs eventually results in proportional increases in the price of the protected local commodities as paid by the consumer. If there is no price impact, why do it?”
There are claims from local producers, and perceptions abound, that imported chicken poses health risks, is of an inferior quality to local products and other countries are dumping their product onto the South African market.
Chicken imports company Mkabayi Group founder and director Nontwenhle Mchunu, however, disputed this, stating that exporters are not dumping onto the South African market, but rather exporting their excess high-quality chicken to South Africa to meet demand.
Johnston countered the claim that imported products are a health risk and of an inferior quality. “In terms of the quality issue, we believe imported chicken, as currently regulated, poses no health risks to consumers if properly handled. Sancu has received no complaints in a very long time regarding food poisoning either from imported or local chicken.”