Consumers and retailers stood to benefit from a strong and growing manufacturing sector, Manufacturing Circle executive director Coenraad Bezuidenhout stressed on Tuesday, noting that this was critical to sustainable growth and shared prosperity

This statement comes after Shoprite CEO Whitey Basson expressed his concern about the decline in the local manufacturing industry and its lack of competitiveness and innovation.

“Many manufacturers complain that due to high input costs they cannot compete with imports and, therefore, beseech the government to limit those imports by imposing higher duties on imports,” he stated in the group’s annual report.

This had placed retailers at a crossroads, as many of the manufacturing sector’s employees were their clientele and a loss of jobs would strain performance in the retail sector.

“The dilemma is that, at the same time, the retailer owes the people of this country the opportunity to buy what they need at the lowest prices – 50-million people cannot be held to ransom by manufacturers that are unable to compete effectively in a world market,” stated Basson.

Bezuidenhout stated that this was unproven and incorrect. “While manufacturers would support positive attempts to address the plight of poor consumers, it would only bring short-term relief and long-term misery if we did so solely to the benefit of retailers and importers and at the cost of sustainable growth,” he said.

He noted that there was a need for fair trade arrangements to stop the importation of unfairly incentivised goods and called for a level playing field in terms of trade arrangements, quality standards and competitive industrial policy support for South African manufacturers and processors.

“We are globally recognised for the quality and reliability of our manufacturing in key areas, including beneficiated goods, but we will lose these competencies if we allow our domestic manufacturing capacity to be further hollowed out,” he said.

He lauded the actions taken by the Department of Trade and Industry and the International Trade Administration Commission of South Africa (Itac) in respect of chicken and sugar imports.

In September, Trade and Industry Minister Dr Rob Davies raised the poultry import tariffs by an average 8.75% to stimulate local production and save jobs in the industry, while the Itac tabled proposed increases in the domestic dollar-based reference price for imported sugar, from $358/t to $764/t.

“To not have taken action there, would have been to send jobs overseas and decimate local industry, leaving local consumers vulnerable to price gouging by importers in the future. It is, therefore, in the long-term interest of consumers and not to their detriment as importers suggest,” he averred.