SA poultry producers to rule the roost?
Monday’s hike will most likely see an increase in chicken prices throughout the country.
JOHANNESBURG - Tariffs have been raised on five types of imported chicken to protect local producers from a flood of foreign goods, the Department of Trade and Industry revealed on Monday.
The South African Poultry Association (Sapa) pushed for the hike saying the cheaper imports were threatening thousands of local jobs.
But Monday's hike will most likely see an increase in chicken prices throughout the country.
The increases, in one case to the maximum 82 percent allowed by global trade rules, comes after a sharp drop in poultry production in South Africa since 2010 against a big rise in imports.
The new tariffs will come into effect immediately.
The move is aimed at ensuring a reasonable profit for producers and still encourage investment in a sector employing around 100,000 people, Minister Rob Davies said.
Sapa's Kevin Lovell says the hike does provide some equal footing for local producers, but says they still have concerns about European importers.
"We can compete better with all of the countries who are exporting to South Africa, except for the European Union. This action doesn't deal with imports from them. They're exempt from the tariff and we need to deal with that."
Association of Meat Importers and Exporters CEO David Wolpert says the tariff may be a victory for Sapa and government, but not for consumers.
"We as an association have always opposed customs duties on basic foodstuffs because of its effect on the poor," he told 567 CapeTalk/Talk Radio 702 Bruce Whitfield on Monday night.
"We're disappointed as this will be financed by the consumer. At the same time, we are happy that the increase levels have not risen to the highly inflationary and arguably greedy limits recommended by Sapa. That would have been devastating to the consumer."
Asked who would see the greatest benefit of the tariff increase, Wolpert said, "The biggest loser is the consumer. The biggest winner is a combination of government, who would increase revenue, and the local poultry association."
But he said Sapa's business model was dysfunctional and the tariffs would do little to help them without a major overhaul.
Davies 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.