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Poultry hike to even the playing field

Around 20,000 jobs can be created if govt minimises the importing of chickens.

The Department of Trade and Industry announced an increase on the import tariff of chicken on 30 September. Picture: sxc.hu

JOHANNESBURG - The South African Poultry Association (Sapa) says the local industry has the potential to create another 20,000 jobs if government further minimises the importing of chicken.

The Department of Trade and Industry announced on Monday that tariffs will be raised with immediate effect on five types of imported chicken in order to protect local producers from a flood of foreign goods.

While the hike will most likely see an increase in chicken prices throughout the country, Trade and Industry Minister Rob Davies says he's agreed to the hike to raise local production and secure jobs.

Sapa CEO Kevin Lovell has welcomed the news.

"It's never been our intention to get rid of all the imports. We just want to be able to compete equally and fairly with them. But if we had minimal imports, we could easily put another 20,000 jobs directly or indirectly into the South African economy."

Sapa pushed for the hike saying the cheaper imports were threatening thousands of local jobs.

Lovell said the hike does provide some equal footing for local producers, but said 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."

CONSUMERS WILL SUFFER

Meanwhile, Association of Meat Importers and Exporters CEO David Wolpert said 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 the Money Show on Monday night.

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."

He said Sapa's business model is dysfunctional and the tariffs would do little to help them without a major overhaul.