Business

Meat association urges government to reassess import duties on poultry

The South African Association of Meat Importers and Exporters (Amie) is calling for a comprehensive review of import tariffs on poultry, claiming that the duties are another form of tax that consumers cannot bear.

This comes after the South African Reserve Bank (Sarb) Monetary Policy Review report for October indicated that customs duties on frozen whole chicken and bone-in pieces more than trebled between 2013 and 2022, increasing from 27% to 82% and 18% to 62% respectively.

The report said this contributed to rising prices of frozen chicken meat and declining imports, with the effects exacerbated by anti-dumping duties and safeguards “imposed to limit substitution towards the European Union”.

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The report added that frozen chicken experienced a cumulative increase in most favoured nation (MFN) tariffs, from 18% in 2010 to 62% in 2021, increasing consumer prices by between 13% and 40%.

“Because chicken is the main source of meat protein for most low-income households in South Africa, tariffs on chicken products are regressive,” the report states, recalling government’s recent decision to temporarily suspend tariffs on chicken imports for 12 months.

It says the suspension should support purchasing power and real consumption by lower-income South Africans.

Call for review

“Given the weak economy and high inflationary environment, and the fact that the Sarb believes that the country has not yet seen a peak in inflation, it is essential that the government do everything it can to ensure that this critical source of protein remains within reach of the most vulnerable in our society,” says Amie CEO Paul Matthew.

“It is time that the government takes a long, hard look at its trade policy, which seems to be protecting large domestic manufacturers at the expense of consumers,” he adds.

Matthews says that while demand for chicken has increased over the years, local production has remained constrained. He notes that imported chicken, which accounts for less than 10% of total consumption excluding mechanically deboned meat (MDM), is vital in the production of processed meat products.

“Imported poultry not only fills the consumption gap but provides the necessary competition to ensure that prices are kept in check,” he adds.

“What has occurred in South Africa is that ever-rising duties have restricted and concentrated production, pushing up prices.

“Liberalising trade will remedy this in favour of consumers.”

 Nondumiso Lehutso is a Moneyweb intern.


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