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Poultry Industry Cries Fowl!

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Poultry Industry Cries Fowl!

17th March 2017

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For more than 3 years now, the South African poultry industry has cried foul over the import duties charged on foreign poultry products. These import duties have come under scrutiny due to the surge in imports of foreign products, as well as the alleged dumping of poultry in the South African market, which has resulted in some local poultry producers announcing major retrenchments.  In response, the Department of Trade and Industry (DTI), in conjunction with the Department of Agriculture, Forestry and Fisheries, has been working with domestic poultry producers to address these challenges.

The demand for bone-in portions of chicken is relatively non-existent in the EU, making it more of a by-product for EU producers who can therefore sell bone-in chicken portions to the South African market at a reduced cost. The South African market has a high demand for bone-in chicken portions.

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In addressing local poultry industry grievances, in 2013, the import duty on several poultry products was significantly increased.  Current duties for chicken imports from countries including the US and Brazil equate to an 82% duty for whole birds, a 37% duty for "bone-in" portions, a 31% duty for carcasses and a 12% duty for boneless cuts. These import duties, however, are not applicable to imports from the EU due to the preferential trade agreement they have with South Africa.

Anti-dumping trade remedies have also been implemented. In 2015, anti-dumping margins between 3.86% to 73.33% were imposed on frozen bone-in chicken pieces from the UK, Germany and the Netherlands. There were already anti-dumping duties in place in respect of the US and Brazil.

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EU Ambassador, Marcus Cornaro has recently dismissed the allegations that European exporters are dumping bone-in chicken on to the SA market. Cornaro pointed out that the prices of frozen chicken pieces from Belgium, Ireland and Spain are not the cheapest on the market. He has also noted that imports from the Netherlands, France, Germany, the UK, Hungary, Poland and Denmark are currently prohibited, due to the Avian flu ban on imports that was implemented late last year.

The S.A government has placed a provisional safeguard import duty (applicable until July 3 2017) of 13.9% on frozen chicken legs imported from the EU. The EU and local importers, however, have challenged this decision. The outcome of this challenge has yet to be announced.

For more information on the above, please contact customs@wylie.co.za or Quintus van der Merwe, Head of Customs & Excise, on 031 5757306 or Anton Lockem, Head of Tax, on 031 575 7413.

Written by the Tax and Customs & Excise teams at Shepstone & Wylie Attorneys

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