October MPR report confirms import duties drive up poultry prices and hurt
consumers
• AMIE calls for a comprehensive review of import duties on poultryJohannesburg, 17 October 2022 – AMIE is calling for a comprehensive review of
import tariffs on poultry, saying that duties are simply another tax that consumers are
unable to bear. This follows the SA Reserve Bank’s (SARB) latest Monetary Policy
Review report (see page 41), which clearly showed that duties applied on imported
poultry drive up the cost of chicken and hurt consumers.
Paul Matthew, the CEO of AMIE says: “The MPR report highlighted the extensive
use of protective trade measures by South Africa in recent years, and the cumulative
impact that this has had on the rising price of chicken. 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. It’s 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.”
Customs duties on frozen whole chicken and bone-in pieces have more than trebled
between 2013 and 2022, increasing from 27% to 82% and from 18% to 62%
respectively.
According to the report, “this has contributed to the 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 (EU). 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%.”
The MPR report explained: “Because chicken is the main source of meat protein for
most low-income households in South Africa, tariffs on chicken products are
regressive. To this end, the temporary suspension of tariffs on chicken imports
announced by Government should support the purchasing power of, and the real
consumption, by lower-income South Africans. Looking ahead, greater use of
economy-wide cost-benefit analyses for sectoral trade policy considerations could
provide better insights into the long-run impact of tariffs”.
The MPR Report also supported the Government’s recent decision to suspend the
imposition of anti-dumping duties on the basis that it will curb the increase in chicken
prices. Likewise, AMIE has welcomed the suspension of anti-dumping duties on
chicken imported from Brazil, Spain, Poland, Ireland and Denmark for twelve
months, saying this decision is a major win for millions of cash-strapped South
African consumers.
“We see the suspension of duties as an excellent first step towards containing the
rising cost of chicken, but we can and must do more. It is for this reason that we are
appealing to Government to conduct a full review of duties on chicken products.”
“While the demand for chicken has increased over the years, local production has
remained constrained, especially for certain cuts of meat. Imported chicken
accounts for less than 10% of total consumption if you exclude Mechanically
Deboned Meat (MDM), which 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. 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,” concludes
Matthew.
Ends
