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Import duty fees, imposed by Sars after a recent inquiry into poultry dumping by Brazil, are being disputed. Photo: Simphiwe Mbokazi.
Ayanda Mdluli
Brazil’s poultry association, Ubabef, would lodge a complaint with its own government and with the World Trade Organisation (WTO) against South Africa, it said yesterday.
This was to contest import duty fees to be imposed by the SA Revenue Service (Sars) to limit poultry dumping in the market.
The position was supported by Carolina von der Weid, the trade attache at the Brazilian embassy in Pretoria, who said the report by South Africa’s International Trade Administration Commission (Itac) came as a surprise and was inconsistent with the practice of fair trade by producers in Brazil.
Itac has drawn fire with its recent report that chicken products from Brazil were sold in South Africa at margins between 40 percent and 60 percent lower than they would retail at in the country of origin.
Von der Weid cited technical errors with the data collected by investigators, as well as with the methodology applied by South African authorities. This was in addition to an “unjustifiable ban” on Brazilian pork.
Marilia Martins, Ubabef’s market relations co-ordinator, said the products under investigation (whole chicken and boneless cuts) represented less than 3 percent of the total chicken consumption in South Africa.
She said Itac’s findings ignored tax differences between products sold in Brazil’s domestic market and those exported to South Africa. Since the tariffs would last until August, the industry in Brazil would lose about $70 million (R537m).
“Products sold in the domestic market have taxes of 16.5 percent and (this) was not considered by Itac when setting the normal value. None of the information provided by Ubabef or the Brazilian government was… in their analysis,” Martins said.
In addition, she said, the data provided by three out of the four Brazilian firms in the inquiry were not included and these firms were deemed uncooperative, even though they had “spent several weeks collecting more than 1.5 million transactions in the domestic market to report to Itac”.
“We believe that there is no dumping,” Martins said.
Some local importers said information supplied by the body, which reports to the Ministry of Trade and Industry, was inaccurate, and Itac could have been deliberately used by the Southern African Poultry Association to mislead.
George Southey, a manager at Merlog Foods, which was listed as non-compliant in Itac’s inquiries, disputed Itac’s figures.
Itac said between 2008 and 2010, whole frozen chicken imports from Brazil increased by 300 percent. Southey said this was not the case. He believed the figure to be about 172 percent.
Zoleka Xabindlela, a senior manager for trade remedies at Itac, said the organisation used statistics provided by Sars, the official government authority for import statistics. She refuted claims that the body served as a rubber stamp for the poultry association.
Southey said importers brought in 400 000 tons of meat and chicken last year, which served the poorer end of the market, whereas local produce was aimed at the affluent.
He said Itac’s findings would hurt the industry because imported poultry also went into processing, manufacturing and retail products. There were many people employed to work with imported meat products across the value chain, he said.
“I don’t believe that the local industry is geared to take advantage of the shortfall. This won’t create mass employment opportunities as big producers move towards mechanisation.”
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Stanza, wrote
It seems like here in S.A we are going to have a big problem, because I think the fact that we joined the "BRICS" countries the aim was to trade with those guys in any situation so that we have the opportunity to enter in the so called Global market....but now it seems like we are running away from the main aim, then why don"t we pull out from there??
Anonymous, wrote
I'm sorry but I'd rather buy South African poultry thereby supporting South African jobs. Farm to Table saves the environment and South Africans know what their eating, better than chowing on some unknown chicken from Brazil or China. The WTO can take a hike, they are outdated and screwed us over on the Massmart takeover. Were are our jobs going?!?
Seen It All, wrote
I see a lot of brain donors advocating the imposition of import duties. Heloooo... This money goes to the government and helps no-one, excepts corrupt politicians. What you should be pushing for is subsidies to stimulate the local economy. Unfortunately for citizen joe, import duties mean higher local prices, but lotsa loot for the government. Subsidies mean prices are competitive, but it means 'money out' for government. Which option do you think will win??
theolep, wrote
As much as i do not support dumping but sometimes imported products are better than south african produced. I had to return 3 low watt bulbs 2 times after they lasted a few hours instead of 5000 promised. May be the batch was not QA'ed properly, at the same store i then bought phillips and they have been working 2 months down the line.
GF, wrote
We must be importing Brazilian chicken because we need to and fortunately its cheaper. We did we join with Brazil,Russia,India,China if not for the benefit of trade. If we ban or try to reduce imports they will do the same with our exports!
Zambezi, wrote
Hey you guys is SA are lucky, here in Botswana, we pay at least 35% more Kg for chicken than you do.
Anonymous, wrote
Maybe the Brazilian price is more realistic. Maybe we are just getting ripped off by our chicken industry.
Anonymous, wrote
If this is only 3% of the total poultry market in SA - This is hardly product dumping. Give tthe poor and the ever stuggling South African Middle Class a break and give access to some quality pultry at reasonable prices. However mark the package clearly so we know we are buying foreign meat. Let the consumer choose.
Brett, wrote
Nigel, wrote
I think we need to understand why we are importing in the first place, there is obviously shortfalls in our market created by market principals, i.e our local producers are exporting. Red meat and lamb is a classic example. The cost of these products are now at European prices, whereas a few years back our meat was always 30-40% cheaper than Europe, explain that one away. I recall not so long ago there was no fillet or rump to be had (all was being exported, why, ...free market trading) Now that the wheel has turned, they are crying wolf. Let them take it on the chin, I am tired of being ripped off.
Wolf, wrote
Goodness Gracious, wrote
@Mbhekaphansi - I do agree with your feelings in this regard, but unfortunately it is not that simple. There is too much money in it for retailers and the government to care about local trade and skills. We are just the puppets in a larger game that has no interest in us.
Iain, wrote
The problem with the comments so far is that they lack a basic understanding of free and open trade and how it works. The article clearly states that Itac didn't even bother to check local domestic taxes in Brazil which are high for local sales but don't exist for exports. Also Brazil has poultry farms which dwarf anything we have so they get the economies of scale and how they can produce so cheaply. Their imports actually add value into the food chain by keeping local produces honest [a normal practice in free trade]. Local produces are separately getting investigate for cartel practices so this is a bad move choking imports as it protects them further to do what they like. Also the containers which bring the poultry over are used then for fruit exports to Asia and if you choke this supply line then you potentially will see increased prices for our own fruit industry in exporting fruit to Asia. Cause and effect and basic economics which most people fail to reason through and notably govt type organisations anywhere who don't understand trade and why its healthy both for exports and imports in any country.
LLCOOL, wrote
Anti-dump, wrote
IDC must sponsor local producers and we wount have problems like this.How can import chicken be sold to the poor or satisfy lower level of market?IDC and DBSA must support small scale farmers who will be entrusted with the responsibility of satisfying the lower income earners and the poor.We have so much land and products to farm and produce enough feed for our chickens
Mbhekaphansi, wrote
How about imposing these massive duties on Chinese imports too? Charge 500% duty inorder to make it expensive to bring them in so that it's not worth bring them in and keep our local factories in business. All countries dumping in our country must be stopped in their tracks.
Sinies, wrote
Brazil is building their economy by excluding foreign competition, they should be brought before the WTO for their actions.
Anonymous, wrote
why import meat from Brazil in the first place?? Grade the local produce so that local produce can not only serve the affluent but also serve the poor. do not alywas think about money money and more money. Think about long term and feeding the people with healthy produce!
Henry S, wrote
JR, wrote
The poorer end of the parket? What a load of rubbish, Pick and Pay are selling this as are other retail chains. We do not need their meat an poultry as there
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