Brazilian exporters, local importers and consumers of certain South American chicken products will be hit the hardest as the government enforces a section of the Customs and Excise Act of 1964.
This section seeks to impose a provisional payment to combat dumping of products.
The imposition of provisional payment was gazetted and published on Friday by the SA Revenue Service (Sars).
It follows an investigation by the International Trade and Administration Commission (Itac) after Brazilian poultry groups were found to be dumping frozen chicken goods on the South African market.
The inquiry found that some Brazilian companies had dumped their products at a value of 60 percent less than in their respective markets. Other groups had dumped their products at a margin of more than 40 percent below the prices in Brazil.
The imposition may be good news for local poultry producers, while consumers, importing firms and Sars could lose when all factors are considered.
Brazilian poultry producers dumped boneless cuts in the Southern Africa Customs Union markets (Sacu) of Botswana, Lesotho, Namibia, South Africa and Swaziland.
Zoleka Xabendlini, the senior manager of trade remedies at Itac, said a detailed investigation found that some Brazilian chicken goods had financially wounded Sacu producers.
The investigation was launched in June last year after the commission found compelling evidence that chicken products from Brazil were being imported at dumping prices into the local market.
The application against dumping practices was made by FC Dubbleman and Associates on behalf of the Southern African Poultry Association, which represents 80 percent of Sacu poultry producers.
The local companies represented by the poultry association include Rainbow Chicken, Early Bird Farms and County Fair Foods.
Xabendlini said the aim of the anti-dumping duty protection was to get rid of unfair competition from foreign producers. “The aim is not to ban imports altogether,” she said.
Brazil and South Africa, along with Russia, India and China, are members of the Brics trading bloc.
Sars published the imposition of provisional payment on Friday last week.
According to data supplied by Itac, imports of whole frozen chicken from Brazil increased by 300 percent from 2008 to 13 million kilograms in 2010. Imports of boneless portions from Brazil added 52 percent from 2008 to 25.4 million kilograms in 2010.
Brazilian exporters investigated were Brasil Foods, Aurura Alimentos, C-Vale Co-operative and Seara Alimentos.
Local importers that were investigated were Federated Meats, Chester Wholesale Meat, Eitlin International Trading, Merlog Foods, Britos Food International, Millennium Meat Import and Export, Fercon Foods and Foodcorp’s Consumer Brands.
The commission found that Chester, Eitlin, Merlog, Britos, Millennium and Fercon had supplied deficient information that was not considered by the commission for its preliminary findings into dumping allegations.
Stephan Brink, the general manager at Britos Food, a meat and food retailer with 26 outlets countrywide, said the group did not submit answers to Itac because “the findings would have been a foregone conclusion”.
He said the meat importers already knew what the findings would be and that imported chicken constituted less than 15 percent of total consumption in South Africa.
“Imposing the import duties is ridiculous to start with… The biggest losers will be the consumers and we will see a loss of import tax revenue for Sars. Consumers will be at the mercy of local producers,” he said.
He accused Itac of being a rubber stamp of the poultry association, expressing the concern that the decision was done to benefit local “fat cats”.
Marius Gericke, the chairman of the poultry association, welcomed the findings by Itac. He said Brazil had not adhered to the principles of fair trade and that the assessment of the South African market had not been conducted fairly.
The poultry association’s goal, like that of Itac, was to level the playing fields in the poultry industry so that local producers could compete fairly.
Gericke said the association would continue to show the commission that other poultry imports were not conducted according to World Trade Organisation rules.
Itac was established through an act of Parliament in June 2003 and is accountable to the minister of trade and industry. The body’s core functions are customs tariffs investigations, trade remedies and import-export control. - Ayanda Mdluli