Johannesburg - Organisations in the poultry industry are calling on the Department of Trade, Industry and Competition to enforce anti-dumping duties to save the sector from financial harm.
Many industries in South Africa have been crying foul for many years because of product dumping. The process involves the importing of low-cost goods to another country and ultimately making it impossible for the local producers to compete.
This happens when the importer wants to eliminate unwanted stock without negatively affecting their industry. It then causes havoc in the importing countries' industries.
South Africa receives its poultry imports from nine countries: Brazil, Denmark, Ireland, Spain, Germany, Netherlands, the US, Poland and the UK. Local organisations such as the Food and Allied Workers Union (Fawu) and the South African Poultry Association (Sapa) are against poultry dumping because of its negative impact on the economy and the growth of the broiler industry in the country.
Dumping is blamed for an economic decline and job losses in the industry.
Fawu claims that 2 500 of its members were among the 9 000 poultry industry workers who lost their jobs between 2011 and 2017 because of this trend.
“Poultry dumping results in big players [businesses] cutting production to save costs and small farmers closing their businesses, which contributes to job losses, increasing the already existing catastrophic levels of over 40% of unemployment,” said Fawu’s deputy general secretary, Vuka Chonco.
Confronted with the impact of poultry dumping on the labour market, Fawu called on the Minister of Trade, Industry and Competition (DTIC) to impose dumping duties.
"The minister must reintroduce anti-dumping tariffs to prevent foreign poultry from hijacking the South African market," he said.
In November 2019, the union met the Department of Trade, Industry and Competition, the Department of Agriculture, Land Reform and Rural Development and other stakeholders to agree on remedial actions to ensure the survival of the local market.
“We are starting to see some of our recommendations come to fruition; 1640 jobs have been created so far and we are witnessing the establishment of 17 farms as well,” he said.
The poultry industry is one of the largest agricultural sectors in the world. The sector has a turnover of at least R51 billion, and South Africa produces 1.9 million tonnes of meat annually, said Izaak Breitenbach, general manager at SAPA.
A survey Sapa conducted in 2019 suggested that about 47% of small-to-medium enterprises (SME) farmers have gone out of business with no means to re-access the industry.
“The industry has been sluggish, and various small businesses have gone bankrupt in the last decade. Furthermore, domestic consumption of chicken has been replaced by 30% of chicken imports, meaning at least 10 000 more jobs that could have been created in the country were created overseas,” said Breitenbach.
He explained that for the local industry to survive, the Department of Trade, Industry and Competition must ban international broiler competitors from importing their poultry products into the country at low cost as the industry would not survive while competing with dumped products.
Breitenbach encourages poultry farmers to engage with Sapa.
“South Africa has applied for nine consecutive anti-dumping duties where in all cases, harm and dumping were both proven thus far,” he said.
Last year, the International Trade Administration Commission conducted an anti-dumping investigation on frozen bone-in portions of chicken originating in or imported from Brazil, Denmark, Ireland, Poland and Spain. After the research, the commission recommended that the Department of Trade, Industry and Competition impose anti-dumping duties.
“The minister considered the current rapid rise in food prices in the Southern African Customs Union [market] and globally, as well as the significant impact this has on the poor, and the impact that the imposition may have on the price of chicken as one of the more affordable protein sources. The minister therefore decided to suspend the imposition of the anti-dumping duties for 12 months or a shorter time depending on the prevailing circumstances at the time,” said Thalukanyo Nangammbi, the commission’s communications manager.
Poultry dumping affects not only companies in the industry but also consumers. Most of these products are imported frozen, processed and repackaged in bulk, making it difficult to trace when they first had been processed.