Dismay, disappointment and anger at tariff rebates decision

In addition to continuing poultry industry dissatisfaction with the planned tariff rebates on chicken imports into South Africa, there’s a suggestion that the government has not applied the rates that were recommended.

Producers can see no reason for the rebates, which will be permitted only if there is a shortage of chicken on the local market, and then only if that shortage has been caused by an outbreak of bird flu. Both conditions are necessary and neither applies at the moment. Bird flu has abated, chicken is in surplus and prices are coming down.

The SA Poultry Association (SAPA) said the decision to encourage additional chicken imports was irrational, and there could be no justification for approving any rebates applications. It said the industry was “already on its knees” because of bird flu outbreaks, power outages and high input costs.

SAPA’s Izaak Breitenbach told SABC television that the industry was “very disappointed” at the rebates announcement. There had been no shortage last year and there was plenty of chicken available at the start of 2024. Encouraging additional imports now would “exacerbate the oversupply” he said.

The Sunday Times this week headlined its report “Local poultry industry angry at import tariff cuts”.

It noted the trading update from Astral Foods, in which the country’s largest poultry producer said it was “dismayed” at the poultry import tariff rebate structure recommended by the trade regulator, the International Trade Administration Commission (ITAC).

“No shortage of chicken has been experienced or expected in the local supply chain with industry production at normalised levels due to numerous contingency plans implemented,” Astral stated. 

The newspaper also quoted FairPlay founder Francois Baird as saying the rebates scheme was “not a rebate, it’s a nullification” and it would inflict fresh punishment on a battered poultry industry.

Baird said rebates would only enrich importers and not bring prices down for consumers “because importers don’t pass on those savings, they just pocket them”.

His advice to trade minister Ebrahim Patel was to keep import tariffs and anti-dumping duties in place and rather scrap the 15% value added tax on locally produced bone-in poultry to keep chicken affordable for low-income households.