The South African Poultry Association (SAPA) has called for an investigation into chicken import prices, due to numerous examples of both under-pricing and over-pricing of chicken imports.
SAPA’s Izaak Breitenbach said in a statement that up to 50% of chicken imports may be under-priced, with considerable accounts of revenue lost as a result.
“This apparent tariff evasion on poultry imports could be costing South Africa thousands or even millions of rand in unpaid import duties.”
Breitenbach said SAPA had asked the SA Revenue Service (SARS) to investigate. It also intended to take the matter up with the ministers of agriculture and of finance.
He explained that under-pricing happened on chicken products subject to import tariffs, such as leg quarters, drumsticks and wings, while the over-pricing occurred on duty-free consignments of mechanically deboned meat (MDM).
Some dutiable chicken imports were declared “at sometimes impossibly low import prices”. By contrast, some consignments of MDM, which comes in duty-free, were nearly double the usual import price during the first half of this year.
“The gains on MDM would compensate foreign producers for losses on underpriced dutiable products, but there is nothing to prove that this is a deliberate strategy.”
The questionably priced products had come mainly from Brazil and Argentina, which together supply 90% and sometimes more of South Africa’s poultry imports. However, some strangely priced imports came in from the Netherlands, Ireland and Spain.
“This is a very serious situation, not only for South Africa’s poultry industry, but for the national revenue service, which appears to be losing out on considerable amounts of revenue which should have been paid on chicken imports.
“An urgent investigation is essential, both to protect the fiscus and to prevent harm to South African poultry producers, who would be competing against unfairly priced chicken imports,” Breitenbach said.
He cited the example of chicken leg quarters from Brazil imported at R2.07/kg. The Brazil production price was R25.43/kg, calculated by Wageningen University in the Netherlands. The usual import price for Brazil leg quarters in the first half of this year was between R19/kg and R20/kg.
Leg quarters had been imported from Argentina at R12/kg, when import prices were more usually between R18/kg and R19/kg.
Offal had been imported from Brazil and R5.kg (usually R7/kg – R8/kg) and from Argentina at R4/kg (usually priced between R5/kg and R9/kg).
Over-pricing happened on imports of MDM, which comes in duty free. Declared import prices on these consignments could be nearly double the usual import price.
Import prices for MDM from Brazil in the first six months of this year were mostly between R8/kg and R11/kg. However, numerous consignments arrived priced at between R15/kg and R18/kg.
Similarly, some consignments of MDM from Argentina, usually between R9/kg and R12/kg, were priced at R17/kg and R21/kg, Breitenbach said.
