Chicken importers have fallen so much in love with rebates on chicken imports that they would like them to be implemented permanently.
Importers were hugely in favour of the unnecessary and unjustified rebates the government put in place for the first three months of the year. There was no shortage of chicken at the time, and certainly no shortage caused by outbreaks of bird flu – the only factors the government is supposed to consider when deciding if rebates are warranted.
Nevertheless, the rebates went ahead, mostly retrospectively because they were announced at the end of the three-month period to which they applied. That would have given importers refunds totalling millions of rand on tariffs they had already paid. No wonder they were so enthusiastic!
There’s no evidence that the rebates worked as intended – they were incentives designed to result in additional imports of specific categories of chicken. Yet, for the first three months of 2024, the two highest-volume import categories were down on the same period in 2023. Offal import volumes dropped 12.3% and bone-in portions such as leg quarters were a huge 41% below the previous year.
Nevertheless, there was a spike in April, when everything except bone-in portions rose substantially. Whether these were meant to arrive in March but were delayed in South Africa’s clogged ports, or whether importers had hoped the rebates would continue into April, we will probably never know.
So far, the rebates have not been renewed beyond March, though they can always be applied retrospectively once again, giving importers another fat bonus. FairPlay hopes this will not happen, because there is – and was – no justification for them.
Importers think differently. Hume International’s Roy Thomas has been vocal on the subject, most recently making a convoluted argument linking import volumes with the demands of low-income consumers, who are certainly not the ones ordering billions of rand’s worth of chicken from Brazil.
Where Thomas is clear, however, is on the desire of importers for permanent rebates on all chicken offal imports, and specifically on imports and chicken liver destined for school feeding schemes. It is becoming a theme in his statements.
Increased import volumes will of course increase importers’ profits. Whether it will benefit consumers remains to be seen. Yet again, importers make no commitment that lower import prices will be passed on to consumers. That, too, has become a theme.
