The fight is on to stop unfair trade in poultry

The South African poultry industry is intensifying its focus on stamping out unfair trade in poultry. This includes both dumping – importing poultry at unfairly low prices – and illegal trading methods to avoid or reduce payment of import duties.

“This is a top priority for us because unfair trade is the main cause of the long-term distress in the poultry industry at the moment,” said Izaak Breitenbach of the SA Poultry Association (SAPA).

Progress is being made on the dumping side. Breitenbach was delighted at the renewal for another five years of anti-dumping duties against Germany, the Netherlands and the United Kingdom. As reported last week, the renewal was recommended by South Africa’s International Trade Administration Commission (ITAC) after investigating an application by the local industry.

“It would have been disastrous for poultry farmers if the anti-dumping duties had not been renewed. Fortunately, the evidence we presented was very strong and ITAC found that dumping was likely to continue if the duties were allowed to lapse.”

ITAC is currently investigating an application by SAPA for new anti-dumping duties against Brazil, Denmark, Ireland, Poland and Spain.

There is progress, but slower progress, in curbing illegal trade. SAPA is pressing very hard for action in terms of the poultry master plan on aspects of illegal trade. These include:

Under-declaration – where the declared value of imported chicken is below its real worth, resulting in lower import duties.

Misdeclaration – where imported chicken that would attract high duties is declared under a different tariff code with lower or no duties.

Round tripping – where import duties and value added tax (VAT) are evaded because the chicken is supposedly for re-export, but it actually stays in the country.

Volumes can be significant. An analysis by the Department of Trade, Industry and Competition found that in 2018 Brazil recorded exports of 5 000 tonnes of mechanically deboned meat (MDM) to South Africa. However. South Africa recorded imports of 22 times that amount in the same year – 110 000 tonnes of MDM, which comes in tariff-free.

Every month, the official SA Revenue Service import statistics show some imports at extremely low prices. The industry suspects that many of these instances may be under-declaration or mis-declaration.

These practices are not only illegal, they also result in a large loss of revenue for the government. The SA Revenue Service (SARS) is part of a master plan task team seeking to identify and prevent these practices, and bring offenders to book.