Why chicken importers want import tariff rebates

Chicken importers have spelled out exactly which import tariffs they want suspended. Not surprisingly, they are aiming for the tariffs whose removal would give imports a significant price advantage over local chicken products.

They are not targeting anti-dumping duties, though this option is on the table. Paul Matthew, CEO of the Association of Meat Importers and Exporters (AMIE), has said his association is opposed to dumping, and they are not applying for rebates on anti-dumping duties.

Of course, AMIE and Paul Matthew are on the record for having vehemently opposed anti-dumping duties in the past, for years. Why then the sudden flip-flop?

One possible explanation may be that, in this case, rebating anti-dumping duties would not make nearly as much difference to importers’ profits, as rebating the tariffs AMIE says it has singled out in its submission to ITAC. It wants the temporary removal of tariff increases instituted in 2020, and of all tariffs on offal (chicken carcasses, heads, feet and liver).

The decreases would be significant. In 2020 the general tariff on bone-in chicken – the portions such as leg quarters which provide most competition to local producers – increased from 37% to 62%. AMIE told ITAC that it wants that reversed. Tariffs on boneless cuts rose from 12% to 42%. Take it back to 12%, says AMIE.

Offal imports have been subject to import tariffs of 30% since 2013, when they rose from 27%. Zero-rate all offal, says AMIE – i.e. no tariffs at all. South Africa’s offal imports have been increasing steadily and totalled R573 million in 2022.

Chicken importers have not denied FairPlay’s suggestion that they might be making “fat profits” because low-priced imports are sold at close to local market prices. And their statement includes no commitment to pass on to consumers the full benefits of any tariff reductions.

The importers’ proposal would also apply to bone-in imports from the United States. Since it forced on South Africa a significant annual quota free of anti-dumping duties, the US has become this country’s biggest supplier of bone-in chicken. Those shipments, dumped but unpenalised, are however subject to the 62% general duty which AMIE wants ITAC to cut back.

That would be a lot of chicken coming in at prices local farmers cannot match due to unfair competition without sufficient cause. Importers would be delighted, but South African producers, and thousands of workers, would have much to be afraid of.