The South African poultry industry has squashed the argument that chicken imports do not compete with local chicken or harm local producers.
The argument is raised regularly by chicken importers in opposing applications for anti-dumping duties on chicken imports. They cite two main reasons – firstly that most chicken imports are mechanically deboned meat (MDM) which is not produced in South Africa, and secondly that imports do not contain the popular packs of individually quick frozen (IQF) chicken, which account for a large proportion of South African chicken sales.
Nine successful applications for anti-dumping duties have found that chicken imports come in at unfairly low prices, harm local producers and threaten local jobs.
Those losing arguments were repeated recently by Dr Gustav Brink, in an article in BusinessTech, which described him as a “mercantile law and dumping expert”. Brink questioned how much competition really existed between importers and domestic poultry producers.
The answers were provided by Izaak Breitenbach of the SA Poultry Association (SAPA).
“To suggest that imports do not compete with local chicken is nonsense,” Breitenbach responded.
While MDM was the biggest category of chicken imports, it was not an issue. A paste used in the production of processed meats such as polony, MDM is not produced in any quantity in South Africa. There was, however, “intense competition” from the other 40% of chicken imports.
Mixed IQF packs are not imported, but “they are assembled locally by importers who thaw bulk frozen imports, inject brine into chicken pieces, and refreeze them in mixed packs to compete with local IQF,” Breitenbach said.
“In addition to this imported competition for local IQF packs, there is also competition from imported whole chickens, half chickens, breast meat, heads, livers, gizzards and 10kg packs of catering portions.”
Breitenbach said that the local industry is highly competitive, and local producers can produce chickens cheaper than EU countries, but not Brazil and the United States, which have lower feed costs because they produce all their own grain.
“We are happy to compete with fairly priced chicken imports. What no industry can compete against is dumped imports, such as the leg quarters and other bone-in portions dumped here as unwanted surplus by the EU, US and other countries in previous years.”
Answering suggestions that South Africa should be prioritising the export of chicken breast meat to Europe and other areas where it fetched premium prices, Breitenbach said EU requirements for raw meat imports would exclude South Africa from this market.
However, initiatives were underway to ramp up exports of cooked chicken, for which the requirements were less onerous. Local producers had spent millions in the past five years on new facilities to produce cooked and semi-cooked chicken meat.
“Exports are underway, and now we are looking for export approval from the EU, the United Kingdom and Saudi Arabia for cooked products.”
SAPA’s application for the removal of the 15% value added tax from chicken was aimed at making chicken “even more affordable” in South Africa, Breitenbach said.
