The South African Poultry Association (SAPA) has applied for anti-dumping duties on imported chicken from five countries, including Brazil and four European Union nations.
Izaak Breitenbach, general manager of SAPA’s Broiler Organisation, indicated that they have evidence that Brazil, Denmark, Ireland, Poland and Spain have been dumping frozen chicken portions into the local market.
This boils down to unfair competition for Mzansi’s producers and costs local jobs.
“They are bringing frozen chicken portions into South Africa, often at prices lower than their production costs, and/or lower than they are selling the same product in their home markets.
“This not only constitutes dumping under World Trade Organisation (WTO) and South African rules.
“It is also unfair because it creates jobs in producer countries while stifling economic growth here.”
Billions lost in imports
Food For Mzansi earlier reported that R6.1 billion leaves the country every year in the form of imports. Also, every year the import industry spends R6.1 billion creating jobs in in places like Europe, America and Brazil.
François Baird, founder of the FairPlay movement, warns that local jobs are in danger and that our chicken industry’s new application for anti-dumping duties against Brazil and four European Union countries is overdue.
“Dumped and predatory chicken imports, mainly from Brazil and EU countries, have constricted the local industry resulting in thousands of workers losing their jobs.
“Thousands more jobs have not been created because predatory imports have held back the expansion that would have met increasing local demand for chicken.
“Instead, higher demand was met by dumped imports, unfairly increasing the market share of importers exactly as they had planned.”
These predatory imports are designed to displace local production and local jobs with the ultimate objective of gaining control of the whole market as has been done in other countries, believes Baird.
Anti-dumping duties needed
“Foreign producer countries mean to keep on doing this. If they succeed, a strategic local industry supporting more than 100 000 jobs and the families they support in vulnerable communities throughout the country will be at risk. Anti-dumping duties will help to mitigate that risk.”
Breitenbach revealed that the application has been submitted to South Africa’s International Trade Administration Commission (ITAC) which will investigate the complaint before making a recommendation to the minister of trade, industry and competition. The process is expected to take about 12 months.
“The application is supported by a vast number of organisations and entities, from grain producers, smallholder farmers and contract growers to the majority union in the chicken industry and companies dependent on the poultry value chain, such as equipment suppliers and feed suppliers,” said Breitenbach.
He said their application provides evidence of dumping by nine countries and it shows the extent to which South Africa is a target for countries dumping surplus chicken.
Furthermore, he indicated that the purpose of the applications is to level the playing field, ensuring fair competition in the Mzansi market by eliminating the unfair advantage exporting countries have because they are not charging fair prices.
“The South African chicken industry is highly competitive by international standards, and we produce chicken at a lower cost than EU countries.”
Yet, Breitenbach claims, EU countries continually dump chicken here because they will take any price they can get for surplus chicken meat their markets don’t want.
“Brazil does the same, even though their subsidised production costs are lower than ours. Some of their imported chicken is priced at about half of what it costs them to produce it.”
“The situation has become more precarious since covid-19 disrupted retail globally, so that chicken-producing countries all sit with overflowing cold-storage facilities and are looking around for markets to target with this surplus. We are expecting a renewed onslaught and it is crucial for us to be vigilant and use the trade remedies that are available to us, to protect South African jobs.”
Breitenbach said the application was part of a long-term strategy to stabilise and grow the South African chicken industry as outlined in the master plan. The industry has already invested R1 billion of the R1.5 billion it pledged to improve processing facilities and has increased production by 5% to date.
The master plan aims to support the local industry and encourage investment, transformation and expansion into local and export markets.
“A key part of this growth will be import substitution as the government takes measures to contain imports and then reverse their share of the local market, which has been growing rapidly for a decade or more.
“The master plan says specifically that we should act decisively against any form of unfair trade and any attempts to dump poultry products on our market,” Breitenbach pointed out.