New Tariffs to Push Up Chicken Prices

This morning, Minister Rob Davies of Trade and Industry announced new chicken tariff rises on all imports, apart from those from the EU – with levels climbing to as much as 82%. Local producers claim they are struggling to compete against dumped chicken, and government has investigated their application for protection, and gone through an elaborate procedure – required under WTO rules. Davies said the new tariff regime has already entered into force. He claimed action was needed following a drop in the local production of poultry products, with imports rising. He said action was needed to support an industry which supports 48 000 people, with 100 000 jobs at stake if you include indirect jobs. Said Davies: “The industry is bleeding.”
There are different rates applied to 5 categories of poultry products, with the highest jump imposed on whole birds from 27% to 82%. Offal, which Davies said is an important source of protein to low-income households, saw a tariff rise from 27% to 30 %, and similarly bone-in portions saw a relatively modest rise. Aside from the whole chickens, Davies said the average tariff increase was 8.75%, and he did not appear too worried about big price rises for poorer consumers – while acknowledging there would be a noticeable impact on the cost of a Sunday roast chicken. He warned local producers not to be greedy, and said he would not tolerate uncompetitive behaviour to thrive behind a tariff wall. There would be an early review of the new tariffs – which would look at production trends, employment trends and import trends. The new tariffs don’t apply to the EU, which has its own trade agreement with ZA, but Davies said he would like to negotiate the right to more easily apply safeguard measures to imports from the EU as well. In answer to questions, he said tariff duties are imposed as tools of industrial development, and denied he is being protectionist as ZA does have the right to boost tariffs within certain limits. “This is a potential employment generating sector. If we can’t produce chickens in SA, what can we produce?”

The government is clearly concerned about hitting then poorer consumer as we head to an election, but inevitably chicken prices will rise as a result of these new tariffs. The message to wealthier consumers might be: “Let Them Eat Offal”

Tweets of the Day:
Jana Marais (@janamarais): "If you like what we’re doing, buy our shares. If you don’t, buy our shares so you can fire us."- Jabu Mabuza in high spirits at #Telkom AGM
Puns (@omgthatspunny): When the TV repairman got married the reception was excellent.
SpikeWilton (@spikeWilton67): I’m a dyslexic agnostic insomniac; I’m awake all night wondering if there really is a dog.

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