Their intention to come up with a solution comes after they have had discussions with the government to review import tariffs on poultry, as they believe duties are another form of tax that consumers are unable to bear. AMIE’s Chief Executive Officer (CEO), Paul Matthew, says what usually happens is that every time import duties are applied, local companies match those duties which increase the price of chicken.

The South African Reserve Bank’s (Sarb) Monetary Policy Review report for October indicates that customs duties on frozen chicken and bone-in pieces more than trebled between 2013 and 2022, increasing from 27% to 82% and 18% to 62% respectively. When Matthew compares the previous year (2021) with this year (2022), there has already been a 12% increase in the prices. “Now the local companies have come back to consumers and said this is impacted by the Ukraine war and other things. However, if you look closely at the duties that have been applied, you will notice that [customs duties] are now up to 82% for a frozen chicken from the 27% in 2013.” He explains that although an argument can be made that the input costs are high, there is no use in denying that there has been a big increase in tariffs.

Matthew further explains that there is no doubt that the import tariff increase has impacted the way consumers buy poultry, as they have seen fewer people buying the product as compared to the previous years. “Now consumers are buying different products such as livers, chicken feet, instead of buying the actual chicken.” He says that they have no problem with tariffs being applied, however, they would like to see fewer tariffs being applied. “Because chicken is the main source of meat protein for most low-income households in South Africa, tariffs on chicken products are regressive. To this end, the temporary suspension of tariffs on chicken imports announced by the government should support the purchasing power of and real consumption by lower-income South Africans. Looking ahead, greater use of economy-wide cost-benefit analyses for sectoral trade policy considerations could provide better insights into the long-run impact of tariffs,” he explains.

With the government’s recent decision to suspend the imposition of anti-dumping duties, it is believed that this decision will curb the increase in chicken prices. “We see the suspension of duties as an excellent first step towards containing the rising cost of chicken, but we can and must do more. It is for this reason that we are appealing to Government to conduct a full review of duties on chicken products.”

OFM