A chirp too soon

CEO Kevin Lovell says the antidumping measures are not yet in place. "We have instituted provisional measures while a complaint of dumping against Brazil is heard."

Brazil, a member of the BRICs club together with Russia, India, China and SA, has reportedly requested "consultations" with SA over the matter, which Lovell says is "normal procedure".

"We stand by our accusation that Brazil is dumping chicken and SA's international trade administration commission (Itac) must have considered it a fair call, judging by the duties it imposed."

Lovell says the issue is not about the local poultry industry but "how SA views international trade. And the fundamental issue is that Brazil does not want to be seen as bad guys in international trade."

Brazil accounted for almost 95% of SA's boneless chicken and 45% of whole chicken imports in 2010, says Itac. This is Brazil's first trade dispute with an African country and only the fourth charge laid against SA at the WTO.

SA has put a duty of 62,93% on the import of whole chickens and 46,59% on boneless cuts from Brazil.

Despite the tariffs, legal and illegal chicken imports into SA continue, says leading producer Astral Foods. Sales & marketing executive Phil Tozer says the imports are driven by "streetwise" local entrepreneurs and not Brazil, the US or the EU, which each produce 20% of the world's poultry compared with SA's 1,6%. Brazil exports 25% of its production, double SA's total production.

Tozer says the industry has no fight with legitimate chicken importers. "But there are a number of importers who do not play by the rules, who find loopholes." He says the habitual transgressors have been caught and fined several times but the fines are not heavy enough. "Their illegal activities are losing jobs in SA; they should be named and shamed."

A company appointed by the poultry industry has found: "wrong products in wrong boxes" attracting different import tariffs; under-declaration on pricing by big meat importers; importing chicken via Europe since only Brazil and the US but not the EU pay tariffs on poultry imports; and false import permits.

Lovell says there is no fundamental reason why the SA industry cannot supply enough chicken for the market and that though import irregularities have been uncovered, the SA Revenue Service (Sars) does a fine job and penalties are appropriate. "It's just the way it is with imports. Sars has an inspection model but can't examine everything."

Source: Financial Mail via I-Net Bridge