They had applied for tariff protection on all imported chickens and certain chicken pieces produced in Brazil and sold through local retailers.
Davies last week decided against imposing anti-dumping duties on imported whole bird and boneless cuts from Brazil, as requested by South African Poultry Association, because he believed the problem extended beyond just one country.
He further did not want to fight with Brazil at the World Trade Organisation (WTO). Brazil has lodged a complaint against the preliminary anti-dumping duties that the International Trade Administration Commission (Itac) imposed in February.
Davies said Brazil had regarded the duties as a "huge precedent" and it was determined to fight against them through the WTO's dispute resolution mechanism. He said there was scope for the general tariff for poultry imports to be increased without having to resort to anti-dumping duties.
The Department of Trade and Industry had discovered that there was "considerable water" between the bound tariffs on chicken imports (the maximum which South Africa can impose) and the much lower tariffs which South Africa actually applied, Davies said.
South African Poultry Association's chief executive Kevin Lovell said the body was "very disappointed" with Davies' decision. The association believed South Africa should have fought what was an issue of unfair trade at the WTO.
Itac had decided that Brazil was guilty of dumping after two investigations.
Lovell said raising the general tariff would be an effective measure only if it could be applied to all countries.
But the European Union (EU), a significant exporter of chicken-leg quarters to SA, was excluded in terms of the Trade Development Co-operation Agreement it signed with South Africa.
The agreement stipulates that there would be zero tariffs on chicken imports.
Lovell believes it was inappropriate for a fair trade measure (general tariffs) to be used against unfair dumping, which was causing "massive harm" to the local industry.
The South African Poultry Association estimated that R3.5bn worth of chicken entered the country at what it claims were unrealistic prices over the past year. This equates to about 5-million chickens each week.
Lovell claims that if the chicken was produced locally, 20 000 jobs would be created.
Association of Meat Importers and Exporters' chief executive David Wolpert said the stance that his organisation adopted towards a general tariff hike would depend on the extent of the increase.
He warned that any increase in the tariffs would hurt consumers as it would result in higher prices being charged by retailers.
Davies conceded that there was growing foreign penetration of the local chicken market by imported products and said that "something needed to be done".
He admits that the provisional anti-dumping duties the department had imposed had not had the desired effect.
The duties had in fact benefited the importers of chickens from countries such as Brazil and those in the EU and had negatively affected local poultry producers.
Source: Business Day via I-Net Bridge
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