Are chicken importers squealing because they think they've lost?

Statement by Francois Baird - Chicken importers are waging a very noisy campaign which they must hope will influence government regulators deciding whether or not to renew a set of anti-dumping duties on poultry imports. My mother used to warn me that people shout louder as their arguments weaken.

Importers, of course, want the duties removed. Duty free chicken imports would make them more money.

Their problem is that those anti-dumping duties are there for a reason. Dumped chicken imports are unfairly priced, do not comply with WTO rules, harm local poultry producers and cost local jobs. While these measures against predatory trade are in place, the South African poultry industry has become the second most competitive poultry producer in the world, surpassing not only European producers but also the United States.

South Africa’s trade regulator, ITAC, has already found there are good reasons which would seem to justify renewing anti-dumping duties against Germany, the Netherlands and the United Kingdom for a further five years. It said there is evidence that, if the duties are lifted, the harm of dumped imports would resume or continue.

ITAC has set out what it says is the prima facie case for renewal, and invited interested parties, including foreign producers and local importers, to comment.

Importers have done so, through the Association of Meat Importers and Exporters (AMIE). They have done so privately to ITAC and are repeating their objections very publicly in every news outlet that will listen to them.

They must either believe that ITAC’s decision will go against them, or that by shouting in public their desperate attempts to prevent the valid renewal of anti-dumping duties would sway ITAC.

FairPlay does not know what ITAC will decide – we leave that to the wisdom of the commissioners. But we sincerely believe that the anti-dumping duties should be renewed, because more is at stake than the harm from dumped imports from three countries.

The fight from importers is much wider. South Africa has imposed anti-dumping duties against nine countries – the three involved in this review, and six others. AMIE has launched court challenges against all of them.

It clearly hopes that anti-dumping duties are lifted from Germany, the Netherlands and the UK, to be followed by the United States, Brazil, Denmark, Ireland, Spain and Poland.

That is a horrifying prospect for anybody who cares about South African jobs, our poultry industry, the interests of South African consumers and the country’s food security. Not to mention income to Treasury and rural development. South African poultry farmers are small town employment machines.

The poultry industry’s stated objective is to feed the nation with high-quality affordable chicken. It has done so for decades, to the benefit of millions of low-income households for whom chicken is their main source of meat protein. Chicken comprises more than 60% of the meat consumed in South Africa. With unemployment and malnutrition at record levels, these objectives are of national strategic importance.

Chicken importers, on the other hand, import dumped chicken at low prices which are not passed on to South African consumer. Dumped chicken sells at market prices, providing fat profits to importers whose actions belie their repeated professions of concern for consumers. It’s part of a larger predatory trade strategy to undermine local poultry production. Dumped chicken cheats South Africans and boosts foreign jobs.

The SA Poultry Association (SAPA) submitted in March this year a detailed application for the renewal of anti-dumping duties against the three countries concerned. Importers were silent at that stage, and are only shouting now that ITAC says SAPA has made a case that dumping would continue or recur if the duties were lifted.

ITAC says SAPA has submitted “sufficient evidence to show that it would experience an increase in imports, decline in sales volume, decline in profit, decline in capital expenditure, decline in capacity utilisation, decline in output, decline in growth, decline in productivity, decline in investment, decline in cash flow, increase in price depression, and increase in price suppression if the duties expire”.

If importers win, that’s what would happen to a poultry industry that is profitable and competitive after recovering from a previous dumping crisis and a devastating outbreak of bird flu in 2023.

Chicken importers can shout as loudly as they like, but they are on the wrong side of this argument, economically and morally.

Francois Baird is founder of the FairPlay movement