What is the status Quo Impact of current tariffs on competition and competitiveness



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tarix29.07.2018
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Part 1

  • Part 1

  • What is the status Quo

    • Impact of current tariffs on competition and competitiveness
    • Implications of local industry tariff increase application on imports
    • Part 2
    • Status of Poultry tariffs and Implications to local industry and consumers
    • Part 3
    • Way Forward


Part 1

  • Part 1

  • Status Quo

    • Five tariff Headings Current Requested Req Rands/kg
      • 0207 12 20 CCS 27% 82% R 9.91
      • 0207 12 90 W/Birds 27% 82% R11.11
      • 0207 14 10 B/less 5 % 82% R 2.20
      • 0207 14 20 Offal 27% 82% R 3.35
      • 0207 14 90 B/in R 2.20/kg82% R 6.53


    • Quality (SPS Measures)
      • (SPS - Sanitary and Phyto Sanitary)
      • Disease and bacteriological (imports top quality)
      • The import regime is extremely strict and honerous
    • Volume of imports
      • Relation to consumption
      • Relation to brining
    • Serial offenders
      • Comp Comm, Labelling, Brining, APS dispensations




Imported Volume compared to Brining

  • Imported Volume compared to Brining



Jobs

  • Jobs

    • Local Jobs direct 5,000
    • Indirect (making consumer ready) 10,000
    • These are real jobs which do exist
    • Other Agricultural Exports (retaliation)
    • Citrus Black Spot (EU)
    • Canned Fruit (Aus)


History of protection 1997-current

  • History of protection 1997-current

    • 1997 B/In R 2.20 (2 years)
    • 2001 USA Dumping
    • 2004 Duty Increase
    • 2006 USA Dumping Sunset Review
    • 2006-13 Brining (hugely profitable)
    • 2011 USA Dumping Sunset review (faulty ITAC)
    • 2012 Brazil Dumping application (PC DTI concerns)
    • 2013 Duty review (non EU)
    • 2013* DD EU (Holland and others)
    • 2013 SPS request to DAFF (Underhand)


Impact of current tariffs on competition and competitiveness

    • Impact of current tariffs on competition and competitiveness
      • The large producers are squeezing out all competition
          • (local and imported)
        • Local competitors are limited in access to Genetic material, Feed, Distribution channels etc
        • Limiting import competition thereby limiting choice
        • There is currently an equilibrium between local supply and import which is good for competition.
    • Local is not forced to become “GLOBALLY COMPETITIVE


Implications of local industry tariff increase application on imports

    • Implications of local industry tariff increase application on imports
    • The impact of this application (if approved) will have a limiting effect on total imports
    • Imports from non-EU countries will be effectively stopped
    • There will be an element of diversion of imports to the EU. (at slightly higher prices)


Part 2

  • Part 2

  • Status of Poultry Tariffs in SA

  • Implications to Local Industry

  • Implications to Consumers



Status of Poultry Tariffs in SA

  • Status of Poultry Tariffs in SA

    • We believe that ITAC made a decision at meeting on 09 July 2013
    • We expect that this decision has been forwarded to the Minister DTI
    • We are surprised that this “rushed job” has not been finalised after two months
    • Importers are living “week to week” waiting for tariff announcement
    • Speculation is now causing real market disturbance


Current Currency

  • Current Currency

    • Depreciation of Rand has already provided a 25% protection since the investigation period


If no change in duties:

  • If no change in duties:

    • SAPA will:
      • be forced to become globally competitive
      • have to relook their flawed business model
      • have to “balance” the carcasse
      • have to look at exports
    • The consumer will be in the best position for both: - price and
      • - choice


Access to food will be limited

  • Access to food will be limited

  • Affordability of Food will be negatively affected

  • Quality levels will reduce

  • Choice will be limited

  • Jobs will be negatively affected

  • Global competitiveness will not be necessary

  • Consumers will pay for a poor business model

  • In the event of a disease outbreak the SA food security will be threatened!!



Implications of local industry tariff increase application on imports

    • Implications of local industry tariff increase application on imports
    • The impact of this application (if approved) will have a limiting effect on total imports
    • Imports from non-EU countries will be effectively stopped
    • There will be an element of diversion of imports to the EU. (at slightly higher prices)


  • The net effect will be rising food prices, limited choice and lessened food security





Solutions

  • Solutions

  • Way forward

    • Mediation (between all affected parties)
    • CIDP (AMIE has a role to play)
    • Inter Departmental discussion (PC DTI/DED/DAFF)
    • Market Enquiry (Comp Comm mandate)
      • Will result in a comprehensive value chain evaluation from genetic, feed, medicines, brining, distribution, marketing, and management and ownership, including imports’ role in this complex industry
    • DAFF finalising and enforcing the “new” brining limits (max 4%) (supported by AMIE)


  • Thank you





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