US producers plan to pluck chicken farmers
IMPORT TARIFF BATTLE
By S'THEMBISO MSOMI
US POULTRY exporters to SA have warned of sharp price rises if government gives in to demands for increased import tariffs on poultry to protect the industry from American dumping.
The US Poultry & Egg Export Council, which appears before the SA Board on Tariffs and Trade on Wednesday to defend itself against allegations of dumping, says its presence in the local market has helped keep prices down.
The council has sent Jim Sumner, its president, and Larry Lieberman, a leading US poultry exporter, to SA to present its defence. It has also hired a top local economist to lead evidence.
The board launched an investigation in December into alleged dumping after Rainbow Farms and the Southern African Customs Union lodged a petition. Rainbow says it can't compete with the low prices charged by importers and that the "dumped" products have resulted in lower profit margins for local producers.
But Sumner says economists will present evidence showing that the SA poultry industry as a whole is very successful and that an unnamed company is using the dumping allegations as a scapegoat for its own "managerial failures" and other problems.
Although they don't mention names, the Americans clearly plan to focus on how Rainbow's constant leadership changes and labour problems have affected its profit margins.
Lieberman says he is amazed by the "misinformation" spread in an attempt to get more protection from the state.
"People quote exaggerated figures of 85 000 tons of chicken leg quarters in a year. Where do they get those figures? Poultry imports from the US were 25 000 tons last year. These are official statistics that could be verified with US Customs officials.
"The truth is that domestic poultry production has grown from 530 000 tons in 1993 to a projected 1-million this year. This proves that the local industry is growing and that we have a very small market share," he says.
The two men warn that if tariffs are raised, local consumers will lose out as prices will rise dramatically.
"Currently, a leading grocer in Los Angeles can sell quality boneless, skinless chicken breasts at R19 a kilo, while the equivalent in SA sells for R25 a kilo. In the US whole fresh chickens sell for R6.98 a kilo, in SA you pay R11 a kilo or more. Why is the SA consumer being penalised?" says Sumner.
He denies the notion that US companies charge a premium for chicken breasts in the US to subsidise exports.
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