South Africa Alleges Dumping of Poultry Meat

SOUTH AFRICA - Astral says local poultry producers are preparing information to back an anti-dumping case on imports being sold for less than they would fetch in their home markets.
calendar icon 16 February 2011
clock icon 4 minute read

Local poultry producers are preparing information to back an anti-dumping case on imports being sold for less than they would fetch in their home markets, Astral Foods CEO, Chris Schutte, said yesterday.

Business Day reports that imports over Christmas were up 42 per cent from 2009, translating into 21.5-million chicken carcasses or five million per week against local production of 18.5-million per week, Mr Schutte said.

The strong rand (ZAR) in December saw poultry imports up to ZAR3 cheaper per kilogram than locally produced product. "These portions are being sold at lower prices here than the country of origin. That constitutes dumping," Mr Schutte said.

The subsequent weakening of the rand has only helped slightly. Last month, chicken imports were 33 per cent higher than in January last year.

The industry is particularly concerned about the surge in imports of the leg quarter portion, as opposed to deboned chicken that still has to be processed. Importers of intact leg portions compete directly with producers for the individually quick frozen market, which accounts for 65 to 70 per cent of all chicken sold in South Africa.

Imported realisations – the average value of the sale of all constituent parts of a chicken – were ZAR12.83 per kilo, while the local average was closer to ZAR16.62, Mr Schutte said.

"Opportunism" on the rand's value was behind the rise in imports, he said. About 71 per cent come from Brazil, with Argentina second on 10 per cent.

One analyst said Brazil had a definite competitive advantage over South Africa as production costs were significantly lower in that country, according to Business Day.

"The raw materials are cheaper in Brazil and the production facilities are streamlined and efficient," he said. "If Brazil is selling the product more cheaply in SA than at home this would be questionable practice.

"The real question is whether placing anti-dumping laws or duties on the product would sour relations with Brazil. This is a political issue. The rand may also weaken and slow imports down anyway and make it a non-issue," the analyst added.

Health-conscious Brazilians are known not to eat the dark meat leg quarter portion more popular in the local market in SA, he said. Importers have said the local industry had consistently under-performed and had blamed imports when the real culprit was inefficiency in their own businesses.

Separately, Mr Schutte said Astral had never defrosted and reworked chickens in the same way as Country Bird, reports Business Day. Its rival got a lot of publicity for its practice of reworking frozen chicken by thawing, washing, and injecting it with brine and refreezing it with new sell-by dates.

Astral does flavour enhanced portions with a salt water to improve meat tenderness, he said, adding: "We do not rework our chicken in the way described in the newspapers."

Returned fresh chicken is frozen, labelled as such and sold to staff or other customers, while returned frozen product that has left the cold chain is turned into pet food or destroyed, he said.

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