SOUTH AFRICA – Quick-service restaurants in South Africa have described the re-introduction of anti-dumping duties on frozen potato chips as a disaster to the sector.

Georg Southey, general manager of Merlog Foods, has argued that South Africa had a shortage of supply on the production and processing side, because of load-shedding and disease problems, amongst others.

“The anti-dumping duties will only drive-up frozen potato chip prices. Wholesalers were already paying a 20% premium on imported frozen chips, as the imported product sold for roughly R33/kg for the past three months, versus R25/kg for the locally produced product,” he said.

However, the South African potato industry body has welcomed the reinstatement of import duties on frozen potato chips after tariffs lapsed earlier this year.

The International Trade Administration Commission of South Africa (Itac) has decided to reinstate import duties after investigating the impact of frozen potato chip imports on South Africa’s agriculture and agro-processing activities.

The investigation found that South Africa has long been a prime destination for dumping below-cost frozen processed potato products.

The investigation report alleged the dumping of frozen potato chips was from Belgium, Germany, and the Netherlands. Frozen fry import rates now stand at 67.33% for Belgium, 23.9% for the Netherlands, and 18.1% for Germany.

Ayabonga Cawe, Chief Commissioner of the International Trade Administration Commission said: “Many of these products were landing in our country, not only duty-free but were also landing at prices that are much lower than comparable prices in the ordinary course of trade in the countries where much of these goods are produced.”

“This is about leveling the scales from a price perspective. And when I say price, it’s the price it lands at in the ports in the country. We want to give some impetus to domestic producers.”

Willie Jacobs, CEO of Potatoes South Africa, pointed out that the industry was greatly relieved about the announcement, as it came a day before the 18-month cut-off within which an anti-dumping investigation had to be completed.

He said that Agri Inspec data revealed that frozen potato chip imports from Germany and the Netherlands had increased by 100% in January, after the removal of anti-dumping duties, and was probably higher, as the industry had since become aware of companies that were reporting wrong codes to avoid import taxes.

“Farm gate potato prices have been relatively sticky over the past five years, with average prices about 2% lower last year than in 2017,” Jacobs explained.

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