Bloomberg News

Brazil Poultry Group to Approach WTO on South Africa Chicken

February 15, 2012

(Updates with Brasil Foods comment in fourth paragraph.)

Feb. 15 (Bloomberg) -- Brazil’s poultry association said it will ask the government to approach the World Trade Organization about South Africa imposing higher tariffs on some imports from the South American nation.

These are “flagrant violations of the WTO’s anti-dumping agreement,” Ubabef Markets Director Francisco Turra said in a statement posted on the Sao Paulo-based organization’s website yesterday and dated Feb. 13. “It’s clear that South African importers’ responses and information from Ubabef about how the costs of the Brazilian products are calculated weren’t considered, besides other technical failures.”

Import charges of 6 percent to 63 percent have been imposed on the poultry for six months, as initial information showed Brazilian producers are dumping products in South Africa and neighboring countries, Francois Dubbelman of Pretoria-based FC Dubbelman and Associates, which represents the South African Poultry Association, said yesterday.

The South American producers include BRF Brasil Foods SA, the world’s biggest poultry exporter, and Seara Alimentos, the pork and poultry unit of Marfrig Alimentos SA, Latin America’s second-largest producer of beef. Brasil Foods declined to comment, the company said in an e-mailed response to a query today.

South Africa’s International Trade Administration Commission, which asked for the tariffs, will finalize its findings once interested parties have commented on the preliminary outcome, it said in its Jan. 30 report.

Antitrust Investigation

South Africa imports 16 percent of all chicken consumed in the country, with 70 percent of that coming from Brazil, according to Ubabef.

“The products under investigation for dumping represent 3 percent of the poultry products” in the South African market, Ubabef said.

The charge on whole chickens will be 63 percent in addition to the current 5 percent, while that for boneless cuts is an extra 47 percent on the 27 percent now, it said.

Ubabef estimates the tariffs will result in the industry losing $70 million annually.

South Africa’s antitrust authority, which is completing an investigation into complaints about market allocation and information-sharing by local producers, has found contraventions and talks for possible settlements have started, Business Day reported today, citing Keith Weeks, head of enforcement and exemptions at the Competition Commission.

Hardly Threatening

Rainbow Chicken Ltd., one of the local producers who made the application, is South Africa’s biggest chicken producer.

The move to raise tariffs are unnecessary as the shipments aren’t a threat to local producers, according Dave Wolpert, chief executive officer of the Association of Meat Importers and Exporters of South Africa.

“Imports from Brazil of the two products that are the subject of the anti-dumping action represent less than 2 percent of local production of these same products -- hardly threatening,” Wolpert said in a letter published in Business Day on Feb. 7.

--With assistance from Lucia Kassai in Sao Paulo. Editors: Gordon Bell, Alastair Reed

To contact the reporters on this story: Tshepiso Mokhema in Johannesburg at tmokhema@bloomberg.net; Ana Monteiro in Johannesburg at amonteiro4@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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