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Manipulation of Statistics Noted in Chicken Antidumping Case

by 5m Editor
1 February 2012, at 8:40am

SOUTH AFRICA - The heat is on in the Brazilian chicken antidumping case, with those opposing the application by local producers for greater protection saying there is a huge amount of misrepresentation and manipulation of statistics.

BusinessDay reports that the Association of Meat Importers and Exporters (AMIE) made an oral submission to the International Trade Administration Commission earlier this month, supporting its written submissions made last year.

The AMIE is an umbrella body representing importers and exporters of various meats, including chicken. The association is objecting to the protection of an industry that it says is clearly not in distress.

The application for further tariffs on imported Brazilian chicken was brought by the South African Poultry Association (Sapa), which represents the major players in the local chicken market, including Rainbow Chicken and Astral Foods.

According to David Wolpert, CEO of the AMIE, importers were already paying customs duty of 27% on the imports of whole chicken and R2,20/kg on boneless cuts.

The requested duty increase on Brazilian chicken amounted to an extra 28,96% on whole birds and 15,49% on boneless cuts. The cost per whole chicken from Brazil is currently R16, with the existing customs duty included. Sapa wants the import duty to increase by R3. The cost for Brazilian chicken breasts (boneless cuts) including customs duty is R19,50, and Sapa wants it to increase by R3/kg.

Brazilian poultry association Ubabef claimed the antidumping case was political, and that SA is protecting inefficient producers to the detriment of the millions of people who can benefit from a cheaper protein supply. Local producers complained about rising transport, electricity and chicken feed costs, claiming they were financially hamstrung by the imports from Brazil and needed protection.

Donald Mackay, director at XA International Trade Advisors, said for an antidumping application to be successful the applicant needed to show that the importer was selling at a lower price in SA than in their own market. They also had to show that there was harm caused by a drop in volume or a cut in margins, causing financial distress that could lead to retrenchments.

The applicant had to demonstrate that this prejudice was caused by the dumping, said Mr Mackay, who is consulting for the AMIE. He said they did not see any harm done by Brazilian imports. Argentina’s whole-bird exports to SA represent almost 50% of whole-bird imports, compared to Brazil’s 41% and the rest of the world’s just more than 9%, Mr Mackay said.

The AMIE argues the industry was quite profitable and that the financial statements of local producers given to the commission did not make sense, with return on investments rising by almost 800% from 2008 to 2010, gross cash flow increasing nearly fivefold and sales volumes increasing 3% for whole birds between 2008 and 2010.

Sapa and some of the larger players in the industry could not comment yesterday.