DROP 27% BROILER CHICKEN LEVY - ECC

MBABANE- The Eswatini Competition Commission has recommended a reduction of import levies for processed broiler chicken meat products.

The recommendation arises from a conclusion which the commission made in its inquiry to the effect that there was a 27 per cent levy imposed on broiler chicken meat and some chicken meat products imported from outside Southern African Countries Union (SACU) members.

Such a recommendation rhymes well with the objectives of the Eswatini Strategic Road map where improving Eswatini’s Business environment was strongly emphasised. These improvements entailed access to markets and resources for individuals together with addressing all indicators under the Ease of Doing Business Index.

The World Bank in its 16th edition of 2019 ranked the kingdom 117 out of 190 countries. The Broiler Chicken Market Inquiry was conducted in accordance with Section 11 (2)(f) of the Competition Act, No. 8 of 2007 and its objective was to examine the market structure of the market and the state of competition in the market.

The market inquiry was a result of a study that was submitted by the Ministry of Agriculture to the Eswatini Competition Commission in 2012 regarding the performance of the poultry industry and perceived unfair competition.The study stated that the conduct of some players resulted in firms exiting the different levels of the broiler chicken market.

Additionally, the smaller players in the market approached the commission to complain that they were being forced out of the market by anti-competitive conduct by some of the players in the market. The conclusion made in the inquiry was to the effect that there was also a 15 per cent value added tax imposed to all poultry imports including processed meat.

The commission said it was concerned about the levies imposed on imported broiler chicken meat and products. It was pointed out that these levies tended to limit import competition and competition in general.
The Ministry of Agriculture and NAMBoard was reported to have argued that, the levies were meant to protect local farmers, as well as to support their development and growth.

“However, the commission is concerned about these levies because they tend to restrict import competition and competition in general. The effect of the levy is realised when the secondary processors are not able to get adequate supply of broiler chicken meat from the local processors and they cannot import because it would be expensive to do so,” read the report in part.

Independent growers not consistent – commission
mbabane – Regarding independent growers, who comprise small scale growers that produce broiler chickens independently, the finding was that such farmers were not consistent and they mainly supplied the informal market.

The commission noted that independent growers, who grew small quantities, were not in the same level as with contract growers despite the fact that contract growers also supplied in the live market.

Online South African publication, BizCommunity, recently reported that the gazetted agricultural safeguard levy of 35.3 per cent imposed on bone-in chicken cuts had raised concerns for the Association of Meat Importers and Exporters (AMIE).

It was reported that Europe, one of South Africa’s largest trading partners, saw the safeguard as a blow to the preferential nature of its trade relations with South Africa, the costly effect of which would extend to the already cash-strapped South African consumer. “Considering the current economic climate, this could not come at a worse time,” said Paul Matthew, CEO Designate from AMIE according to BizCommunity.

It was stated that he further said: “SA, via SACU, in its misguided attempts to protect its domestic poultry industry, has once again imposed a tariff on imports which will, as history has shown, be passed on to those that can least afford it: ‘the local consumer’.”

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