A Closer Look

2023: Reviewing Multiple Trade Agreements

In the New Year, we intend to continue to advocate for consumers and addressing poultry prices and reviewing trade agreements.

Christmas gifts are sometimes beautifully wrapped – but are disappointing when they are finally opened.

2022 was the opposite – the packaging was really ugly (petrol price increases, food shortages, inflation, recession, load-shedding) but our latest statistics show surprising economic growth.

As the holidays approach, many people are no longer paying attention to global and domestic crises, but rather planning their year-end celebrations with family and friends.

Mandate in 2022

Our mandate in 2022 has been, and will always be, to bring you independent news about the poultry industry so that you, the consumer, can make informed choices when browsing supermarket shelves. We support the views of small and independent farmers, consult with market researchers and trade lobbyists, and interrogate claims made by the five large poultry producers who dominate the industry.

In the New Year, we intend to continue to do this, and one of the big issues coming up will be the question of taxes on chicken that are keeping our poultry prices artificially high. There is broad consensus from consumer champions, trade experts, and economists that import tariffs (which are, to be truthful, a tax on imported chicken) is inflationary. They allow local producers to push up their prices in order to inflate their profits.

Astral Foods

This can be clearly seen in the announcement by Astral Foods – one of South Africa’s largest poultry producers – that they made more than R1 billion profit last year. Despite this, they have warned that due to high input costs they would be raising the price of chicken in 2023.

Of course, they can raise the price of chicken, say roleplayers in the poultry industry, because chicken imports are subject to 62% duties, which means that the consumer is paying a 62% tax on imports in order to subsidise Astral.

Import Tariffs are Inflationary

Paul Matthew of the Association of Meat Importers and Exporters puts it like this: “The government has recognised that import tariffs are inflationary,” he says. “But the International Trade Administration Commission (ITAC) is still going ahead in 2023 with evaluating our trade agreements for the purpose of adding more taxes and tariffs.”

Matthew’s statements are supported by evidence. The SA Reserve Bank confirmed in their October Monetary Policy Review that tariffs are a significant contributing factor to the price of goods. The Pietermaritzburg Economic Justice and Dignity Group (PMBEJD) said that the basic basket of goods increased in price by 13,5% year on year, and the price of frozen chicken pieces has increased by 24,7% between September 2020 and September 2022.

So in 2023, we will be dealing with the weighty issues of reviewing multiple trade agreements including the US sunset review. These are complex issues, but we will unpack them as comprehensively and simply as we can.

In the meantime, we wrap up with year with a wish that your festive celebrations are exactly what you wish for: your heart’s desire, beautifully packaged, with a big red bow on top!

Leave a Reply