Import duties could mean fries have had their chips

Cape Town – New import duties on frozen fries need to be reviewed, as industry players say this could impact rising food prices.

XA Global Trade Advisors, who hosted a briefing on the matter on Wednesday, said the call comes on the back of the International Trade Administration Commission’s (ITAC) recent imposition of provisional duties on frozen fries imported or originating from Belgium, Germany, and the Netherlands.

The provisional duties imposed are between 10% and 182% for some countries.

“We cannot continue to impose duty-upon-duty on food and expect it not to harm consumers.

“The duties on fries specifically have increased the price of fries by 88%, from R16/kg in 2021 to R30kg in 2022.

“Duties are not in the public interest, they are just another form of tax that consumers have to bear and have the concerning consequence of increasing the cost of food in an already tightly squeezed consumer market.

“The time has come to take a hard look at our trade policy and to weigh up its impact on the rising cost of living,” said XA Global Trade Advisors chief executive, Donald MacKay.

Georg Southey, general manager of Merlog Foods, explained that out of all potatoes grown in South Africa, 88% were processed for consumption, and 12% for seed.

Of the 88% for consumption, only 20% were used for the production of French fries and crisps.

The largest South African manufacturer owns more than 75% of the market for French fries, and thus controls the bulk share of the fries processing sector and the potatoes used to make fries.

“The result of a general shortage of SA potatoes used for fries, and a constrained processing capacity, compounded by the fact that the largest manufacturer uses in the region of 75% of all potatoes in this category means that everyone else has to import fries in order to meet the growing demand for fries in the SA market,” said Southey.

According to Mckay, ITAC has not considered the shortage of domestic potatoes used to make fries, and that there was not enough fries processing capacity in South Africa to meet local demand.

Cape Times

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