THE International Trade Administration Commission of South Africa (Itac) on Friday introduced a provisional safeguard duty of 61.42% on imported frozen potato chips.
This was after it found there was sufficient evidence that a surge in imports was harming the local industry. Safeguard measures are implemented to protect against any unforeseen surges in imports.
The investigation into the increase in imports was initiated in March 2013 following an application by food company McCain, which was supported by Nature’s Choice and Lamberts Bay Foods.
Itac found that imports in 2010, when compared with 2009, had increased more than 810%. In 2012, imports were 1,398% more compared with 2009 imports.
Importers fiercely opposed the investigation arguing that imports were a small proportion of local consumption and that an increase in duties of even 15% to 20% would stop imports completely. As a result local prices could increase in the absence of import competition.
In its application McCain said it was experiencing "serious injury", which included a decline in sales, output, market share, productivity and capacity utilisation. This was due to the "recent, sudden, sharp and significant surge" in imports.
But Affected Potato Importers, an unincorporated body representing K&M International Trading, Lamb Weston, Merlog Foods and Agristo, said earlier not one of the criteria necessary for the imposition of safeguard remedies had been met in the application.
The provisional measure will remain in place for 200 days pending the finalisation of the investigation.