Customs duty increase on frozen vegetables rejected

The Minister of Trade Industry and Competition rejected ITAC’s recommendation for a duty increase on frozen vegetables classified under tariff subheading 0710.90. This means the 10% duty in place will remain as is.

The Minister’s reasons for rejecting the Commission’s recommendations centered around the impact of the duty increase on pricing. Indeed, the duty increase that the applicant sought is considerably high and would have likely contributed to an increase in prices of frozen vegetables.

Furthermore, the Minister took into account the negative impact that food price inflation has on the South African economy and on financially hard-pressed consumers. In addition, it was found that the volume of imports had also decreased from 2020 onwards. Nature’s Garden had cited increasing import volumes as one of the reasons for its application. Particularly volumes from China and the European Union.

The duty increase investigation was initiated on 22 February 2019 following an application by Nature’s Garden (Pty) Ltd. The applicant sought the duty to be increased from 10% to 37%. The primary reason for seeking the duty increase was that low cost imports of frozen vegetables are undercutting prices of domestic frozen vegetable producers. The applicant further claimed that the situation is placing the domestic industry in distress.

The current position will be reviewed by ITAC in 9 months.  Findings and recommendations will be provided to the Minister for further consideration.

Need assistance or want to know more about duty increases? Contact us on infor@tradesolutions.co.za