SA Dairy Traders Fight Tariff Raise

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By Wezi Tjaronda WINDHOEK Some importers and distributors of South African dairy products are up in arms over plans by the government to introduce a tariff increase on imported UHT milk. The Diary Producers Association last month made an application to the Ministry of Trade and Industry (MTI) to have the tariff on the milk increased from an import duty of 42.5 cents to 40 percent of the import value. Taeuber &Corssen SWA Pty Limited, an importer of Parmalat dairy products and Supra Sales Pty Limited, which imports and distributes Dairy Belle products to Namibia, through their legal attorneys P. F. Koep &Co, have asked the government not to introduce the increased tariff until they are fully informed about the basis for the application and also to have sight of any supporting documents presented to the ministry in this regard. It was agreed recently that the increase in the tariff be gazetted, while the companies claim the process has not been transparent. In a letter written to MTI Permanent Secretary Andrew Ndishishi, the attorneys say their clients, who represent 46 percent of the sale of dairy products in Namibia were not consulted and were not given an opportunity to respond to the reasons made to support an increase. “While our clients support an independent Namibian dairy industry, our clients are concerned that the process which is being followed is not transparent and that many other issues about which they are concerned have not been divulged, alternatively are not subject to scrutiny,” said the letter signed by Advocate Peter Frank Koep. The distributors also requested the government, through their attorneys to confirm that the levy “will not be increased until consultations have taken place and our clients have been given an opportunity of commenting on the application and the wisdom of introducing this tariff”. The dairy industry last month applied for an increase in the imported UHT milk tariff to protect the industry against collapse. Apart from this, it also applied for an extension of the Infant Industry Protection on dairy products until 2012. The protection expires in 2008. The application, which was made through the Ministry of Trade and Industry to the SACU Secretariat, was discussed at the secretariat’s meeting last month. The association says the increase in the tariff is one of the ways that the industry and the ministry are looking into to rescue the industry from what they term an onslaught from competitively priced dairy products from neighbouring South Africa. Ndishishi said the SACU meeting last month reached an understanding that the industry still needs time to grow and be able to compete. The industry in 2004 warned that unless there were measures put in place to protect the industry, it would collapse. It further says that if the situation does not change for the better at the end of 2006, lots of farmers will close down their operations and more people will lose their jobs. The other option would be for dairy farmers to start selling their milk on their own, he added. The two companies say they wonder whether Namibian consumers have indeed benefited from the protection because even though local producers have a price advantage in the light of the part levy, local milk is sold at higher prices than the imported one, which leads to them being accused of dumping. Instead of producing the 1.7 million litres quota the industry had since January 2005, the farmers can now only produce 1.5 million litres per month. Production has also been affected by the floods in Mariental, which the industry says are responsible for a further drop in production to 1.3 million litres in February, March and April.