Summary
In January 2020, the South African government introduced HPAI based restrictions on poultry meat imports from Poland. Within 5 weeks similar restrictions on imports from the Netherlands, which had been in place since the beginning of 2017 were lifted. However, this was conditional on the validated certification the birds from which the meat was derived had been raised and processed in the Netherlands. The EU strongly objects to these conditions. In the fourth week of April the South African authorities were notified of the launching of a dispute settlement case under the EU-SADC EPA. This case was however immediately suspended in light of Covid-19 related constraints. South Africa’s conditional opening of its market to Dutch poultry products needs to be seen in light of the multiple HPAI outbreaks across Europe, the pan European nature and intra-corporate sourcing practices of European poultry companies and the serious constraints on the operation of South African SPS import controls in the face of the Covid-19 pandemic
On 3rd January 2020 in the face of an outbreak of Highly Pathogenic Avian Influenza (HPAI) in Poland, the South African government introduced a ban on all poultry product imports from Poland, with the exception of ‘heat-treated poultry products from which the importer has obtained a valid veterinary import permit’. ‘Poland is by far the largest producer of poultry meat’ in the EU and in recent years has become the leading exporter of poultry meat to South Africa (see table). This is particularly the case in the sensitive area of imports of poultry parts, where Poland accounted for 37% of South African imports of frozen bone-in poultry meat products in 2019.
USDA analysis highlighted how between January and November 2018 and January-November 2019 Polish ‘exports of bone in chicken to South Africa increased by 316%’ (1), while according to the EC market access data base in the whole of 2019 Polish poultry meat exports increased by 131%. This saw Poland become by far the largest EU supplier of poultry meat to the South African market.
However, with Poland joining in January 2020 Belgium, France, Germany, Hungary the UK and the Netherlands on the list of EU member states from which poultry meat imports to South Africa were banned, this strong growth trend will be halted.
| Evolution Total EU Poultry Meat Exports to South Africa 2014-2019 (0207) | |||||||
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | % share | |
| EU28 | 196,295 | 211,310 | 272,196 | 76,554 | 81,126 | 126,914 | |
| Netherlands | 75,498 | 78,164 | 111,769 | 2,141 | 822 | 767 | |
| Poland | 26 | – | 4,944 | – | 22,045 | 50,950 | 39.9% |
| Ireland | 9,419 | 15,782 | 18,406 | 23,672 | 26,933 | 30,936 | 24.5% |
| Belgium | 6,383 | 8,985 | 9,268 | 19,235 | 24,155 | 22,912 | 18.0% |
| Spain | 12,817 | 28,188 | 41,074 | 8,730 | 5,830 | 20,499 | 16.2% |
| UK | 43,014 | 18,252 | 43,782 | 1,876 | 501 | 748 | 0.6% |
| Germany | 19,631 | 278 | 3,945 | – | 50 | 49 | 0.04% |
| Sweden | – | 50 | – | – | – | 25 | 0.02% |
| France | 9,408 | 22,925 | – | – | 349 | 1 | 0.00% |
| Hungary | 8,628 | 10,197 | 12,726 | 50 | 24 | – | |
| Austria | – | – | – | – | 12 | – | |
Source: EC Market Access Data Base, https://madb.europa.eu/madb/statistical_form.htm
The Netherlands was subsequently, on the 11th February 2020, removed from the list of countries from which imports into South Africa were banned on SPS grounds. The measures against imports from the Netherlands had first been introduced in November 2016 and had a profound impact on Dutch exports to South Africa, which in 2016 had accounted for fully 41% of total South African poultry meat imports from the EU. The Dutch poultry industry not surprisingly welcomed this announcement.
However, with HPAI outbreaks elsewhere in Europe, the entry of Dutch poultry meat products to the South African market was made conditional on validated certification of the poultry from which the meat was derived having been born, raised, slaughtered, processed and packaged in the Netherlands.
This South African move needs to be seen in a context where poultry processing plants in the Netherlands are used to cut and pack for export poultry parts derived from birds raised elsewhere in the EU and even the Ukraine. This causes concern over the effectiveness of EU member states specific HPAI import restrictions in containing HPAI as the disease spreads across Europe (see companion epamonitoring.net article, ‘Absence of Clear Region of Origin Labelling of Poultry Suggests a Need for Pre-emptive Import Restrictions as Spread of Highly Contagious AI Spreads Across Europe’, 12 March 2020).
The impact of these processing practices has also caused concern amongst Dutch poultry producers. Dutch poultry farmers are concerned the good name of Dutch poultry raised to the highest European production standards could be undermined by poultry meat raised elsewhere yet being exported with a ‘Made in the Netherlands’ label (3).
| Comment and Analysis The introduction of country specific origin certification requirements for poultry meat imports on phytosanitary grounds, does not sit easily with the European Commission. Such requirements are seen as violating the integrity of the single market, with the EU wishing to see the whole of the EU territory as a single entity for rules of origin purposes. This being noted individual buyers, such as KFC routinely include county of origin requirements in their contractual requirements (4). While such commercially based origin labelling appears acceptable, the EC appears to have problems with similar such country of origin requirements when this is intended to support SPS protection measures. Thus we find, in the fourth week of April 2020 the European Commission (EC) notified the South African government of its intention to launch a dispute settlement process under the EU-SADC EPA on the use of country of origin requirements for poultry meat products. However, within 48 hours the EU Delegate to South Africa reportedly informed the South African government the dispute process would be halted in light of Covid-19 related constraints. This may reflect an emerging appreciation of the scale of the challenge the trade, health and economic impacts of the Covid-19 pandemic is presenting to African governments, with Ministers and personnel from all concerned departments being wholly preoccupied with dealing the immediate crisis situation faced. The South African governments decision to link the reopening of the its market for Dutch poultry mat to validated certification of the Dutch origin of the birds from which the meat is derived, needs to be seen against the background of the increasingly pan-European nature of poultry sector companies. MHP, the leading Ukrainian poultry meat company, whose production was equivalent to ‘70% of the whole Dutch poultry meat industry’s turnover’ as early as in 2016 (4), has increasingly established a presence in EU member states (see companion epamonitoring.net article ‘Ukrainian Poultry Company MHP Secures Third foothold inside the EU’, 22 October 2018). This includes in the Netherlands where the processing of imported poultry birds for sale in the EU and third country markets is a source of concern to Dutch poultry farmers (see companion epamonitoring.net article ‘Ukrainian Poultry Company MHP Secures Third foothold inside the EU, 22 October 2018). In 2019 EU imports of poultry meat products form the Ukraine grew 8.6% and increased a further 18.7% in January 2020 compared to January 2019 (5). The growth in these poultry meat imports has in part been fed by a loophole in the EU regulation which has allowed MHP to export under an under-utilised quota bone-in-breast meat, which is then de-boned at its sister plants in the EU (6). These imports to the Netherlands, from the Ukraine, which is not an EU member states and is not part of the EU customs union and single market, are a particular concern for the South African authorities in their import trade with the Netherlands. |
Sources:
(1) USDA/GAIN, ‘South Africa Bans Poultry Imports from Poland’, 7 February 2020
https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=South%20Africa%20Bans%20Poultry%20Imports%20from%20Poland_Pretoria_South%20Africa%20-%20Republic%20of_02-03-2020
(2) USDA/GAIN, ‘South Africa Lifts Ban On Poultry Imports From The Netherlands’, 09 March 2020
https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=South%20Africa%20Lifts%20Ban%20On%20Poultry%20Imports%20From%20The%20Netherlands_Pretoria_South%20Africa%20-%20Republic%20of_02-25-2020
(3) latifundist.com, ‘Unfair to our farmers — Dutch Poultry Producers Rally Against MHP’, 23 June 2016, 15:23
https://latifundist.com/en/interview/250-nespravedlivo-po-otnosheniyu-k-nashim-fermeram-miting-gollandskih-proizvoditelej-ptitsy-protiv-mxp
(4) poultryworld.net, ‘The Netherlands is MHP’s gateway to Europe’, 25 July 2016
https://www.poultryworld.net/Meat/Articles/2016/7/The-Netherlands-is-MHPs-gateway-to-Europe-2842516W/
(5) EC, Table ‘Imports of poultry meat from selected origins’, 19 March 2020, at ‘EU Market Situation for Poultry Committee for the Common Organisation of the Agricultural Markets’, 19 March 2020
https://circabc.europa.eu/sd/a/cdd4ea97-73c6-4dce-9b01-ec4fdf4027f9/24.08.2017-Poultry.pptfinal.pdf
(6) DW, ‘How Ukrainian poultry becomes EU produce’, 6 October 2019
https://www.dw.com/en/how-ukrainian-poultry-becomes-eu-produce/a-49125767