Farm Frites International fails to prevent duty on French Fries exported to South Africa

An attaempt by the Dutch frozen potato chips importer Farm Frites International to prevent the International Trade Administration Commission (Itac) from imposing a residual dumping margin on the firm failed on Tuesday, effectively removing it as a competitor from the South African market.

The High Court in Pretoria dismissed Farm Frites’ urgent application against Itac, the Minister of Trade and Industry and McCain Foods, in which it sought an order preventing Itac from treating it as a non-cooperating interested party in Itac’s dumping investigation against producers and exporters from Belgium and the Netherlands, and imposing a residual dumping margin of 26% on Farm Frites.

A residual dumping margin is determined to cover all the foreign producers or exporters from the country that are named in the investigation, which did not participate or did not fully participate in the investigation. Importers of frozen potato chips in South Africa, as well as producers in Belgium and the Netherlands in particular, have previously been hit by a provisional safeguard duty of 61.42% on the product, which was introduced in July last year.

Safeguard measures are used against unforeseen surges of imports. This safeguard duty was suspended in January this year after discussions between the European Union and SA in August and December last year. However, the safeguard duty matter was still under consideration by Trade and Industry Minister Rob Davies, Itac chief commissioner Siyabulela Tsengiwe said on Wednesday.

"The World Trade Organisation agreement on safeguards makes provision for various consultations to take place during the course of investigations between the concerned countries in order to try to find amicable solutions," Mr Tsengiwe said.

The safeguard duty and the anti-dumping investigation that took place against Belgium and the Netherlands followed an application by food company McCain Foods, supported by various other producers, for protection against the much cheaper imports.

XA International Trade Advisors director Donald MacKay, who represented Farm Frites, said on Wednesday Farm Frites had effectively been removed from the South African market because of the residual dumping margin.

Mr MacKay said they provided relevant information to Itac and brought the application because it considered Itac’s decision to treat Farm Frites as a non-cooperating interested party unreasonable.

They are waiting for the court to provide the reasons for its decision before deciding on their options.

Itac made a preliminary finding at the end of last year on allegations of dumping by McCain and imposed provisional measures on producers from Belgium and the Netherlands, ranging from the 6.19% for Belgium’s Clarebout Potatoes and 30.77% for all other producers and 18.18% for all producers in the Netherlands except for Lamb Weston/Meijer.

Recommendations will be made to Mr Davies on a final determination of the investigation.