French fry import tariffs remain a ‘hot potato’ – stakeholders

By Glenneis Kriel


6 December 2022 | 3:40 pm

Potatoes South Africa (Potatoes SA) has rejected recent claims that the implementation of import tariffs on French fries was driving up food prices and threatening food security in South Africa.

French fry import tariffs remain a ‘hot potato’ – stakeholdersAlthough South African farmers are producing adequate volumes of potatoes to be processed into French fries, failing infrastructure is putting pressure on supply, according to Willie Jacobs, CEO of Potatoes SA.
Photo: FW Archive

Georg Southey, general manager of Merlog Foods, told Farmer’s Weekly that the price of frozen French fries had almost doubled over the past year, from about R16/kg to R30/kg due to the introduction of import tariffs, which, according to him, created a shortage of French fries on the market.

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“South Africa does not produce enough of the type of potato used for the production of French fries and [there is not] enough processing capacity to [produce] French fries in the country. Wholesalers, such as myself, therefore have to import frozen chips from other countries so that every small vendor, shisa nyama [outlet] and restaurant can keep French fries on their menus.”

He added that Merlog, a distributor of both imported and locally-produced frozen chips, had not been able to secure frozen chips from any of the local producers for more than six months because of these supply challenges.

However, Willie Jacobs, CEO of Potatoes SA, stressed that the import tariffs, which amounted to 23% for Belgium, 104% for the Netherlands and 181% for German suppliers, were necessary to protect the local industry against “dumping”.

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“These suppliers were [previously] selling frozen chips below their normal market value and this was undercutting South African producers and costing [the country] jobs,” he said.

Jacobs added that the import duties did not affect food security in South Africa, as frozen French fries were simply too expensive for underprivileged communities and vendors who catered for these communities to purchase.

“The concept of ‘slap chips’ is actually a South African own product, derived from among other [varieties] the Mondial [potato] cultivar, which is not seen as ‘a proper processing variety’. This [variety] is available in abundance on fresh produce markets, and the so-called ‘kasi kos outlets’ make ‘slap chips’ from fresh varieties.

“Based on this, the only industry that may currently be experiencing shortfalls is [members of the] restaurant [industry] using real French fry varieties, mostly processed by McCain, Lamberts Bay and Nature’s Garden in South Africa.”

In addition, Jacobs said farmers were producing varieties for processing purposes on contract, and these contracts were secured for at least two years in advance, which was the timeframe needed by seed potato producers to supply farmers with tubers of the required varieties.

“There is no shortage, as both our Mondial and Sifra varieties are suitable for processing, and account for 84% of the total market delivery.

“[In addition,] we have experienced various periods of oversupply during the past year, with farmers at times even having to collect some of their potatoes from the market to prevent them from rotting there.”

Jacobs confirmed that the Southern African Customs Union had sufficient capacity to satisfy the region’s demand for frozen chips across all supply chains, but said processing plants faced extreme pressure with regard to their production capacity, due to the failure of infrastructure for the supply of electricity and water.

He said the impact of rolling blackouts were being amplified in processing plants, as the two-hour downtime period was often extended to six hours for a factory, due to the time it takes for the production line to be restarted.

According to Jacobs, South Africa had the capacity to process about 450 000t of potatoes per year, and in 2018 these volumes reached levels of 430 000t.