Restrictions on import of dairy products should be 'last option'

18 Jul 2013 13:00
WINDHOEK, 18 JUL (NAMPA) - South African producer and distributer of dairy and beverage products to Namibia, Clover Industries Limited says quantitative restrictions on the import of dairy products into Namibia should be the last option for the local dairy industry.
Clover Executive Commercial Dr Jimmy Botes said this whilst speaking during a public consultation on quantitative restrictions on the importation of dairy products into Namibia on Thursday.
?Quantitative control is the last option and can be abused by certain players in the industry. It is not the way to go,? he cautioned.
The Ministry of Trade and Industry has received an application for the imposition of quantitative restrictions in terms of the relevant provisions of the Import and Export Act, 1994 (Act No. 3 of 1994) on the importation into Namibia of fresh, extended shelf life (ESL) and Ultra High Temperature (UHT) milk; buttermilk, curdled, yoghurt and other fermented milk from the Namibian dairy industry.
Since 2012, the local dairy industry has been under constant pressure from cheaper dairy imports. The local dairy market is fully deregulated; hence open for competition with imported products based on free market principles. The main competition is the UHT market and also lately, the introduction of ESL milk. Imported UHT milk competes directly with locally processed UHT milk, while ESL milk competes directly with local fresh milk. However, notwithstanding free market principles prevailing in the Namibian dairy market, the local producers and large scale processors are in a disadvantaged position against the imported products. These relate mainly to inherent differences in production costs and production methods, distribution costs to local retailers, as well as the application of Value Added Tax (VAT). Urgent interim measures are necessary to ensure the continuation of members of the Dairy Producers Association (DPA) of Namibia.
Botes however stressed that his company offers the consumer good products at an affordable price.
Clover also believes in fair competition and warned against ?monopolistic behaviour? in the dairy industry.
He said the company is very insignificant and small in Namibia, and provides only about 10 per cent of dairy products to local consumers.
?We offer good products and at an affordable price. It is not about the market share, but about the principle,? he added.
Meanwhile, at the same occasion, Director of Planning in the Ministry of Agriculture, Water and Forestry (MAWF) Bernd Rothkegel, speaking on behalf of Agriculture Minister John Mutorwa, noted that no regulations have been passed under the Control of the Importation and Exportation of Dairy Products and Dairy Products Substitutes Act, No. 5 of 1986.
?This means no control measures in terms of this Act are in place. Why this is the case, while the industry finds itself in difficulties for the past couple of years, are not yet known to some of us,? he stressed.
According to the minister, the DPA said interim support measures could not be provided for under the Import and Export Control Act, No. 32 of 1994 and the Control of the Importation and Exportation of Dairy Products and Dairy Products Substitutes Act, No. 5 of 1986. Possible consideration was given to inclusion of dairy products, as a controlled product under the Meat Industry Act, No. 12 of 1981. However, the concern was raised that the amending of the Meat Industry Act to include dairy products would be too time consuming and not helpful in addressing the immediate crises of the dairy producers and processors.
In the meantime, the DPA preference to have dairy products included in the Meat Industry Act, together with the Meat Board?s approval to amend the said Act accordingly, promoted the submission of a proposed Bill of the Meat Industry Act. The amendments proposed the inclusion of controlled products besides meat products of cattle, sheep, goats and pigs (all controlled products) also dairy products, hides and skins, poultry (broilers) and eggs of poultry.
The discussions on quantitative restrictions on the importation of dairy products into Namibia continue.