ITAC Warns SA Retailers Against Peanut Butter Price Hikes After New Import Tariff
- The International Trade Administration Commission has recommended a 20% import tariff on peanut butter entering South Africa
- Chief Commissioner Ayabonga Cawe warned local manufacturers and retailers against using the tariff to justify unfair price increases
- The watchdog will work with competition authorities if price hikes do not match actual production cost increases
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South Africa’s trade watchdog has approved a new 20% tariff on peanut butter. The move protects local manufacturers from cheaper imported peanut butter. ITAC warned retailers not to hike prices unfairly.
ITAC previously taxed peanut butter at a lower duty than raw groundnuts. That imbalance left local manufacturers worse off than bigger overseas competitors. The new tariff finally closes that gap for domestic producers.
Peanut butter previously attracted a duty of just 99 cents per kilogram. Groundnuts used to make it locally faced a much steeper charge. This created a clear tariff anomaly that hurt domestic producers.
Poultry group RCL Foods had actually pushed for a 25% duty. ITAC settled on 20% after weighing all the available evidence. ITAC Chief Commissioner Ayabonga Cawe discussed the reasoning on The Money Show.
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ITAC will be watching pricing behaviour closely
In a report by BusinessTech, Cawe said retailers must not raise prices beyond real production costs. The commission ran a consumer welfare study before making its call, he said. Peanut butter remains an important protein source, Cawe said.
In the report, Cawe said prices had already climbed faster than other proteins since 2020. South Africa needs a stronger local groundnut industry, he said. Relying too heavily on imports could leave the country exposed, Cawe said. Countries like India could restrict exports and disrupt local supply, he explained.
ITAC said the tariff will undergo a formal review after three years. The commission will track both manufacturers and retailers throughout that period. Cawe issued a direct caution to the industry over pricing. Any unjustified increase will trigger action alongside competition authorities.
See the full report here.
More about tariffs
- The Trump administration placed South Africa in its highest tariff category alongside China, Japan and South Korea.
- The Western Cape High Court in Cape Town ruled that the City of Cape Town’s tariffs are unlawful and invalid in favour of Afriforum and the South African Property Owners’ Association (SAPOA). Read more:
- The United States government planned to hit 60 countries, including South Africa, with brand-new trade taxes.
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Source: Briefly News
