Case made for continued protection of EU poultry sector
05 April 2014
A study commissioned by the Association of Poultry Processors and Poultry Trade (AVEC) on the competitiveness of the EU poultry meat sector has reviewed the costs of production for selected EU member states and international exporters of poultry meat. Total production costs (farm-level and slaughtering) in the EU vary on average between €1.56/kg (Hungary) and €1.82/kg (Italy), while the four main EU poultry meat exporters to Africa – the Netherlands, UK, Germany and France – have costs of €1.65/kg, €1.69/kg, €1.64/kg, and €1.70/kg respectively. In comparison, total production costs in Argentina, Brazil, Ukraine, the USA, Thailand and Russia are 71%, 72%, 77%, 80%, 84% and 92% of average EU production costs.
On the basis of a review of applicable regulatory requirements, the study concluded that “in general, non-EU countries do not have any or have limited legislations on environmental protection, food safety and animal welfare.” This in part accounts for the differences in costs of EU and non-EU producers. Against this background, “quotas and import levies protect the EU from third-country imports whose legislation or production requirements do not meet the requirements or expectations of (EU) consumers.”
Overview of EU quotas and in-quota import levies for selected poultry products
| Poultry meat salted | Poultry meat preparations | Poultry meat natural | Poultry meat preparations | Turkey meat preparations | |
| 0210.9939 | 1602.3219 | 0207.1410/ 50/70 | 10602.3230 | 1602.31xx | |
| Ad valorem levy (%) | 15.4 | 8 | - | 10.9 | 8.5 |
| Import levy (€/t) | 1,300 | 1,024 | 1,024 | - | 1,024 |
| Quota (tonnes) | |||||
| Brazil | 170,807 | 79,477 | 11,932 | 62,905 | 92,300 |
| Thailand | 92,610 | 160,033 | 5,100 | 14,000 | 0 |
| Other | 828 | 11,443 | 3,300 | 2,800 | 11,596 |
| Total | 264,245 | 250,953 | 20,332 | 79,705 | 103,896 |
Source: LEI Report 2013-068 (see below), Table 4.3, p. 46.
Overall, since 2007 EU imports of poultry meat have not on average increased (the annual average is around 854,000 tonnes, compared to 858,000 tonnes in 2007). In contrast, EU poultry meat exports have grown consistently since 2007. Between 2007 and 2012, exports to Benin and Ghana increased by 119% and 138% respectively, compared to an overall increase in EU poultry meat exports of 65%.
EU poultry meat exports to Benin and Ghana and total exports (tonnes)
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | |
| Benin | 64,000 | 83,000 | 85,000 | 115,000 | 126,000 | 140,000 |
| Ghana | 29,000 | 31,000 | 29,000 | 41,000 | 69,000 | 69,000 |
| Total EU poultry meat exports | 867,000 | 982,000 | 1,015,000 | 1,264,000 | 1,412,000 | 1,430,000 |
Source: LEI Report 2013-068 (see below), extracted from Table 4.4, p. 49.
The EU imports primarily breast fillet and prepared poultry meat, largely under strictly controlled quota arrangements at “reduced or no import duties”, and it exports primarily poultry parts. The average price of EU imports is €2.61/kg, while the average price of exported products is €1.44/kg. The average value of EU domestic sales is €2.46/kg.
The study argues that lowering import levies would “impact [upon] the competitiveness of the European poultry meat sector”. It concludes that “further market access or lower import levies… will continue to weaken the competitive position of the EU poultry meat industry and will put at risk a sector employing more than 300,000 EU citizens.”
Editorial comment
The EU’s poultry trade regime effectively manages imports in the light of the needs of EU poultry producers and evolving consumer demand. Despite the emergence of an additional consumer demand of 595,000 tonnes (+5.7%) between 2007 and 2012, overall imports into the EU have remained stable. This is despite the lower cost structure of the main potential third-country suppliers.
The EU’s trade regime helps to support EU poultry prices by increasing average import prices above average EU poultry prices. In contrast, the sale price of EU poultry meat exports (mainly poultry parts) is only 68% of average domestic EU poultry meat prices and 55% of the average price of poultry meat imports.
While the EU consumes and imports high-quality poultry meat products and exports largely poultry parts, questions nevertheless arise. Without the existing system of protection based on tariff-rate quotas (TRQs):
- Would EU poultry meat prices remain as high as they are?
- Could EU poultry meat production be sustained at present levels (+10.2% between 2007 and 2012)?
- Would EU export volumes have risen to current levels, and could they be sustained?
Questions also arise over the extent of cross-subsidisation of EU poultry meat exports resulting from the TRQ-managed import regime. This is an issue currently under investigation by South Africa’s International Trade Administration Commission (see Agritrade article, ‘ Namibian Trade Minister pessimistic on SADC–EU EPA agreement, 16 March 2014), and one that is likely to take on increasing significance as EPA tariff and trade policy commitments enter the implementation stage.
