Against opposition from sweet importers (of which there are now approximately 100), following a ruling from the International Trade Administration Commission (ITAC) the South African government increased the ad valorem duty on sweets from 25% to 37%. This follows an application from the South Africa Chocolate and Sweet Manufacturers Association (SACSMA) which claimed that the flood of sweet imports, mostly from Brazil had resulted in some 2,650 job losses in the past three years. In the light of the extensive under-invoicing which is taking place in the sector, SACSMA called for ‘ a fixed tariff of R1.80 a kilogram’. However the ITAC argued that ‘SARS could best address the allegations of under-invoicing and that the customs tariff is not the appropriate instrument to counteract this practice’.
Developments in the South African confectionery sector highlight the importance of thinking in ‘product chains’ when establishing tariff policies for sugar-containing products under an EPA. This is particularly important given the cost savings which the EU confectionery industry will make following EU sugar- and dairy-sector reforms. Despite the argument of the ITAC, there would appear to be a strong case in ACP countries for using fixed tariffs in order to avoid under-invoicing, which appears to be endemic in this sector.