ITAC says no to rebate of the duty on milk preparations

The International Trade Administration Commission (ITAC) notified the MPO on Wednesday that the Commission has decided to reject an application for rebate of the import tariff on milk preparations (milk powders which contain other ingredients such as vegetable fat) for the manufacture of infant food. The application was lodged by Aspen Nutritionals in the third quarter of 2015.

ITAC referred the application to, among others, the MPO for comment and an objection to the application was submitted to ITAC. The MPO stated that there is a significant risk for misdeclaration since milk preparations that contain other ingredients and the end product, infant food, cannot be distinguished from milk powders, buttermilk and whey powder. In addition, the South African dairy industry is highly competitive and is a net exporter of dairy products .

The MPO emphasised that the local dairy industry was under severe pressure as a result of unsustainably low international producer and dairy product prices, high imports and high production volumes in 2015 which led to the stockpiling of products with a longer shelf life such as milk powder and UHT milk. Market conditions were volatile with both milk processors and dairy farmers experiencing a cost squeeze.

The MPO made an oral presentation to the Commission on 8 March 2016 as part of the final consideration of the merits of the application. To read more, click HERE.