The general customs duty on imported peanut butter has increased from 0.99 cents/kg to 20% ad valorem after government accepted a recommendation by the International Trade Administration Commission (ITAC) aimed at strengthening South Africa's domestic peanut butter industry.
The increase follows an ITAC investigation launched after RCL Foods, producer of Yum Yum peanut butter, renewed its application in December 2024 for greater tariff protection. RCL had initially sought a 25% ad valorem duty, arguing that low-priced imports were undermining local manufacturers.
ITAC found that peanut butter imports increased by 81% in 2024 to 4.44 million kilograms, with India accounting for almost all of the growth in import volumes.
During the same period, domestic production, sales volumes and capacity utilisation declined, while manufacturers faced rising raw material, labour and operating costs, the commission said.
ITAC also identified what it described as a tariff imbalance within the groundnut value chain. While raw groundnuts attract a 10% ad valorem duty, roasted groundnuts and peanut butter had been subject to a duty of just 0.99 cents/kg, which the commission said had disrupted supply chains and reduced the competitiveness of local manufacturers.
Although ITAC agreed that additional tariff protection was warranted, it recommended a lower duty than the 25% ad valorem requested by RCL.
"Imposing a full 25% ad valorem duty would place undue pressure on vulnerable households," the commission said. "Moderate duty increases would better balance support for domestic producers with food affordability."
According to ITAC, the revised 20% ad valorem duty is intended to improve the competitiveness of domestic producers while taking into account the impact on consumers.
