The Belgian, Dutch and German potato industries are afraid that it will become increasingly difficult to export frozen French fries to the South American market. Colombia has announced that it will charge anti-dumping tariffs on frozen potato products from these three European countries.
“The threat Colombia poses is relatively limited. A reasonably small volume of French fries is sent to the Colombian market. This market is currently good for total imports of 47.000 tons in 2017/2018. Of this, Belgium exports 27.000 tons, the Netherlands 11.000 tons, the USA 3.600 tons, Canada 2.200 tons, and Germany 1.400 tons", says Romain Cools of Belgapom. Belgapom is the Belgian potato trade and processing industry association.
He goes on to say that, "Therein lies the core of the problem. The procedure is being put in place by the Colombian growers association, Fedepapa. They are working with local potato processing industries. They are also targeting only Belgium, the Netherlands, and Germany. Not the USA and Canada, who are, when it comes to volumes, more important than Germany."
"We have also established that in Colombia's case, reference is made to South Africa and Brazil. These countries have already started and finalized such procedures. Our third concern is that Colombia is not only comparing apples to oranges; they are comparing them to lemons", continues Cools.
"The Dutch and Belgian sales margins of French fries on those countries' local markets is being compared to the margins of products being sold on the Colombian market. These are entirely different products, yet people are not taking this into account. This, despite repeated pressure from Europe", he says.
Knock-on effect
The percentages are not yet known, but it is expected that they will be on the low side. "This illustrates that this is also a political issue. The farmers' organization that filed the motion played the nationalist card to get political support", says Cools. “What causes us the most concern is that this is the third time such a motion has been filed. We have heard that Colombia's neighboring countries are planning to do the same."
"The danger lies in the fact that a knock-on effect is created. We have, therefore, asked the European Commission to put a definite end to these practices", he says. "We suggest that Europe lays a complaint with the WTO. If Colombia is prosecuted, it will also dash the hopes of all the other countries who were planning to do the same. These countries assume that Europe only barks but has no bite. We want Europe to bare its teeth and, in necessary, bite."
South Africa and Brazil
According to Cools, it is not just about the Colombian case. It is also about all possible cases. The South African decision dates from 2014. In 2019, it was decided that it be extended. "There is a strong possibility that it will be extended again. In Brazil, we went directly to court, but the judge did not even consider the case", he explains.
"In South Africa, the levies did indeed lead to a (temporary) decrease in imports. In Brazil, the volume remained the same. It was just the suppliers that changed. Taxes are levied per individual company. Each one gets its own tariff", says Romain. “Why are they focusing on Europe? It makes me think there is a political undertone to this."
Protective measure
It is essential to put a stop to this methodology and not have other countries inspired to follow suit. "We have already heard rumblings from Peru and Argentina. After Brexit, if the United Kingdom starts a similar procedure, the same might happen there. The effect of this on the entire European potato chain cannot be underestimated."
"And a tiny morsel of detail - in the end, the local consumers are the victims of these taxes. The sales margins climb, and the local consumers must pay more for their French fries", Cool concludes.
For more information:
Romain Cools
Belgapom
3 Sint-Annaplein
9290 Berlare
Romain@fvphouse.be
www.belgapom.be