On 25 July 2025, the International Trade Administration Commission of South Africa (ITAC) called for comment on the proposed increase in the ‘general’ rate of customs duty from 0.99c/kg to 25% ad valorem on peanut butter, classifiable under tariff subheading 2008.11, which is due by 22 August 2025.
The application, which must be provided in the format of a questionnaire available on ITAC’s website, was lodged by RCL Group Services (Pty) Ltd (RCL), which reasoned that:
- During the 2020/21 period, ITAC considered an application by RCL for an increase in the ‘general’ rate of customs duty on peanut butter, classifiable under tariff subheading 2008.11.1 from 0.99c/kg to 25% ad valorem. An investigation was subsequently initiated on 15 January 2021 through a publication in the Government Gazette for interested parties to comment.
- ITAC made a recommendation to the then minister of trade, industry, and competition (the former minister) on the subject application. The former minister then referred to ITAC’s recommendation for further investigation and consideration. In the referral, the minister requested that ITAC consider: “the price-raising effect, industrial capacity, competition in the market and the value chain”. The minister’s concerns were based on the price-raising effects of a staple product for low-income households, namely peanut butter.
- Considering the above, ITAC requested the submission of an updated application as well as updated market, trade, and financial data from RCL. ITAC received a fully updated application from RCL, which has reiterated, amongst others, the following reasons for its application:
- A 10% ad valorem customs duty on groundnuts (tariff subheading 1202.41 and 1202.42) was implemented on 21 October 2003.
- Importers are circumventing this duty by importing peanut butter, leading to a 24% ad valorem increase in imports from 2023 to 2024.
- Imported peanut butter prices are 19.3% lower than local production costs, causing distress in the Southern African Customs Union (SACU) industry.
- RCL has sacrificed volumes to maintain margins, resulting in a decline in market share.
- Without relief, local manufacturers may exit the market, resulting in higher prices for imported peanut butter.