Inside: Potato Market

Immediate levy on chips pushes processors out of the market

17 February 2017 - Clarisse van der Woude - 13 comments

The import duty that Brazil introduces on French fries from the Netherlands, Belgium, Germany and France will take effect immediately and the percentages are so high that many processors are immediately forced out of the market.

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The percentages vary enormously per manufacturer: from 0 to 133,2 percent, according to an official government document on Friday. The Belgians fare considerably better than the Dutch. For example, Clarebout faces a levy of 11,7 percent, Mydibel with 9,9 percent and the Belgian Agristo and Farm Frites 13,3 percent. It is striking that no import tax has been imposed on Ecofrost and Lutosa.

The Dutch factories are faced with a rate of up to 96,9 percent. Also Farm Frites and McCain, even though the overview states that this is not the case, according to a Brazilian source. Aviko and Lamb Weston/Meijer have been charged a levy of 37,2 percent, Bergia even 41,4 percent and the Dutch branch of Agristo 13,2 percent. It is possible that the latter hitched a ride with their Belgian brother, because it looks like the Belgians emerged from the negotiations stronger than the Dutch.

Belgians emerged from negotiations stronger than the Dutch

France comes off badly with a rate of 133,2 percent, but that does not apply to McCain. A levy has been set for German chip bakers of 6,5 percent for Wernsing and plus 55 percent for other companies.

Although the document does not say when the import tax will come into effect, customers in Brazil inform Dutch suppliers that this will be immediately. The measure would be valid for a maximum of five years. "Everyone here and in Brazil is on their hind legs," a source from a Dutch trade office tells us.

'This is tough news for us. We export large volumes of fries to Brazil. Such a levy will force us out of the market in one fell swoop and encourage unfair competition. We have noticed in recent weeks that customers have withdrawn and postponed orders due to the risk that they could be confronted with high import duties. Our customers in Brazil are furious about the introduction. We have to take into account that they do not want the containers that will be on the boat next week for that price.'

It is also a major setback for Hylke Brunt from Vavi. 'We are in shock and can hardly imagine that this is possible, this special way of working. The level of the rates is too absurd for words. The reason why there are such large differences between the companies is also unclear to us. I expect our members to consider a response next week.'

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