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Duty stand-off threatens KFC return
13/12/2012 00:00:00
by Business Day
 
 
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KFC set to return, eyes duty exemption

A QUARREL over duty tariffs on chicken imported from South Africa could delay fast-food chain KFC’s re-entry into Zimbabwe.

Country Bird, which has KFC franchise rights for Zimbabwe, is the biggest importer of chicken into the country.

Finance Minister Tendai Biti drastically increased import duties in his 2013 national budget. Chicken importers now pay $1.50/kg or 40%, whichever is the higher of the two.

KFC outlets in the capital, Harare, and Bulawayo were closed at the height of Zimbabwe’s economic crisis in 2007.

Country Bird said it believed Zimbabwe’s economy had recovered sufficiently to support the chicken franchise and it hoped to reopen KFC outlets early in the new year.

But the company’s request for a waiver on chicken import duties has riled the local poultry industry, which had welcomed the new duty regime.

The Zimbabwe Poultry Association said it had hoped the new duties would result in some of the $65m spent annually on chicken imports going to local breeders.

Country Bird CEO Jeff Wright on Wednesday confirmed the special request to the government.

"Country Bird is engaging with Zimbabwean poultry producers to produce chicken for the franchise to meet Yum! International’s standards.

"This will take some time and, in the interim, Country Bird has asked for a duty waiver."
Yum! Brands, the largest restaurant chain in the world, owns KFC.

Bruce Layzell, KFC’s GM of new African markets, said Zimbabwe could not import chicken from South Africa because of a ban on South African poultry.

KFC was looking for a short-term import waiver until it improved supply from Zimbabwean producers to the company’s requisite standards and capacity.

Mario Beffer, administrator of the Zimbabwe Poultry Association, on Wednesday dismissed KFC’s quality concerns. "That’s nonsense," he said.

"Yes, we have been on the back foot, but we have always had quality products. We are confident of our products, they are competitive and of a high standard."

Beffer said the association had no issues with imports from South Africa, but duty had to be paid. "We want levies agreed at Southern African Development Community level to be paid. Some products have been evading duty and are priced very low on the local market."



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Layzell said if the waiver request was denied, KFC would delay its re-entry into Zimbabwe.
"Delays or non-acceptance of the waiver request will only delay our opening and expansion plans."

KFC applied the same global food safety and food quality standards in Africa as it did all over the world, Layzell said. "If we can achieve these standards and appropriate capacity with local suppliers, we will use them.

"The alternative, where permissible, is to import from our global network of approved suppliers. We have a supply of various items from places such as Thailand, Belgium, Brazil, the US, South Africa and Egypt."


 
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