Cheap imported fruit shouldn't be subject to emergency tariffs to protect Australia's processed fruit industy according to a report by the Productivity Commission.
The Commission's interim report assessed whether provisional safeguard measures should be put in place and found no “compelling evidence of the existence of critical circumstances sufficient to justify the application of immediate provisional safeguard measures”.
Its final safeguards report, due by 20 December 2013, however, will determine whether there is a case for definitive safeguard measures, which can apply for up to four years.
The inquiry was prompted by SPC Ardmona which called on the government to apply the safeguard measures to certain imported processed fruit products, which it said were unfairly impacting its profitability.
While the Commission found that recent increases in imports of processed citrus, pears, apricots and ‘other fruits’ were unlikely to be sufficient to meet the terms of the Agreement on Safeguards, imports of mixtures and arguably of peaches may meet the terms.
“Further data are required to reach a firm conclusion, which will be available in the final report,” it said.
The Commission also said the supermarket companies had provided evidence on the retail performance of Australian and imported processed fruit and on the performance of the processed fruit category as a whole, as well general information on their policies to source products domestically.
The Commission said it also looked at the supermarkets' private label strategies and found that though imports enabled certain supermarket pricing strategies to take place, the imports themselves did not vary downwards in price.
“Supermarket decisions on pricing strategies and product sourcing were made domestically, rather than being caused by changes in the world market for processed fruit products.”
The Commission also found that SPC Ardmona’s production constitutes a major proportion of the total domestic production of processed fruit, and due to its position as a subsidiary of Coca-Cola Amatil, a three month delay pending a definitive safeguards determination was “unlikely to lead to circumstances that would be difficult to repair.”
“For this accelerated report, the Commission has not received compelling evidence of the existence of critical circumstances sufficient to justify the application of immediate provisional safeguard measures. The available evidence suggests that waiting a few months for a decision, until completion of the final safeguards report in December, is unlikely to cause injury to the domestic industry that would be difficult to repair,” the Commission said.
