South Africa’s furniture industry is grappling with a surge of undervalued imports that distort market pricing and undermine fair competition. These imports are often declared under incorrect Harmonised System (HS) tariff codes, which mask the actual value of the products and help avoid or reduce import duties.
Greg Boulle, deputy chairperson and CEO of the South African Furniture Initiative (SAFI), says there is an urgent need to tackle the impact of illicit imports.
“Our industry plays a vital role in supporting jobs, communities, and the economy. However, undervalued imports threaten this foundation, and local manufacturers struggle to compete.
Impact of undervalued imports
“Illicit imports directly harm local businesses,” explains Boulle. “By bypassing appropriate duties, these products unfairly undercut the prices of locally produced furniture, making it difficult for our manufacturers to sustain operations and invest in growth. This imbalance is costing the industry jobs, profitability and long-term stability.”
Undervalued imports also erode consumer trust, as some products fail to meet quality and safety standards. In contrast, local manufacturers adhere to stringent regulations to ensure durable, high-quality furniture, which increases production costs.
The impact of undervalued imports extends beyond individual businesses to the broader economy. Reduced production volumes threaten job security and stifle opportunities for growth and innovation.
“Every job in the furniture sector has a ripple effect on families and communities,” Boulle emphasised. “Protecting our industry means protecting livelihoods and creating opportunities for the future.”
Unleashing SARS
SAFI has strengthened its collaboration with the South African Revenue Service (SARS) to address these challenges. Efforts include targeted training for customs officials to enhance the accuracy of valuation practices and reduce the prevalence of misdeclarations.
Proper customs valuation is critical to levelling the playing field, and the responsibility falls on SARS to ensure imports are fairly assessed and create a competitive and transparent marketplace.
SAFI has asked SARS to investigate raw material imports declared under specific HS subheadings that currently attract no duties. This targeted approach will help curb the misuse of duty-free classifications and promote compliance across the industry.
Protective measures
SAFI plans to apply for anti-dumping and safeguard duties on specific raw material and furniture categories. These measures would protect the local market from the disruptive effects of low-cost imports priced below fair market value.
“Advocacy backed by data is essential in this process,” Boulle states. “We are analysing trade patterns, discrepancies in import valuations, and the overall impact on the local industry to build a robust case for these protective measures.”
SAFI will present its findings to SARS, the Department of Trade, Industry and Competition (DTIC), and other stakeholders in early 2025.
Call to action
SAFI calls on all furniture manufacturers, suppliers, unions and service suppliers to work together to address market imbalances, advocate for fair trade practices, and secure the industry’s long-term sustainability.
“The challenges we face are significant but not insurmountable,” Boulle says. “Through collective action, we can create a fairer marketplace, promote local manufacturing, and ensure a thriving future for South Africa’s furniture industry.”