Business Report
01 August 2026
By Yogashen Pillay
The International Trade Administration Commission of South Africa (ITAC) has recommended increasing the customs duty on imported peanut butter from 0.99 cents per kilogram to 20% ad valorem, saying the move is needed to protect the domestic industry from rising imports and improve the competitiveness of local manufacturers.
The recommendation follows an application by RCL Group , which had sought an increase in the tariff to 25%. After investigating the matter, ITAC opted for a lower rate of 20%, saying it strikes a balance between supporting local manufacturing, promoting value addition and maintaining affordability for consumers.
According to the commission, domestic peanut butter producers have faced declining production, sales volumes and capacity utilisation during the investigation period, while imports have risen sharply.
ITAC found that India remained the dominant source of imported peanut butter and that local manufacturers have consistently been at a price disadvantage compared with imported products.
At the same time, domestic producers have experienced higher production costs driven by increases in raw material prices, labour expenses and operating costs.
“ITAC recommended that the general rate of customs duty on peanut butter be increased from 0.99c/kg to 20% ad valorem, to provide a more appropriate balance between supporting domestic manufacturing, encouraging value addition, and maintaining consumer affordability,” it said.
The commission also announced that it will launch a self-initiated investigation into the creation of a temporary rebate provision for imported groundnuts under Section 16(1)(d)(ii) of the International Trade Administration Act, 2002.
ITAC said the proposed rebate would complement the tariff increase by lowering input costs for domestic peanut butter manufacturers and improving their competitiveness.
It said the investigation will assess the feasibility of establishing a rebate mechanism to improve the competitiveness of domestic peanut butter manufacturers through lower input costs.
The latest recommendation follows an earlier application submitted by RCL Foods during the 2020/21 period, which did not result in the requested tariff increase.
ITAC said RCL submitted an updated application in December 2024, allowing the commission to assess more current information and address concerns previously raised by the Minister.
During the investigation, ITAC considered submissions received from interested parties alongside industry data before reaching its decision.
The commission noted that peanut butter plays an important role in South Africa’s food basket, particularly for lower-income households.
ITAC described peanut butter as a staple food product that accounts for around half of the spreads market, excluding margarine, while also serving as an affordable source of protein. It said industry efforts to secure zero-rated VAT status for peanut butter reflect its importance to consumers.
“Its inclusion in the household food basket surveys and the industry’s push for zero-rate VAT status underscore its importance for low-income consumers.”
Groundnuts are mainly consumed either as edible nuts or processed into peanut butter, with approximately 55% of commercial groundnut consumption destined for peanut butter production.
ITAC said the current tariff structure is misaligned because raw groundnuts attract a 10% customs duty, while roasted groundnuts and peanut butter are subject to a duty of just 0.99 cents per kilogram.
According to the commission, this disparity undermines value chain efficiency and weakens the competitiveness of domestic processors.
“Domestic groundnut production is on an upward trajectory, with the 2024/25 crop estimated to be 11.6% higher than the five-year average of 56,004 tons (up to 2024/25). Long-term trends place average annual production at approximately 62,000 tons,” ITAC said.
The commission concluded that raising the tariff would help address existing anomalies in the peanut butter value chain while supporting the Southern African Customs Union (SACU) industry, which has lost production volumes, sales and market share as imports gained ground.
ITAC maintained that the accompanying investigation into a temporary rebate on imported groundnuts could further strengthen domestic manufacturers by reducing their input costs and improving capacity utilisation.