In brief
The South African government has implemented a substantial increase in customs duties on specified peanut butter tariff lines, raising the general rate from 0.99 cents per kilogram to 20% ad valorem. The decision follows an International Trade Administration Commission of South Africa (ITAC) investigation which concluded that domestic peanut butter producers were experiencing declining production, reduced sales volumes, increased competition from lower-priced imports, and rising operational costs. While duty-free treatment remains available for imports from certain jurisdictions, including the European Union, United Kingdom, European Free Trade Association (EFTA) and Southern African Development Community (SADC) member states, imports qualifying under the African Continental Free Trade Agreement are now subject to an 8% duty. The amendment is expected to increase import costs and may require businesses to reassess procurement strategies, supply agreements, customs valuation models and transfer pricing arrangements. Importers should also evaluate whether preferential trade agreement benefits are available and monitor future developments, including ITAC’s proposed investigation into a temporary rebate provision for imported groundnuts intended to support local peanut butter manufacturing.
In more detail
The South African government has implemented an increase in the general rate of customs duty applicable to peanut butter classified under tariff subheadings 2008.11.11, 2008.11.15 and 2008.11.19. The general duty has increased from 0.99 cents per kilogram to 20% ad valorem — which also applies with respect to imports of peanut butter from the Southern Common Market (MERCOSUR) regions. Imports of the product from the European Union, United Kingdom, the European Free Trade Association and the Southern African Development Community, continue to enjoy duty-free access to South Africa, while imports of the same product under the African Continental Free Trade Agreement, are subject to an increased customs duty of 8% from 0.396 cents per kilogram. The tariff amendment was gazetted on Friday, 24 July 2026.
The amendment follows an investigation conducted by the ITAC pursuant to an application by RCL Group Services (Pty) Ltd. ITAC found that during the period of review:
- Domestic peanut butter production, sales volumes and capacity utilisation had declined;
- Imports had increased significantly;
- Imports were consistently priced below locally manufactured products; and
- Local manufacturers were experiencing rising production and operating costs.
All of which constrain the ability of domestic producers to compete effectively.
Following its investigation, ITAC recommended an increase in the customs duty from 0.99 cents per kilogram to 20% ad valorem.
Businesses importing peanut butter into South Africa are encouraged to evaluate the impact of the duty increase on their landed costs and broader supply chain arrangements. Consideration should also be given to existing supply agreements, customs valuation and pricing models, inventory and procurement strategies, and transfer pricing arrangements where import transactions between related parties are anticipated. Importers should further assess whether any preferential tariff treatment may be available under an applicable trade agreement, as the increased general rate of 20% ad valorem will apply where no preference is available.
In addition to recommending the duty increase, ITAC announced its intention to initiate an investigation into the possible introduction of a temporary rebate provision for imported groundnuts (peanuts). The stated objective is to reduce input costs for domestic manufacturers and improve the competitiveness of local peanut butter production.
The increase in the customs duty on peanut butter is no longer a proposed measure. As of Friday, 24 July 2026, the general rate of duty on the affected peanut butter tariff lines has increased from 0.99 cents per kilogram to 20% ad valorem, potentially resulting in a significant increase in import costs for affected businesses. Given the potential commercial and customs implications of the amendment, affected businesses are encouraged to consult their customs and international trade advisers to assess the impact of the duty increase on import costs, contractual arrangements, and compliance obligations. Early engagement may assist in identifying potential duty mitigation opportunities and ensuring overall compliance.