This week, the Mexican Ministry of Economy announced its final decision regarding the anti-dumping case spearheaded by three of the largest poultry companies in Mexico, including Bachoco S.A. This victory for Mexican poultry companies mandates that anti-dumping duties will be imposed on U.S. competitors that export leg quarters south of the border. According to the Mexican government, U.S. firms that sell leg quarters in Mexico at cheap prices are effectively undercutting the local industry, creating “dumping conditions.”In the first five months of this year alone, broiler meat shipments to Mexico grew by 18%, largely coming from companies including Tyson foods and Simmon Foods. Tyson Foods stands to lose considerably from the decision, as chicken exports to Mexico and in-country sales generate a total $483 million. Leg quarters, or the bottom half of the bird, make up the majority of chicken exports to Mexico. U.S. consumers tend to prefer breast meat, prompting chicken processors look to other countries to export dark meat and maximize profits.
Mexico will not assess the duties until its market recovers from a recent Avian Influenza outbreak, in keeping with a recommendation to temporarily suspend the process. Companies involved in the decision claim that this suspension is unnecessary, saying that “Avian Influenza H7N3 was contained and did not affect chicken producers.”
Tyson and Simmons Foods deferred comment on the recent decision according to their trade organization, the National Chicken Council. Representatives of the National Chicken Council and the USA Poultry & Egg Export Council affirmed the Mexican government’s decision to keep trade open and duty free, but claimed that the Mexican Trade Commission’s determination is “flawed and that international bodies would not support such a finding.”