Duty on the import of milk and milk products had been placed decades ago and that had no bearing on the price of butter in Fiji. This was revealed by Attorney-General Aiyaz Sayed-Khaiyum in Parliament yesterday.
Responding to a question on the increase of the price of butter, Mr Sayed-Khaiyum called out to National Federation Party leader Biman Prasad for his comments in Labasa where the latter said Government policies led to the increase in the price of butter in Fiji.
While giving a history lesson to Mr Prasad, Mr Sayed-Khaiyum reminded him that Fiji had never produced its butter locally. All butter had been bought in bulk from New Zealand.
Even before Government divested of its shares in Rewa Dairy, all butter that was brought in was exempt of duty while other companies were paying 27 per cent duty.
Mr Sayed-Khaiyum explained that it was wrong of Mr Prasad to insinuate that the duty was put in place to protect Southern Cross Foods Limited’s interest.
Government divested of its shares in Rewa Dairy in 2009.
Mr Sayed-Khaiyum said: “Madam Speaker, we see these kinds of claims being made in the rural areas of Fiji where perhaps people do not have access to correct information and, Madam Speaker, it has been reported in media that Hon Prasad has claimed that the rise in the price of butter has essentially been driven by Government and Government’s policies. It would serve you to listen Hon Prasad.
“Madam Speaker, it needs to be corrected, what Honourable Prasad told to the people of Vanua Levu is completely false. Let me give you a few facts. Fiji imports the majority of its bulk requirements, butter slabs from New Zealand with value addition done in Fiji.
“As such the butter price in New Zealand fully influences the butter price in Fiji. What we call Rewa Butter, Madam Speaker is in fact butter that is already made in New Zealand. It has been done from Mr Ram Chand’s days, always has been done.
“For years, Madam Speaker, Rewa Dairy as it was known then has always had protection. Rewa Dairy has always brought in bulk butter at zero rated duty. They paid VAT when Rabuka Government introduced VAT. And then in order to protect Rewa Dairy, there was a duty on fully packaged butter brought in from overseas by other companies like Anchor Butter etc and the duty protection rate Madam Speaker, was 27 per cent.
“The duty protection existed all these years prior to that. It is completely false to aggregate the sale of or the divestment of shares of Rewa Dairy which became Fiji Dairy to the import duty placed.”
He further pointed out that the average landed cost of butter slabs duty free ranged from $13 per kilogramme and went as high as $14.48 per kilogramme in 2017 compared to $8.88 in the beginning of last year.
This happened because the price of butter worldwide has gone up.
“It’s okay to go to people in Vanua Levu to spin things as you want to spin, but when the facts are presented he is now making all this sorts of noise,” Mr Sayed-Khaiyum retorted after Mr Prasad continued to attempt to interject.
“Fact is that duty on butter is the same as it was when it was Rewa Dairy and the fact of the matter is and I can present all of this in writing and it can be verified by an independent third party that the world price of butter has gone up,” Mr Sayed-Khaiyum said.