Frutas de Chile says the new royalty will impact the competitiveness of the sector
The Chilean fruit industry faces a growing threat to its international competitiveness due to increased operating and logistics costs, a lack of investment in the country’s water infrastructure, and increased tariffs in the US.
This was the message that Miguel Canala-Echeverría, general manager of Frutas de Chile, delivered to the government in discussions over a bill that seeks to establish a new port tax in the country.
Canala-Echeverría warned that the proposed royalty could seriously affect exports, noting: “Ultimately, the imposition of new taxes reduces the sector’s ability to compete globally”.
He said the new tax would be passed on to cargo, raising the sector’s logistics costs by an extra US$ 2.5-US$3mn each season. Instead, he said the government’s focus should be on increasing port efficiency, ensuring land access, road safety, and implementing third shifts. “Solutions must be generated to make logistics more efficient, and efficiency does not necessarily come from more taxes,” he noted.
Canala-Echeverría warned: “Today, the competitiveness of export fruit farming is at stake, as competitive pressures are increasing and other competitors have matched or improved upon Chile’s tariff preferences. We face challenges related to water resources, which are restricting our growth.”
He pointed to significant pressure from the increase in quarantine pests entering the country, primarily due to the illegal food trade, which results in higher production costs and jeopardizes access to international markets.
Canala-Echeverría noted that the increase in operating and logistical costs has affected the country’s competitiveness compared to its competitors. He highlighted the situation in Peru, where acreage has expanded considerably thanks to investments in water and port infrastructure. Peruvian growers also benefit from the Agricultural Development Law, which includes a 15 per cent reduction in income tax and accelerated depreciation of 20 per cent annually for hydraulic and irrigation infrastructure.
