It’s be­com­ing a game of chicken for lo­cal pro­duc­ers

Saturday Star - - NEWS - KASHIEFA AJAM

SOUTH African re­tail­ers who are sell­ing dumped chicken at prices marginally cheaper or at sim­i­lar prices to that of lo­cally pro­duced birds will not only con­trib­ute to the de­struc­tion of the in­dus­try but are putting the health of their con­sumers at risk.

Lo­cal far mers have to com­ply with a long list of re­quire­ments to en­sure the chicken that goes to mar­ket is safe and trace­able.

But when re­tail­ers buy dumped chicken, they don’t know where it comes from and whether it has been re­frozen af­ter be­ing repack­aged.

This, ac­cord­ing to Chris Schutte, chief ex­ec­u­tive of As­tral, the largest chicken pro­ducer in the coun­try, poses a po­ten­tially dev­as­tat­ing health risk.

“We’ve just seen with the Brazil­ian meat scan­dal what can go wrong. And in a coun­try where we have un­em­ploy­ment of 27% and ris­ing, it makes no sense for re­tail­ers to sup­port the Euro­pean in­dus­try at the cost of their own cus­tomer base.”

Mike Schus­sler, chief econ­o­mist at Econ­o­mists.co.za, says re­tail­ers are wors­en­ing the prob­lem by al­low­ing price sup­pres­sion.

“Pre­vent­ing lo­cal sup­pli­ers from ad­just­ing prices ac­cord­ing to agri­cul­tural cir­cum­stances is not fair and causes ir­repara­ble harm.

“In the long-term, it’s of great eco­nomic im­por­tance that lo­cal busi­ness sup­ports the lo­cal in­dus­try.”

Sho­prite spokesper­son Sarita van Wyk says the chain pro­cures more than 98% of its chick­ens from lo­cal farm­ers. “The re­al­ity, how­ever, is that the con­stant high de­mand for chicken out­strips sup­ply in South Africa. We have to im­port very small quan­ti­ties when needed.

“The amount of im­ported chicken we sell in our stores ac­counts for less than 2% of the to­tal amount of chicken im­ported into South Africa. In com­pli­ance with la­belling reg­u­la­tions, a la­bel iden­ti­fy­ing the coun­try of ori­gin is af­fixed to the prod­uct.”

The pro­cure­ment of lo­cally pro­duced prod­ucts will al­ways be a pri­or­ity for Sho­prite, she says.

Schutte, how­ever, says it’s sim­ply not true that the South African in­dus­try is un­able to meet the de­mand.

“We not only can pro­duce enough chicken to ful­fil the per capita de­mand, we have sub­stan­tial spare ca­pac­ity. It sur­prises me that a lo­cal re­tailer would choose to buy for­eign dumped chicken when here at home there is more than ad­e­quate sup­ply.

“Why would RCL Foods scale down pro­duc­tion if the de­mand out­stripped the sup­ply?”

David North, the group ex­ec­u­tive of cor­po­rate af­fairs and group strat­egy at Pick n Pay, says all its chick­ens are pur­chased from rep­utable sup­pli­ers with strict qual­ity con­trol. “We sup­port South African pro­duc­tion in this and other ar­eas.”

Mark God­frey, the group fi­nan­cial direc­tor for Spar, says all its stores are in­de­pen­dently owned but the listed com­pany does not buy any im­ported chicken.

“Spar it­self is not pay­ing any im­porters for chicken, but the in­di­vid­ual own­ers of stores may be. The own­ers are not obliged to buy from par­tic­u­lar sell­ers.”

Yes­ter­day, it was re­ported that 13 of Rain­bow Chicken’s 22 farms on the Dur­ban-to-Pi­eter­mar­itzburg N3 route are up for sale.

The far ms have al­ready been taken out of pro­duc­tion, cost­ing 1 350 people their jobs. The price tags for the farms range from R9 mil­lion to R60m.

The poul­try farm­ing gi­ant stated that be­cause of the in­creased vol­umes of dumped chicken flood­ing the mar­ket, pri­mar­ily from the EU, it had been forced to scale down its op­er­a­tions in Ham­mars­dale.

Scott Pit­man, RCL spokesper­son, con­firmed the sales to In­de­pen­dent Me­dia, say­ing the com­pany had also closed one of two shifts at its Ham­mars­dale plant. Re­trench­ments took ef­fect at the end of Jan­uary.

Although Deputy Pres­i­dent Cyril Ramaphosa re­cently told Par­lia­ment that the govern­ment would try to save be­lea­guered poul­try farms, RCL has main­tained it won’t go back on its de­ci­sion to put the 13 farms up for sale.

It is not wait­ing for the govern­ment’s in­ter­ven­tion.

“The farms have al­ready been taken out of pro­duc­tion and the staff re­duc­tions took ef­fect by the end of Jan­uary, so there is no staff left on the farms,” Pit­man says.

It’s be­lieved that if chicken dump­ing from the EU is not halted within the next eight to 12 months, more than 130 000 people will lose their jobs and the in­dus­try will prob­a­bly fold.

Dur­ing an in­tense de­bate in Par­lia­ment this week, SA Poul­try As­so­ci­a­tion chief ex­ec­u­tive Kevin Lovell said ur­gent ac­tion was re­quired and pro­posed that mea­sures be put in place to re­duce im­ports by at least half.

This would still make im­ports the third-largest source of chicken prod­ucts on the lo­cal mar­ket.

Of all the chicken con­sumed in the coun­try, 26% was im­ported and 45% (240 000 tons) were bone-in chicken por­tions, Lovell re­vealed.

The EU im­ports rep­re­sented 81%. “We are the EU’s biggest ex­port des­ti­na­tion (rep­re­sent­ing) more than 19% of their (chicken) ex­ports,” Lovell said.

Marthi­nus Stander, chief ex­ec­u­tive for Coun­try Bird Hold­ings (CBH), the coun­try’s third-largest poul­try pro­ducer, says the in­dus­try is “on the brink of col­lapse”.

CBH gave no­tice in Au­gust last year that it would close down its Mahikeng abat­toir, which it ac­quired in 2006 when the pre­vi­ous com­pany, Agrichicks, went into liq­ui­da­tion, em­ploy­ing about 1 500 people.

“I t ’s a very hard de­ci­sion if this com­pany that you re­sus­ci­tated, you have come to the con­clu­sion that you have to close its doors.

“The rea­son for that is very specif­i­cally the un­con­trolled sub­sidised dump­ing of por­tions into the SA mar­ket by the EU.”

Chick­ens at a poul­try farm. Lo­cal pro­duc­ers are fac­ing tough times with the dump­ing of meat from abroad.

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