I refer to a number of your recent reports regarding job losses in the poultry industry. Job losses are tragic whatever their cause, and in our current dire economic climate, even more so. But let us at least be honest in our analysis of the primary causes.
Local poultry producers have indeed been hard hit by drought and consequently high feed prices, which have devastated their financial performances. However, this is a cyclical problem in a world where weather conditions are constantly changing at a time of unpredictable and severe climate change. Local producers therefore need to interrogate and modify their own business plans to limit the damage caused by such natural phenomena.
Depicting imports as a major contributor to their problems is disingenuous — imports do not dominate this sector of the economy, comprising less than 15% of local chicken consumption. They merely act as a balance between supply and demand and provide the South African consumer with a choice of unbrined product. They also act as a bulwark against rising poultry prices — again in the consumer’s interest.
Yet they are, and always have been, a convenient scapegoat during times of difficulty for local producers.
Second, there are two issues that are not even mentioned in your reports. SA is notorious for high brining levels — injecting chicken with a water and salt solution to "enhance succulence". This practice has been so abused over the years that brining limits have now been implemented by the government.
The practice has, over the last decade or so, driven out of business many local producers of both fresh and brined chicken that simply did not have the capital to compete, resulting in major job losses, another area where the finger has always been pointed at the poultry import industry. Much of the local industry’s damage is self-inflicted.
Then there is the issue of exports. Why does the embattled local poultry industry not export more than a few thousand tonnes per annum?
Unbrined product could easily be exported, with a major export drive and the enforcement of European health requirements. No customs duties would apply, and the weak rand would be of great assistance.
If successful, the attempts to intimidate the government into imposing higher duties on imported chicken can only have one outcome — higher chicken prices at the till, something hard-pressed consumers can ill afford.
We have regularly approached local industry representatives suggesting that we meet to discuss our differences and seek solutions to enhance the value and performance of the "chicken brand" in SA. All of our offers have been spurned, and responded to by way of media attacks and applications to the government to take action to limit imports.
It seems that this is their only response to healthy competition, to the detriment of consumers. It says much about the philosophy driving the local poultry industry.
CEO, Association of Meat Importers and Exporters of SA