South African Poultry Association to Collaborate with Competition Watchdog

The South African Poultry Association (Sapa) has announced its full cooperation with the Poultry Market Inquiry initiated by the Competition Commission. This decision comes at a critical juncture for the industry, which has faced considerable turmoil and uncertainty in recent times.

Expressing initial skepticism, the industry has questioned the necessity of the inquiry and voiced concerns regarding certain statements and presumptions within the Commission’s announcement. However, Sapa remains committed to actively participating in the process, aiming to influence the terms of reference and eventual conclusions through the provision of comprehensive data, facts, and perspectives.

A key focus of the inquiry will be the issue of market concentration, particularly within the broiler and egg sectors, raising concerns about its potential adverse effects on both industry dynamics and consumer welfare. Sapa underscores the importance of providing insights into these matters, highlighting an underlying suspicion regarding the impact of concentrated market power.

One contentious point addressed by Sapa is the characterization of industry demands as “ongoing demands for bailouts through ever-increasing tariffs and the imposition of anti-dumping duties.” Sapa vehemently denies such assertions, emphasizing that the industry has consistently sought protection against unfair trade practices and dumped imports rather than bailouts.

A central challenge faced by the South African poultry sector is the formidable competition posed by imports, particularly from countries like the United States, where production capacities significantly exceed those of local producers. Despite efforts outlined in the 2019 Poultry Master Plan to address this issue, the industry contends that insufficient progress has been made in curbing imports and supporting local growth and job creation.

Addressing concerns raised by the inquiry, Sapa asserts that South African poultry producers remain highly competitive on a global scale. However, recent challenges such as soaring feed costs exacerbated by geopolitical events and domestic infrastructure deficiencies have significantly impacted profitability. As a result, the industry faced a year of no profits, with major companies experiencing substantial losses.

Despite these challenges, the poultry sector remains a cornerstone of the agricultural industry, contributing significantly to the nation’s economy. With a total annual gross production value of nearly R72 billion in 2022, it accounts for a substantial portion of both agricultural and animal product gross value, underlining its importance to the broader economy.

Source: Freigth News