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Open Animosity Between Chicken Importers, Producers Intensifies

24 March 2017

SOUTH AFRICA - The open animosity between chicken importers and producers intensified on Thursday as both blamed each other for the crisis facing the poultry industry in South Africa.

According to Enca, the South African Poultry Association (Sapa) and the Association of Meat Importers and Exporters (Amie) joined unions and government departments in briefing Parliament’s portfolio committee on trade and industry during public hearings on the crisis.

Sapa argued that the EU was illegally and unfairly dumping bone-in chicken portions in South Africa, and that if government does not intervene and possibly increase tariffs, the jobs bloodbath will continue across the industry value chain.

“You can’t stop behaving badly that’s why you catch them so they stop behaving badly. We can’t stop the Europeans dumping, we can only catch them,” said Kevin Lovell, Sapa chief executive.

“Who benefits from the dumping? It’s very hard for us to know for sure. It’s a combination of the importer and the retailer…some importers actually live in Nettleton Road, which is the richest road in South Africa…”

“Do importers take away jobs? Yes, clearly we demonstrated that.”

Amie hit back, saying the crisis facing the industry and the possible resultant job losses was not due to imports.

“Jobs losses cannot be based on dumping, the job losses are based on inefficiencies in their operations,” said Amie chairman Georg Southey.

Mr Southey said the pressure being felt in the poultry industry was “self-inflicted” and continued to argue strongly against another safeguard or increase in anti-dumping duties.

“The safeguard should not be put in to protect an uncompetitive and unproductive industry,” he said.

“Our request is not to give protection to an industry that may not need it.”

Country Bird Holdings (CBH) chief executive Marthinus Stander insisted the industry was “on the brink of collapse”.

CBH, South Africa’s third largest poultry producer, 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.

“It’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,” said Mr Stander.

CBH had since been approached by the department of trade and industry to halt shutting the doors of the abattoir.

“We are hanging in there,” he said, adding that if the abattoir closes, 1,605 direct and indirect jobs would be lost.

“I think the stress is unbearable. I write a monthly magazine that goes to all our employees and every month and I’ve got to say hang in there and you can feel it, you can see it, it is very tough out there.”

He said EU imports had “skyrocketed” since 2008 and local producers were unable to compete with the “sheer volume” of bone-in chicken portions coming from Europe.

“No matter how competitive you are, even if we produce a whole bird at the cheapest price in the world, we cannot compete with a dumped product.”

Mr Stander said they had approached the EU in Pretoria to explore the opening of its markets to South African breast portions, but acknowledged they were unlikely to ever export to the EU.

“The simple fact is breast is their crown jewel, that is the product that they can sell at three to six times more than the dark meat into their own market, because that’s a preference of that market, so they protect that.”

Mr Stander said the banks were also currently “in limbo” in terms of coming to the aid of the industry.

“You know what banks do when the sun is shining, they hand you umbrellas, when it starts to rain they want the umbrellas back.”

They waiting for a signal – the signal is something substantial, something concrete that we can say this is what the government is doing and supporting us in our struggle to cope with the unfair, illegal situation of that dumping,” he said.

The industry, said Mr Stander, was in desperate need of a decision to alleviate the stress the industry was under.

“The brown meat, the portions, that is our crown jewels, because whether you are black or white or rich or poor in this country that’s the stuff we eat. The bone-in portions that’s what we braai, that’s what we potjie, that’s what we stew, that’s what we curry.”

The unions also called for intervention from government, but added that ordinary South Africans, the private sector and retailers should “come to the party”.

“We need a mass campaign to popularise Proudly South African. Here’s a good chance to bring it to life,” said Congress of South African Trade Unions’ Matthew Parks.

Mr Parks called for the immediate cessation of retrenchments, saying those who had already been laid off should either be reemployed or redeployed.

“There must be equal commitment around consumer prices. We can’t leave prices as is. Often retailers make killing at expense of producers.”

The Food and Allied Workers Union argued that tens of thousand of jobs should not be sacrificed for “a few hundred storage handling jobs” in the import and export industry.

ThePoultrySite News Desk



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