As summer approaches, catering companies and stockvels will be clamouring to get the best poultry deals for clients and associate members.
For the informal market, the chicken wars are plutonic to their business. Whether the price of chicken increases or decreases, quality or no non quality, people will still buy chicken. But what are these chicken wars all about?
Imagine the headache the International Trade Commission of South Africa (ITAC) is sitting with – being a judge and jury in the ongoing chicken wars. On the left is the South African Poultry Association completely against chicken imports versus Ebiesa and Association of Meat Importers and Exporters (AMIE) embracing competition.
The South African Poultry Association (SAPA) is against dumping decrying the job losses this imposes. “If dumping of portions into our market can be stopped, there is significant empowerment opportunity” it said in an official statement.
Some believe SAPA is merely playing to the gallery. Chicken imports were apparently not the issue.
“What seems to be evident from the current back-and-forth accusations among all the role players is that there is a lot of uncertainty and disagreement about the true difficulties facing the chicken industry and what the solution to the longer-term future of the South African chicken industry is” said Trade Law Centre (Tralac) researcher Willemien Viljoen.
Chairperson of Ebiesa, Unati Speirs was unflinching in her respite for SAPA. According to Spiers SAPA was creating “the wrong impression of imports, as the imports satisfied more than 20% of the local market.”
SAPA vehemently disputed this and protested that there was a huge influx of bone-in chicken portions into the South African market. Effectively, this laid the ground in exterminating the local market as local producers were unable to compete. ‘This is fundamentally the reason SAPA requested ITAC to increase import tariffs from Brazil by 82%.’
The reality facing SAPA was that it is reluctant to transform. These ‘local producers’ to be affected were large corporations who were already benefitting from lower feed prices and production costs. Small-medium poultry farmers faced higher feed prices making their production costs inefficient said Spiers.
Paul Matthew Chief Executive Officer of the Association of Meat Importers and Exporters (AMIE) believed that the solution to this impasse was to allow trade protection to continue and allowing chicken imports to supplement where the domestic production falled short.
Clearly, the biggest people to benefit if ITAC was to relent was SAPA and a band of large poultry corporations said Matthew.
According to Spiers, there were creative ways for SAPA to ensure it meets the 20% shortage of chickens and small-medium poultry farmers would serve as a catalyst.
The South African Department of Trade and Industry set up a team tasked to put a long-term strategy to assist the industry in complying within the rules of the World Trade Organization. According to Viljoen, “there were a variety of policy options which could be utilized, including domestic support measures, trade remedies, structural reform, support for new entrants, government procurement, marketing and export promotion.” These chicken wars were from calling an armistice.