In the on-going chicken war between local producers and importers, the old adage that the best means of defence is attack seems to hold true. This as the Association of Meat Importers and Exporters (Amie) takes its case against the South African Poultry Association (Sapa) and local frozen chicken producers to the Competition Commission (CC). In turn, this was a battle plan to beat an application already brought by Sapa for tariff hikes on frozen chicken imports from Brazil and Argentina. Amie’s complaint was that SA chicken producers were using the International Trade Administration Commission (Itac) and customs duties to remove import competition from the market. And there were other alleged anti-competitive practices, according to Dave Wolpert, CEO of Amie. “These included price manipulation in vertically integrated businesses (between feed producers and chicken growers) and exclusionary practices in the transportation of chickens,” he said, noting that major producers have exclusive contracts with specific transporters and no other truckers can get in the door. This latter, he told FTW, seemed to be the one that the CC showed most interest in as an anti-trust practice – against the competition law that promotes or maintains market competition by regulating anti-competitive conduct by companies or bodies. And the latest news in this action by Amie, Wolpert told FTW, is that the CC had posed a number of questions to the importers, to which they had to reply before last Friday. Bringing us up to date on the Sapa complaint to Itac, Wolpert said that nothing had yet been gazetted about the chicken growers’ request for an increased duty. “So it’s still in the process,” he added. However, he also felt that the importers of frozen chickens and chicken products were not actually using cut prices as a tool to beat the price of local chicken. “We don’t think it’s a price factor at all,” Wolpert said. “Our records show that imports are actually landed at a higher price than local products.” What really gave them the sales edge was that local chicken growers were sticking to internal business models. “They produce water-injected products, which the consumers really don’t want,” said Wolpert. “That’s what’s really at stake.” This all followed a previous call from Amie for a market inquiry into the poultry sector. Wolpert has already suggested that the poultry industry could probably benefit from such an inquiry to establish just what it is that renders local producers unable to compete effectively. At the same time, it would have to take into account the effect of imports on local businesses and consumers. And, indeed, the fact that SA currently imports more than 20 000 tonnes of boneless chicken each year for the processing and food service industries would seem to indicate that there is definitely a market gap that the local industry doesn’t fill. The chicken war carries on. INSERT Major producers have exclusive contracts with specific transporters and no other truckers can get in the door.
