Feathers fly as commission sniffs into chicken and egg industry

Trade union federation Cosatu and black farmers have thrown their weight behind the Competition Commission’s market inquiry into the poultry industry.

Their stance is in opposition to the one held by established businesses, which labelled the inquiry as an attack on chicken and egg producers.

The African Farmers’ Association of SA (Afasa), which represents aspirant small- and medium-sized black farmers, said the probe was akin to chickens coming home to roost, as emerging farmers often faced constraints when trying to make inroads in the poultry industry.

“If we embrace the principle of transparency, then we don’t have any problem with the Competition Commission getting into the nitty-gritty, looking at the value chain of the poultry industry,” said Afasa chief executive Thandeka Mbasa.

Her comment comes as Astral CEO Chris Schutte recently told Business Day that the probe was surprising as the industry was struggling with loadshedding, poor water supply, bird flu, and imports.

However, his comment did not deter Mbasa.

Investigation welcomed

“We do appreciate that the poultry industry has gone through a lot of difficulties [like] avian flu, loadshedding, etc,” she said.

“However, the challenges that our farmers continue to face as they try to make progress, which include the high input costs, the availability of hatcheries, and access to eggs, for instance, pose a challenge.

“Let the Competition Commission understand who the players are on the field. These issues are really an obstacle to our farmers’ progress.

“We welcome this investigation by the commission, and we would like to see our farmers empowered with the knowledge that will enable them to deal better with the realities of operating in this space.”

The inquiry was launched after the poultry industry saw millions of chickens being culled due to bird flu.

This resulted in a shortage of supply of eggs and chicken, which is South Africa’s most loved source of protein, resulting in prices shooting through the roof.

Cosatu spokesperson Matthew Parks said the probe would protect low-income households suffering from excessive pricing.

“We welcome the inquiry and support the work of the Competition Commission to root out anti-competitive practices in the economy,” said Parks.

“This is important to protect financially struggling working-class families from excessively high prices.”

“However, Parks said the probe should not have a negative impact on jobs.

Probe into the value chain

“While doing this, we need to also ensure we protect an important local industry and its jobs,” said Parks.

“We should avoid the temptation to remove measures that protect the sector and allow a flood of cheap, subsidised imports at the expense of badly needed local industries and jobs.

“The commission should take a holistic look and examine the entire value chain to ensure prices are fair and reflective throughout.

“The industry should have nothing to fear if they are not engaging in any anti-competitive behaviour.”

The commission said it was conducting a market inquiry into the value chain as it has reasons to believe there are features in the poultry market that may impede
distort or restrict competition.

The draft Terms of Reference for the Poultry Market Inquiry were gazetted on February 6, and members of the public and interested stakeholders were invited to make written submissions by no later than 4pm on March 8.

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