Retailers opt for local poultry

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Representatives of Woolworths, Pick n Pay, Shoprite Checkers, Spar and Nando's were called by Parliament's trade and industry portfolio committee to account for their chicken-purchasing policies on Tuesday as part of the committee's hearings into the poultry industry crisis.

The government, poultry producers, meat importers, animal feed producers, agricultural economists and others have also made submissions.

Fast-food retailer Nando's said it used locally produced chicken only to support the local industry and to ensure the products were fresh. It was concerned about the sustainability of the local industry, which had undergone a consolidation.

"This has led to fewer role players, with smaller and medium-sized operations at risk," said Nando's. The company said it would like to see imported products held to the same quality and safety standards as the South African industry.

Pick n Pay representative Gerhard Ackermann said less than 3% of the retailer's poultry products were imported. Most imported products in SA were sold at independent retailers and on the informal market, he said.

Spar representatives said the retailer imported 21.9% of its poultry products in 2017 at a value of R125m, up from 14.2% for R66.5m in 2016. About R447m was spent on local poultry in 2017. The average gross margin on poultry had fallen to 8.84% in 2017, from 9.54% a year ago.

"The Spar group's import policy is to support local producers first and only as a last resort, to import if products are not available locally," it said. The group also argued for stronger health and safety audits on imported chicken.

"Maize shortages, cost of electricity and inconsistent water supplies are some of the huge challenges local producers are facing to compete with imported poultry," said Spar.

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Shoprite Checkers, which has about 60% of the formal retail market in frozen chicken and 30% in fresh chicken, said 97% of the chicken it sold was locally produced. It said the average margin on individually quick-frozen chicken had varied from -2% to 2% over the past 12 months.

Shoprite Checkers' fast-food chain Hungry Lion used locally produced chicken only. It imported only when there was a shortage of specific cuts. The imported products were mostly used in value-added items. Shoprite Checkers said the local industry needed to grow its export markets and was pricing fresh chicken too high.

Woolworths' head of fresh foods Julian Novak said all the chain's fresh, frozen and rotisserie chicken was locally sourced. As an ingredient in other products 95% of the chicken used was also local.

Source: Business Day