Chicken Industry

Astral looks to produce tinned chicken

South Africa’s largest poultry producer, Astral Foods, is planning a canned chicken product to rival tinned pilchards and sardines.

According to Business Report, Astral CEO Chris Schutte told a media briefing that the canned chicken product is still in its infancy and the company is planning a trial run.

Speaking after the release of the company’s interim results, Schutte said Astral was not planning its own canning facility but would use a third-party canner. Astral is considering a canned chicken product to compete with 410g tins of fish.

The announcement follows comment by the Competition Commission’s Essential Food Price Monitoring Report that South African consumers were buying more canned pilchards as their preferred protein option.

“While chicken is still South Africa’s favoured protein source, canned pilchards have gained renewed popularity as consumers adjust their food expenditure in response to the rising cost of living and the effects of load-shedding on their ability to store perishable foods,” the report said.

However, Schutte told the Sunday Times that canned pilchards were not replacing chicken, which remained better value.

“We have seen a swing in sales in the past six months because people were afraid of buying frozen stuff because it might go off because of load-shedding,” he said.

Not discussed is the issue of value added tax (VAT). Canned pilchards (80% of which is imported) will enjoy a 15% price advantage over canned chicken, because pilchards are exempt from VAT and chicken is not. If local chicken is to compete fairly with foreign pilchards, tinned chicken must be VAT-free.

Both Astral, the country’s largest chicken producer, and Quantum Foods, the largest listed egg producer, have published improved results for the six months ended March 2024. Both companies noted improved electricity supply and reduced feed costs after a disastrous 2023, but warned that without a vaccination programme bird flu could devastate chicken flocks again this winter.