The profits of chicken importers are coming under scrutiny. When Astral Foods, South Africa’s largest poultry producer, announced a substantial increase in profits last month, AMIE’s Paul Matthew suggested they were profiteering at the expense of poor consumers.
That was quickly disproved (although Matthew has not apologised or retracted his accusation).
However, FairPlay founder Francois Baird has challenged Matthew’s importers to reveal their own profit levels. As no importer is listed on the stock exchange, their results are not public, but Baird suspected they were “substantial”.
He noted that poultry imports had averaged R6 billion a year for the past six years. If importers had sold those consignments for only 10% more than they paid, they had made R600 million a year, every year, for six years.
“What have they done with R3.6 billion over the past six years?” he asked. “Expanded their business? Created South African jobs instead of buying imports which create jobs in Brazil and Europe? Or have they just enjoyed fat profits?”
The 10% markup is a very conservative guesstimate. If it was 20%, then importers would have pocketed R7.2 billion over the past six years. And the higher you go, the more billions they make. The true figure would be very interesting. Will they tell?
As low import prices are not passed on to consumers, FairPlay has repeatedly called on importers to cut their profits and enable lower chicken prices for low-income households who depend on it as their primary source of meat protein. The result, not surprisingly, has been silence.
Baird stated that, with food inflation rocketing worldwide, the best way to reduce chicken prices for the poor would be to remove the 15% value added tax (VAT) from the chicken portions most consumed by the poor.
“Scrapping VAT on those specific chicken portions will directly benefit consumers, particularly poor consumers, and scrapping VAT on chicken feed will directly benefit local chicken producers, particularly small poultry farmers,” he said.
Importers are not listening. We hope the government is.