Statement: Chicken importers must reveal “substantial” profits

Released: 30 May 2022

FairPlay has challenged chicken importers to reveal their “substantial” profits and to say how much they have invested in expanding their industry and creating local jobs in South Africa.

FairPlay founder Francois Baird made the challenge during a media briefing on 30 May. 

Baird noted that, for the past six years, chicken imports have averaged R6 billion per year.

“If chicken importers sold those consignments for only 10% more than they paid – and we think it’s more because we believe their profits are substantial – then they are making R600 million a year. Every year, for the past six years.

“What have they done with R3.6 billion over the past six years? 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?”

Baird directly challenged Paul Matthew, CEO of the Association of Meat Importers and Exporters, to give these answers.

“AMIE’s business model seems to be to buy low and sell high – the low prices at which they import chickens are not passed on to consumers. We have repeatedly called on AMIE to cut their profit margins to make chicken more affordable to consumers, particularly lower income shoppers for whom chicken is their preferred source of meat protein.

“They have never replied. I think journalists should go and ask Mr Matthew those questions,” Baird said.

Izaak Breitenbach, head of the broiler division at the SA Poultry Association, was an invited speaker at the event.

He said that, during negotiations for the poultry sector master plan, the local industry had committed to investment and expansion targets, and the creation of local jobs.

“The poultry industry has committed to investing R1.5 billion, of which R1.14 billion has already been completed. Most has already been spent on expanded production capacity. We have so far created more than 1 300 jobs. We report on these figures regularly to the EOC and DTIC who audit and verify our efforts,” Breitenbach said.

Dismissing claims by Matthew that poultry producers were making profits at the expense of the consumer, he said a recent study by Genesis Analytics had found that for the past 10 years producers had not made enough profits to invest back into the industry.

He also referred to Matthew’s claim that chicken prices had risen by 17% in the past year, and his implication that producers were profiting while consumers suffered. Price increases had been forced by rising feed prices, which made up 70% of a producer’s input costs.

“Feed prices went up by 20% and Brazil has raised chicken prices by 23%. Our increases are far lower than Brazil – our industry is actively fighting price increases,” Breitenbach said.

Amanda Mdodana, a small-scale poultry farmer, called on consumers to support local producers and buy local chicken.

She said chicken was being imported at prices with which local farmers could not compete. She  knew of 500 small-scale farmers, each employing a minimum of three people, who were at risk of closure.

If import tariffs were removed, as importers have requested “then local businesses will close and jobs will be lost,” she said.