A chicken shortage caused by bird flu would be an opportunity to increase pilchard sales, says Oceana, producers of the popular Luck Star brand of canned pilchards.
While chicken producers are battling, Oceana says sales of canned pilchards have increased by 8% over the previous 11 months.
In an investor call reported on by Business Day, Oceana CEO Neville Brink said the company had taken market share from chicken and could react to any chicken shortage by importing more pilchards. It would keep prices low because price was a key driver of consumption.
As FairPlay has pointed out, chicken and pilchard are popular protein sources for lower-income households. The key difference is that pilchards are exempt from South Africa’s 15% value added tax (VAT), while consumers must pay that extra 15% for every piece of chicken that they buy.
FairPlay has repeatedly stated that chicken prices could be reduced immediately if the government removed VAT from the chicken products which have been a staple for low-income households.
Oceana states that less than 10% of their pilchards come from South Africa. By comparison, chicken production is a massive local industry, employing more than 50 000 people directly and supporting probably as many indirectly. Chicken feeds the nation, accounting for 66% of South Africa’s meat consumption.
High food prices have made the need for “VAT-free chicken” all the more urgent.
