The benefits of large-scale poultry production were spelled out this week by the SA Poultry Association (SAPA).
The statement, by SAPA’s Izaak Breitenbach, was in response to the Competition Commission’s market inquiry into the poultry industry. The inquiry includes an examination of the industry’s structure and level of concentration.
Large-scale poultry production helped keep chicken prices affordable for consumers, Breitenbach said. This was the most widely implemented organisational structure in the global poultry industry.
“Size and scale are what enable the production of affordable protein around the world. It is the large integrated producers who ensure that smaller producers can access affordable, high-quality day-old chicks,” Breitenbach said.
“Integrated players subsidise poultry sector public goods, from the biosecurity training for smallholders to capital-intensive national cold-chain and processing capacity, which would simply not be feasible if these operations were fragmented across hundreds of small operators.”
The Commission’s concern that integrated players “gatekeep” inputs was misplaced. Integrated firms supplied critical inputs to contract growers, carrying the investment risk while growers received day-old chicks, feed, veterinary guidance and a guaranteed offtake.
“Far from locking out independent entrants, these arrangements lower barriers to entry by removing the need for small farmers to finance hatcheries, feed mills or expensive cold chain infrastructure before they can farm or potentially accessing prohibitively expensive services that are not part of an integrated chain.”
The commission should not lose sight of threats that actually constrained competition, Breitenbach said. He cited dumped chicken imports, excessive feed costs driven by global markets, load shedding, failing logistics and the cost of disease outbreaks.
He called on the commission to partner with the poultry industry to mobilise blended finance schemes, scale up independent hatchery capacity where feasible, and design smart incentives that encourage integrators to expand supplier and owner-operator pathways.
“South Africa’s poultry sector is a vital engine of jobs, rural livelihoods and food security. It contributes an outsized share of agricultural output and supports more than 134,000 people across the value chain,” he explained.
Rather than attacking the operational realities of poultry production, he hoped the inquiry would be “a targeted, evidence-based process that protects consumers from unfair imports, holds commercial players to transparent standards, and supports investment, transformation, and rural employment”.
“This balanced approach will strengthen competition not by breaking scale, but by ensuring scale works better for South Africa’s economy and its people,” Breitenbach said.
