Competition Commission of SA to Conduct a Market Inquiry into the Poultry Industry Value Chain

Competition Commission of SA to Conduct a Market Inquiry into the Poultry Industry Value Chain
Photo: Food Safety Africa 09.02.2024 676

The Commission has reason to believe there are features in the poultry market that may impede, distort or restrict competition, according to its press release.

The antitrust agency invites members of the public and interested stakeholders to make written submissions by March 8 on the draft terms of reference (ToRs) for the Poultry Market Inquiry (PMI) that were gazetted on February 6.

The PMI will also examine the participation of small and medium-sized enterprises and historically disadvantaged persons in the poultry industry value chain.

“Market outcomes in the poultry industry matter, as chicken meat and eggs are a key source of protein for the majority of South Africans, and particularly low-income households,” 

says Competition Commission chief economist James Hodge.

A poultry market inquiry can complement other initiatives to improve the competitiveness of the industry to the benefit of consumers and smaller participants, he adds.

The PMI will start 20 business days after the publication of the final ToRs, and the final report will be completed within 18 months.

Details on the administrative phases of the inquiry along with Guidelines for Participation will be made available on the Commission’s website once the final ToRs are published. At that point, members of the public and businesses will be invited to provide written representations and information to the inquiry, the Сommission says. 

Chicken remains the most popular meat in South Africa, with domestic poultry production covering only 85% of consumption.

An outbreak of highly pathogenic avian influenza virus in South Africa in the summer of 2023 led to the death of a significant number of poultry in the country. A shortage of eggs arose, and stores were forced to limit the sale of eggs to single hands. A number of countries banned the import of South African eggs. As a result of the outbreak of avian influenza, the South African poultry industry suffered losses of about R9.5 billion.

Statistics South Africa’s latest inflation figures reveal that, in 2023, the price of eggs increased by 38%, chicken giblets by 18.3%, fresh chicken portions by 14.6%, whole chicken by 8.4% and individual quick frozen portions by 6.4% – all above average inflation for the year.

Industry players point to various challenges affecting the food supply chain in South Africa, including loadshedding, water shortages and shipping disruptions owing to the conflict in the Red Sea. All of these factors may contribute to higher prices for consumers.  

Sources: Compcom.co.za, Engineering News

food markets  South Africa 

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