Chicken could become more expensive if industry's tariff request gets go-ahead

South Africa's chicken industry wants government to implement tariffs on chicken imports, the Competition Commission's Poultry Market Inquiry reveals.

This comes despite the fact that South Africa is struggling to produce enough to meet local demand.

Tariffs are generally passed along to consumers, which would make the key protein source more expensive for households already under severe financial pressure.

Year-on-year, meat went up 11.3% as of August. Chicken is generally seen as a cheaper source of protein than other meat types.

Statistics South Africa does not specifically provide input into chicken in its consumer price index for August.

The Commission recently announced a formal market inquiry into the sector, which will begin on a date still to be communicated.

The inquiry will dissect the entire value chain of an industry that is the largest contributor to the agricultural sector, with an annual gross value of nearly R72 billion in 2022 and employing approximately 134,000 people.

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According to the Commission's published terms of reference, local broiler producers maintain that tariffs and anti-dumping duties "are necessary to protect local producers and preserve employment against ‘unfair’ imports."

However, this stance seems contrary to the Commission's clear warning that such protectionist measures “can negatively affect consumers generally, and low-income consumers in particular, who rely on chicken as a key source for protein”.

The market is dominated by a handful of major players.

Preliminary data shows that the four largest chicken producers – Astral, RCL, Country Bird, and Sovereign – account for nearly 63% of the country’s total chicken production.

The Commission noted that the industry “appears to be dominated by few, large and vertically integrated companies,” with features that may “impede, restrict or distort competition”.

The inquiry will also scrutinise pricing dynamics.

Feed constitutes the most significant cost driver, and the Commission has observed that, while producers have struggled to recover costs when feed prices spike, they have also “not transmitted lower feed prices to the price of chicken meat”.

The industry has recently faced severe challenges, including avian flu outbreaks and load-shedding.

The Commission notes that, with no recent power cuts, production has since rebounded to 21.4 million birds slaughtered per week in 2024.

In response to the inquiry, JSE-listed Astral Foods has stated it will “engage constructively with the inquiry process,” while clarifying that “this inquiry is not an investigation into anti-competitive behaviour”.

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