A Closer Look

Fairplay Perhaps not Playing Fair

The recent article that appeared on the Fairplay website on March 3 2022 (SA Industry says it can replace chicken imports click here cannot go unchallenged.

There are two logical fallacies that FairPlay insists of re-iterating at every opportunity: firstly that all poultry imports are either illegal, or unfair, or ‘dumped’, and that the 20% of poultry products that are imported are somehow impacting the local market so severely that poultry producers are battling to stay afloat.

Let’s take a reality check.- At the moment, there is only dumping because FairPlay says there is. The unproven dumping assertions, which have dominated the narrative since 2019, have led to such highly punitive import tariffs that the importing countries have been compelled to request an investigation. This investigation, conducted by the International Trade Advisory Commission (ITAC), has received submissions from the Association of Meat Importers and Exporters (AMIE SA) as well as the five affected countries (Poland, Spain, Ireland, Denmark and Brazil). The results of the ITAC investigation will be released in June 2022.

Until the ITAC investigation is complete, and the results are published, it is disingenuous for FairPlay to repeatedly refer to ‘dumped chicken imports’. There is, at the moment, no evidence that such a thing exists. And there does not seem to be any evidence that the poultry industry, which posts substantial profits every year, is battling to survive. There are reports occasionally of illegal imports that are seized by customs. But by continually using the terms ‘imports’, ‘dumping’, unfair trade’ and ‘illegal imports’ interchangeably, FairPlay is deliberately creating the impression that our local industry is drowning under a wave of predatory foreign chicken.

To therefore claim, as they do in their second logical fallacy, that imports are synonymous with job losses, damage to investment, expansion and job creation is equally disingenuous. There are a number of threats to the local poultry industry, but legal imports are not one of them. Our poultry industry has a structure unique in the world: the entire sector is manipulated by five large local producers. These producers have the ear of the government, dominate the discourse, control the market, regulate new entrants, choke off competition, and raise the barrier-to-entry for emerging farmers. Ours is also one of the most protected poultry industries in the world, posting large profits while declaring itself under pressure.

The article in question also makes the claim that imports are unnecessary because local production can meet domestic demand. Local production would never be able to meet domestic demand for three simple reasons: the local industry is regularly hit by avian flu that disrupts production; our local industry does not balance the carcass (ie separate out high-value chicken portions like breast meat and wings to export or to sell at a premium, while discounting low-value chicken portions like the brown meat and drumsticks), and it is completely at the mercy of external forces such as the exchange rate, and global supply-and-demand for elements such as imported chicken feed, machinery, antibiotics and fuel.

The poultry industry in South Africa has the potential to be a driver of growth, transformation, food security and export revenue for South Africa. Or at least, that is the vision in the Poultry Master Plan. But when a segment of that industry keeps perpetuating a fallacy of unfair competition in order to justify its lack of transformation and inclusiveness, It shows that the problems lie much deeper than that.

Leave a Reply