South Africa’s poultry sector faces a pivotal year in 2025, with efforts focused on increasing local production, expanding exports, and improving consumer affordability. The Department of Trade, Industry and Competition (DTIC) Poultry Master Plan outlines these objectives, which aim to address persistent challenges while bolstering food security and economic growth.
Proposed VAT Exemption of Poultry Products
The South African Poultry Association (SAPA) and the Association of Meat Importers & Exporters (AMIE) have together submitted a proposal to National Treasury for specific chicken products, such as frozen bone-in portions and offal, to be exempted from Value Added Tax (VAT).
The submission argues that this measure could make chicken more accessible to low-income households struggling with high food prices.
SAPA’s broiler division General Manager, Izaak Breitenbach, said the VAT exemption could lead to a 15% price reduction which will stimulate demand for these cuts. However, he noted that avian influenza outbreaks had already driven chicken prices up by 8%, reducing per capita consumption to 3.2 kilograms annually.
“The VAT exemption would significantly improve affordability for consumers, but the financial implications for the National Treasury make it uncertain,” Breitenbach said.
The proposal aligns with President Cyril Ramaphosa’s November commitment to expanding food items in the VAT-free basket.
“Among the measures to ensure that all South Africans have affordable access to sufficient food, the government is looking at whether the basket of food items that are exempted from VAT could be expanded to include more basic products,” Ramaphosa said during his annual address to the National Council of Provinces last month.
However, its success remains in doubt, as critics cite the risk of misuse—a key reason similar initiatives have failed in the past. SAPA is, however, seeking to avoid this by aligning its submission with the regulations.
Export Opportunities
South Africa’s poultry industry has been a contentious market. Although there are explorations into export opportunities for breast meat to the European Union (EU), the United Kingdom (UK), and Saudi Arabia, local production capacity must first be sufficiently developed.
Breitenbach is optimistic saying “These markets hold significant potential for revenue diversification.”
While this is the ideal way forward for any growing economy, it must be taken into consideration that South Africa currently does not produce enough poultry for its own consumption. Although new export markets for South Africa would be great in growing the sector, there is a lot of work that needs to be done. Looking at the latest year-on-year trade statistics from SARS, there has been a decline of 6.25% in South African origin chicken exports, with bone-in chicken still being the leading poultry export commodity.
On the other side, Avian Influenza outbreaks continue to pose a threat to the industry, not only locally but also internationally. SAPA has introduced stricter hygiene protocols, farm monitoring, and rapid response mechanisms to mitigate future risks.
The future for sustainable exports and disease management would be implementation of regionalisation and compartmentalisation. This practice would, however, need to be implemented bilaterally to import and export markets.
Broader Economic Challenges
South Africa’s greylist status has emerged as another hurdle for the poultry industry. While the country has made progress in addressing some of the Financial Action Task Force’s concerns, significant challenges remain.
“Being on the greylist means stricter financial checks, which could discourage foreign investment and slow economic growth,” Breitenbach said.
This increased scrutiny has implications for the agricultural sector, including the poultry industry, which relies heavily on international trade and investment.
ABSA’s latest AgriTrends report expects poultry price increases to ease after double-digit increases in 2022 and 2023, as a result of an expected stronger ZAR and robust growth in production by key global suppliers such as Brazil. Ongoing disease issues hold an upside to this view and have the potential to exert upward price pressure and disrupt traditional trade rhythms associated with broiler meat. Locally, a cycle of lower feed prices is likely to improve margins which could stimulate supply. This could add to keeping a lid on substantial price increases over the medium term.
There is also a growing concern over the industry’s diminishing market access for imports, potentially leading to higher prices and supply shortages, with additional markets recently closed due to HPAI outbreak.
On 11 December 2024, The Department of Agriculture, Land Reform & Rural Development (DALRRD) issued three new poultry trade restrictions for New Zealand, Denmark, and the Netherlands due to Avian Flu outbreaks.
Other countries currently restricted due to Avian Flu include the United Kingdom, Israel, Germany, Hungary, France, Zimbabwe, Belgium, Sweden, Canada, Chile, and Australia.
Poultry imports are necessary for securing access to high-quality, affordable protein for South African consumers and ensuring the nation’s food security. Despite efforts, the local poultry industry cannot meet the demand and rely on imports to bridge the shortfall.
Chicken accounts for approximately two-thirds of South Africa’s meat consumption. The country consumes an estimated 23 million chickens weekly, of which 19 million are locally produced.
Imports, primarily from Brazil, meet about 20% of local demand. Any disruptions to Brazilian exports could significantly impact affordability and disrupt South Africa’s food security in respect of this staple protein. Mechanically Deboned Meat (MDM), especially critical for the manufacturing industry, plays a vital role in providing lower LSM consumers with the option of affordable protein through the manufacturing of polony and other processed meat.
Growth Potential
Between 2024 and 2030, South Africa’s poultry market is projected to grow by 5.8% annually, driven by rising demand from households and the food service sector. Despite challenges such as high feed costs and power supply issues, opportunities exist in value-added products and innovative farming practices.
The VAT-free chicken proposal has sparked debate, with some experts suggesting it could shift consumer preferences from red meat to poultry, potentially altering market dynamics.
Industry experts including EasyChicken Club’s Flo Masoane, and Dr. Gustav Brink, have called for more support from the government to help local poultry producers compete in the market in 2025 going forward.
Collaboration between government and industry remains vital. The Poultry Master Plan (PMP) exists on paper but there are not many sustainable initiatives demonstrating the development of emerging poultry producers.
The AMIE transformation initiative under the banner of the AMIE Academy shows promise, but it focuses specifically on trading not only poultry, but all meat products. However, it exemplifies how the industry can make a change when funding is applied with the right goal in mind – a net positive impact and sustainable development.
“Despite its challenges, the poultry industry is poised for meaningful progress in 2025,” Breitenbach said. “With targeted reforms and expanded market access, we can position this sector as a cornerstone of South Africa’s agricultural economy.”
Balancing Act – Local Producers and Poultry Imports
In a recent podcast interview, Dr Gustav Brink highlights the challenges presented between domestic poultry supply and poultry imports.
Despite these challenges, poultry remains vital for food security in South Africa. Creating balanced competition between locally produced and imported poultry is crucial for food security sustainability and affordability for the South-African consumer.
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