POULTRY MARKET INQUIRY: INPUT SOUGHT ON DRAFT TERMS OF REFERENCE

POULTRY MARKET INQUIRY: INPUT SOUGHT ON DRAFT TERMS OF REFERENCE

• 07 February 2024
• Trade, Industry & Competition
• SA Legal Academy

The Competition Commission has issued a Government Gazette notice calling for input by 8 March 2024 on draft terms of reference for an inquiry into the entire poultry market value chain.

This is noting that, according to the document:

• ‘most of South Africa’s broiler chicken and egg products are produced by large commercial firms that are generally vertically integrated from the genetics and day-old chicks through to animal feed and … slaughter, processing, and distribution’, and that
• the 2019 Poultry Sector Master Plan – ‘as a negotiated agreement between the public sector and the industry’ – ‘cannot and does not seek to address the structure, outcomes and conduct … likely to be adversely affecting competition’.

Background information informing the draft terms of reference pays considerable attention to what is perceived to be an imbalance in the bargaining power relationship between dominant firms and their contractors, distorting market conditions.

Against that backdrop, it is envisaged that the inquiry will focus on:

• the pricing of and access to quality key inputs including genetic stock, parent stock, feed, eggs, day-old chicks (for both broiler and egg-laying hen rearing), abattoirs and cold chain logistics
• the impact of large integrated producers as the ‘gatekeepers of key inputs’
• the implications of possible imbalances in the commercial relationship between contractors and integrated producers at all levels of the value chain, affecting the growth and sustainability of small-scale producers and the emergence of independent competitors with market access, and
• the role of retailers, quick-service restaurants and processed food companies in facilitating new entry and access to markets by independent producers

Please click the links below for more information:

• Government Gazette notice
• draft terms of reference
• master plan

Published by SA Legal Academy Policy Watch

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