15 Feb 2023

Fair play in the poultry industry, including the sale of fertile eggs, day-old chicks and chicken feed manufacturing has improved ever since a study into the sector was carried out to correct the then existing anomaly.

A study conducted by the Ministry of Trade and Industry through the Competitive and Consumer Authority revealed that there were currently two major producers of fertile eggs and day-old chicks in the country, while broilers and layers were produced by various establishments and retailers in the market.

Answering a question in Parliament on Tuesday, trade and industry minister, Mr Mmusi Kgafela said the study revealed some bottlenecks, among them protectionist policies used by early entrants to make it difficult for any new market entrants.

Mr Kgafela said some of the bottlenecks included requirement to seek consent from the existing players before one could seek permission to import.

He added that such existing players were already vertically integrated along the supply value chain and at the same time, competing with small players who were their customers.

“These existing players supplied day-old chicks and poultry feed, and it was almost impossible for new entrants to import feed.

This makes it very difficult for small players to compete with their master suppliers,” he said.

Mr Kgafela said the study however, made a number of recommendations, some of which have already been realised.

He said some of the positives from the recommendations were that more producers of feed were able to enter the market, which reduced the high cost of feed.

“More producers of day-old chicks also entered the market and this also brought down the cost of day-old chicks, and because of evident business opportunities in the market, this attracted more market entrants in the production of day-old chicks and poultry feed manufacturing,” he said.

Mr Kgafela said there were currently about 260 poultry projects across the country, majority of which were small scale broilers, while poultry feed manufacturers were currently seven.

The minister said the poultry sector still had a lot of opportunities for small businesses within the various sectors of supply value chain.

As a ministry, he said they were content that the sector no longer had the monopoly or duopoly like it was prior to the implementation of the Competitive Act.

“Due to allegations of restrictive business practices especially collusion of pricing, the ministry and the Competitive Consumer Authority are carrying out an investigation in the manufacturing and supply of poultry feeds,” he said.

He added that the investigation and its legal process would be complete in August and results would be shared with Parliament.

Minister Kgafela was responding after Member of Parliament for Palapye, Mr Onneetse Ramogapi wanted to know if there was any monopoly in the poultry sector, and if any, what the ministry was doing to rectify the situation.

Mr Ramogapi also wanted to know if the ministry would consider investigating and reporting the findings. ENDS