Local poultry industry proves its competitiveness – tariffs and production growth easing prices

The imposition of the tariffs on chicken imports and the substantial increase in the production of poultry in South Africa have had the desired effects of exerting downward pressure on the retail price of locally produced chickens, which is, in turn, enhancing their value proposition to hard-pressed consumers.

By Eustace Mashimbye, Chief Executive Officer of Proudly South African

These developments are not only boding well for the sustainability of the poultry industry and its ability to retain and create much-needed jobs across the sector’s value chain, but moreover, they are debunking the misconception that locally produced goods are not price competitive compared to their import counterparts.

Over the past 10-odd years, the poultry industry in South Africa has faced significant challenges precipitated by unabated dumping of highly subsidised chicken imports, widespread power constraints and interruptions in South Africa, and severe drought conditions that hampered profitability.

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Unfair imports hurting local producers

The unfair trade practises that some European importers adopted did not make matters any easier for the local ailing poultry industry. For example, some European producers reserved mechanically deboned meat, such as chicken breasts and fillet, for their local markets where the demand is stronger for this portion of meat and shipped bone-in chicken or brown chicken carcasses to emerging markets such as South Africa, where consumption of chicken wings, thighs and drumsticks is buoyant.

Having already generated profits from domestic sales, the bone-in chicken is shipped, thawed out and repackaged, often with misleading claims that dupe locals into believing that the meat has been packaged or even produced in South Africa.

Due to the poor handling of these chicken imports, which are thawed and refrozen during the transportation and packaging process, the meat subjects unsuspecting consumers to harmful bacteria and pathogens such as Salmonella and Campylobacter, which have been widely reported to cause severe foodborne illnesses.

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Poultry’s contribution to the economy

At Proudly South African, we are acutely mindful of the crucial role that the local poultry industry plays in the economy and its contribution to the well-being of millions of South Africans.

Chicken is the most widely consumed animal protein in South Africa and provides the most affordable source of animal protein to consumers. Secondly, it is the single largest contributor to the Gross Production Value (GPV) of agriculture, contributing more than R68 billion in revenue in 2024. Thirdly, it is the biggest offtake of animal feed, with broiler production accounting for around 50% of total feed produced by members of the animal feed manufacturers association in South Africa.

Industry protection yielding results

In a bid to protect our local industries from the onslaught of unfair trade practises and provide them with the space to scale and become globally competitive, we have been advocating for increased import tariffs across sectors where local producers are buckling under the strain of unfair trade practises such as dumping, which are crippling the local industries and leading to job shedding.

The poultry industry is one such sector where we have been vocal about the urgency of insulating the sector from predatory and unfair competition by calling for sustained investment and structural reform, increased production and for the government to protect the industry through tariffs. The signing of the Poultry Industry Masterplan is yielding the desired outcomes and has given the industry the space to ramp up production levels exponentially while reducing chicken retail prices for consumers.

According to the South African Poultry Association, the imposition of these tariffs and improved technical efficiencies have given the industry the economies of scale to be globally competitive and to match and exceed the price points of chicken imports. This has seen the imports of bone-in portions declining substantially from 287 000 tonnes in 2018 to less than 40 000 tonnes by 2024 after a sustained period of rising imports, which were core to the industry being declared in distress.

Affordable and sustainable protein source

The rising production levels and the decline in retail prices are giving consumers an opportunity to confidently opt for locally produced chicken and poultry products without pricing being the key purchasing determinant.

Locally produced chicken and associated poultry products have one of the lowest environmental footprints and feed conversion ratios (FCR) among livestock. The farming of poultry in South Africa is governed by stringent animal welfare standards that meet international norms, which prohibit the farming of broilers in cages and forbid the feeding of hormones to chickens.

For the hard-pressed consumer that must stretch their shrinking disposable income to juggle rising fuel and electricity costs and spiralling food prices, poultry products provide the most cost-effective animal protein and the lowest cost protein available to consumers. Data from the National Agricultural Marketing Council confirms that the cost of chicken in South Africa is competitive compared to beef and pork abattoir prices, making chicken a viable option for consumers looking for affordable meat alternatives.

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Buying local supports jobs

Consumers in our country can now take comfort in knowing that they can pay competitive prices for quality and ethically produced local chicken and poultry products from retail shelves bearing the Proudly South African logo, in the full knowledge that their purchase is also helping to boost a resilient and competitive industry that is creating jobs and sustaining livelihoods across its entire production value chain. This further strengthens our long-standing rallying call for consumers across all sectors of society to buy local when making purchasing decisions, whilst also reconfirming what we have always advocated for, which is that local is not always more expensive, and our efforts, as a collective, can help ensure that our competitive industries become more competitive and sustainable.