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Thursday, 2 September 2010   |   Issue: Vol.26 No.175  |  Friday, 20 November 2009
News
The Multi million Pula chicken fight

Some senior government officials have found themselves caught up in a game of big shots in the lucrative poultry industry in a case that was probably going to reveal top secrets and fall-out between big guys Peter Kirby of Richmark Poultry and


 
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The ban was to take effect today
At the centre of the saga, that was likely to push chicken meat prices skyrocketing, are three major players - Irvine's Botswana, Ross Breeders and Richmark Poultry.

In an affidavit Peter Kirby, Managing Director of Richmark Poultry, who is also chairman of Botswana Poultry Association, states that the Ministry of Agriculture went out of its jurisdiction to impose a ban on the imports of DOCs, something that falls under the Ministry of Trade and Industry. He accuses officials at the ministry of colluding with the two companies - Irvine's Botswana and Ross Breeders - to impose the ban despite low production that does not meet demand to the advantage Ross Breeders.

Kirby says that at a "secret meeting" held in Francistown, sometime in March, a certain Dr John Moreki of the Ministry of Agriculture and representatives of Ross Breeders and Irvine's Botswana agreed to impose the ban without the input of other stakeholders and Poultry Association of Botswana, which monitors the local poultry market. He alleges that the meeting was held at Irvine's hatchery in Francistown.

"The two aforesaid hatcheries called for this meeting and sought to influence the Ministry of Agriculture to impose and enforce a ban on the importation of DOC's. Against the heels of the aforesaid secretive meeting, Dr John Moreki issued a notice for a meeting to be held either on the 31st August or 1st September 2009 to discuss issues pertaining to the poultry industry in Botswana" he says in the affidavit.  He added that another meeting was held in Palapye on 10th September where it was revealed that a "customer' had written to the ministry stating that they were producing a surplus of hatching eggs, which are currently sold as table eggs instead of being hatched to produce chicks. "At the 10th September meeting it then emerged that the customer was Ross Breeders and this alone poses a question of the impartiality or otherwise of the ministry," he says.

Kirby says that he was informed that the Ministry of Agriculture wanted the attendees to agree impromptu to the ban of the importation of DOCs from outside Botswana and to buy from a local company, namely Ross Breeders. "It was indeed stated that Ross Breeders had written to the ministry requesting them to effect the said ban as a matter of urgency," he says. He says that there were two versions to the minutes of the Palapye meeting, saying the ministry officials have distorted what transpired. "Of interest is that the minutes from the ministry were not passed, signed and adopted by the attendees," he says in the affidavit. Another meeting was held on October 20 at Maharaja in Gaborone and once again the ministry officials distorted the minutes.

Furthermore, Kirby says that another meeting held on November 10 disbanded in chaos, after officials from ministry refused to listen to the voices of other stakeholders but showed bias towards the two companies. Who are the players?

According to Kirby, the two companies are the major players in the poultry industry in Botswana. He says Irvine Botswana concentrates on hatching and sale of DOCs, whilst Ross Breeders does hatching and also competes with Richmark in rearing of broiler chickens and selling of chicken meat on the market through its sister companies. He says Ross Breeders is linked to Tswana Pride (Pty) Ltd, Dikoko Tsa Botswana (Pty) Ltd and Coldline (Pty) Ltd. He says there are some persons who are directly or indirectly involved in spearheading these enterprises. "One major person who features as a shareholder and/ or director of them all is Abdul Satar Dada who is a shareholder and director of Tswana Pride (Pty) Ltd and other shareholder therein is his company, namely Associated Investment and Development Corporation (AIDC) (Pty) Ltd of which he is also shareholder and director.  He is also a director of Dikoko Tsa Botswana and again AIDC is a also majority shareholder," he says in the affidavit.

Kirby states that one Yusuf Dada appears as director in Tswana Pride and Dikoko Tsa Botswana. "Abdul Satar Dada is also director of Ross Breeders Botswana," he adds. He says Dave Gilbert features as director of Ross Breeders and he coordinates the enterprises in the poultry industry in Botswana. He reveals the names of other stockfeed suppliers linked to the Ross Breeders (Pty) Ltd.  "It is clear therefore that this group of companies is moving towards dominating the supply of stockfeeds and given the way this group has influenced the Ministry of Agriculture to ban importation of DOCs, it is most likely that one day a directive will be issued that there is need to protect infant stockfeed industry and be instructed to buy all stockfeed from Ross Breeders," he says.

He further alleges that the group of companies has established a cartel that controls the poultry industry in Botswana as it has influence over the Ministry of Agriculture. "It cannot be gainsaid that this group of companies has a dominant position through one or more of them and possesses economic and bargaining strength in the poultry industry and on the market. The cartel is such that Ross Breeders is the main company which is involved in the laying and hatching of eggs," he says.  He disclosed how the companies are linked and the manner in which the group operates. "Tswana Pride (Pty) Ltd, Dikoko Tsa Botswana (Pty) Ltd and Ostins (Crescent chickens) all receive DOC's from Ross Breeders to rear up to maturity so as to be ready for the abattoir.  Coldline is the vehicle through which Tswana Pride and Dikoko Tsa Botswana market and sell frozen chicken meat," he says. He reveals that the burning down of Tswana Pride abattoir at Notwane around May this year has caused shortage of frozen chicken. The abattoir is yet to open. "The above scenario completes the cycle of market dominance in favour of the aforesaid group of companies," he says.

Quality and quantity of chickens
To an ordinary man, chicken is chicken - it is either fat or skinny - 'finish and klaar'. However, according to Kirby, who says he studied medical technology, there is a breed called COBB chicken that has good all-round meat portions, has biggest breast meat and mostly preferred in retail shops.  "The COBB chicken is recognised as the best in countries like South Africa, United States of America, and Brazil," he says. The two companies, he adds, are unable to provide him with his preferred breed, as he can only get a third of what he needs. He says for the past four years he has raised the issue of quality with his suppliers - Ross Breeders - but there is no improvement. He says the breeds they He says the breeds they supply to him are costly to maintain and have a high mortality rate before they reach 10 days. "The chicks were small and therefore uneconomic with stunted growth, they have different genetic constitution from COBB," he says. Kirby stated that they challenged the ban on grounds that it is the Minister of Trade and Industry who can make the decision in this issue and not director of Animal Production or his department. He says it is trite that the Ministry of Agriculture, let alone a departmental director, cannot arrogate to themselves powers, which are specifically vested in the Minister of Trade and Industry.

Richmark produces 50, 000 oven ready chickens per week, employs 350 people and has investment worth P40 million, Kirby says. He adds that his company spends P24 million annually on stockfeed and has secured the upper end of the market because of good quality chicken meat. "The high turnover of Applicant's chicken meat is directly attributable to the high quality of COBB chickens," states Kirby.

Justice Tafa also ruled that the parties should enter into negotiations and/or consultations with respect to the timeframe within which the permission and/or authorisation to import shall lapse. Each party was ordered to pay for the costs.
Shame Taimu represented Richmark and there were no replying affidavits because the Attorney General (AG) did not oppose the application.

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