Business

Poultry industry oligopoly under spotlight

Government is expected to soon open up the poultry industry
 
Government is expected to soon open up the poultry industry

CA’s communications and advocacy manager, Gladys Ramadi recently told stakeholders that the price of chicken in Botswana is amongst the highest in the region due to tight restrictions that protect the dominant players.

This came after small poultry entrepreneurs expressed concerns at a stakeholder meeting that it was difficult to penetrate the local poultry industry as the country’s big players have agreements to lock out everybody else.

Ramadi said the Authority has conducted a study with three other countries, which confirmed that ownership in the poultry sector is concentrated in a few dominant players.

“The study revealed that ownership in the poultry sector is unique and complex. The largest poultry producers in Botswana have ties to South African producers, and domestic producers are no match to these huge firms at the breeder and processing   levels.

We have submitted some recommendations to the relevant ministry based on the study as one of our mandates is to advise government on competition issues,” she said. 

In response to whether the Authority has any mechanisms in place to deal with cross-border anti-competitive practices, Ramadi said the Authority collaborates with other competition agencies.

She noted  that last May, SADC competition authorities signed a memorandum of understanding that will facilitate the sharing of information and joint efforts in dealing with foreign companies that engage in anti-competitive practices across borders.

One of the dominant players in the local poultry industry is Tswana Pride, a broiler grower with an abattoir and distributes its products through its subsidiary company, Coldline.

Tswana Pride produces both the ordinary chicken meat for general household consumption and the processed (brined) chicken meat for fast-food franchise businesses.

Another player Richmark, which is in broiler production, is partly owned by Brink Holdings, which is in partnership with Pioneer Foods of South Africa.

On regulating prices of goods, the authority said it does not regulate prices, and in fact is against price control as prices in the market should be determined through demand and supply in a competitive environment.

“The Competition Authority will only intervene on prices when agents hijack the market by imposing artificial prices or engage in price fixing,” Ramadi said.