Court proceedings were launched after former Namibia trade and industry minister Calle Schlettwein restricted the country’s monthly chicken imports to 600 tonnes in April 2013. While the figure was subsequently raised to 900 tonnes last October (2014), South African producers have baulked at the move.
The South African Poultry Association (SAPA), South African poultry exporters Astral Foods, Supreme Poultry, Crown Chickens, Afgri Poultry and Rainbow Farms have legally challenged the restrictions, claiming they protected the Namibian industry in contravention of World Trade Organization (WTO) agreements, including the General Agreement on Tariffs and Trade (GATT); the Southern African Development Community (SADC) Treaty, SADC Protocol on Trade 1996; and Southern African Customs Union (SACU) Agreement.
The case was originally heard in Namibia’s High Court, in Windhoek, last November before Judge President Petrus Damaseb, where parties discussed issues of document discovery. SAPA CEO Kevin Lovell said the parties were "sparring over validity issues", but that his association would pursue the case. "We consider the Namibian market important enough to expend time and money to regain the access we have lost and which loss we feel is for reasons not supported by the applicable laws," he told GlobalMeatNews.
No date has yet been set for a new hearing to decide the substance of the case. Industrialisation, trade and small and medium enterprise (SME) development minister Immanuel Ngatjizeko said the government continued to prepare its case.
Damaseb’s preliminary judgement noted the restrictions affected SAPA members while Namibia Poultry Industries (NPI), as the country’s largest producer, would benefit.
He stressed NPI had invested more than NAD600 million (USD48 million) in establishing a local Namibian industry and industrialising the economy in line with the government’s Vision 2030 economic development plan. The investment created 540 permanent jobs and another 100 indirect opportunities via services and manufacturing.
"It is obvious therefore the impugned notice is intended to protect NPI ostensibly in pursuit of an industrialised policy," the judgement stated.
In a paper entitled Regional Dimension of Competition in Poultry published by the South Africa-based Centre for Competition Regulation and Economic Development and released in November, Tatenda Zengeni said growth in poultry demand in Africa and producers’ ability to absorb labour had attracted significant investments into the sector.
The industries in Namibia, Botswana, Zambia and Zimbabwe were increasingly controlled by South African producers, he noted, but there had been government intervention in those countries to support domestic players.
"The cartel and abuse of dominance cases, which have been brought in South Africa against some of the largest regional producers, suggest the industry is prone to anti-competitive behaviour, and warrants careful competition law scrutiny if the potential benefits of developing effective regional value chains (which leverage existing cost advantages) and rivalry in this sector are to be achieved," the report concluded.