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Bachoco Q1
on June 22, 2016

South Africa chicken sector at odds over brining limit

Proposed regulations are scheduled to take effect in October

The proposed regulation of brining levels is the latest area of disagreement among members of South Africa’s poultry industry.

The potential regulations  were announced by the Minister of Agriculture, Forestry and Fisheries, Senzeni Zokwana, in April and are due to come into full effect in October.

Brining is the process in which chicken is injected with a salt-water solution, which extends its shelf-life and improves its appearance to the consumer.

The new regulation for both fresh and frozen poultry meat states that total brine injection for whole carcasses is limited to a maximum of 10 percent, and for individual portions to no more than 15 percent. Products must be labelled accurately, for example, “chicken with brine based mixture,” and manufacturers must carry out tests to ensure compliance with the new water uptake and injection limits regularly, and keep the records for at least a year.

South African Poultry Association opposes proposed rules

According to a report in BD Live, the South African Poultry Association (SAPA) is still hoping to stop the Department from implementing the new brining rules. SAPA, which represents the country’s poultry producers, says the regulations will force them to produce more chicken for the same level of revenue, which would adversely affect their profitability, or they will have to increase prices for hard-pressed consumers.

Association of Meat Importers and Exporters of South Africa has another view

Also claiming to support poor consumers is the Association of Meat Importers and Exporters of South Africa (AMIE SA) but it presents a different argument.

“AMIE calls on local industry to stop exploiting consumers by pumping their chicken with excessive salt water and in turn compromising their welfare,” said the association's CEO, David Wolpert. “People want chicken for their chicken. Saltwater and spin does not feed (a) family.”

He added that producers should sell smaller packs of chicken pieces at current prices.

“SAPA continuously and hysterically attempts to discredit imported chickens as ’waste', knowing full well that imported chicken quality is far superior to the local equivalent that is literally swimming in water,” added Wolpert, who claimed that the local industry is adding as much as 40 percent salt water to chicken products.

South African poultry sector faces additional challenges

Until the financial impacts of the government’s proposed brining legislation can be fully assessed, investors are holding off on further commitment to the poultry industry in South Africa, it has been reported. Profitability for most players is widely expected to be adversely affected by the new rules. However, the brining issue is just one of a number of challenges facing the poultry sector in South Africa.

Following protracted negotiations, agreement was reached between South Africa and the United States in January of this year, and the first shipment of U.S. poultry meat for more than 15 years was exported to South Africa the following month.

Shortly after that, feeling under even greater pressure from poultry meat imports, SAPA initiated an Agricultural Safeguard Action against bone in chicken portions imported from the European Union, according to AMIE, an initiative that the traders are opposing.

RCL Foods, owner of Rainbow Poultry, warned in its latest financial report about the challenges ahead from the local poultry market being “significantly oversupplied.” While its chicken business had mitigated costs against future lower revenue and the business had performed well, its profits were down 15 percent. The report added that “the sharp increase in the price of soft commodities used in poultry feed was to a large extent effectively hedged in this reporting period, but will significantly affect feed cost going forward.”

Latest half-year results from poultry and animal feed company Astral Foods revealed a drop of 1.5 percent in its poultry division’s revenue, and a 22 percent decline in overall operating profit.

Astral’s chief executive warned that future financial performance could be hit by the effects of local drought on feed supplies and competition from imported poultry meat.

On the prospects for the future performance of the South African poultry industry, Astral commented that demand for poultry will continue to be constrained due to limited consumer discretionary spend and weaker seasonal poultry consumption patterns.

Local broiler production is likely to be cut back as an imbalance is caused between supply and demand as the result of the high level of poultry imports and rising prices of locally produced feed ingredients following a prolonged and severe El Niño-related drought. Furthermore, weakness in the local currency, the rand (ZAR), has been inflating the cost of all imported supplies, including corn, soybeans and poultry genetics, according to Astral.

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