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SA misses chicken-panel deadline as Sapa mulls appeal

Sep 21 2016 16:28
Tshepiso Mokhema and Loni Prinsloo

(iStock)

Company Data

ASTRAL FOODS LIMITED [JSE:ARL]

Last traded 190
Change 2
% Change 1
Cumulative volume 1426
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

RCL Foods Limited [JSE:RCL]

Last traded 9
Change 0
% Change 4
Cumulative volume 10046
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - The agriculture ministry missed a court deadline to determine if poultry producers can sell down current stocks of brined chicken before regulations that cap the amount of the liquid in birds start next month. An industry body said it’s considering appealing a separate court decision not to postpone the rules’ start date.

READ: New chicken row brewing in SA

On September 12, the North Gauteng High Court in Pretoria ordered that the department set up an appeals board that should hear and rule on the South African Poultry Association’s (Sapa's) request on stocks by Wednesday, a court order showed. Sapa was informed that the panel was established on September 19 but it hasn’t set up a meeting because a member is unavailable, Kevin Lovell, chief executive officer of the body, said by phone on Wednesday.

Separately, the court today refused the association’s request to review the new regulations and suspend the 15% cap on brining altogether, according to Amish Kika, a lawyer at Fairbridges Wertheim Becker, who represented the Department of Agriculture, Fisheries and Forestry.

Some of the frozen chicken on the country’s supermarket shelves has brine content that exceeds this level because it was produced before the lower cap was introduced, and if these stocks are destroyed rather than sold, R500m to R2bn of “safe, edible and nutritious food” will have to be thrown away, Lovell said last week.

Companies affected include Astral Foods [JSE:ARL], the nation’s largest producer of frozen chicken pieces. Astral has started reducing the amount of the solution in its poultry portions to 15%.

Today’s judgment that the regulations will start on October 22 “reflects that the minister in this instance took into account important considerations like food security alongside food safety, and accordingly considered the interest of consumers,” Kika said in an emailed response to questions.

The department is allowing RCL Foods [JSE:RCL], South Africa’s largest chicken producer, to deplete its existing stocks of chicken with brine levels exceeding 15% after the October 22 introduction of the cap, according to Lovell.

The court also ruled against delaying the new regulations by eight weeks to allow companies to prepare new packaging and comply with administration.

“We believe that the industry is about to suffer a major contraction, that food security will be reduced and that jobs will be reduced in our industry,” Lovell said.

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