Chicken import war
In its papers the Meat Board says the applicant “has little interest in supporting the local poultry industry and that it insists upon allocation of a quota well in excess of what it is entitled to”.
10 September 2019 | Justice
In his particulars, signed on 24 May this year, Sarel Oberholzer asks the court to review, correct or set aside the decision by the Meat Board to allow him to import only 5.963, 5.608 and 5.194 tonnes of chicken for the months of April to June this year.
Oberholzer's company supplies frozen chicken to the Namibian Defence Force and school hostels across Namibia.
“In order to meet its needs in respect of frozen chicken, [African Meals Catering] requires no less than 100 tonnes monthly. Given that insufficient frozen chicken is produced in Namibia, [African Meals Catering] is constrained to import its monthly chicken requirements from South Africa,” Oberholzer's court documents state.
'Premium' price of N$10
He told the court that other importers “such as Deep Catch are permitted to import more than 20 times as much” and that he is then forced to buy this chicken “at a premium of at least N$10 a kilogram,” which he says costs him N$600 000 a month.
He attached a letter from his lawyer, Mark Kutzner of Engling, Stritter & Partners, to the Meat Board, dated 18 September last year, to this effect.
In its response on 27 September 2018, the Meat Board said it had approved imports of 6.966 and 8.649 tonnes for September and October last year.
Oberholzer says he buys 25 to 30 tonnes of local chicken from Namib Poultry Industries but his permissible imports have been reduced monthly.
This, he says, limits his right to constitutionally protected trade.
By way of its general manager Paul Strydom, the Meat Board hit back with a scathing affidavit in which it describes the procedures for quota allocations. These, Strydom says, are based on a formula and are allocated without “fear or favour”. Currently, the maximum allowable imports are 1 500 tonnes monthly.
Enough local stock
Strydom says that Oberholzer claimed that “insufficient chicken is produced locally and he is constrained to import his monthly chicken requirements from South Africa”.
Attached to his affidavit is a letter from the commercial manager of NPI, Pieter van Niekerk, confirming sufficient local stock. The letter is dated 10 July 2019.
Van Niekerk says: “Stockpiles for the last year have been in excess of 1 000 tonnes, currently standing at 1 686 tonnes. We can supply more than 100 tonnes on whole birds or any portion of the whole bird.”
Strydom told the court that “it follows that [African Meals Catering] has little interest in supporting the local poultry industry and that it insists upon allocation of a quota well in excess of what it is entitled to with consequent prejudice to other importers (including those who give local support).”
There are currently more than 60 importers in Namibia and the total quota is shared between these companies. The allocation of quota is made by the Meat Board based on the current demand, local supply, the importer's historical market share over a period of 12 months, and the extent of the importer's purchase of locally supplied poultry in the two months preceding the application.
Low local support
Strydom is of the view that Oberholzer is well aware of the formula and yet, “expects preferential treatment”.
“Increased quota,” Strydom writes, “can only be achieved by buying locally.” Moreover, the quota can be increased if the importer provides proof that no local product is available. This, he says, Oberholzer did not do.
“I dispute [Oberholzer's] claim to giving local support. During the past 24 months, 116.3 tonnes were bought, an average of 4.8 tonnes per month of which 59% were bought over the last four months.”
With respect to Oberholzer's claims of his constitutional rights as well as “unreasonable, unfair or irrational restriction to his right of trade”, Strydom told the court that “in light of the obvious rationale and purpose behind the import restrictions, clearly made and implemented in the interest of Namibians, he disputes those grounds.
He also asked the court that the matter be dismissed because the allocations that Oberholzer wanted set aside had already expired at the end of July, having been valid for only 30 days.
In closing, Strydom also made it known that as of 1 July this year, the Meat Board would no longer manage the poultry marketing promotion scheme and the management of import permits.
Last week, before Deputy Judge President Hosea Angula, Oberholzer's counsel filed a notice that it would bring an application on 30 September to compel the Meat Board to provide the full records it has on African Meals Catering.
The matter was postponed to Wednesday of this week for a status hearing.
Tobias Louw from Theunissen, Louw and Partners appears for the Meat Board while the government attorneys act for the two ministers.
Oberholzer made the news some years ago when it came to light that he was part owner, along with former Windhoek mayor Matheus Shikongo, in August 26 Logistics at the time it was awarded the tender to supply food to the Namibian Defence Force. The then Tender Board had not given the ministry of defence an exemption to bypass it in the N$5 billion tender. Oberholzer is also a director of Natural Namibian Meat Producers, which operates the abattoir at Aranos. At the time of its establishment, Shikongo was a shareholder but it is not known whether he retains those shares at this time.
The matter of chicken imports has been in the news of late, in particular with the South African Poultry Association trying to have import restrictions removed in the Namibian High Court in spite of asking for increased protection in their own country, and the recent revelation that roughly 5 000 tonnes of chicken were imported illegally into the country last year.