Pork pulled back after crisis

31 March 2019 - 07:52 By PENELOPE MASHEGO
Meat hub: China has an annual pork market of $1-trillion. North-east production is forecast to reach 120-million pigs. Picture: REUTERS
Meat hub: China has an annual pork market of $1-trillion. North-east production is forecast to reach 120-million pigs. Picture: REUTERS

It has been just over a year since the world's largest listeriosis outbreak hit SA, but the crisis turned out to be a boon for the pork industry which last year saw its highest fresh meat sales in three years.

In just a few months shoppers who fled the cold-meats aisles turned to fresh pork, attracted by lower prices in the wake of the crisis. In March last year, minister of health Aaron Motsoaledi announced SA had a listeriosis outbreak and asked people to stop buying and consuming processed meats. Two hundred people died from listeria after eating ready-to-eat products.

Tiger Brands, which makes Enterprise processed meat products that were the source of the outbreak, reported a 26% loss in headline earnings for the year to September.

For Johann Kotzé, CEO of the South African Pig Producers Organisation, this marked the beginning of a challenging time for pork producers.

"We had the best prices ever and the most pigs ever sold. And all of a sudden, boom, we had this awakening call and this awakening call happened when the minister said 'avoid all ready-to-eat meats' and that is where the slaughter price went down," said Kotzé. speaking on the sidelines of the FNB pre-harvest briefing on Wednesday.

He explained that though the contaminated parts were the casings made for cold meats and the pig skin used to give polony products structure, people were wary of ready-to-eat pork products.

During the outbreak, abattoirs reduced their prices for pork per kilogram from about R28 to R18-R19. But this challenge opened up a new market for producers.

"About 20% of our market fell immediately when Enterprise was not there any more and [then] the recall," said Kotzé. "Eskort kept on going, so they pushed their market space [and] there was still pork going into that market but we believe we lost about 80% of that market when listeria hit. So that 80% went into the fresh side.

"So all of a sudden, you had an artificial oversupply because the market wasn't ready to absorb this."

Demand increased for fresh pork. Abattoirs slaughtered more pigs than planned, resulting in a record slaughter of 3.1-million in 2018 from 2.7-million in 2017.

"Our world in pork changed for the good because of the experience we had," Kotzé said.

The key to pork's comeback was low prices, which meant that consumers in the living standards measure (LSM) of between four to six could now afford quality cuts.

Kotzé said: "People are not afraid of pork or its myths. We've sold the most pigs ever in a very difficult time. Why? Because it was affordable, so people got exposed to it and all of a sudden people start buying."

Tiger Brands communications director Nevashnee Naicker said shoppers had resumed buying Enterprise products but consumption was not back to normal yet.