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Retail chains accused of shunning local producers
23 October 2006
IRIN

Acknowledgements: FANRPAN acknowledges IRIN as the source.


LUSAKA, 23 October (IRIN) - The region's farmers allege that South African food retail chains setting up shop in their countries have a "step-brotherly attitude" towards local produce.

"We are deeply concerned and very much disappointed with some of these South African food outlets, who are refusing to sell Zambian agricultural products," said Guy Robinson, president of the Zambia National Farmers Union.

South Africa's Shoprite Group of Companies is the largest food retailer Africa, with 846 outlets in 17 countries across the continent.

A survey by the South African Institute for International affairs (SAIIA), a Johannesburg-based think-tank, conducted in nine African countries, including Mozambique, Botswana, Ghana, Egypt, Angola, Mali, Senegal and Kenya, found that 10 percent or less of the food products in some stores was sourced locally.

"The widest criticism of the South African retailers is that they have established relatively few linkages to local business," said Hany Besada, a researcher at the SAIIA's 'Business in Africa' section. "Part of the problem is that the stores have a very stringent quality control process and the products that are sold off the shelves require capital intensive investments [which many African countries are unable to make]."

Shoprite maintained that it supported local fruit and vegetable farmers in countries like Namibia, Zimbabwe, Zambia, Malawi, Mozambique, Tanzania, Uganda and Mauritius. "Progress has been made in sourcing local vegetables in most African countries. As far as fruit is concerned, the challenge for ... local suppliers in Africa is to develop existing and potential sources of subtropical fruit in order to increase [Shoprite's] production".

South African food retail outlets used allegations of "poor quality" and "lack of capacity to provide the required quantity" to justify turning down local producers, according to the Farmers Union of Malawi (FUM), "which is false - they did not even try our produce before rejecting us," claimed FUM director Benito Eliasi.

Despite negotiations brokered by the Malawian government, the retailers have not been forthcoming. "They even import potatoes for their stores," Eliasi complained.

Although neighbouring Zambia has continued to attract a lot of investment from South Africa and other countries because its pro-market policy, which treats foreign investors to lengthy tax holidays, local farmers said they had benefited little from retail food outlets and eateries.

High income tax, expensive diesel and steep electricity tariffs mean Zambian farmers do not make a lot of money. Securing ready markets for their produce is also a major problem. Although President Levy Mwanawasa's administration has made strides in promoting agricultural production in the country, analysts said not much had been done to create a corresponding market for produce.

"We have very few options as to where we can sell our products, and this is why it absolutely does not make sense to bring in potatoes from South Africa for making chips [French fries], or bring in so many bananas, vegetables and tomatoes when we are growing plenty of these foodstuffs here", Robinson commented.

Consumers also point out that it would make better business sense to sell local fresh produce, as people know the products. Imported food has sparked a public outcry against a number of retail outlets in Zambia.

"There are certain times when we just want to walk into a food outlet and buy a purely Zambian dish, or when we receive visitors from abroad and they want something totally Zambian - but you can't find that in most of these food outlets," said Mary Zulu, a government worker in the capital, Lusaka.

"We are now being forced to go to open markets, where hygiene standards may not be at their best, but because we cannot get local foods in most of these supermarkets, we have no option ... It is like South African businesses are trying to impose their GM [genetically modified] oranges, bananas and chickens on us," she alleged.

"We Malawians like our potatoes, which make good chips, and we don't really appreciate the South African potatoes," complained Ines Tembo.

SAIIA's Besada pointed out that most of the retail stores catered to the upper end of the market. In poorer countries like Malawi, where most of the population lives on less than a US$1 a day, consumers preferred bargaining with local producers in informal markets. "They get good prices, and fresh vegetables and produce, which is not the case in the retail stores," said Eliasi.

Farmers have called for government intervention to protect local agriculture. "Inasmuch as the government is fighting hard to promote agricultural development, we feel there should be measures put in place to ensure that only foodstuffs that we cannot produce locally, like apples, are imported, not things like chicken, beef, fish or pork," said Muyunda Ililonga, president of the Consumers Association of Zambia.

"These are some of the trade imbalances that need to be checked as a matter of policy, to ensure that our local producers have a broader market to target for their products. It's time government started promoting the interests of the local producers, instead of just offering incentives to foreign investors at the expense of local businesses. It should not be just a question of Zambian consumers buying, but also of Zambian suppliers selling their produce," Ililonga added.

Like the Malawian farmers, others have decided to take matters in their own hands. "We are trying to set up our own chain of organic produce stores to support our small-scale farmers," said Eliasi.

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