In the latest clash over a very lucrative beef export quota, accusations are flying thick and fast with the country’s major beef company Meatco accused of employing strong arm tactics in a situation analogous to David versus Goliath.
WINDHOEK – A fight over the beef export quota to Norway has again erupted between the country’s national and largest beef exporting company, Meatco, and the small independent meat processing company Witvlei Meat.
The two companies are now jostling for the 2014 export quota, with each not happy with the 50-50 sharing formula, a compromise brokered through Cabinet in 2010 when the two companies’ bickering over the lucrative beef quota first surfaced. The date of November 18 has now been set for a panel of analysts to hear submissions from the two companies on the issue.
Meatco’s chief executive officer Vekuii Rukoro was not prepared to publicly comment on the dispute yesterday when approached by New Era, unlike the managing director of Witvlei Meat, Hendri Badenhorst, who accused Meatco of making unrealistic promises in a bid to muscle Witvlei Meat out of the Norwegian export market.
Sparking the latest spat is a letter from Rukoro to the Meat Board of Namibia, which administers the quota, asking that Meatco be allocated an increased portion of the exports destined for Norway. In the letter, which was availed to New Era, Meatco argues that the “current allocation detracts fundamentally from the very purpose for which the Norwegian government extended this facility to Namibia, namely to benefit the greatest number of Namibian producers.”
The letter stresses that the current equal allocation “is grossly discriminatory against the close to 100 percent of Namibian producers who market their cattle through Meatco, and is therefore, morally and legally indefensible.”
Both Meatco and Witvlei Meat have formally applied for their share of the quota for the period January 1 2014 to December 2014. Last year Witvlei Meat and Meatco exported 675 tonnes each to Norway, which makes up the 1 350 tonnes quota allocated to Namibia. However, Meatco argues that the 675 tonnes is only equal to 3 percent of its total production while for Witvlei Meat it equals 73 percent of total production.
Badenhorst, in an interview with New Era, charged that Meatco is not capable of delivering on their promise of some N$100 million incentives that Meatco promises producers if it gets a lion’s share of the beef export quota to Norway. Badenhorst says the promise is “in the category of fiction”. He said Witvlei Meat has invested heavily in the community of the town and ploughs back big chunks of its annual profit of some N$1.6 million into various ongoing projects that keep the town alive.
“It is obvious that Meatco as the big player wants a monopoly and thus has come up with a false promise to producers of becoming shareholders and reaping unrealistic benefits. Witvlei Meat has made it categorically clear that we respect Cabinet’s decision, and are happy with the 50:50 distribution,” said Badenhorst.
The meeting set for November 18 follows an unsuccessful meeting of October 30 between the two meat processing companies. Roelie Venter and Andre Mouton, the two experts in the field of cost effectiveness of the European market, mediated the meeting. The meeting did not reach any binding agreement.
“We are eagerly awaiting the meeting of November 18, and we reserve our right to make our submission to cabinet if needed at the appropriate time. We expect of the Meat Board to honour Cabinet’s decision and to announce the 2014 quota,” he said.
The October 30 meeting proposed that the quota allocation should be revised, based on capacity. According to this formula Meatco is supposed to receive 90 percent of the quota while Witvlei should receive 10 percent. Such an allocation, Venter and Mouton argued, would result in producers receiving cash benefits of between N$80 million and N$100 million. Badenhorst has questioned the formula, calling it a misconception to fool producers.
Meatco nevertheless argues that Witvlei Meat does not pass onto Namibian producers the benefits accrued from the lucrative Norwegian market, with the profits instead benefiting individual shareholders some of whom are foreigners. It is an allegation Badenhorst shot down saying: “Witvlei Meat has no foreign shareholders and there is no talk of unfair advantage to us.”
By Deon Schlechter