WINDHOEK – The sensitive issue of sharing the 2014 beef export quota to the lucrative Norwegian market between three Namibian companies will be decided next week Wednesday.
The decision will however only be made after the final submissions have been scrutinised by a panel of experts. Meatco and Witvlei Meat have been at loggerheads over the 50/50 formula, approved by Cabinet in 2010. The battle for the much sought-after Norwegian market has since heated up with Brukarros Meat Processors (BMP) also applying for an unknown slice of the cake. The meeting slated for next week Wednesday, was agreed upon after the parties involved failed to reach any binding agreement on a similar consultative meeting on October 30, headed by two experts in the field of cost effectiveness in the European market, Roelie Venter and Andre Mouton. Meatco has since stressed 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. The debate between Meatco and Witvlei Meat over the 50/50 formula for beef exports to the Norwegian market in 2014 took a whole new turn recently when newcomer to the beef export business BMP applied for a portion of the quota.
The latest development in the battle for a piece of the sought-after pie could bring about another intense discussion when a panel of analysts will hear final submissions from all three applicants during a special consultation and discussion session next week Wednesday by the Meat Board, which administers the quota.
It will also mean that the 50/50 formula, approved by Cabinet, will have to be revised before the quota allocations are announced for the 2014 exports. Manager of BMP Salomon Nemaire said his company obtained full access to the EU market on January 26, 2009 and has since been exporting some 200 tonnes of prime lamb and venison products to Norway. The stakeholders of BMP are a consortium of individuals and Namibian-based companies and the company officially opened its doors in January 2008. The plant has a official slaughter capacity of 1 500 sheep per day with a deboning operational capacity of 300 carcasses per day. The majority of sheep and lamb carcasses are, however, marketed in neighbouring South Africa. The BMP plant is situated on the farm Coenbult, 20km outside Keetmanshoop. Meanwhile, the largest beef exporting company, Meatco, and the small independent meat processing company Witvlei Meat have been involved in a bitter battle over the 50:50 formula. Without disclosing the percentage BMP has applied for, Nemaire said it will initially be “just a small portion of the quota.”
Last year Meatco exported only 3 percent of its total production to Norway, while Witvlei Meat exported 73 percent of total production. Witvlei Meat last week expressed its satisfaction with the 50/50 formula, but 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. Meatco also wants a review of the 50/50 sharing formula for the 2014 quota allocation, arguing that in terms of the volumes it slaughters it cannot share the export quota equally with Witvlei.
In 2012, Meatco’s two export licensed abattoirs produced 104 524 tonnes of beef of which it could only export 675 tonnes to Norway under the 1 350 tonne quota allocated to Namibia. This translates to about 3 percent of its total production. This, according to a 2011 submission of Meatco to the Permanent Secretary of Trade and Industry led to the company’s revenues decreasing by approximately N$35 million during the 2011/2012 financial year. Meanwhile, Witvlei Meat shot down allegations that the current allocation has resulted in an unfair advantage to an individual business and its shareholders that have led to producers receiving lower prices, while enriching foreign shareholders. ‘Witvlei Meat has welcomed the third entrant and requested that their application (provided it’s a small volume) be granted and the balance be divided 50/50 between Meatco and Witvlei Meat. Witvlei Meat is currently asking the country’s highest court to overturn a High Court judgement in which Agribank obtained an eviction order against Witvlei Meat in March this year. The three judges reserved judgment after hearing oral arguments on the appeal.
Meanwhile, Agribank has since decided not to proceed with the eviction of Witvlei Meat, but decided to enter into an interim arrangement while the parties await a decision of the Supreme Court.
By Deon Schlechter