• December 1st, 2020

Retailers, distributors united to bolster local milk sales

WINDHOEK - Retailers and distributors of UHT (long life) milk have committed themselves to purchasing all locally produced UHT milk to bolster the utilisation of the Namibian product after hopes faded for long-awaited legislation to control the import and export of dairy products.

This united front to boost growth at home was formed last week, following a series of industry meetings on how to save the fledging local dairy industry. All hopes were placed on new legislation on the control of especially cheap UHT imports from South Africa before the end of 2018. However, this law has not yet come into force, in meantime role players in the industry have decided to support dairy producers in Namibia. Consumers have also been urged to support locally produced dairy products so that Namibian milk production can continue in the unfair environment created by much cheaper imports. All role players on board the train emphasised that Namibian produced milk meet high quality standards and are hormone free.

This last minute rescue effort comes in the wake of a study revealing that some seven million litres of dairy per annum has entered Namibia undeclared over the last six years, which translates into a total of 108 million litres of unauthorised dairy products. The Dairy Producers Association (DPA) undertook the study done in collaboration with the Namibian Trade Forum (NTF), which conducted an analysis of the dairy industry in Namibia. The study was done by Dataspank and the results of this study were announced at an industry meeting recently.

The study shows that the Namibian dairy industry accounts for only one percent of all dairy products in relation to the South African dairy industry. Namibia’s total annual milk production is 24 million litres, which South African producers produce every three days. Where Namibia’s total dairy population is 3 000 dairy cattle, some individual milk producers in South Africa have 3 000 cows per stable. 

At a series of meetings in November, the South African figures were used to demonstrate that it is simply not possible for Namibia to compete against global markets. Nevertheless, the dairy industry in Namibia is seen as a sector of strategic importance for government in terms of employment, industrialisation and growth.

The study further shows that with a current population growth of 1.8 percent and with a constant per capita consumption of nine litres of UHT milk per day, there is great potential for growth in the industry. However due to imports of UHT milk, this market share of locally produced UHT milk has stagnated and especially imports have grown. Therefore, imports must be limited to allow the local sector to grow. 

Role players at the meeting stressed the importance to support the local dairy industry, especially in view of the Namibian economic growth. It is hoped that the draft legislation, which will regulate imports, and which is currently at its final stage, will be tabled in Parliament this year to provide the necessary support to the industry. 

Agricultural minister Alpheus !Naruseb earlier this year promised the dairy industry his personal support for the speedy conclusion of the amendments of the Dairy Act so that the necessary support can be given to the crippled local dairy industry as soon as possible.   

The country’s 16 dairy producers and the entire dairy industry have been in dire straits for the past few years and producers have faced more than one price reduction in the last two years, which could potentially mean the end of business for some of the dairy producers.  . 

In addition to the price reduction, payments of producers are being deferred on a monthly basis.  This critical situation in the dairy industry can be ascribed to mostly the influx of UHT milk and closely related other dairy products into Namibia. Recently, imported UHT milk from SA was selling for cheaper than Namibian bottled water in some outlets. 
Almost all butter and cheese sold in Namibian shops are imported. 

Feeding costs increased by nearly 50 percent since 2016 and total production costs increased by about 28 percent over the same period.

High customs tariffs to Angola and Botswana hampered exports to neighbouring countries and prevented market expansion.

Namibia’s only long-life milk production plant, which belongs to the Ohlthaver & List Group, could face closure if the trend continues, resulting in almost 500 job losses.

Sven Thieme, the Managing Director of the Ohlthaver & List Group, told dairy producers some time ago already that Namibia Dairies lost potential sales of N$1 million a month on long-life milk because of local shops stocking imported UHT milk.

If the UHT plant shuts down, it would result in cutting down the 1.7 million litres received from milk farms per month to only 700,000 litres, which would increase the price of milk for the average consumer drastically. 

Staff Reporter
2018-12-11 10:45:04 | 1 years ago

Be the first to post a comment...

You might also like...