Nam Dairy producers brace for milk war

0shares Share0 Tweet0 Share0 Print0 Email0Namibia dairy producers have warned against dumping tactics by South African milk companies after an industry protection measure on long-life milk (UHT) lapsed on 1 January. For eight years, Namibia levied a 40% infant industry protection duty on UHT. In 2011 this levy dropped to 13,6%.   Since the regulation […]

Namibia dairy producers have warned against dumping tactics by South African milk companies after an industry protection measure on long-life milk (UHT) lapsed on 1 January. For eight years, Namibia levied a 40% infant industry protection duty on UHT. In 2011 this levy dropped to 13,6%.

 

Since the regulation lapsed, prices have dropped by 12,5%, said the Namibian Dairy Producers’ Association. “The current situation is a real problem for the sector,” said chairperson Kokkie Adriaanse. “The market for long-life milk in Namibia is very big at about a million litres a month.

With the protection gone, we fear the market will be flooded by products from Uruguay, Brazil and Ireland imported through South Africa. This means producers won’t see a price increase for their milk in the near future.”

According to Hubertus Hamm, managing director of Namibia Dairies, Clover allegedly sold its milk below N$10 (R10) in Namibia in 2011, up to 20% below the South African price. This is “dumping”, he alleged, “and an attempt to destroy Namibian businesses and jobs.”

According to Hamm, Clover produced 6 million litres of long-life milk in South America, which it dumped in markets in Southern Africa. Pressure from South African milk producers ensured that it did not sell the product here.

Clover has denied the allegations. “Clover is a brand that has always been sold across sub-Saharan Africa at a premium due to our quality offering. Dumping is not, and has never been, part of Clover’s business model,” said the company. However, it will participate in “structured promotions with the retail chains in Namibia as is the case in South Africa.”