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Local food manufacturers’ inability to meet growing demand would cause them to lose their client base to foreign rivals, Shoprite chief executive Whitey Basson has warned.

October 5, 2007 By Tom Robbins Cape Town – Local food manufacturers’ inability to meet growing demand would cause them to lose their client base to foreign rivals, Shoprite chief executive Whitey Basson has warned. “The long-term implications of these continuing shortages is that South African manufacturers will find it difficult to regain space on supermarket shelves once their production problems have been resolved,” Basson says in the company’s 2007 annual report. He says Shoprite’s stores in African countries, which generally have low food processing capacity, are increasingly turning to Europe, the Far East and South America for supplies. This follows Basson’s comments in August, when he said local manufacturers had underestimated demand and were unable to meet consumer requirements for products that included pasta and baby food. Retailer Massmart also complained recently of some food shortages. Basson says in the annual report that such problems for operations in the rest of Africa are exacerbated by the South African authorities’ inability to resolve trade bottlenecks out of the country. “South Africa’s trading structures have to be reviewed to keep pace with the growth elsewhere in Africa.” Tiger Brands, the country’s largest food processor, said it had previously fallen short of demand for its Fattis & Monis pasta products but that a capacity upgrade had already dealt with the problem. Jimmy Manyi, Tiger Brands group executive for corporate affairs, said the firm did not face a challenge meeting demand for its products. AVI would not comment on Basson’s statements but referred to a previous statement where it said it would resolve a biscuit shortage as new capacity came on stream in January. Referring to Africa, Basson says red tape is slowing the movement of goods between countries “and numerous trading opportunities are lost because of a lack of co-operation between African countries … “There is much talk of a United Nations of Africa, but for that to become a reality the continent will have to do away with its many trading blocks, different sets of duties and regulations, and the endless restrictions on trade.” Shoprite stores in other parts of Africa and its single hyperstore in India contributed R4.3 billion to total sales of R39 billion during the year. Basson says that while the commodity-rich countries, like Angola, are improving ports, roads and air services, infrastructure is still below par. “Lead times, especially through harbours, vary from 60 to 120 days and we are obliged to destroy merchandise worth millions that has passed its sell-by date,” he says in the report.