Import restrictions threaten supermarket supply chains in Southern Africa

According to The African Development Bank’s annual African Economic Outlook, which was published last month, such South African retail chains as Shoprite risk becoming victims of their own success in Southern Africa. This is because governments in the region have begun to perceive them as a threat to local economic development and are moving to protect local suppliers by imposing trade restrictions and local content requirements on some categories of food products. “Botswana, Zambia, and Zimbabwe ban imports of poultry, maize meal, and cooking oil, and Zimbabwe’s competition and tariff by-laws require supermarkets to purchase at least 20% of their products domestically,” the report notes.
“The countries that are hosting this South African retail expansion are increasingly concerned with the disadvantaged position of domestic suppliers and, with the support of local firms, neighbouring countries are starting to pressure the supermarket giants to expand domestic supply,” Reena das Nair, senior researcher at the Centre for Competition, Regulation and Economic Development at the University of Johannesburg told website Moneyweb.
Shoprite currently operates more than 400 stores outside of South Africa (which accounted for 16% of its total sales and 9% of profits during the 12 months to June 2018), while Pick n Pay and Spar operate a smaller number, as does Botswana-based Choppies. Most of these chains have introduced supplier development programmes in markets where they operate, but evidently these are viewed as insufficient by some local governments.
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