Remgro-controlled consumer brands conglomerate RCL Foods has suffered a setback in its bid to “safeguard” its Western Cape based farm from a mooted chicken development that is located within 3km of its property.
RCL fears that the project poses a biosecurity threat to its operations.
RCL is SA’s largest processor and marketer of chicken, and the Hopefield facility, located east of Saldanha Bay and Langebaan, comprises about 15% of RCL’s national breeding flock. The facility was established in 1983 and has been operated by RCL since 1994.
The JSE-listed group, which owns brands such as Sunbake bread, Supreme flour and Rainbow chicken, wanted the Western Cape high court to rule that the environmental authorisation granted to an entity called Vermikor for the proposed development of chicken houses and associated infrastructure this close to its property be declared invalid.
RCL argued that Vermikor’s proposed free-range operation created a biosecurity risk. Free-range farming allows animals to roam freely outdoors for at least part of the day, rather than being confined entirely to enclosures.
RCL unsuccessfully argued that the site of the proposed free-range facility contravenes norms and standards for the positioning of poultry farms.
One of the arguments the company raised was that the rearing of birds in Hopefield farm are extremely “high value” birds that produce 140 broiler chicks each in their lifetime.
The Hopefield farm has five sites with 19 chicken houses. Each house rears about 7,500 pullets twice a year and the property houses about 264,000 female and 3,300 male birds.
RCL said it was worried that because the Vermikor project was 2.9km from its property, should there be an outbreak of avian influenza at the proposed site, it will not be able to transfer the rearing birds to the laying farms and they will not be able to send eggs to the hatchery as this will be within the 3km quarantine zone as set out by the department of agriculture, forestry & fisheries.
RCL highlighted the 2017 outbreak of avian influenza that saw the poultry industry suffer losses in excess of R5bn as one of its concerns. It proposed that the Vermikor development be moved at least 10km away from its farms and any major roads.
None of these arguments, however, persuaded the judge to reverse the decision of the provincial government to grant Vermikor the required environmental authorisation.
“RCL is not in a position to dictate which biosecurity measures ought to have been imposed on other poultry operations. It is also not appropriate for RCL to advance an argument that would require this court to engage in a polycentric decision-making process,” the judgment reads.
“The reality is that a range of biosecurity measures can be imposed on small-scale farmers by a reasonable decisionmaker. This is what occurred in this case. It is not open to RCL in review proceedings to complain that better measures ought to have been imposed.”
RCL was not immediately available to respond to the judgment. The company last week warned that it expected its interim headline earnings per share to fall by as much as nearly 27% amid challenging market conditions and unprecedented load-shedding. The expected fall was largely attributable to Rainbow and the baking business unit, it said.
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