Latest news with #CGCSA
The Citizen
3 days ago
- Business
- The Citizen
Consumer Goods Council calls for urgent expansion of zero-rated foods
Only low-income consumers will understand the difference a few rands make if more food items are Vat zero-rated. The Consumer Goods Council is calling for an urgent expansion of the list of zero-rated food products to ease the cost burden on poor households. More food items were added to the zero-rated list when there was a Vat increase on the cards, but when the increase was scrapped, the food items were removed. In response, the Consumer Goods Council of South Africa (CGCSA) addressed the Parliamentary standing committee on finance this week, calling for the National Treasury to urgently reintroduce the expansion of the list of zero-rated basic food items in the draft tax legislation expected to be published soon for public comment. Neo Momodu, CGCSA executive for legal, regulatory and stakeholder engagement, submitted that in a country facing food insecurity, expanding the list of zero-rated food products, will ensure that poor households are able to afford more healthy and nutritious food that they would otherwise not be able to buy. She said while the CGCSA welcomed the decision not to increase Vat, this had unfortunately led to the withdrawal of the minister of finance's decision to expand the basket of Vat zero-rated food items to ease the burden of food costs on the poor and vulnerable. ALSO READ: Godongwana cuts zero-rated food basket in Budget 3.0 Vat zero-rated foods in first and second versions of Budget In his first and second national budget statement for 2025 the minister proposed expanding the basket of Vat zero-rated food items to include canned beans and peas, dairy liquid blends and certain organ meats (offal) from sheep, pigs, goats and poultry. However, after the Vat increase reversal statement of 24 April 2025, the National Treasury announced that 'the decision not to increase Vat means that the measures to cushion lower income households against the potential negative impact of the rate increase now need to be withdrawn and other expenditure decisions revisited'. Momodu said this decision is particularly concerning for the CGCSA and its members because many South Africans are hard hit by the cost of living and the zero-rating of the additional products would have gone a long way to not only cushion consumers but also improve healthy eating and healthy lifestyles, as well as improve food security. ALSO READ: Zero VAT rating of products does not help poor people – expert Scrapping of Vat increase helps, but consumers need more zero-rated items 'Although there is no doubt that the decision to retain the Vat rate at 15% benefits consumers, this 'win' for consumers must be properly unpacked. It has merely avoided one of the potential additional direct costs that consumers carry by maintaining the status quo. This 'win' did in fact not create any positive means to reduce the existing burdens on financially vulnerable households. 'Maintaining the status quo is simply not enough to provide any tangible difference for vulnerable households or manifest the socio-economic obligations on the government to deliver food security to all consumers, especially protected groups that include women, children and disabled people. 'It would be an unfortunate outcome if the traction gained to expand the list of zero-rated items were to be lost due to seemingly erroneous and misplaced ties between expanding the zero-rated list and further tax increases. These two things are mutually exclusive and each bears interrogation on their own merits,' Momodu said. ALSO READ: Budget speech: VAT increase decision not made by someone who knows hunger Retailers try to help, but more food must be zero-rated She pointed out that the CGCSA's food manufacturer and retail members have and continue to find ways of ensuring that basic food items are sold at competitive prices, aware of the impact of food costs on their consumers, particularly the poor and disadvantaged. 'Therefore, expanding the basket of Vat zero-rated food items would have been beneficial for consumers.' Momodu said the Treasury should find ways to ease the untenable financial strain that South African consumers, particularly lower income households, face due to the cumulative impact of above inflationary increases in taxes, levies and costs of living generally.
Daily Maverick
22-05-2025
- Politics
- Daily Maverick
Alarm over battery cage cruelty met with stonewalling while 95% of SA's laying hens suffer
The response by the Consumer Goods Council of South Africa to an open letter calling for an end to practices that block dialogue and transparency about where our eggs come from and requesting effective engagement, indicates a failure of their own values, including 'accountability' and 'integrity'. Chicken and eggs have been in local and international news a lot lately – whether it is because egg prices in the US have reached record highs this year due to a bird flu outbreak in the region, or because of the recent abhorrent and horrific cruelty discovered at a local broiler farm – a lot of important issues are being brought to the fore. However, despite these and other increasing issues associated with the farming of animals, and growing global awareness of the need for change, in South Africa concerns are also being raised over industry's deliberate efforts to block reform and maintain inhumane, unsustainable practices in South Africa's poultry, specifically egg, industry. In the past year there has been a marked increase in stonewalling and bullying by industry leaders and complicity from government bodies. Despite attempts to engage industry role players, the response has been to double down, thereby extending the use of cruel battery cages and withholding vital information that is being used for policy decision-making. The Consumer Goods Council of South Africa (CGCSA) went so far as to threaten potential litigation against a member of the Southern African Faith Communities Environmental Institute (Safcei) team if they didn't desist from contacting and engaging the CGCSA's members on the issue of hen welfare and egg production. They also advised their members against engaging effectively with civil society on this issue. In response, Safcei and Animal Law Reform South Africa (ALRSA) wrote an open letter to the CGCSA, calling for an end to practices that block dialogue and transparency about where our eggs come from and requesting effective engagement. The letter is supported by a broader coalition of 24 civil society and nonprofit organisations. The letter, titled 'Eggsposing Foul Play in South Africa's Egg Industry', details concerns that more than 25 million laying hens in South Africa, the vast majority of the laying flock, are subjected to unnatural and unsustainable conditions and methods of egg production. Hens are crammed into tiny wire cages, enduring a lifetime of suffering without space to express natural, healthy behaviour, denied even the most basic protections that all animals deserve, as contained in the Five Freedoms. The letter also outlines the problematic lack of transparency and accountability in South Africa's egg industry, undermining the constitutional rights of consumers. For example, in 2020, the South African Poultry Association (Sapa) commissioned the statutory body, the National Agricultural Marketing Council (NAMC), to conduct a study to assess the viability of the South African egg industry if a policy to end the use of cages was introduced. The industry-funded study claims there would be huge costs and unemployment if the country transitioned to cage-free egg systems. To give more context on the concentration of the egg industry in South Africa, commercial egg production is dominated by only three major producers: Eggbert, Nulaid and Highveld Cooperative, which command about 51% of the market share. With a gross turnover of R14.5-billion at producer level, eggs are the fourth-largest animal product sector in agriculture. The total value of the South African egg market at retail level in 2024 was estimated to be about R26-billion, dominated by only a handful of big players such as Shoprite-Checkers, Spar, Woolworths, Pick n Pay and MassMart (most of which are CGCSA members). In 2022, on average, retailers increased the price of large eggs by more than 100% sold to the public. More damning is the evidence that they don't pass savings on to consumers, according to the competition watchdog in late 2024. And if the recent news cycle from the US is anything to go by, it is clear that the price of eggs matters as a yardstick when it comes to the economy and political decision-making. Accordingly, the data behind this NAMC study is undeniably of public interest, yet it remains hidden from consumers. More than 4,000 people have signed a petition demanding its release, but the full report has still not been made accessible to the public. Organisations, including ALRSA, have tried for years to obtain the study through numerous requests to the NAMC, Sapa, the CGCSA and the Department of Agriculture, Land Reform and Rural Development, including using the Promotion of Access to Information Act 2 of 2000 and even approaching the Information Regulator. The industry and the government continue to use the findings to promote the use of cages while not granting access to the source information. The official position in South Africa seems to be trying to maintain the status quo until at least 2039, while more than 25.5 million laying hens (95%) are suffering in caged production, with only 5% being cage-free (4% free-range and 1% barn). Our concerns about the opacity in the industry are further explored in ALRSA's recent ' Scrambling for the Truth ' report, which highlights how many consumers might care about animal welfare, but most lack access to information about food production (specifically eggs) and its impact on animals, human health and the environment. Without this information, consumers remain in the dark and are unable to make informed and ethically aligned choices. An earlier report, ' Laying Down the Facts ', explores how the South African egg industry impacts animal welfare, the environment, food safety, health, social issues and rights, and business practices. The need to move away from cages for hens is also to be considered in a global context in which more than 30 countries have completely banned some form of caged egg production, and nearly 2,600 public commitments have been made by food corporations around the world to remove cages from their egg supply chains. A number of leading South African businesses have pledged to go cage-free or have already achieved this standard. Considering consumers' experiences in recent years with egg shortages and high prices due to repeated avian flu outbreaks affecting livelihoods and resulting in the mass killing of our national flock, the response by the South African egg industry to these issues is even more concerning. For all of these reasons, Safcei and ALRSA, along with other co-signatories to the open letter, have called on the CGCSA to take seven actions in accordance with their values: 'Integrity. Excellence. Accountability.' This includes refraining from silencing and intimidatory tactics; promoting transparency; incorporating animal welfare within their purview; promoting consumer and constitutional rights; fostering accountability; refraining from engaging in potentially collusive practices; and encouraging effective engagement with the public and concerned organisations. We sent the open letter to the CGCSA in February, and while they have still not responded formally more than two months later, they have attempted to distance themselves from the issues raised and shirk accountability. In a statement, the CGCSA dismissed the concerns raised as 'misdirected' and 'not within our scope', failing to acknowledge their direct letter sent to Safcei and their own members on these matters. They also indicated that 'the sector follows regulations', not admitting their extensive efforts (including litigation) in the regulatory space for food products. It is clear that the CGCSA have either misunderstood the detailed open letter or are deliberately attempting to divert attention and responsibility to other stakeholders. Either way, their initial response indicates a failure of their own values, including 'accountability' and 'integrity'. Despite having 'consumer' in their name, as an industry representative, they appear to be committed to protecting corporate interests at the expense of consumers, the environment and animals. Our position has not changed: we will continue to seek constructive and evidence-based dialogue and to push for transparency, accountability and meaningful reform in South Africa's poultry industry. The future of millions of hens, human health, consumer rights and environmental sustainability depends on it. DM Francesca de Gasparis is executive director of the Southern African Faith Communities' (Safcei) Environment Institute. Safcei is a multifaith climate and eco-justice NGO committed to supporting faith leaders and their communities in southern Africa to increase awareness, understanding and action on eco-justice, sustainable living and climate change. Amy P Wilson is cofounder and acting executive director of Animal Law Reform South Africa, South Africa's first dedicated animal law nonprofit organisation. It uses law and policy as tools to address intersectional issues and ensure justice and protection for all who require it.
