THE Meat Traders Association of Lesotho (MTAL) has distanced itself from the recently launched Basotho Meat Enterprise (BME) in a move they say is aimed at maintaining fair competition in the industry.
The new company, which was established with the intention to buck the trend of importing all processed meats through local production, was officially launched on Monday this week.
The company was created to increase the country’s production base, thereby stimulating positive economic growth through job creation.
The company was founded by two shareholders namely Meraka Abattoir and South African investor Stephan Engelbrecht, who each holds 35 percent shares.
Ten percent of the shares was set aside for acquisition by MTAL while the remaining 20 percent will be set aside for investors.
However, to date MTAL is yet to take up the 10 percent offer by BME. The association, which also declined invitation to Monday’s launch of BME, said it was awaiting clarity on the 10 percent share offer and the role to be played by the BME in the country’s meat industry.
The association claims that BME is operating as a manufacturer, wholesaler and retailer at the same time, since it sells to different classes of customers up to the final consumer.
MTAL secretary general Teboho Motshephe told the Lesotjho Times this week that they are worried that BME is going to drive meat wholesalers and retailers like middleman out of business by taking their customers.
Mr Motshephe, whose butchery business is a walking distance from BME, which is located at DLM complex at Ha-Mabote in Maseru, said retailers cannot afford to compete with the manufacturer in terms of price.
“We are not going to be party to an establishment we believe is going to kill our businesses,” Mr Motshephe said.
“The way we see it, BME is going to drive many Basotho meat retailers’ businesses to the ground because it sells to final consumers at lower prices than most retailers.”
He said the government, as the custodian and facilitator of free trade, must ensure that BME is restricted to manufacturing and not encroaching into the wholesale and retail spaces for the survival of the value chain.
He said for retailers to compete with BME prices, the government would need to lift the red meat ban it imposed in 2017. He added that the unpopular ban has already resulted in at least 62 job losses in the meat industry.
MTAL also wants the government to help Meraka Abattoir, the only certified slaughterhouse in the country, to produce grade A livestock. This to get rid of the monopoly of selling grade A meat products currently enjoyed by Meraka as the only entity allowed to import the meat.
The association also wants the government to resuscitate district level slaughter pads to allow more players into the industry.
In a letter seen by this publication, the association recently wrote to the management of BME to register its concerns on the new venture.
“It is with great regret that the MTAL informs you that we will not take part in any and all the activities that will take place on the 5 August 2019 during the opening ceremony of BME.
“In short, we are not accepting the invitation. Furthermore, we are also not accepting the purported 10 percent shareholding offer from BME due to the following reasons:
“We are still waiting for a presentation from BME directors to clarify on the 10 percent shareholding;
“How the business is going to operate as opposed to Basotho butcheries, (whether a manufacturer, wholesaler of retailer).
“Please understand that we took this decision without hard feelings, we were just protecting the right to fair competition in the meat industry. So far, at least 62 Basotho were reported to have lost their jobs in the butcheries after the borders were closed for red meat importation in 2017.
“Lost market and unfair competition from Meraka, Basotho Meat Enterprise and other meat wholesalers kicked out the small butcheries out of business,” reads the letter signed by the secretary general Teboho Motshephe.
For his part, BME director Mosito Khethisa said the company has two distinct classes of customers namely business and retail customers who are served differently.
“We have two different departments which serve our customers that are divided into business and retail who are sold using with own prices.
“Our prices are in such a way that they will not negatively affect the market out there, so there is no need for them to worry about competition from us,” Mr Khethisa said.
The director of marketing in the Ministry of Small Business Development, Cooperatives and Marketing, Lekhooe Makhate reiterated Mr Khethisa’s sentiments that the BME is not going to interfere with retail competitors.
He added that the traders who are complaining about BME are just a “small clique with individual interests rather than those of the association”.