The Competition Tribunal will by tomorrow, announce its decision on the battle for control of poultry company Sovereign Foods.
Sovereign Foods has earlier complained to the Competition Tribunal to help them prevent one of its minority shareholders Country Bird from voting at a shareholders meeting at the end of the month which the tribunal had agreed to.
The well-known poultry company claimed it competing company, Country Bird alongside other connected parties have a stake of just less than 15 percent which they are building ahead of the shareholder’s meeting proposed to hold by next week in a bid to block a broad-based Black Economic Empowerment deal from going ahead.
Agreeing to this deal, Sovereign foods would find itself in the controlling hands of management and a number of black investors.
The company wants the Competition Tribunal to order that any move by the Country Bird group to reinstate rights to its existing Sovereign Foods shares be considered a merger.
Meanwhile, south African food prices have undergone a hike following the hash effect of drought and the economic slow down.
South Africa’s Reserve Bank (SARB) postulated that local food price inflation is expected to rise to 11% (year-on-year) in 2016-Q4 – the highest in five years – from 5.9% y-o-y recorded in December 2015.
The SARB attributed a build-up in food price pressures to a depreciation in the value of the rand as well as the impact of El Niño on the local and regional agricultural sector.
Inflation on food and non-alcoholic beverages surged to 8.6 percent in February from 6.9 percent in the previous month, according to the statistics office. Transportation prices rose 8.7 percent compared with 5.5 percent in January.
Core inflation, which excludes food, non-alcoholic beverages, gasoline and electricity costs, quickened to 5.7 percent in January, from 5.6 percent.
The SARB Is therefore of the opinion that local manufacturers‚ wholesalers and retailers will be unable to continue stemming food price inflation‚ with the projected 11% y-o-y rise in food prices during the fourth quarter suggesting the fastest rate of food price inflation since 2011Q4.