South African food shortage warning

Pick n Pay CEO Pieter Boone warned of food shortages and social unrest in South Africa as load-shedding moves to higher stages.

Speaking to Michael Avery on Classic Business, Boone said load-shedding disrupts South Africa’s food supply chain.

“We see that in certain categories, including maize meal and chicken supplies,” the Pick n Pay CEO said.

The strike rate – the difference between what Pick n Pay orders from suppliers and what it receives – is up by double digits in certain categories.

The higher strike rate impacts the availability of certain products and categories to South African shoppers.

“I foresee, because of the government’s inactivity, that we will experience a further deterioration of power supply. It is not if stage 8 will occur, but when,” he said.

Boone said if South Africa goes to stage 8 load-shedding, food manufacturing will suffer, and South Africa will experience a food shortage.

“It is no longer a question of pricing, but rather whether you can secure stock to serve your customers,” he said.

He added that higher stages of load-shedding also affect the water supply in many parts of the country.

When people struggle to get food and water, it causes severe social problems and can lead to civil unrest.

“That is my biggest fear – potential social unrest. We cannot afford a second wave of social unrest in South Africa,” he said.

Pick n Pay chairman Gareth Ackerman has previously warned that South Africa’s entire food industry is under existential threat.

An estimated 45% of South Africa’s available food supply is lost or wasted annually. One of the consequences of blackouts is increased food waste.

“In a country that already registers troubling levels of poverty and hunger, this is unacceptable,” Ackerman said.

He said Pick n Pay has reduced food waste by nearly 30% over the past four years and has donated 880 tonnes of edible surplus food to FoodForward SA.

However, the situation is made very difficult as load-shedding impacts the food supply chain in South Africa.

“I feel compelled to caution that the entire food industry is under existential threat,” Ackerman said.

“The probability of social unrest relating to food shortages and possible store closures, if blackouts get too high, is now heightened.”

“Faced with the reality of structural economic decline, the only meaningful government action seems to be inaction, and to place blame on those trying to help solve the problems.”

Boone and Ackerman’s concerns echo those of Efficient Group chief economist Dawie Roodt, who worries about rising poverty levels and poor economic growth.

Roodt said the high poverty levels and unemployment with rising food costs are a recipe for mass unrest and disorder. It puts South Africa on the brink of disaster.

“My biggest fear is that a spark can make the situation explode. It is a highly volatile situation waiting to explode,” he said.

Political analyst JP Landman and Nedbank’s chief economist Nicky Weimar also warned that South Africans could expect another Marikana and July Riots.

2023 will be the eighth year running where South Africa will have declining or stagnant per capita incomes.

With elevated inflation, particularly in consumer staples such as food and energy, fertile ground for social unrest has been laid in South Africa.

And so, there is the possibility for widespread unrest akin to July 2021. Just as that was unpredicted, it would be naive to think that it will not happen again if things do not change, said Weimar.

The Centre for Risk Analysis has also warned that South Africa faces a winter of social unrest as sustained power outages limit economic growth and job creation.