Namibian watchdog sues Namib Mills, NPI over poultry monopoly
The two companies, which collectively control approximately 74% of Namibia’s poultry market, are alleged to have withheld access to tertiary poultry products.
NAMIBIA – The Namibian Competition Commission (NaCC) is pursuing legal action against Namib Mills and its subsidiary Namib Poultry Industries (NPI), accusing them of anti-competitive conduct that allegedly restricts access to poultry by-products for micro, small, and medium enterprises (MSMEs).
The two companies, which collectively control approximately 74% of Namibia’s poultry market, are alleged to have withheld access to tertiary poultry products, such as soup packs, giblets, necks, hearts, gizzards, heads, feet, and liver tubs, from MSMEs for a six-month period, creating a barrier to entry for smaller players.
This case, formalised in a Government Gazette notice in February 2024, stems from an investigation launched in June 2022 following multiple complaints by MSMEs, including informal traders in low-income areas.
The Commission contends that Namib Mills and its subsidiary NPI’s refusal to supply these low-cost by-products, which are highly sought after in the informal sector, hampers fair competition and limits consumer choice, especially in under-served communities.
The products in question form a crucial revenue stream for small businesses such as Pro Healthy Bites, which cater to households in informal settlements.
Without consistent access to these items, MSMEs risk losing customers to major retailers located far from their base, where consumers incur additional transport costs and often face higher retail prices.
According to the NaCC, these practices may breach Section 23 of Namibia’s Competition Act, which prohibits certain restrictive practices that are inherently anti-competitive.
The Commission argues that by refusing supply, the companies are engaging in a ‘per se’ prohibition, meaning such conduct is illegal without requiring proof of harm or justification.
Furthermore, while the companies may seek to defend their actions under Section 26, which allows dominant firms to justify their conduct with efficiency-based arguments, the NaCC appears unconvinced, particularly given the scale and duration of the alleged exclusion.
Established in 2011, NPI is Namibia’s sole local poultry producer, with a production capacity of 3,500 tonnes per month. Namib Mills is the exclusive distributor of NPI products. The Commission emphasised that their dominance leaves MSMEs highly dependent on their willingness to trade fairly.
Although both companies deny having an exclusionary policy, they admit to requiring a minimum purchase of 280kg for certain products, an amount that many small traders are unable to meet. The Commission views this threshold as an unfair barrier that effectively locks out MSMEs from the market.
In its notice, the NaCC stated its intent to approach the High Court to have the companies’ conduct declared unlawful. It will also seek pecuniary penalties, alongside a court order to cease the practice and prevent future recurrence.
However, the commission has also extended an invitation for the parties to settle the matter out of court.
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