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Dairy Distress: Clover Seeks Protection in SA

02 December 2008

SOUTH AFRICA - Milk processor Clover has applied to the trade and industry minister for protection of the dairy sector from competition rules because the industry is in distress.

If granted, the move could see the industry exempted from competition legislation, reports news agency AllAfrica.

According to AllAfrica, the Competition Commission has investigated Clover and four other milk processors for collusion.

Clover deputy CE Manie Roode blamed the sector's woes on deregulation. His sentiments echo concerns raised recently by Competition Commission senior economist Simon Roberts about the negative effect of deregulation on the agricultural sector. Roberts called for "intelligent regulation" to remedy the situation.

SA is one of only three major deregulated dairy markets in the world, but competes with industries that get state support through subsidies and measures such as the state purchase of surpluses.

A sharp drop in demand for milk products in recent months led to a huge surplus in the market, pushing prices down at a time when producers are squeezed by higher input costs. The surplus has been made worse by substantial but uncoordinated imports of dairy products prompted by a shortfall last year.

TheCattleSite News Desk



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