Witvlei Meat Sues Govt Over Export Quota

EXPORT beef company Witvlei Meat was back in the Windhoek High Court last week to make a second attempt to challenge government’s decision to change the allocation of Namibia’s duty-free beef export quota to Norway.

In an urgent application heard by Judge Dave Smuts on Thursday, Witvlei Meat asked the court to stop the implementation of the minister of trade and industry’s decision in late December to slash Witvlei Meat’s share of the Norway beef export quota.

Witvlei Meat also asked the court to order the Cabinet, Government, the ministers of trade and industry and of agriculture, and the Meat Board to keep the previous division of the export quota dating from August 2010 unchanged while Witvlei Meat takes legal steps to try to have the decision to change the quota allocation set aside.

Judge Smuts reserved his judgement after hearing oral arguments on Thursday.

Namibia has a quota to export 1 600 tons of beef a year to Norway free of trade tariffs. The Cabinet decided in August 2010 that the export quota would be shared equally by the Meat Corporation of Namibia (Meatco) and Witvlei Meat, with each of the companies entitled to export 800 tons of duty-free beef to Norway each year since then. That decision was accompanied by a statement that government would review the quota allocation to accommodate new exporters who qualify to provide beef for the European or Norwegian markets.

Witvlei Meat was left dismayed when the Minister of Trade and Industry, Calle Schlettwein, decided in late December to allocate an export quota of 100 tons to the Keetmanshoop-based Brukkaros Meat Processors for 2014, while the share of the quota allocated to Meatco was increased to 1 200 tons and Witvlei Meat’s share for 2014 was cut to 300 tons.

That decision was not rational, was taken arbitrarily and was unfair towards Witvlei Meat, the chairman of the company’s board of directors, Sidney Martin, charges in an affidavit filed at the court. Martin claims that Witvlei Meat was not given a proper hearing before the decision was taken, and specifically was not given a chance to be heard after the Meat Board had made a recommendation to the minister about the allocation of the quota for 2014. Martin is also arguing that his company has not been given reasonable or enough time to re-organise its business and operations on the basis that there would be a major change in the division of the export quota in 2014.

Witvlei Meat “is currently facing financial ruin” if the changed quota allocation is kept in place, Martin says.

The decision that Cabinet took in early December last year to allocate the export quota for 2014 through a bidding process in which a list of criteria was to be considered was a policy decision, which is not subject to be reviewed by the court, Schlettwein is arguing in another affidavit filed with the court.

Witvlei Meat knew since August 2010 that the quota allocation could be changed, and the company could in those circumstances not arrange its business on the premise that it would have the quota it received in 2010 each year after that as well, Schlettwein says. In any event it received a proper hearing, and also used the opportunity to direct letters setting out its position to Cabinet members and the President, before the decision on the quota allocation was taken, Schlettwein adds.

The company “should be able to survive with or without the quota”, according to Schlettwein: “If the business model of [Witvlei Meat] was based on some unjustified expectations that the quota would always be available to it, the [company] must blame itself.”

If Witvlei Meat is indeed facing financial ruin it is as a result of its own managerial decisions and business philosophy rather than because of the export quota change, Meatco’s chief financial officer, Nico Weck, says in another affidavit before the court.

The company has alternative markets available to it, and nobody has prohibited Witvlei Meat from expanding and diversifying its operations into other markets, Weck says.

He notes that, while Witvlei Meat’s abattoir has the capacity to slaughter 27 000 head of cattle a year, an average of only 8 467 head of cattle a year are slaughtered at the abattoir, according to Meat Board records. The company prefers to focus only on the most lucrative international market, which is Norway, but could mitigate the loss of part of its quota by expanding its exports to other markets such as the rest of Europe, Weck claims.