SOUTH AFRICA – South African fast-moving consumer goods retailer, Pick n Pay, has invested R340m to acquire Western Cape-based abattoir and meat processing and packaging company Tomis Group aiming to expand its red meat offering.

The group, whose stock is down 32% year to date, said the transaction will enhance its fresh meat offer to customers.

“Tomis’ key assets include a 15,000m2 under-roof lamb feedlot, lamb and beef abattoirs, and a meat packaging plant situated on a 140ha farm. Tomis has approximately 320 employees and recorded sales of R720m for their 2022 financial year,” it said.

“It operates under the highest animal welfare, food hygiene, ethical, and environmental standards. Tomis owns the ‘TOMIS’ and ‘Roam Free’ trademarks, which are being acquired as part of the transaction.”

Pick n Pay added that the transaction fee will split into an upfront cash consideration of R323m, while the remaining R17m will be payable on the third anniversary of the transaction.

“Meat and butchery is a key product category for both Pick n Pay and Pick n Pay QualiSave under the group’s Ekuseni strategy,” the retailer stated.

“The acquisition will significantly enhance our fresh meat offering to customers while providing the group with a number of benefits.”

With Tomis, the retailer will also have an enhanced ability to develop and roll out innovative, value-added products for customers and reduce red meat costs, unlocking the ability to give customers greater value.

This is in addition to access to a centralised meat packaging, providing a more reliable supply, and unlocking synergies through the Pick n Pay group’s centralised supply chain distribution network.

Lastly, the acquisition is aimed to provide sales growth opportunities, with the potential to supply Pick n Pay franchisees Boxer and other retailers and wholesalers.

Meanwhile, the director of Food importer Hume International logistics and operations, Roy Thomas has noted that the looming threat of South Africa’s expulsion from the African Growth and Opportunity Act (Agoa) trade agreement with the US threatens to push the poultry industry over the edge.

The threat comes as South Africa’s chicken supply and its crucial import industry are already in a tenuous position as a result of the global bird flu outbreak.

“Demonstrating the importance of the white meat to local tables, South Africans consume about 1.8-million tonnes of chicken each year, or an average of 33 kg per person,” Thomas Pointed out.

“This represents close to 60% of all meat consumed, making chicken one of South Africa’s most important proteins and staple foods.”

For all the latest food industry news from Africa and the World, subscribe to our NEWSLETTER, follow us on Twitter and LinkedIn, like us on Facebook and subscribe to our YouTube channel.