The Foible of Fragmentation. New Recommendations for Restructuring the Fishing Industry

A paper delivered to the Competition Commission recommended that government use the 2020 long-term fishing rights allocation to restructure the fishing industry and combat ‘reconsolidation’. JOHANN AUGUSTYN from the South African Deep-Sea Trawling Industry Association strongly disagrees.

FINSA: Were you surprised by these recommendations?

JA: Yes we were shocked. To date most of the emphasis has been on ensuring there is transformation in the industry and that the pace is accelerated. There have been enormous investments by black industrialists in this sector as well as significant investments in employee share schemes to accelerate the pace of transformation. Now that these investments have been made, the talk has moved to fragmenting the industry.

It is well documented globally that fishing is an international industry and to be globally competitive requires economies of scale. For this to be possible consolidation is required and not fragmentation. Consolidation allows for maximum beneficiation in South Africa which in turn means maximising job creation. Fragmentation will destroy jobs and reduce value addition.