Pick n Pay Chair Gareth Ackerman Slams Government for Inaction in Fixing SA's Structural Economic Problems
Key Highlights :
Pick n Pay chair Gareth Ackerman has slammed the government for its "inaction" in addressing SA's structural economic problems, warning of an "existential threat" to the food industry, as well as social unrest stemming from food shortages, if power outages worsen. Speaking at an investor presentation after the release of the JSE-listed retailer's full year results, Ackerman did not mince his words, saying that instead of trying to find solutions, the government was focused on blaming retailers for rocketing inflation.
Ackerman also noted that SA's support of Russia could come at the expense of more valuable relationships with Western Europe and the US, and given the risk to crucial trading agreements, it was "beyond understanding." He added that these issues had been costing Pick n Pay about R60 million a month recently. "Shockingly, 37% of the cost of each litre of diesel we have bought – over half a billion rand’s worth – has gone into government coffers and the [Road Accident Fund] as a windfall tax. This is unconscionable, particularly when rolled up across the economy and the hardship the blackouts are causing," he said.
In addition, Ackerman argued that it was "distressing to see irresponsible efforts to shift the blame for food inflation onto retailers," as pleas by retailers to be included in the diesel tax rebate, had fallen on "deaf ears". He stated that elevated inflation was being driven largely by external factors, such as Eskom having transferred some of its "costs to industry through the stages of blackouts", with companies having to "absorb these costs".
Despite this, Ackerman said Pick n Pay had, through a "herculean effort" this year, kept its internal inflation rate below official consumer price inflation and at less than half of food inflation, which in March reached 14% - the highest in more than a decade. He also warned that the entire "food industry is under existential threat" due to the probability of social unrest relating to food shortages and possible store closures if blackouts get too high.
Ackerman further noted that about 45% of SA's total available food supply was being lost or wasted annually and that one of the consequences of "blackouts" was increased food waste. He said Pick n Pay had, over the past four years, reduced food waste by nearly 30% as it worked "steadily towards our target of 50% by 2030". He also said that the company had donated more than 880 tonnes of edible surplus food to FoodForward SA, valued at more than R35 million and was working with government to change some of the regulations which would allow more edible surplus food to go to those who really need it.
In conclusion, Ackerman said the government was "mixing up policy with politics" at a time when "growth-orientated policy change and certainty" should be the only items on the agenda. He argued SA's growth depended on important policy shifts, but warned the country was "unlikely to see them happen before next year's elections". Ackerman said that the power interruptions had "placed the economy under enormous pressure" and that SA was not growing at the required rate to ensure to absorb unemployment and improve living standards. He concluded that "we need to grow the size of the cake before we try to cut it differently."
