The global poultry industry has undergone dramatic consolidation, with the number of major commercial breeding companies falling from over 26 in 1981 to effectively just two today. Tyson Foods in the U.S. and EW Group in Europe now control approximately 90% of commercial breeding stock worldwide through their ownership of the dominant Ross and Cobb fast-growing broiler chicken breeds. The impact of this consolidation is particularly significant in African markets, where poultry represents a growing source of protein.

Market concentration in breeding stock is strikingly high across the countries studied in this report. In South Africa, RCL Foods (Cobb breed) and Astral Foods (Ross breed) each hold 40 to 50% of the market share in breeding stock, with Country Bird Holdings claiming just 5 to 10% through Arbor Acres, another fast-growing broiler breed. Zambia shows a more balanced but still highly concentrated distribution between Ross and Cobb at around 45% each, with the Indian River breed accounting for 10%. Malawi demonstrates extreme concentration, with Central Poultry controlling 85% of the supply of broiler day-old chicks (DOCs).

The barriers to entry in breeding are substantial and quantifiable. Setting up grandparent breeder facilities requires approximately $3 to $4 million in investment and takes 15 to 24 months from receipt of grandparent stock to first commercial production. Companies with distribution licenses enjoy significant cost advantages, with parent stock for internal use priced around 40% lower than market sales prices. As the report highlights, these barriers effectively entrench the position of established players, locking out smaller, independent producers.

Price analysis reveals concerning patterns across the region. DOC prices in Zambia and Malawi are double those observed in Brazil, a major global producer. In 2021 and 2022, prices in these countries were 50% higher than in South Africa. The year 2021 saw particularly sharp increases, with prices rising 30% in local currency terms and 67% in U.S. dollar terms. These increases occurred despite Zambia’s position as a regional production hub with growing exports, suggesting the exercise of market power.

Trade data reflects the dominance of the multinational breeding companies. Most breeding stock imports originate from the U.S. and U.K., where Tyson and EW Group maintain their primary facilities. Zambia has emerged as a regional hub, with DOC exports growing significantly from 2016 to 2021. While South Africa remains a net exporter of DOCs to the region, its exports have declined since 2016, coinciding with increased regional concentration.

The competition landscape has been further shaped by international mergers and regional consolidation, which are detailed in the report. Notable transactions include Aviagen’s acquisition of Hubbard in 2018 (with Aviagen having already been acquired by EW Group in 2005), as well as strategic joint ventures between Tyson and Hendrix Genetics to corner the market on slow-growing breeds. In the regional market, the Zambian competition authority’s 2018 finding of cartel conduct (where companies collude to restrict supply and raise prices) led to temporary price decreases, but prices rose again following subsequent consolidation through joint ventures in East Africa.

Vertical integration amplifies these competitive concerns. Major producers have integrated into feed production, where they typically control 70% of production costs through ownership of feed mills and key inputs. This integration, combined with control over breeding stock, creates significant advantages over independent producers and raises barriers to entry throughout the value chain.

For policymakers and advocates, the findings underscore several urgent priorities:

1. Reforming international merger review processes to consider developing country impacts;
2. Enhancing coordination between competition authorities to investigate potential collusion; and
3. Taking measures to support alternative breeding stock suppliers and independent producers.

Food security advocates should particularly focus on the connection between market concentration and access to affordable protein sources, while competition advocates can use the detailed price and market share data to push for greater scrutiny of joint ventures and cross-shareholdings. For animal advocates, the report calls attention to the complex global dynamics that favor intensive farming systems, pushing out smaller, independent producers and potentially limiting the growth of alternative farming systems. Given concerns such as climate change and zoonotic diseases, relying so heavily on a handful of breeds and a single production method also raises resilience risks. This has local and global ramifications.

Without intervention, the research suggests that consolidation in this key agricultural input market will continue to affect food security, economic development, and small producer livelihoods across southern Africa.