Dollars 



Dollars 



Dollars 



per 12/2'A's 



per 12/ 2% 's 



per 12/2'A's 



3.03 



2.94 



2.83 



3.00 



2.91 



2.79 



3.18 



3.09 



2.97 



3.84 



3.69 



3.57 



4.23 



4.11 



3.99 



Government controls and assistance 



South Africa's canning industry is characterized at times by aggressive internal competition, particularly 

 during weak market periods when sales lag. To counteract these tendencies and promote stability, the industry 

 occasionally has subjected itself to either voluntary or legal controls over minimum prices and conditions of sale in 

 the United Kingdom. These schemes, as they are referred to in South Africa, have not been very successful in 

 achieving the desired goals, primarily because of fluctuations in supply and demand in the export market and 

 inadequate machinery in the schemes to deal with these changing market conditions. 



In 1967 the Canned Fruit Export Marketing Act was passed to provide new statutory authority over the 

 marketing of canned fruits. The Act was invoked the following year with the establishment of the South African 

 Canned Fruit Export Board. This Board has the power to determine minimum prices and the terms and conditions 

 of export sales. Products covered by the Act and under the Board's control are canned apricots, peaches, and pears 

 and any canned product declared by decree to be canned fruit. Currently, this list includes fruit salad, fruit cocktail, 

 and canned two fruits. 



The Board has as yet applied its marketing control only to sales of consumer size cans in the United 

 Kingdom. The marketing regulations established for 1969 prohibit the sale of substandard grade fruit and specify 

 terms and conditions of sale, such as limits on quantity discounts, buyers' label allowances, and commissions to 

 agents. In addition, the Board establishes minimum ci.f. prices by grade and can size. The prices per dozen A2^ cans 

 for a selected number of canned fruits in 1969 are as follows: 



Variety Fancy Choice Standard 



Apricots (Royals) 



Peaches 



Pears 



Fruit cocktail 



Fruit salad 



Under the Act's provisions, no person may export canned fruit without a license from the Board. In 1968, 

 58 firms, including the 14 canners, obtained such licenses. The bulk of these licensees, excluding the canneries, 

 reportedly did not export any of the controlled fruit products. Exporters not involved in processing are not an 

 important segment of the industry since the larger canners handle their own export sales. Also, three of the smaller 

 canners have combined their export marketing operations into one organization. 



Although the marketing controls have performed satisfactorily to date, the test will come if and when the 

 market weakens and stocks build up. As in the previous control schemes, no provisions exist in the Act to alleviate 

 the costs and problems to canners associated with such market conditions. 



The industry had been free of direct governmental subsidies until 1969, when compensation of over $1.5 

 million was paid to fruit canners to help them offset their losses resulting from devaluation of the British pound. 

 This is supposed to have been a "one-shot deal," with no other money forthcoming. 



Trends and prospects 



The changing complexion of South Africa's export trade has been highlighted by the growing penetration 

 of markets other than the United Kingdom. In 1968 South Africa replaced the United States as Belgium's leading 

 source of imported canned peaches; became the second leading supplier of the West German market, again replacing 

 the United States; and came close to doing the same in the Netherlands. 



All signs currently point to a strengthening of this trend toward market diversification. Production of 

 canned peaches and other canned products, such as fruit cocktail, may rise sharply in the next few years; most will 

 continue to be intended for export. Per capita consumption of canned peaches in the United Kingdom is the highest 

 in Europe and is not expected to increase much in the near future, especially if the current credit and monetary 

 strings in that country are not loosened. Also, competition in the U.K. from the products of other countries, 

 particularly from Australia which also benefits from tariff preferences, is already intense and not likely to diminish. 



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