Food dumping and its impact on the economy

Food dumping and its impact on the economy

Introduction

Story (Article)

There was a recent uproar (late January 2013), about Air chefs workforce facing disciplinary measures based their act of dumping extremely large quantities of food. Air chef is a unit of SA Airways. During December, it dumped 250 cheese snacks, 150 desserts, 300 turkey croissants, 840 lemon meringues and about 1000 bread rolls in one week. In between 13th and 20th December, Air chefs was also reported to have dumped 38 kilos of beef, 380 kilos of vegetables, 2040 walnut pastries and biscuits, 59 kilos of cheese, 90 kilos of beef sausage and 160 kilos of egg pulp.

The wastage caused by Air Chefs was credited to ordering too much food, theft and fraud by employees, and an improper control of stock (inventory management issues). Previously, excess food was distributed amongst charities; however, this is no longer in practice due to demands by unions for transparency in the selection of charities. Forensic audits revealed the extent of wastage to an estimated cost of R5 million a month to the airline (5 million South African Rand equals to 0.525 million Australian Dollar). Air Chefs prepared 22, 000 meals daily for its 125 flights. Already relying on SAA for funds, it received R99 million by 2012 and is expecting R49 million furthermore.

Discussion

The wastage of food in the form of dumping is a classical example of the demand and supply forces. The staff of Air chefs procured and prepared food in excess to the amount of food actually required by their customers - the passengers. Here the excess of food - supply, over the required amount - demand creates an excess supply of food. This excess supply is then dumped or wasted. Had the company been a commercial business it would have to sell out this excess of food at a lower price until the quantity demanded equalled the quantity supplied (the excess).

Issues favouring dumping practice

Considering the face that Air Chefs operates in a region of the world where the poverty and famine levels are at their highest (South Africa), the preferable solution would have been to distribute the food among the hungry populace. However, this would have not have been possible due to various reasons.

Labelling Requirements

The labelling regulations of South Africa published in the year 2010, clearly requires products to display a safe 'duration' of time for usage, for example, 'best before' or 'use by', etc

Due to their perishable nature, fresh products have very short time duration. That makes excess product unable to be sold and if given away (distributed) publicly, it would cause trouble for the business from the government and inspection authorities.

The Consumer Protection Act

The CPA (68) of 2008 set the minimum level of consumer protection requirements. Even though it empowers the consumers against the hazards of product consumption, it also creates a barrier for anyone who wants to give away or distribute food that is not so “fresh” or up to the quality ...