Black economic empowerment has been a fraught affair among food producers and processors for several years. That's because the subject has been tied to the emotionally charged subject of land redistribution, which delayed the development of the agri-BEE transformation charter.
After years of wrangling, the agricultural sector, its related processing industry and the previous minister for agriculture & land affairs produced a charter that was agreeable to everyone.
But a new minister, Lulu Xingwana, came into office and the discussion grew quiet. Last year, after a six-month silence, the charter re-emerged from her office as a different document with different targets, which upset the applecart.
"It [the absence of a charter] may have slowed down transformation in these industries," says Empowerdex researcher Steven Hawes.
However, with the publication of the broad-based BEE codes last year, there is a sense that the food companies are beginning to embrace BEE.
"There is a trickle of companies coming through," says Michelle Brun of the National Empowerment Ratings Agency.
"First it was the micro, then medium, then the large companies - the large companies put pressure on the small companies to get their ratings before they did their own."
It is Tongaat, along with Oceana, which it has just unseated in the top empowerment rankings, that stand head and shoulders above their peers - and many others in SA industry. Their scores reflect a holistic approach to empowerment that transcends others' silo-like mentality that focuses on an aspect of BEE - whether it is ownership, equity or socioeconomic development.
"Transformation needs to be an ongoing, strategic process that is incorporated into your business strategy," says Brun. "When you are spending 3% of your payroll on training, that becomes expensive and therefore should be a strategic issue."
Yet what many of the agro-processors and others in the food and beverage industries have tended to do is to look at elements of the scorecard in isolation, says Brun. Instead when one considers the seven pillars of the BEE scorecard as one strategic imperative, they would find that one element of the scorecard supports another. "Tongaat seems to have got this right."
As has Oceana. Last year the company scored an A from Empowerdex in the black ownership category. An effective 30,16% of the company is in black hands.
After Tongaat and Oceana comes SABMiller, Rainbow Chicken and Distell, which made it under 100.
Though it hasn't moved in the rankings, SABMiller has been involved in some successful empowerment initiatives, "to create wealth for new players", since 1987.
It introduced its owner-driver project, which resulted in former employees forming their own companies to distribute SAB's brands. Now about 60% of volumes are distributed by these operators.
