The conflicting parameters of the rhino horn trade tender

The debate regarding trade is one of the most controversial, acrimonious arguments about modern conservation.

The primary justification for a legalised trade of rhino horns is to provide a temporary solution, which will [theoretically] allow private rhino owners to sell their sustainably sourced horn in exchange for financial respite from the burden of protecting their herds from poachers.  

The trade idea gained notoriety by feeding on both private desperation and public naivety. The Private Rhino Owners Association (PROA) chairman Pelham Jones and John Hume, once custodian to the world's largest concentration of privately owned rhinos were at the forefront of two conflicting financial strategies.

Some of their most compelling reasons for trade are in complete contradiction to the objectives of the financial strategies they promote. Ponder the following two concepts:

1. Economy pricing:

The success of economy pricing relies on the seller having lower overheads than their competitors, which enables the seller to sell large volumes of cheap goods, to quickly gain a high market share by undercutting their competitors. In theory, off-loading a product (in this case rhino horns) below black-market prices (estimated to be upward of £50k per kilo,) allows the seller (in this case the rhino horn owner) to legally sell horns stockpiled by the private sector during the last two decades. This is an attempt to drive down the price of raw horn and force syndicates out of business, which would in turn reduce poaching. So far so good, right?
 
Wrong.  Why would self-proclaimed businessmen Hume and Jones market this concept, knowing the overheads of the syndicates would be significantly less than that of the average rhino owner, let alone Hume who has been vociferous in claiming his monthly expenses are circa. R5 million?  Why continue to promote a concept which requires owners to sell their horns (considered a luxury commodity) at heavily discounted prices at a time when private rhino owners desperately need the most lucrative return for their investment?

In the first opportunity to legally sell horns since the lifting of the moratorium in April 2017, and in contradiction to PROA 'expert' Michael Eustance, Hume and Jones instigated an online auction, the purpose of which was to drive prices up, validating their luxury status and high retail value, rather than down to devalue the horn, undercut the syndicates and reduce poaching.

2. Penetration pricing:

Penetration pricing focuses on selling a premium product (in this case the rhino horn) at an artificially low retail price or introductory offer, then gradually increasing prices after a customer base has been established. This strategy affords the seller a competitive edge against their established rivals (in this case the poaching syndicates) in the hope of driving competitors out of the marketplace and allowing gradual price increases without competition. The concept relies on the sellers’ expectation that customers (in this case the rhino horn consumers,) will switch from purchasing expensive illegally sourced horn to the cheaper legal alternative. Thus, the market can be supplied by regular horn harvesting and poaching will decrease.
 
Penetration pricing could allow legalised sales to quickly gain a higher market share, particularly if discounted horns become financially accessible to potential consumers previously excluded from purchasing, either due to high black-market prices or illegality of the transaction. Although market stimulation has been ferociously denied, it would be virtually impossible to sell luxury goods at affordable prices without creating a mass appeal, particularly to aspiring horn consumers. 

Before April 2017, pro-trade supporters claimed South Africa’s domestic moratorium, implemented in 2009, was the reason behind the escalating poaching of rhinos in the public and private sector. Back in August 2017, Jones hoped the planned auction would determine demand and the fair market value of the horn. Despite this, there was little interest and no sales at the online auction.  The live auction was cancelled and the CITES international ban was blamed for the two failed initiatives.

It's hardly surprising, given the controversial nature of the sales and the difficulty of obtaining CITES permits to transfer ownership and move the horns, but also because consumers value horns from wild rhinos.  In a 2022 study by the University of Copenhagen, researchers found consumers valued horns from wild rhinos because of their perceived medicinal efficacy rather than those of farmed rhinos. 

If a horn trade is truly the viable solution, Hume, Jones et al claim, then why has no horn consumptive country endorsed this proposal?

It's unlikely that private owners with herds much smaller than Hume's (which is all) would see an acceptable income after commissions and taxes unless horn prices rise steeply and rapidly. 

It was also suggested that legal sales be trialled for a limited period of time (possibly five years). This is also contradictory when neither businessman was in this for the short term. According to a crowdfunding page on crowdfunding website Indiegogo, Hume had invested almost three decades of time and more than $100 million of his own money breeding rhinos, growing his herd and de-horning regularly for trade speculation.

Hume was also dogged by controversy after two men were arrested in the North West Province, South Africa in possession of more than 150 rhino horns in early 2019.  

Although the men had a permit to transport the horns from one location in Gauteng to another location in Gauteng the permit did not allow transportation through any other province and they were arrested in violation of the permit. While no money changed hands, Hume admitted selling 181 horns to a buyer in Port Elizabeth claiming the arrested men were transporting the horns for the buyer, who would pay him when the horns were delivered.  In early 2022, Hume's petition to have his horns returned to him, estimated to be worth R20 million, was denied by the High Court, Pretoria.

Judge Hassim said that version of events struck her as “most bizarre” claiming “It is astounding that a self-professed businessman would voluntarily release valuable assets, such as rhino horns, from his control and custody, entrust them to a “potential buyer” he has never personally met for inspection in the hope that the potential buyer becomes a buyer,” .  If the case wasn't bizarre enough, there were also reports that one of the men arrested, Clive John Melville is Hume's nephew.

Hume's ranch was put up for auction in April 2023, but no bid was obtained.  The rhinos were later sold to African Parks, a non-profit organization managing 20 million hectares of national parks and protected areas across 12 African countries, in September 2023. Over the next decade, more than 2000 rhinos will be rewilded in protected areas across Africa.

Even after decades of controversy, multiple failed attempts to overturn the international ban, and the absence of a prominent advocate such as Hume, the South African government remains committed to trade. Barbara Creecy, South Africa's Minister of Forestry, Fisheries and the Environment, unveiled her Draft Biodiversity Management Plan in June 2023. While the draft states that rhino horns will not be traded immediately, regular, legalised trade is intended once government conditions are met by 2030.  A copy of the plan can be viewed below.