A staple of the Australian diet is the latest victim of the Omicron crisis, as staff shortages hit Australia’s biggest chicken supplier and shelves go empty.
The staff shortages have significantly cut sales at Ingham’s and made some products unavailable at one of its big customers, KFC.
Australians eat almost 47kg of chicken each a year, making it the country’s most popular meat, according to industry statistics.
It is also the cheapest meat on the market – at an average of $5.43 a kilo it is less than half the price of pork, lamb and beef.
“The rapid spread of the Omicron variant across eastern Australian states from December 2021 and the resulting staff shortages, are now also having a significant impact on the Australian supply chain, operations, logistics and sales performance of Ingham’s, and some of its suppliers and customers,” Ingham’s said in a statement to the ASX that sent its share price tumbling more than 6%.
“This has disrupted production and distribution capability, and impacted sales.”
Market sources said Ingham’s customers included KFC, which Guardian Australia has confirmed is suffering from a shortage of some products due to difficulty in obtaining fresh chicken pieces on the east coast.
Staff shortages are worst in processing plants, where chickens are cut into pieces such as thigh and breast fillets. This has resulted in Ingham’s shipping more whole chickens to supermarkets and other retailers.
Consumers have reported empty shelves in the chicken sections of supermarkets as shoppers clear out available stock.
Ingham’s said its main sites were open and “have not experienced significant on-site transmission of Covid”.
“However, they are experiencing significantly lower levels of staff availability which is impacting production volumes and operational efficiency,” the company said.
“Operational changes are being made to volume and mix across Ingham’s Australian business and it is not currently possible to predict how long this disruption will continue.”
A KFC spokesperson said the fast food chain was “currently experiencing intermittent supply chain disruptions nationally due to Covid-19 related absenteeism at our chicken suppliers, meaning some of our restaurants are unable to offer our full menu which relies on fresh chicken”.
“We’re working with our multiple suppliers to mitigate the impact and provide them with support, but we expect some disruptions to continue in the coming weeks.”
Ingham’s said it was too early to tell what effect the shortages would have on profit.
Its managing director, Andrew Reeves, said many employees were “forced to isolate at home due to contracting Covid in the community or as a result of being close contacts”.
He said a decision by state and federal governments which removed a requirement for asymptomatic close contacts who work in the meat industry to isolate for seven days “should assist to alleviate some of the current staff shortages”.
“As operating conditions begin to stabilise, we expect our production capacity to recover relatively quickly to meet customer and consumer demand.”
The secretary of the Australian Council of Trade Unions, Sally McManus, said workers in meatworks were particularly vulnerable to catching Covid-19.
“There’s social distancing that’s been put in place but that is not enough with Omicron and inevitably if one person on that line gets sick and is infectious there’s a high chance, especially as we know because of that type of wet, cold environment, for it to spread as well,” she said.
Eggs, however, are not yet in short supply, with the industry confident that it can handle the disruptions.
“Any absence of eggs in stores is a result of disruptions to supermarket staffing and logistics, and not a reflection of continuity of supply,” said Rowan McMonnies, managing director of Australian Eggs.
“Australia’s 21 million hens are still laying eggs, and farmers are working around the clock to get those eggs to their customers,” he said.