The industry is facing an “existential threat to its future if we have another year like this”, warned the poultry giant’s ceo Ronald Kers, pointing to soaring production costs in energy, feed and labour, and this year’s worst-ever avian flu outbreak.
“Whenever you lose tens of millions of pounds in revenue, that has an influence on any business, large or small,” he added.
Precarious
“Many businesses (across the whole of the food sector) are now in a very precarious position and the worst is yet to come.”
2 Sisters has faced less disruption from the bird flu outbreak than its sister company Bernard Matthews. However, it had still lost “millions” of pounds in recent months, Kers told The Grocer.
He said that 2 Sisters had primarily felt the impact of bird flu through increasing supply chain inefficiencies in areas such as exports, which are currently banned due to bird flu restrictions.
Prices
“Those carcases and back ends that would normally go into export markets have had to stay on the domestic market, and that collapses prices, bringing far less value back [into the business] and pushing up our cost of production,” he noted, while calling for more work to develop a viable vaccine.
In total, the supplier’s cost of production had risen by 35% year on year, Kers said. And while its prices to retailers and shelf prices had also risen, he warned they may need to keep climbing into 2023.
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