By Jessica Yun
One of Australia’s biggest poultry suppliers, Ingham’s, says severe staff shortages caused by the current COVID-19 outbreak has halted production of some items and resulted in lower manufacturing volumes.
Many of Ingham’s items sold in supermarkets include frozen chicken and turkey products.Credit:
Ingham’s is a key poultry supplier to McDonald’s and KFC. A KFC spokesperson confirmed with the Sydney Morning Herald and The Age that it was experiencing intermittent supply chain disruptions across the nation and “absenteeism” within its chicken suppliers.
“[It means] some of our restaurants are unable to offer our full menu which relies on fresh chicken,” the spokesperson said. “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 warning came as the climbing number of COVID cases across the country has caused staff shortages across nearly all sectors of Australia’s economy and led to empty supermarket shelves as workers right across the supply chain are forced into isolation.
In its business update released on Tuesday, Ingham’s outlined the extent to which its business has been hamstrung by the record level of Omicron-driven COVID cases, as a large proportion of its workforce remains home to isolate.
“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,” the company said in its ASX statement.
“This has disrupted production and distribution capability, and impacted sales.”
While Ingham’s production sites are still operational, “significantly lower” staff levels have meant production volumes have suffered as a result.
“The operational and trading difficulties have resulted in significant operational inefficiency, additional costs and the temporary suspension of a number of Ingham’s products,” said Ingham’s chief executive Andrew Reeves.
The business was focused on supplying as much product as possible to its customers despite the disruption, he added.
“As operating conditions begin to stabilise, we expect our production capacity to recover relatively quickly to meet customer and consumer demand.”
The ASX-listed company said it could not predict how long the current disruption would last and therefore “premature” to draw conclusions on the overall business and trading impact. The company will issue its 2022 financial year first-half results on February 18.
Investors reacted badly to the grim update, battering Ingham’s share price, which was down by 6.66 per cent as of 10:48am.
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correction
An earlier version of this story incorrectly stated that Collins Foods is the parent company of KFC Australia. The parent company is Yum! Brands.