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Coles, Woolworths respond to claims of 12% chicken price hike

Roast chickens at Coles
Chicken is a festive staple for millions of Aussie families. (Source: Getty) (Getty Images)

Reports of a chicken shortage in Australia have been rife in the lead-up to Christmas, but industry leaders say there is nothing to worry about in terms of their supply at supermarkets like Coles and Woolworths.

The reports stemmed from an industry update from online marketplace Foodbomb, which claimed "chicken is soon to be in short supply, with prices set to go up by 12 per cent before Christmas".

Warning a shortage was looming, Foodbomb's report included comments from Jim Hoang - sales manager for Victoria's largest chicken distributor, Master Poultry - about a significant drop in supply at their end.

"The food industry usually feels it first, ahead of consumers, because major supermarkets get first dibs on supplies due to contractual reasons," Foodbomb Head of Supplier Relations, Nathan Lo Russo, said in the statement.

"Food suppliers, hospitality, venues and caterers are left to fend for whatever supplies remain and this doesn't really trickle down to affect customers for weeks, sometimes months. While the shortage is currently at a supplier level, the reality is it will hit all of Australia soon."

Price hike?

Another Victorian supplier, Oroso Poultry, expected prices of chicken to increase anywhere from 2-12 per cent in the coming weeks, which was echoed by Master Poultry in the report.

"We haven't seen any price increase on our free-range chickens for five years, but recently we've had two price increases," Hoang said.

"Overall, chicken prices have gone up 25 per cent and we've been told to prepare for more, with another price increase coming next week."

Lo Russo added that chicken had consistently been the same price over the past three decades and, while suppliers were reluctant to pass on price increases, increased production costs may force them to do so.

"Historically, suppliers would absorb price increases, as they were minor and usually temporary but now, due to various factors like inflation and staff shortages, those price increases are too high for suppliers to absorb alone," Lo Russo explained.

"As a result, chicken prices will not come down for supermarkets, hospitality venues or food-service businesses, they'll just keep going up to a point and then plateau, creating the new norm."

Coles, Woolworths deny shortage claims

The Australian chicken industry has been plagued with a cocktail of challenges over the past year, with petrol and electricity price increases, post-pandemic labour shortages, and limited wheat supplies needed for chicken feed as a result of the Ukraine war.

The Australian Chicken Meat Foundation (ACMF), however, denied claims of any supply problems, saying it was "not aware of any issues in chicken meat supply or any anomalies across the broader supply chain".

"Australians will be able to enjoy their favourite meat for Christmas and throughout the holiday season," an ACMF spokesperson told Yahoo Finance.

"The suppliers of Australia's chicken meat have reported no chicken shortage."

Supermarkets Coles and Woolworths both denied the chicken shortage claims to Yahoo Finance, with Woolies echoing the ACMF's statement and rival Coles saying this was not something they were experiencing.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), which forecast that the total number of slaughtered chickens for 2022/23 was set to hit 713 million, noted on its website that Australia did not have a food-security problem.

The ABARES website also states that Australia is one of the most food-secure nations in the world and produces sustainably more food than it consumes, despite temporary shortages of some food items in supermarkets.

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