Report warns of poultry imports safety threat

A new report for the poultry industry warns of major potential costs if allowing fresh chicken imports compromises New Zealand's freedom from avian diseases.

Imports of raw chicken meat are banned under the Biosecurity Act but the Poultry Industry Association says there is constant pressure for access from countries like Brazil, the US and Thailand.

The report from Charles River Associates for the association noted New Zealand had not had a recorded case of highly pathogenic avian influenza (HPAI) or exotic Newcastle disease (END) - two lethal, contagious poultry diseases that periodically infect flocks around the world.

An Australian study on a hypothetical END outbreak in New South Wales suggested chicken deaths could result in consumers having to pay A$109 million ($132.74 million) extra over a year for chicken, assuming no imports were allowed to help make up the shortfall.

A 1983 outbreak of HPAI in Pennsylvania had led to 17 million birds being destroyed, with consumers having to pay an extra US$349 million ($572.5 million) more for protein foods over six months as a result of poultry shortages.

The report said it was difficult to gauge what implications these studies had for the costs of a disease outbreak in New Zealand. For example, the effectiveness of measures to contain the spread of disease would have a strong bearing on costs.

The association's executive director, Michael Brooks, said the industry was very keen for the imports ban to remain to help keep diseases out.

The report's authors said they understood the Government faced "some pressure" to consider whether to relax New Zealand's import ban.

Brooks said there were no signs from the Government that it was about to bow to such pressures.

"It's generally mentioned in trade talks. [There will] always be comment about the New Zealand chicken market."

Brooks said about the pressure: "It's something that you're considering on all occasions."

The report acknowledges allowing imports could put downward pressure on chicken prices, although more detailed analysis would be needed to quantify this.

It also pointed out that three companies - Brinks, Inghams and Tegel - account for 97 per cent of the market, with a further eight smaller players.

Falling New Zealand chicken prices, in relative and real terms, had been a factor in consumption growth, and there had been improvements in quality and products, the report said.

"These outcomes are consistent with effective competition in the industry, despite the concentration levels and the import restrictions."

Also, buyers such as the supermarket chains and KFC, had substantial "countervailing power" against the big poultry producers, and the eight smaller players make up a "significant competitive fringe".

Brooks noted that the industry has done a significant amount of work being prepared for any outbreak of the HPAI H5N1 strain, the "bird flu" which has killed humans.

He expected that an outbreak here could be swiftly contained, but the biggest financial impact on the industry would be consumer flight from poultry.


CHICKEN FEED

* Chicken is more popular than beef, lamb or pork.

* Kiwis now eat almost 40kg of chicken per head a year, compared with 15kg in the early 1990s.

* Supermarket expenditure on poultry meat last year was worth more than $500 million or nearly 24 per cent of retail meat spending.

* The big three poultry producers - Brinks, Ingham and Tegel - account for 97 per cent of the market.