British Poultry Industry Deals With Bird Flu

LONDON, Feb. 5, 2007— -- The bird flu outbreak on a poultry farm in rural Suffolk, England, has sent shivers of fear down many a spine. But these fears have little to do with the threat of a possible pandemic. What is really starting to worry people is the effect this outbreak will have on business.

Britain's poultry industry is worth $6.6 billion a year, with exports alone amounting to more than $750 million. Hours after the H5N1 strain of avian influenza was discovered, both Russia and Japan banned imports of live poultry, poultry meat, eggs and poultry feed from Britain.

English poultry exports to Japan exceeded 160,000 fowl last year. Today Britain completed its cull of 160,000 turkeys in a move to quell public fears over the spread of the virus.

So what lies in store for British poultry farmers this year?

This afternoon, in a speech in the House of Commons, David Miliband, the British secretary of state for the Department for Environment, Food, and Rural Affairs, described the risk to the general public from this outbreak as "negligible" and repeated the Food Standards Agency's claims that there is "no risk" in eating poultry or eggs.

Despite his insistence that all possible precautions have been taken to contain the virus, convincing consumers of the safety of British poultry, both at home and abroad, will not be easy.

Poultry processing companies know this better than anyone else. Last April Northern Foods, one of Britain's leading food producers, suffered a drop of almost 50 percent in its share price, following the initial detection of the pathogenic H5N1 strain in Britain.

This year the discovery of the virus on a farm run by Bernard Matthews, Europe's biggest turkey manufacturer, raises new anxieties over the safety of poultry products.

Calls to the Bernard Matthews press office asking about the impact of the virus on its business were not returned. A press statement posted on the company's Web site attempted to assuage customers' fears by stating that all their products "are perfectly safe to eat" and "there is no need to recall or withdraw" products from supermarket shelves.

What Lies Ahead?

The effectiveness of such claims, though, will be measured by whether customers leave their products sitting right where they are now, on grocery shelves, or in their refrigerators at home.

When ABC News contacted Britain's National Farmers' Union to inquire about possible impact on sales, a spokesperson said that they were in close "touch with retailers, and there's been no significant drop in sales yet."

Richard Griffiths, the senior executive officer for the British Poultry Council, told ABC News he supported these claims, saying that "despite the exports made to other countries in Europe and elsewhere, the British consumer is the key to the poultry industry's success. And we don't anticipate a sharp drop in retail sales because of this. We think the British consumer will stay with us."

Such news will no doubt hearten many poultry farmers, whose livelihoods are at stake, especially if the virus continues to spread across the country.

New Restrictions

The chances of that happening seem -- at least for the moment -- dim, given the restriction zones established by the Department for Environment, Food, and Rural Affairs around the area where the virus appeared on Friday. According to a DEFRA press release, "all bird gatherings -- including shows, markets and fairs and pigeon races -- have been banned nationwide until further notice."

But as Griffiths pointed out, "It is too early to judge the true impact of this outbreak." Last year, during a single week in February, France, Italy, Germany, Austria, Greece, Bulgaria, Slovenia, India, Iran and Egypt all encountered their first cases of the H5N1 strain in wild birds.

Nearly all these nations suffered a sharp drop in profits from poultry sales: France's fell by 30 percent, Germany's by 20 percent, Italy's by a staggering 70 percent, while Indian poultry producers took in more than $100 million less than a week after the outbreak occurred.

Faced with such stark statistics, it seems the British poultry industry will not be sighing with relief anytime soon. Whether British consumers will follow the lead of their compatriots in Europe or stake out a path all their own, only time can tell.

Additional reporting by Casey Schwartz