Business monthly March 06
 
EDITOR'S NOTE COVER STORY EXECUTIVE LIFE
VIEWPOINT IN PERSON SUBSCRIPTION FORM
IN BRIEF MARKET WATCH ADVERTISING RATES
IN DEPTH CORPORATE CLINIC
 

IN DEPTH
The Bourse Identity FTA Future Uncertain
Red Sea Resort Taking Shape Private Players Tap Into Water Sector
For Business, Cartoons no Laughing Matter Off The Menu Poultry Industry Succumbs To Bird Flu

by amena bakr

eating chicken has never taken so much courage. an outbreak of avian flu in egypt has transformed the country's favorite dinner dish into - at least in the public's mind - a last meal and death sentence.
panic spread after the government announced on february 17 that the h5n1 strain of avian flu, responsible for 91 human deaths worldwide but feared mostly because it could mutate into a more lethal pathogen, had been detected in birds in cairo, giza and minya governorates.

the government took immediate action, ordering the closure of 150,000 live bird markets and shops across the country, banning the transport of live birds between infected governorates, and culling flocks suspected of coming in contact with the virus.

amr farid, owner of a baladi live bird store in cairo's sayeda zeinab district, says health officials closed his shop, but not before slaughtering all his live poultry. "they told us that we can open our store in 15 days, but all the birds must be frozen. we can't sell them live anymore," he said.

the government also banned the rearing of poultry on rooftops, a common practice in both the city and countryside and one that puts humans in close contact with birds. "the time has come to get rid of the idea of breeding chickens on the roofs of houses, especially under current circumstances," prime minister ahmed nazif said.

health ministry representatives went door to door to homes where poultry is raised, inspecting chickens, ducks and pigeons for the virus, and supervising their slaughter. anyone failing to comply with the culling order faced prosecution and fines of up to £e 10,000. "[the government] made me slaughter my 15 pigeons after checking on them, telling me it was for my own safety," says om magdi, who has been breeding pigeons on her rooftop for over 10 years.

in the days following the initial outbreak, the government announced bird flu infections in 13 of the country's 26 governorates, as well as luxor city. giza zoo, a popular roost for migratory birds, was forced to shut for at least 15 days after inspectors discovered the h5n1 virus in samples taken from 83 dead birds.

as of press time, government sources report the culling of hundreds of thousands of domestically raised birds nationwide, as well as 56,000 chickens at three farms north of cairo and another 10,000 chickens at a farm in the delta. the government has allocated 53 sites for the sanitary destruction of infected poultry and set up an emergency hotline for reporting suspected cases of bird flu - though the line is often down or busy.

the containment measures are a heavy blow to the nation's poultry industry, which was already reporting a 30-percent drop in sales since the worldwide bird flu scare began in late 2005. the industry, which supports 2.5 million people, is estimated to be worth £e 17 billion excluding some 2 million rooftop operations, whose profits remain unknown.

the poultry industry estimates losses at up to £e 10 million daily, with nearly a million employees already laid off. "the situation is very gloomy and at this point it's very difficult to determine when the industry will recover," says magdy el-sebaie, general manager of cairo poultry, the country's largest poultry company.

before the ban on selling live birds, 85 percent of the nation's poultry was sold in live markets, while 15 percent was sold frozen. consumers may be reluctant to switch to frozen poultry, el-sebaie says. "this is definitely a big shift in the market and it will be a while before people get used to the idea of buying frozen poultry."

the shift to a frozen product line could force poultry companies to integrate, and open new slaughterhouses and processing plants, which would require enormous capital at a time when revenues are down. "we need to join forces so we can help lift the market back to its normal state," he added.
owners of smaller operations, however, think the bird flu scare could be the end of their business. mohamed hassan, owner of a small live bird store in garden city, doubts the market will ever be the same again. "my customers are used to buying fresh poultry; there is no way that they would accept the idea of frozen products," he complains, adding that he is contemplating converting his small store into a fish shop. "i have workers that need jobs. i can't just leave them without jobs - they have families to support."

the government has announced it will support the poultry industry, but as the outbreak continues to spread it is unclear to what extent. a government source that spoke to business monthly on condition of anonymity said it will provide low-interest loans to the owners of traditional live poultry shops to purchase freezers, which would help them switch over to the sale of frozen birds. the cabinet has also earmarked approximately £e 1 billion to compensate businesses affected.

poultry farmers and those whose stocks have been culled and removed by health inspectors will receive an undisclosed sum in compensation, the source said. however, poultry outlets will not. "we are not responsible for the loss of all the bird shops since in business there is always gain and loss, and we never shared in their gains so we shouldn't be responsible for their losses."

the government also announced that in a bid to mitigate the losses of poultry farmers it would purchase all healthy stock reared by farmers until march 25, though details of the scheme were not revealed.
hassan is skeptical, fearing the government will undervalue poultry stocks. "they'll give us peanuts for our birds as in both cases it's a total loss for us," he said.

at a third of the price of red meat, chicken traditionally provided nearly 50 percent of the animal protein in egyptian diets. since the bird flu outbreak, however, consumer demand has plummeted.
kentucky fried chicken has reportedly lost almost 75 percent of its sales. at one outlet in mohandiseen, restaurant staff were giving away chicken dinners to workers in nearby buildings. some branches, bereft of customers, are operating with only a skeleton crew.

several cairo restaurants that business monthly contacted said they were still serving chicken and eggs, but customers have been wary. one sandwich shop said chicken menu items were being prepared only from frozen chicken. four seasons hotels, meanwhile, have taken poultry off the menu as a precaution for staff and guests.

according to the world health organization (who), even infected chicken and eggs are safe to eat provided they are properly cooked. "once the meat is cooked to 70 c the virus cannot survive, so it becomes completely safe to eat," who spokesman dr. zuhair hallaj told business monthly last november. he said the only way humans could be infected with the h5n1 virus is through direct contact with the infected bird's feathers, droppings or body parts.

the public's fear and confusion has laid fertile ground for rumors, which have spread far faster than the disease itself. supermarkets sold out of mineral water within hours of an sms message on february 21 that claimed drinking water had become contaminated with the bird flu virus due to people dumping infected chickens into the nile. in an attempt to calm worried citizens, minister of water resources and irrigation mahmoud abou zeid appeared on television to announce that tap water was safe to drink and, to prove it, quaffed a glass of water for the cameras.

ramzi nasrallah, vice president of wadi holding, which runs one of the nation's largest poultry companies, believes that the media has over-inflated the health risk of bird flu. "the worldwide media has given the bird flu too much attention, which caused many people to panic," he said, stressing that cooked poultry and eggs are safe to eat - a message the media has failed to adequately convey.

nasrallah says bird flu is primarily a concern for small farms and rooftop breeders that operate outdoors. large poultry operations take bio-security measures to prevent their stock from having any contact with wild birds. "the only way our birds could catch the virus is through [contact with] other birds and this does not happen," he says.

if there's any good news in this it has been for butchers and fishmongers, who report brisk business. prices of meat and fish have increased by nearly 40 percent in recent weeks, giving many limited-income families good reason to go vegetarian. "i cannot afford the prices anymore, and it looks like me and my family are not going to eat meat for a very long time," complains ahmed mahrous, a 40-year-old taxi driver.

submit your comment

top

   
         Site Developed and Maintained by the Business Information Center of AmCham Egypt
Copyright©2007 American Chamber of Commerce in Egypt