Coles and Woolworths shoppers 'hit hardest' by egg shortage: 'Six-month delay'
Egg shelves are completely bare at the major supermarkets. A leading supply chain expert has explained why Aussies could face product shortages in future.
Coles and Woolworths stores in several Aussie states are struggling to keep a household staple on the shelves. While eggs were noticeably absent in major supermarkets Yahoo News visited in Melbourne and Sydney this week, smaller grocery stores don’t appear to be having the same problem.
The shortage was triggered after outbreaks of H7N8 avian influenza were detected across Victoria, NSW and the ACT, forcing affected chicken farms to cull close to two million birds. Major supermarket wholesalers were among those worst affected, explained Australian National University supply chain management specialist David Leany.
“Supermarkets buy eggs in very big volumes, and they buy them from very big producers, and it’s those very big producers who have been hit the hardest by avian influenza,” he told Yahoo News.
Smaller retailers in contrast aren't always reliant on large suppliers and have been able to maintain supply with purchases from smaller farmers.
Related: Do you know what the tiny number on supermarket eggs means?
When will Coles and Woolworths have a full supply of eggs?
The United States and United Kingdom have also been largely impacted by a separate strain of avian influenza, H5N1. In the US alone, over 145 million birds have been culled since 2022, leading to regular shortages. H5N1 has reached the shores of every world region except Oceania, and in October, the federal government announced an extra $95 million in funding to prepare the nation for its expected arrival in the coming months.
If the recent H7N8 outbreak had affected meat chickens the shortages may not have been so prolonged. They reach slaughter age in less than 5 weeks, but the earliest a layer hen will regularly produce eggs is 18 weeks. The outbreaks of H7N8 were first detected in Australia in May 2024, but it’s in January and February that supply issues have been most noticeable.
“The six-month delay we’re seeing has been the six months to get replacement hens matured and resupplied to farms,” Leany explained.
“Will we have fixed the problems in a month? Not a chance. Will it still be around in three months? Probably. Is it going to be around in six months? Probably not.”
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Supermarkets say they're 'working hard' to fix egg supply
Peak body Egg Farmers of Australia was unavailable to comment about the issue and directed Yahoo News to a statement from early January, which indicated farms were in the process of restocking. Addressing the problem, it also blamed high demand over the summer holiday period and the decision by some producers to shut down cage egg production, and build new free-range and barn-laid farms.
In a statement, Coles told Yahoo it wanted to assure customers it’s “working hard” with its suppliers to improve the availability of eggs. While Woolworths said its supply of eggs has “continued to improve” and that it’s working to “source as many eggs as possible”.
Limits have been placed on egg purchases across large supermarkets around the country, bringing back distant memories of when fights broke out over rationed toilet paper during the Covid-19 outbreak. Or more recently when shipping containers were in short supply, resulting in import delays.
Australia is unique in the world because it has what the nation’s competition regulator, the ACCC, describes as a supermarket “oligopoly”. It estimates 67 per cent of supermarket retail sales are made at Coles and Woolworths, and 9 per cent are at Aldi. Metcash-supplied independent supermarkets, including IGA, only account for 7 per cent.
Can Aussies expect more supply issues at supermarkets?
Leany expects the supply chain model that governs the behaviour of large retailers will continue to result in shortages, because of profit maximisation.
“If you want to make a supply chain super-efficient and super-cheap, you take risks about bottlenecks and single suppliers, and you just hope nothing goes wrong,” he said.
“But if you want to make your supply chain more robust, more resilient, and more capable of withstanding shocks, you build in multiple paths. You don't have it as cheap, you don't have it as efficient.”
In Australia, legislation provides a surety for goods deemed essential for the running of the country, like diesel fuel. But for items like eggs, their supply is left up to market forces.
Because there is diversity in the supply chain and multiple retail sources, Leany doesn’t think further regulation is needed. But he also doubts the supermarkets will change their focus on efficiency any time soon, meaning shortages of individual products could be expected in future.
“If I was on the board of directors, trying to squeeze every cent I could out of the system to get the returns for our shareholders, I probably wouldn’t change the design of the supply chain,” he said.
“I'd say, let's just run a smooth, efficient, cheap supply chain, and now and again, we’re going to have shortages. And it might mean that some of our customers might have to buy their eggs from IGA.”
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