‘Active discussions’: Inghams, Maggie Beer flag further price hikes

Poultry supplier Inghams Group and premium food business Maggie Beer Holdings have both flagged price increases as food producers continue to battle rising energy, transport, feed and logistics costs.

Inghams’ boss Andrew Reeves said the company had already achieved “good price increases” across all its customers, which include KFC, McDonald’s, Woolworths, Coles, Aldi, Subway and more, but indicated more hikes could be on the horizon.

“We remain in active discussions to secure further price increases to offset ongoing feed cost and other inflationary pressures, should this be necessary,” Reeves told shareholders at Inghams’ annual general meeting on Tuesday.

Feed and transport are the two big costs Inghams has to shoulder. Feed costs, which can account for 60 per cent of the price of chicken, have stabilised somewhat thanks to slight drops in wheat and soymeal prices, but are still at elevated levels as Russia’s war on Ukraine constrains global grain supply.

Reeves said supply chain disruptions were still the norm in the current operating environment, but expressed confidence that there would not be a repeat of earlier this year when the poultry producer temporarily halted production of some chicken products altogether amid severe staff shortages.

“We had to stop making certain products until we had sufficient staff return,” the CEO said. “I am confident that, given the reduction in COVID infection levels and the change in government COVID isolation rules, the risk of such high absenteeism levels is now behind us.”

Ingham’s board of directors decided the company’s senior executives will not receive bonuses for the 2022 financial year as COVID’s impact meant the company had failed to hit its targets; Ingham’s net profit after tax for the period slid by 57.9 per cent to $35.1 million.

“Based on the reduced performance of the company in [the 2022 financial year], short-term incentives were not awarded,” said Ingham’s chair Helen Nash. “The long-term incentive plan covering the FY20-22 time period also did not vest.”