Having a disaster plan in place is becoming key to business operations these days. About 40 per cent of companies who did not invest in disaster preparedness planning and which suffer a major business disruption go out of business within two years, according to a KPMG study.
The deaths and sicknesses in humans resulting from the new outbreak of avian influenza in Turkey has intensified consumer fears over the disease and the safety of Europe's poultry flock. In the immediate term processors will be harmed if the concerns seriously impact poultry consumption.
But processors must also look ahead to a decreasing choice of where they source their poultry due to bans on imports of birds from affected countries. The bans could also serve to raise the prices they pay for their supplies.
In the longer term they companies should also be planning for the worst case scenario -- that a major outbreak of the disease in the human population could severely impact their employees and their ability to operate.
A pandemic would also have wider ranging effects, especially if companies depend on third parties to transport their products or deliver supplies to their plants.
Alyson Warhurst, a professor at the UK's Warwick Business School, said businesses should be making disaster plans to account for the possibility they may have to operate with a reduction in their workforce of between 20 per cent to 30 per cent.
The figure accounts for those who actually fall sick from the disease and those who may have to look after family members.
In an interview with FoodProductionDaily.com, Warhurst noted that HSBC bank had recently said its worst-case scenario plans for a possible avian-flu epidemic assume that 50 per cent of its employees will not be able to work.
Warhurst, a fellow of the World Economic Forum, is an advisor to Maplecroft, a UK risk assessment firm that has produced a report on the effects bird flu could have on businesses around the world.
She said that the effects of Hurricane Katrina on US businesses in August underlines the need for disaster planning.
"Risk needs to be unpackaged to make sense of it, and when we do this in respect of pandemic risk, Western Europe comes out as extreme risk along with emerging economies such as South Africa, Nigeria and Indonesia in respect of risk of spread both to and within the country," Warhurst said. "The importance of communicating risk in this way is that it helps business define and detail more effective risk management strategies. It supports preparedness and it highlights the types of risk management strategies business will need to develop depending on a relevant government's capacity to contain a pandemic."
In a global ranking of countries to which human H5N1 flu is likely to spread, the UK is also the only Western country rated as at “extreme risk” from the general impact of a pandemic.
The UK's high level of urbanisation, population density and a large number of foreign visitors increase the country’s vulnerability compared to other European countries, Maplecroft says in an advance briefing of the report.
Overall, Maplecroft ranks the UK as the 25th most vulnerable nation to the effects of a pandemic. Other European countries, the Netherlands, Belgium, Spain, Portugal, and Germany among others, are considered as "high risk".
The Maplecroft global map of pandemic risk provides a perspective on the effects from emerging diseases in 161 countries. It explores the risk posed to human health and businesses in each country by an outbreak of a pandemic disease, with a special focus on avian influenza.
Countries reporting human cases of bird flu — Vietnam, Thailand, Cambodia, Indonesia, China and Turkey — are classed as being at high or extreme risk.
The EU and member states have taken a variety of steps to prevent the occurrence and spread of the disease. In the UK, regulatory agencies have required farmers to register their poultry stocks.
Before the renewed outbreak in Turkey last week, poultry consumption in Europe was just rebounding after plummeting briefly when avian flu influenza was discovered in flocks in Russia, Ukraine, Romania, Turkey and Greece late last year.
At the time poultry consumption fell by between 30 per cent to 40 per cent in Italy, with lesser falls occurring in other countries during October and November.
The new outbreak in Turkey is the first time humans have fallen sick and died outside of Asia. Today the Turkish ministry of agriculture and rural affairs said that bird flu has been confirmed in 11 cities and over a dozen others may also have been affected by the disease.
So far there are 15 confirmed cases of the disease in humans and three others are dead. A mass culling of poultry is underway.
Yesterday the Food and Agriculture Organisation (FAO) sounded the alarm over the increasing spread of avian influenza in Turkey. The highly pathogenic avian influenza virus H5N1 could become endemic in Turkey and poses a serious risk to neighbouring countries, the FAO stated.
"The virus may be spreading despite the control measures already taken,” stated Juan Lubroth, senior FAO animal health officer. “Far more human and animal exposure to the virus will occur if strict containment does not isolate all known and unknown locations where the bird flu virus is currently present.”
The FAO called upon neighbouring countries such as Armenia, Azerbaijan, Georgia, Iraq, Iran and Syria to be on high alert, to apply surveillance and control measures and to ensure that the public is fully informed about the risk.
Meanwhile, the World Health Organisation today reported good progress on containing human infection with the H5N1 avian influenza virus in Turkey, with no new confirmed cases over the last 24 hours. Meanwhile, a meeting to create a plan to respond rapidly to an emerging pandemic virus, organized by the Government of Japan and WHO, gets underway in Tokyo.
Earlier this week Cees Vermeeren, the Brussels representative of the EU's Association of Poultry Processors and Poultry Trade (AVEC) said the outbreak in deaths in Turkey in the EU countries was "worrying" for the industry.
AVEC, other industry organisations and European Commission food safety officials are due to meet tomorrow to discuss the response to the outbreaks.
"It's too early to gauge the reaction in the market," Vermeeren told FoodProductionDaily.com. "Everybody regrets what is happening in Turkey. It worries us. We need a firm response."
He called on the Commission to ensure that any new measures put in place ensure that the poultry industry survives adverse consumer reaction.
"Perhaps we can look at measures that will have less impact on the sector," he said.
In early October 2005 the European Commission imposed a ban on imports from Turkey of live birds and poultry products after the country detected the disease in flocks in the northwest of the country. The ban along with others remains in place.
Since January 2004, a total of 142 human cases of H5N1 infection have been reported in Vietnam, Thailand, Cambodia, Indonesia, and China, according to Eurosurveillance. The cases in Turkey bring the number of affected countries to six, from which 144 cases have now been reported.
The EU produces about 11m tonnes of poultry meat annually, of which chicken accounts for 70 per cent of the total, turkey 20 per cent and ducks four per cent. The EU exports about 1.1m tonnes a year.
In the EU poultry consumption overtook beef and veal in 1996, when BSE hit the headlines. Pork holds the number one position in the EU and could gain from the current crisis hitting the poultry industry.
Poultry production has gradually recovered since a 2004 outbreak of avian flu in the Netherlands during spring 2003. The outbreak reduced EU production by about two per cent. Production in 2004 was slightly less than in 2003.
The outbreak of the milder H5N7 form of the virus in the Netherlands in 2003 gives some idea of potential losses. The country was Europe's biggest poultry producer at the time with more than 100 million chickens. About 30 million had to be destroyed at a direct cost of €150 million. The Dutch Agricultural Research Institute estimates that total costs for the Dutch farm sector, including related industries, at €500 million.
Asian flu first appeared in wild birds and poultry in Asia. The ongoing outbreak in Asia has so far led to the destruction of more than 125 million birds, the death of around 60 people and economic losses estimated at €8 to €12 billion, according to AVEC.
In Europe the reduced import supply pressures from Asian markets led to European poultry prices rising, which was also boosted by high feed grain costs last year.
A WHO online survey of health issues found that people ranked avian flu as the number one health issue in 2005, ahead of HIV/AIDS, tobacco and chronic diseases, including cancer, diabetes and heart disease.
After confirmation of the H5N1 virus in Turkey, Romania and Croatia since October 2005, the EU has stepped up measures against the disease. The H5N1 virus was found in an imported parrot in quarantine in the UK, prompting the EU to ban imports of certain live birds from third countries.
On 29 November 2005, the Commission adopted a communication calling for the strengthening of EU-wide coordination in tracking and responding to avian flu.
In related news, a new study published Monday in the Archives of Internal Medicine suggests the virus is more widespread than thought. However the researchers say that the virus might be less deadly to humans than is currently thought.
"The results suggest that the symptoms most often are relatively mild and that close contact is needed for transmission to humans," stated Anna Thorson, a researcher at Stockholm-based Karolinska University Hospital and one of the authors of the study.