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Bird flu (H7N9) outbreak and its implications on the
supply chain of poultry meat in China
Shahid G. Khokhar,1 Qingfei Min, and Chao Su
Faculty of Management & Economics, Dalian University of Technology, Dalian
116024, China
Primary Audience: Researchers, Policymakers, Government authorities
SUMMARY
During the past two decades, food safety issues in China not only posed serious threats
to Chinese consumers but also damaged the image of Chinese products internationally. In
China, food safety is not only about scientific discoveries, advanced laboratories, and sanitation
equipment; it is more about the role of different players in the food supply chain. The poultry
meat supply chain is instrumental in the spread of the avian influenza A virus (H7N9), raising
questions about how policymakers respond to such threats and whether industries need to be
restructured to manage and control this epidemic so that it does not recur. As a short-term
measure, to prevent the spread of this disease, government authorities enforced the closure of
live bird markets (LBM) in disease-affected areas of China. However, in the long term, the
poultry meat supply chain needs to be restructured. The aim of the current study was to analyze
distribution channels for chicken meat in China and then describe arrangements in poultry
meat sectors that incorporate small- and medium-scale producers into the supply chain while
responding to shifts in LBMs. We also assessed the role of LBMs in spreading H7N9 and how
these interventions affect the poultry meat supply chain in the Chinese market.
Key words: H7N9, live bird market, poultry meat, supply chain
2015 J. Appl. Poult. Res. 24:215–221
http://dx.doi.org/10.3382/japr/pfv007
DESCRIPTION OF PROBLEM
Highly pathogenic avian influenza (HPAI)
appeared in the news at the end of 2003 in Asia
and in a short time spread to more than 60 countries. In 2013, there were 136 confirmed cases
of humans infected with the avian influenza A
virus (H7N9) and 45 deaths in mainland China
[1]. The recent emergence of H7N9, which is
a novel influenza A virus, in China has caused
concerns about the possibility of a pandemic not
only in China but around the world. The poultry
sector is associated with public health risks arising from zoonotic diseases, and it has suffered
1
Corresponding author: [email protected]
huge economic losses because of the necessity of
investing in the prevention and control of H7N9.
To manage these risks, adjustments in the way
poultry meat is produced and marketed are required along the entire supply chain, including
both small- and large-scale producers.
The H7N9 virus is one subgroup among the
larger group of H7 viruses, which normally circulate among birds [2]. Many scientists are trying to identify the source of this virus; however,
there is consensus among researchers that live
bird markets (LBM) are instrumental in its transmission to humans. Even though to date there is
no evidence of human-to-human transmission, a
very recent study at the City University of Hong
Kong revealed that H7N9 can be transmitted not
216
only through close contact but also through the
air [3]. Poultry-to-human and human-to-human
transmission of H7N9 triggered new concerns
about shifting the current distribution system of
poultry meat in China.
Considering the pathological nature of this
disease, biosecurity practices related to the production, distribution, and marketing of poultry
meat in LBM play a significant role in the control of H7N9. In China, the large number of
small-scale poultry producers, traders, wholesale market agents, and LBM makes it difficult
to implement biosecurity measures across the
poultry meat supply chain. Under these conditions, it is hard to establish product standardization and traceability systems. To address the
problems of traceability in the poultry meat supply chain, drastic changes may need to be made
in the systems related to marketing and distributing poultry meat in China.
In this study, we examined the current poultry
meat distribution system of China and how this
distribution system plays a pivotal role in spreading zoonotic diseases, including H7N9. Finally,
we examined the effects of the recent outbreak
of H7N9 on the poultry meat supply chain. We
addressed future trends and challenges faced by
the poultry meat supply chain in the Chinese
market.
CHINA’S POULTRY DISTRIBUTION
SYSTEM
China’s poultry sector plays an important role
in the national economy. The poultry sector is
characterized by a traditional husbandry system
(including backyard operations), which plays a
key role in people’s livelihood and represents
a significant part of the overall poultry output
[4]. However, in the past decade, large-scale
commercial poultry farms have also worked to
meet increasing consumer demand due to rapid
economic development in China. Because of
economies of scale, these large-scale commercial poultry farms have been a new trend in recent years.
During past decades, growth in the poultry
sector was attained by increasing the number of
birds and the level of productivity. Intensifying
the production process—including better feed
quality, improved veterinary services, and breed-
JAPR: Field Report
ing Western poultry breeds—resulted in better
feed conversion ratios, a lower mortality rate,
and shorter production cycles. The majority of
large-scale commercial producers have productivity levels similar to poultry sectors in more
industrialized countries. Due to consumers’ increased buying power and awareness about food
safety, new marketing networks have developed
for poultry meat distribution in China. Consequently, there has been a shift in chicken meat
sales from LBM to supermarkets, but LBM still
sell most of the chicken meat in China.
Large-scale poultry producers are highly vertically integrated. Their business operations
cover production and the marketing chain, and
they have more control over the supply chain.
These large-scale producers have their own feed
manufacturing plants, large-capacity environmentally controlled poultry farms, vehicles to
transport live birds, and a fully automatic poultry slaughtering system that involves cutting and
processing the meat. They sell frozen chicken
meat in different cuts through small and large
supermarkets. Most of these large-scale poultry
producers supply chicken meat to international
fast-food chains (e.g., McDonalds and KFC)
and national meat-based fast-food restaurants
through their own distribution system (Figure 1).
After the bird flu (H7N9) outbreak in 2013,
pilot projects were initiated with the help of
large-scale producers to promote the sale of cold
fresh chicken in Shanghai and Guangzhou. Although selling cold fresh chicken is not a new
concept, its market share has been relatively low,
mainly due to general eating habits; consumers
think freshly slaughtered chicken tastes better
than cold fresh or frozen chicken.
However, the traditional husbandry system,
which is comprised of small- and medium-scale
producers, bring forth the majority of poultry
in China. Chinese agricultural reforms adopted
in the 1980s divided land among village households on an egalitarian basis to create a vast
network of small fragmented landholdings [5].
Table 1 shows that of all broiler farms, 98% are
of small and medium scale, though in 2011, they
produced only 67% of all broilers. These producers do not have environmentally controlled
farms and thus increase the risk of exposing
live birds to infections and spreading disease.
Gei et al. [6] have proposed that the risk of
KHOKHAR ET AL.: BIRD FLU (H7N9) AND SUPPLY CHAIN
217
Day Old
Chicken
Small and Medium Scale
Producers
Large Scale Producers
Biosecurity
Wholesale Poultry
Market
Level
Automatic
Slaughtering Facility
Super
markets
Live Bird Market
Fast food
chains
Consumers
Figure 1. Poultry meat supply chain in China.
environmental exposure to avian influenza is
closely related to poultry handling on small- and
medium-scale farms, where some farmers raise
poultry in common rooms, extra rooms, or restrooms. With the involvement of intermediaries
and wholesale distributors, poor sanitary practices characterize the transport of live birds to
wholesale markets and LBM (Figure 1). However, Table 1, increasing use of more efficient
environmentally controlled farms results a yearly
decrease in small- and medium-scale farms numbers and increase in large scale farm numbers.
BIRD FLU (H7N9) OUTBREAK AND
CLOSURE OF LBMS
In China, the majority of poultry are produced
by small- and medium-scale producers who use
a traditional distribution system to sell chickens
through LBM. As the name of this selling venue
implies, poultry are sold live, and the markets are
open daily except for a few days during festivals.
They are located in urban and semiurban areas,
and they obtain poultry from nearby wholesale
markets. In Chinese culture, consumers view
purchasing live poultry from LBM as more of
a tradition than a necessity. LBM bring poultry
and people into close contact, creating the potential for transmission of zoonotic diseases [7–9].
These LBM process and sell poultry to consumers. Bird processing includes many steps,
including slaughtering, treating with hot water,
removing feathers and viscera, and cutting and
packaging the chicken meat. However, in LBM,
these steps are generally performed without protective material such as overalls, head coverings,
gloves, or rubber boots. Individuals involved
in bird processing in these environments rarely
use disinfecting techniques. Moreover, species
of other birds are kept overnight in the same
cages with the poultry, which increases the risk
of spreading disease. Shi et al. [10] found solid
JAPR: Field Report
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Table 1. Share of Chinese broiler farm numbers, 2010–2011.
evidence that H7N9 viruses come directly from
live free markets that people visited before
falling ill. To ascertain the relationship between
H7N9 and exposure to poultry, we collected data
from 136 confirmed cases of H7N9 about their
demographics (Table 2) of those infected between March, 31, 2013, to October 16, 2013.
When there is confirmation that particular
poultry markets pose a disease risk to humans,
immediate closure of said markets is required to
prevent spreading the virus through poultry and
to reduce human exposure to the virus. During
such a temporary closure, short-term cleaning
Table 2. Confirmed cases of H7N9 and
demographics.
Profession
Retired people
Farmers
Live bird market workers
Family cluster infection
Others
Unreported animal exposure cases
Total
Number
35
29
10
3
26
33
136
Percentage
25.73
21.32
7.35
2.20
19.11
24.26
100
Source: Data compiled from China’s Center for Disease Control and Prevention and China national health and family
planning commission website through weekly news alerts,
from March, 31, 2013, to October 16, 2013.
KHOKHAR ET AL.: BIRD FLU (H7N9) AND SUPPLY CHAIN
and disinfection practices must be implemented.
Following the detection of the H7N9 virus in
poultry in LBM in Shanghai on April 4–5, 2013,
authorities initiated a series of public health measures that included closing all 3 wholesale poultry markets and LBM to stop live poultry sales on
April 6; culling all live birds; safely disposing of
culled birds, excreta, and polluted feed and water; and disinfecting the materials, transportation
vehicles, and tools that had come in contact with
live birds and the market environment [11].
The risk that H7N9 poses to human health is
more serious than the risk from avian influenza
A (H5N1) because H7N9 does not negatively affect domestic poultry or migratory birds; though
the latter has not been reported to cause severe
disease in poultry, in humans it can cause death.
Because poultry carrying the H7N9 virus do not
show negative effects, H7N9 cannot be easily detected in birds; thus H7N9—in contrast to H5N1,
which kills birds—can spread silently [12].
Because the majority of confirmed early
H7N9 infections were reported in Shanghai and
Jiangsu Province, we assume that the virus may
come from these two regions. As Shanghai’s annual poultry consumption is larger than its annual production, Shanghai does not distribute
poultry to other regions. In earlier research we
showed the relative risks of H7N9 infection estimated by poultry distribution [13]. Therefore,
areas providing poultry to Shanghai should be
tested and monitored.
DISCUSSION
Preliminary estimates show that the agriculture sector lost at least 57 billion RMB (about
US$9 billion or 7 billion euros) between April to
June 2013, because of market shutdown in order
to prevent spread of H7N9 virus [14]. Therefore, this bird flu (H7N9) outbreak is not only
a health problem, it is a serious strategic issue
that should lead to restructuring the poultry meat
supply chain. The traditional husbandry system
includes a large number of small-scale poultry
producers with low biosecurity levels. These producers sell live birds to wholesalers who use their
own transportation to bring live birds in wholesale markets. Small retailers buy from wholesale
markets to sell in LBM (Figure 1).
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In China and many other countries (e.g.,
Thailand, Laos, and Singapore), primarily in
urban areas, LPM (Live Poultry market) are
common. A 2006 survey in Guangzhou—the
provincial capital of Guangdong, which borders
Hong Kong in southern China—showed that
80% of households reported purchasing poultry at LPM at least once a year, and more frequent purchases were common [15]. The complete supply chain providing chicken meat from
small- and medium-scale producers to LBM is
unregulated and has minimal biosecurity measures. LBM are flashpoints in the supply chain
where slaughterers and consumers interact with
birds, and if birds are carrying any pathogenic
disease—including H7N9—it can easily be
transmitted to humans. To determine the prevalence of H7N9, China’s Ministry Of Agriculture
conducted a survey, collecting 84,444 samples
from 473 LBM, 896 poultry farms, 32 poultry slaughterhouses, 36 pig slaughterhouses, 79
wild bird habitats, and 137 environmental sampling sites. Results of that survey announced
on April 17, 2013, showed that only samples
from wet markets (live bird markets) were positive for H7N9. As can be seen in Table 2,
together, farmers and LBM workers represent
28% of those who were confirmed to be infected by H7N9 who had exposure to live poultry either on poultry farms or LBM. Similarly,
retired people who used to go to markets for
household shopping constitute 25% of those
infected, patients from other professions represent 19%, and 24% of the total confirmed
cases do not have a history of exposure to
animals.
Regulating live bird markets by implementing
UN Food and Agricultural Organization (FAO)
guidelines—which include rest days for markets,
keeping poultry separate from other birds, cleaning cages, and using personal protective equipment while transporting, slaughtering, and processing chickens—can reduce the risk of transmitting H7N9 [17]. Using hygienic principles
such as extensively cleaning cages and poultry
transport materials reduces the risk of reinfecting poultry farms with H7N9 viruses present
in LBM. The FAO-China public-private partnership program in Guangzhou to strengthen biosecurity in LBM successfully prevented the spread
of H7N9 [18].
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Because of the Chinese tradition of purchasing poultry from LBM, these markets and
distribution channels must be regulated and
monitored in the fight against H7N9 in China.
Targeted workshops and other training on biosecurity measures explaining elementary hygienic
procedures are necessary for individuals who
have close contact with live poultry as they
slaughter and process chicken meat. Similarly,
rest days that are used to clean and disinfect
LBM needs to be strictly implemented.
In contrast, large-scale producers use their
own transportation system to bring live poultry
to facilities where the birds are slaughtered and
processed by automated machines with stringent
biosecurity measures (Figure 1). Implementing
biosecurity practices not only reduces contact
between humans and pathogens, it also makes the
entire poultry sector profitable. These slaughtering machines are designed to process a high
volume of chicken meat; consequently, they are
economically feasible only for large-scale poultry producers. These slaughtering systems can
be used to standardize products, trace poultry
meat, and provide a high level of biosecurity.
The recent outbreak of bird flu (H7N9) in
2013 and the effective closure of LBM allowed
some interested parties to consider making structural changes to the poultry meat supply chain. In
the short term, however, closing LBM prevents
the spread of pathogenic diseases but also inflicts
economic losses on the poultry industry as the
government culls birds from affected LBM and
halts the buying and selling of poultry meat.
In the long run, requiring live birds to be
slaughtered under stringent biosecurity guidelines will result in an integrated poultry industry in which only large-scale poultry farmers
can survive. Such changes would raise concerns
about the sustainability of small-scale producers
because of intense competition from large-scale
producers as well as public perception that small
units of production are responsible for the spread
of disease.
CONCLUSION AND APPLICATIONS
This study’s brief portrait of China’s poultry
meat supply chain provides a context for understanding the complex market and distribution
JAPR: Field Report
systems for chicken meat and the role of LBM
in spreading the H7N9 virus. It also gives guidelines for further research on structural changes
necessary for the Chinese market’s poultry meat
supply chain.
1. The scope of public-private partnerships
aimed at creating awareness about biosecurity measures in LBM should be expanded
across China.
2. Small-scale farmers, wholesalers, and retailers need to be registered with government authorities so that spot checks can implement and regulate biosecurity practices.
3. Small retailers, with help from the government, can establish isolated slaughtering
areas and centrally controlled, cooperative,
large-scale slaughtering facilities.
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