Chicken retail shops have closed in Telangana following traders’ indefinite strike due to falling profit margins and increased operational costs since April 1, the department said. Lack of poultry to cover more cities in the state affects supply in urban markets like Hyderabad, one of the most populated cities in the state.
Traders also led a statewide “mahadharna” in Indira Park involving thousands of retail shop owners and workers.
The decision to shut down shops comes after several meetings by the state retail chicken shop owners’ association with traders from different districts. There are some 50,000 small chicken shops in the twin cities of Hyderabad and Secunderabad alone and most of them have issued statements to the citizens announcing a strike and that it would continue for an indefinite period of time.
Demand for Higher Margins
Retailers are demanding an increase in commission from ₹26 per kilogram to ₹40 per kilogram and they are not prepared to meet rising costs, he continued. The margin cannot adapt to the expenses on the front end, he added, saying.
To be sure, shop rents, electricity bills, transportation and wages all have shot up considerably, yet we are still at an operating margin, and so there are still going to be some huge losses we face,” he commented yesterday, and they have not let up.
Rising Costs Hit Small Businesses
As a result, traders are quick to remind the readers that labour costs have increased dramatically over time. Workers previously were paid wages up to about ₹5,000 in a month while today at current prices the wage could reach nearly ₹20,000 with workers still being. So a significant increase is required to operate our stores having at least three employees in each shop.
Retailers claim it’s clear despite this increase in cost that they still aren’t making nearly as much profit and this has brought strain on small businesses.
Allegations Against Large Firms
Moreover, the poultry industry is “corporatised and corporate-dominated” according to the association and big firms control prices and small retailers get less and less profit. Satish Goud, chairman of the Telangana State Chicken Shop Owners, wrote that integrators determine retail prices and margins become extremely thin.
And our earnings are down tremendously, and there is severe competition in retail, he said. “As one shop hikes their prices, customers go somewhere else. We have to go on an indefinite strike if we want it done at all.”
Call for Government Intervention
All the traders have asked state and poultry to reform the commission structure so as to guarantee fair returns for retailers.
With the indefinite shutdown, shortages and price fluctuations are likely to lead to shortages and price fluctuations in the coming days. And if retailers can’t even get a fair and balanced exchange and the government has to negotiate against retailers (and big poultry traders) and make small poultry buyers a little less expensive in the middle of the price wars it’s going through.
