Two events in 2026 have put the business interruption (BI) question for Australia’s meat and poultry sector into sharp focus – and neither involved physical damage to property.
In February, a cyberattack on Victorian chicken processor Hazeldenes stalled production at its Lockwood South facility, leaving butchers, pubs, and wholesalers across the state without chicken, according to ABC News. The company shut down its wi-fi across the site, customers received no advance warning of missed deliveries, and Hazeldenes engaged external cybersecurity specialists before beginning a phased return to operations.
In June, H5 bird flu was detected on mainland Australia for the first time. The Australian government confirmed the virus on June 20, 2026, in a wild brown skua found near Esperance in Western Australia. Australia had been the last continent to report H5 bird flu, although the detection in wild birds did not change the country’s status as free of high pathogenicity avian influenza in poultry.
Both events point to the same structural problem for brokers: standard BI policies respond to physical damage, but the disruptions most capable of shutting down a meat or poultry operation today frequently involve none.
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Australia manages avian influenza under the Emergency Animal Disease Response Agreement (EADRA), a cost-sharing arrangement between the Commonwealth, state and territory governments, and 14 livestock industry groups. For H5 and H7 avian influenza in poultry, governments cover 80% of eligible response costs and affected industries cover 20%.
What the framework does not cover is consequential loss. Animal Health Australia states that EADRA compensation “is not intended to provide relief and recovery or welfare payments to affected producers or agribusinesses suffering financial losses from an EAD incursion (consequential losses).”
That distinction defines where the private market must step in – and where the current gap sits.
Lockton, whose September 2026 report maps BI risk across the sector, has stated that bird flu cover in the private market is often sub-limited and becomes severely restricted once an outbreak occurs – advising producers to secure protection before the virus reaches their region. The broker has also noted that BI cover for livestock mortality and business disruption is “limited and not always available in all regions, due to the severity of losses following outbreaks and restricted number of underwriters who provide capacity in the sector.”
The scale of what falls outside the government framework is illustrated by the H7 response. The National Management Group committed $37.6 million to the 2025 eradication effort, according to the Department of Agriculture, Fisheries and Forestry (DAFF) – a figure that covers response costs, not the revenue losses operators absorbed during the shutdown.
The September 2026 Lockton analysis extends beyond biosecurity. It identifies cyberattacks, supply chain failures, labour shortages, regulatory intervention, and utility outages as additional sources of interruption that can halt operations and generate material losses without triggering a traditional BI policy.
The report describes the sector as an “integrated ecosystem,” where a single disruption cascades simultaneously across producers, processors, distributors, and export partners.
The financial exposure at stake is substantial. Beef exports reached a record 1,545,784 tonnes in 2025, up 15% on the previous year, according to Meat & Livestock Australia. Total red meat and livestock industry turnover stood at $81.7 billion in 2022-23.
The Hazeldenes attack illustrates a pattern Lockton flags for the whole sector. Meat and poultry operations depend on digital platforms for production management, inventory control, freight coordination, and food traceability. When those systems fail, the production line stops.
Standard property and BI policies typically exclude cyber-caused losses, requiring standalone cyber cover to address operational interruption. Since May 2025, businesses with annual turnover above $3 million have also been required to report ransomware payments to the Australian Signals Directorate (ASD) within 72 hours – a compliance dimension that many existing BI programs were not written to address.
Willis’s Global Food, Beverage and Agriculture Risk Report 2026 – drawing on 450 senior risk decision makers surveyed in February and March 2026 – found that only 62% of food, beverage, and agriculture companies felt somewhat or completely in control of their risks. That is down from 75% in 2024 and 89% in 2023. Supply chain risk was cited by 44% of respondents, up from 40% in 2024.
“Food and beverage companies around the world are navigating a risk landscape that is becoming more complex and less predictable by the year,” said Simon Lusher, Willis global food, beverage, and agriculture leader.
Lockton’s report flags equipment breakdown as an area where coverage conversations are also regularly incomplete. When refrigeration systems or processing lines fail, the larger financial exposure typically sits in lost production, product spoilage, overtime, and customer penalties – not the repair bill.
Indemnity periods compound this exposure. Specialist processing equipment can take significant time to repair or replace, particularly where machinery is custom-built or sourced internationally. If an indemnity period does not reflect realistic equipment replacement and recovery timelines, the gap between what a policy pays and the actual cost of a prolonged interruption can be significant.
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For brokers, the coverage audit questions are now concrete. Does the BI policy carry non-damage extensions for biosecurity shutdowns or regulatory closure events? Is contingent BI structured to cover the right counterparties, including overseas suppliers? Do indemnity periods reflect realistic equipment lead times? Does cyber cover address operational interruption – not just data breach response? And is existing livestock mortality cover in place before, rather than after, a regional outbreak occurs?
The proportion of Australian meat and poultry operators currently holding the right extensions is not publicly available. What 2026 has already demonstrated is that the gap between a standard BI policy and actual operational exposure in this sector is not theoretical – it has already been tested.
