Inghams says a multiyear agreement will cut its sales to Woolworths, but it will remain the supermarket giant’s No.1 poultry supplier under the pact.

The chicken supplier said it expected to sell 1-3 per cent less poultry in 2024-25 in part due to the new arrangement, but chief executive and managing director Andrew Reeves called it a manageable change.

“It’s a one-time step-down,” Reeves told analysts on Friday, after several voiced concern about the arrangement.

“We will still have the opportunity to grow with Woolworths as their business grows.”

“It’s not going to put that sort of pressure on our system that we’ve got to go and just dump volume on the marketplace. That’s not going to happen.”

Woolworths wanted to add more poultry suppliers to its mix to guard against disruptions, rather than because of pricing issues, Reeves said.

“It’s very much a response to the experiences that we all had through the last couple of years of disruption,” he said.

“They have, quite rightly, a very high priority on their customer service levels and security of supply.”

Inghams shares were down 19.6 per cent to $3.11 on Friday morning amid concerns about the deal and what it might mean for the company.

Looking back to 2023-24, Inghams said on Friday the amount of poultry it sold in Australia and New Zealand rose by 2.8 per cent to 476.4 kilotonnes.

It sold more to supermarkets and less to fast-food restaurants as consumers left strapped by cost-of-living pressures dined out less frequently.

“The key long-term fundamentals supporting the poultry sector remain in place, with poultry continuing to be the affordable protein of choice for consumers,” Reeves said.

Revenue climbed 7.2 per cent to $3.3 billion following price hikes in response to significant inflationary cost increases borne by the business.

Inghams’ net selling price was up 5.4 per cent to $6.28 per kilo.

Inghams profit was up 68 per cent to $101.5 million.

-AAP