Up to 20 rural workers face losing their jobs as food giant Hook 2 Sisters threatens to pull contracts from Borders farms.
A company spokesman said this week eight farms - six at Earlston, one at Coldstream and one at Kelso were “informed they are at risk” two weeks ago.
He said: “We outlined last November the restructuring of our Scottish operations and the acute challenges faced by us and our grower base, including a substantial oversupply of chicken and the urgent need to create an economically viable poultry industry in the country.
“It’s with regret that we confirm eight farms in the Scottish Borders are at risk of closure.”
The spokesperson said the local farms were inherited from previous poultry business Marshalls and that structural problems were historic.
He said: “Scotland is the least efficient manufacturing location due to a number of structural reasons, including higher cost of live birds, climate conditions, older assets and longer distribution routes. It’s basically just too far away from cutting or processing sites. There are no cutting sites in Scotland.
They’d have to be killed in Scotland, transported south to England for cutting, then back up to Scotland for processing. It’s not very efficient and is very very costly.”
And none of these had been addressed by previous failed Scottish poultry businesses such as Vion, Grampian and Marshalls.
He continued: “Our agriculture teams will do their upmost to work closely with the affected farms to minimise the impact of this proposal.
“Our current operating environment has remained unsustainable for some time.
“We have to consolidate our production base in order to secure the longer-term future of the poultry industry in Scotland.”
Farming leaders have called on the CMA (the Government’s Competitions and Markets Authority) to intervene.
NFU Scotland said: “Scottish consumers face the prospect of being unable to buy Scottish chicken in their local supermarket. Without urgent action the Scottish Government’s own Poultry Plan, produced in December 2013, will be redundant.
“The retail poultry market is predicted to grow 26 per cent over the next five years but despite the clear demand for quality Scottish chicken the number of independent chicken producers in Scotland has fallen from 28 to 12 since December. The number of chickens produced in Scotland will fall by more than seven million birds per year.”
Following a meeting with the Scottish Chicken Growers Association (SCGA), NFU Scotland is providing legal support to those whose contracts have been terminated.
“The loss of vital infrastructure is an immediate concern, limiting future options and possibilities for the industry as once lost they will be almost impossible to replace, “ said the union.
NFU Scotland President Nigel commented: “Scotland’s chicken growers have reached a crisis point. This has all happened behind the veil of an aspirational Poultry Plan to provide consolidation to Scottish production and to grow it at the same time. In reality, in the last few months, the supply chain has halved.
“The downsizing has cut away vital infrastructure and left the industry focussed in Angus. That is blocking the recovery of the sector. This should be an issue for the CMA, and if required, for it to investigate and act.
“To date little tangible has been delivered through the Poultry Plan and action is needed fast to save the industry before numbers and