The position involving Scottish-produced chicken has become so serious that NFU Scotland has asked the Office of Fair Trading (OFT) to investigate the market with a view to delivering a report to the Competition Commission.
The OFT was consulted on the takeover of Vion’s production units and processing plants last year by 2 Sisters, and at the time authorised the move.
However, the NFUS now clearly believes the actions taken since then go against the reassurances given during the original investigation and require a second look.
Furthermore, the NFUS does not believe what it is seeing in Scotland represents the normal functioning of market forces.
The farming union believes the position is so serious that Scottish consumers face the prospect of being unable to buy Scottish chicken in their local supermarkets as further cuts to producers’ contracts are announced.
At the end of last month four growers’ contracts were terminated, followed last week by a number of free-range contracts.
Now comes news that a number of Hook 2 Sisters company owned farms in the Borders have closed.
The company, with its plants at Coupar Angus and Letham, is by far the dominant player in the Scottish market
Perversely, all this is taking place just as the retail poultry market has been predicted to grow 26% in the next five years.
Despite this 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.
To date 12 growers, all based around or north of Aberdeen, have lost their contracts.
There are fears more cuts could follow.
There is also speculation that the recent closure by PD Hook of its Inverurie hatchery may now see Scottish organic growers struggle to source chicks.
The NFUS says the restructuring, which began in November, of those supplying both 2 Sisters Food Group and now Hook 2 Sisters has been brutal.
After meeting the Scottish Chicken Growers Association, a body hastily formed last year to meet the crisis, NFUS has agreed to provide some legal support to those whose contracts have been terminated.
The loss of vital infrastructure is an immediate concern, limiting options and possibilities for the industry as once lost they will be almost impossible to replace.
The union is consulting with Scottish Government planning advisers to consider options to help preserve current sites.
The worsening situation has effectively left the Government-instigated Scottish Poultry Plan in tatters.
Set up in November, it aimed to maintain the critical mass of the sector after the initial announcement of cuts by 2 Sisters Food Group.
This plan was designed to develop infrastructure and markets to safeguard future production.
Unfortunately, the significant investment needed to create a sustainable chicken-processing hub has not been made or even committed to.
A cutting plant was seen as a vital way of reducing costs as it would save whole chicken carcases having to be hauled to England to be cut into portions before making the long journey back to Scottish supermarket shelves.
NFU Scotland president Nigel Miller said: “Scotland’s chicken growers have reached a crisis point.
“The events of the last few months will see production virtually cease around the north east, with very much a small island of activity left around Angus.
“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 focused in Angus.
“That is blocking the recovery of the sector. This should be an issue for the OFT and, if required, the Competition Commission 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 infrastructure are damaged beyond repair.
“The industry seems far away from the hopeful scenario outlined by the Scottish Government.
“With the numbers of birds at this current level, I would expect some nervousness within the processing sector.
“The numbers don’t appear to add up to support two processing plants within Scotland, and there is potential for a further loss of processing jobs.
“That must start alarm bells ringing with our politicians.”