The company at the centre of Britain's bird flu outbreak was last night preparing to lay off hundreds of staff at one of its factories in East Anglia as the environment secretary, David Miliband, admitted the UK remains vulnerable to further infection.
In a statement, Bernard Matthews blamed the "regrettable" job losses on a 40% slump in sales of its turkey products since the outbreak two weeks ago. It is the first evidence of a serious decline in consumer confidence.
Today the first 130 employees, all from a processing plant at Great Witchingham in Norfolk, will be given redundancy notices. The company warned last night that it may have to lay off 400 to 500 employees if sales do not recover.
Mr Miliband made no mention of the layoffs in the Commons yesterday when he gave an update of developments since the outbreak at the Bernard Matthews farm in Holton, Suffolk, was diagnosed as H5N1 earlier this month. After the deaths of 71 birds from the virus all 159,000 turkeys at the farm were slaughtered.
The job losses will shake the UK turkey industry as it tries to recover from the crisis and shore up consumer confidence in turkey, chicken and eggs. There had been little evidence of a consumer backlash against poultry products to date, although both Tesco and Sainsbury's have reported a dip in sales of up to 10%.
Bernard Matthews announced the staff cuts after meeting with the Transport and General Workers union met to discuss the impact of the outbreak on the industry.
The family-run company, with 57 farms in Norfolk, Suffolk and Lincolnshire and around 7,000 workers worldwide, said the decision was difficult but represented the only option: "We are also doing everything we can to limit the number of job losses and we are working hard to restore consumer confidence. The TGWU agreed to the layoff proposal and both parties will review the situation regularly."
In the Commons, Mr Miliband said there had so far been no reoccurrence of the virus since the turkey cull in Suffolk, but warned: "The expert advice available to me is that there is a constant, low risk of bird flu to the UK and higher risk during migration season. Our response to this is far from over. There can be no guarantee against further outbreaks. In fact the only guarantee is that there is a continual risk. That is why ... I reiterate my appeal to all poultry keepers to register with the poultry register and to maintain the highest standards of biosecurity.
"We are examining all possible routes of transmission, but our investigation of the cause of the incident has focused on transport links between Hungary and the site in Holton and at biosecurity at the site."
Mr Miliband said the earliest that bird flu restriction zones in Suffolk could be lifted was the second week of March, provided there were no further outbreaks or suspect cases in the area.
Chris Kaufman, national secretary of the TGWU, called for government compensation: "There is European precedent for direct government support for workers whose jobs have been affected by outbreaks, and the UK government should act in the same way as the Spanish and Italian governments did in similar circumstances." But Mr Miliband told MPs there was no case for compensation in Britain for "market impacts".
