Up to 20 rural workers face losing their jobs as food giant Hook 2 Sisters has threatened 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.”
None of the issues had been addressed by previous failed Scottish poultry businesses such as Vion, Grampian and Marshalls.
He continued: “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.
“Our agriculture teams will do their upmost to work closely with the affected farms to minimise the impact of this proposal”.
Farming leaders have called on the CMA (the government’s Competitions and Markets Authority) to intervene.
NFU Scotland said the retail poultry market is predicted to grow by a quarter over the next five years but, despite demand, the number of independent chicken producers has fallen from 28 to 12 since December and the number of birds produced will fall by more than seven million 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.
Union president Nigel Miller said: “Scotland’s chicken growers have reached a crisis point. This has all happened behind the veil of an aspirational (Scottish Government) Poultry Plan to consolidate Scottish production and 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. 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.”