Low prices lead to production cuts in Ireland

An Irish poultry processor has cut production by a quarter in response to the rising cost of production, coupled with price cuts by supermarkets.

Cappoquin Poultry announced it will cut chicken production by 25%, with some employees working three-day weeks, the Irish Examiner reports.

Speaking to the Irish Times co-owner and financial controller of Cappoquin, Tom Vaughan, blamed increased costs and stagnant retail prices for the shutdown.

“Animal feed went up from €270/t last year to €370/t now, while the supermarkets are selling chicken cheaper and cheaper. If consumers were prepared to pay an extra euro on whole chickens, it would sort it all out.”

Cappoquin is said to have plans to expand production again later in 2011.

Cappoquin Poultry was rescued from bankruptcy in 2008 by Mr Vaughan and two associates, saving 200 jobs in processing. Currently 165 people are employed at the factory.