Fine Gael said last night that a measure known as “substantial transformation” allows products with minimal processing in Ireland, such as the addition of breadcrumbs, to be passed off as Irish.

According to the Irish Examiner, it called for the closure of the loophole, strict enforcement of existing regulations and the introduction of a 'Green Ireland' label.

Urging the government to act urgently to save the poultry industry, FG TD Michael Creed said the Cappoquin blow follows the closures of Grove Turkeys in Smithboro, County Monaghan, and Castlemahon Chickens in west Limerick.

Meanwhile, the sector, which has a farm gate value of €150-200 million, continues to play an important role in the economic life of many communities.

About 1,500 people are employed in primary processing, while 500 farmers are engaged in the rearing and breeding of poultry for meat. There are 10 approved poultry slaughter plants under the control of the Department of Agriculture, Fisheries and Food, and a number of much smaller operators under local authority control.

Apart from labelling issues, the sector is also under pressure from rising costs, imports from South America and Asia, and the ongoing fear of a bird flu outbreak. The Irish Farmers Association says that 300 growers produce 1.2 million chickens each week, that 90% of chicken used in the catering trade is imported and that these imports fail to meet the stringent standards that apply to growers in this country.

Enterprise Ireland told a delegation from the Joint Oireachtas Committee on Enterprise, Trade and Employment when it visited Cappoquin earlier this year that the Irish poultry industry was in decline.

“Ireland previously had 14 export licences, but now has only seven. Feed prices have risen sharply and it is difficult for factories to recoup this expense.

“Imports from the EU are increasingly targeting the catering industry here and Irish producers are finding it difficult to compete given their high production costs,” it said.

Last year, the poultry industry, along with Bord Bia, conducted a campaign to encourage consumers to look for quality-assured Irish chicken. About 400 retail outlets took part in the promotion. Results from a Bord Bia study of 1,200 grocery shoppers found that origin was a huge influence when buying chicken.

Eight-out-of-10 shoppers cited a preference for chicken with the Bord Bia quality mark, which provides reassurance to the consumer that the product has been produced to the highest standards and can be traced from farm to fork.