The full extent of the damage bird flu has done to Bernard Matthews became clear last night as the company prepared to lay off 600 workers and announced a 40pc drop in sales.

The full extent of the damage bird flu has done to Bernard Matthews became clear last night as the company laid off 130 workers and announced a 40pc drop in sales.

A further 400-500 employees could also lose their jobs at the turkey giant's factories in East Anglia, depending on future sales.

The 130 workers from the factories in Great Witchingham, north of Norwich, have initially been stood down for 20 days but may never return to their jobs.

Ironically, staff at the factory in Holton, near Halesworth, where an outbreak of bird flu was confirmed earlier this month, have been so far unaffected.

But they too are likely to feel the pain as the company prepares to shed a further 400 to 500 jobs. The locations of the jobs at risk have yet to be confirmed by the company, but are likely to be across its sites.

The affected staff at Great Witchingham - where Bernard Matthews has three factories producing whole turkeys and processed cooked meats - were given just 24 hours' notice of the lay-off.

They are being given a one-off payment of £100 each and will also get some statutory payments.

Three days after the company said reports of a dramatic fall in sales were "completely inaccurate", it has admitted that they are true and that sales are down by 40pc.

It is a major blow for the country's biggest poultry processor and the largest turkey producer in Europe.

The interim government report into the bird flu outbreak has highlighted poor practices on the Bernard Matthews farm, including gulls feeding from bins containing meat waste, leaky shed roofs and holes which rodents could get into.

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