The revelation, made yesterday by Deirdre Hutton, chairperson of the FSA board, came amid

accusations by media commentators that the regulator was lax in allowing the company to export raw

meat from the UK site to Hungary -- after the discovery of the H5N1 virus at the Bernard Matthews

site.

"The investigation so far has not found anything that raises the risk to public health,"

Hutton said yesterday after a meeting between the UK secretary of state, David Miliband, and

Hungarian officials. " It is still a possibility that infected poultry has entered the food chain but the risk to public health remains low."

Hutton's announcement could spark off a consumption decline as the public becomes increasingly

wary about the seeming lack of transparency over the outbreak.

While the National Farmers Union last week reported that its survey of the major supermarkets

found no dip in poultry sales, the Guardian newspaper today reported that Sainsbury's and Morrisons

have reported a 10 per cent drop in sales across all fresh and frozen poultry products. Tesco said a decline in sales

was continuing while Asda sales were unaffected, the newspaper reported.

Meanwhile the site at the centre of the outbreak restarted operations today after getting the all

clear from regulators, a Bernard Matthews spokesperson told FoodProductionDaily.com. She said the

company currently was voluntarily not importing or exporting meat between the Suffolk site and the

company's operation in Hungary as of 8 February.

Milibrand, who has denied allegations of a regulatory cover up in a letter to the Guardian, said

regulators and government were working to determine the source of the H5N1 virus, which was

confirmed by scientific tests at the Bernard Matthews poultry farm and processing center in

Lowestoft.

A total of 159,000 birds were slaughtered and the site was cleansed and disinfected before the

Meat Hygiene Service cleared the plant to begin operations. Milibrand said after the meeting that

the investigation into the cause of the outbreak is continuing.

The Department of the Environment, and Rural Affairs (Defra) had said previously that

preliminary scientific tests showed the viruses found at the Bernard Matthews farm may be identical

to the one behind the recent outbreaks in Hungary.

Last month the deadly H5N1 virus re-appeared in Hungary, infecting a 3,000-strong flock of

domestic geese at a farm in the South-East of the country. Hungary put restrictions on the movement

and sale of poultry outside the affected areas as mandated by the EU. The EU did not impose a trade

ban the whole country.

Bernard Matthews has a processing plant in Hungary near the outbreak area and regularly

transports meat back and to the UK plant, which is near its Suffolk plant. Defra said its

investigation will include looking into "arrangements" at the company's adjacent plant for

food processing.

"Nothing I have been told changes the working hypothesis about the most likely route of

transmission following the genetic sequencing results reported last Thursday, but all options remain

under consideration," Milibrand said. "I expect a further report by the end of the

week. Discussions are continuing with Bernard Matthews about biosecurity on their site."

He said the UK was working with Hungary to track the source of the outbreak. The statements come

amid revelations that the UK allowed the transport of six lorry loads of raw meat from the UK to

Hungary after the discovery of the disease.

The Guardian newspaper said the company's Holton plant exported only raw, processed turkey meat, which is used for the production of sausages

at the SaGa Foods Sarkov plant in Hungary. The products are then distributed in Hungary, Germany and Italy.

In a statement today Bernard Matthews said it has always abided by EU rules and followed all the required regulations and restrictions imposed by both British and European authorities.

"Furthermore, Defra and the FSA haven't found any evidence that infected meat has passed through the Bernard Matthews

plant," the company claimed.

In a previous statement Bernard Matthews had said none of the affected poultry had entered the

food chain, therefore making it unnecessary to recall or withdraw any products or to issue refunds.

Poultry meat from the company were "perfectly safe to eat", according to the statement.

The company produces about eight million turkeys every year in the UK, rearing them on 57 farms

throughout Norfolk, Suffolk and Lincolnshire. It also provides retailers with a variety of different

frozen, fresh and chilled branded products from its processing centres. The company also has

production sites in Germany and Hungary.

Meanwhile in other related developments, the National Farmers' Union (NFU) has called for

"country of origin" food labels to be put on foods. The NFU said such labelling would

ensure consumers are not confused about the source of their foods. The call has been made before by

the union, part of a bid to get consumers to eat "British".

UK law does not require food processed in the UK with ingredients sourced from another country to

be labelled as such.

While the UK's regulators are advising the public that the risk of H5N1 being transmitted from poultry to humans was "extremely low", they can take heed of what happened last year in Europe, when a number of countries were affected by outbreaks. Due to a decline in consumption and exports due to the disease, some EU members were forced last year to stockpile supplies, leading to a glut in the market.

The last UK bird flu scare took place in Scotland in March last year, when H5N1 was found in a dead wild swan. Then, chicken sales growth slowed by 10 per cent though consumption bounced back within a few months, according to ACNielsen UK.

A survey released last month by the market analyst found that 78 per cent of consumers worldwide think bird flu will have a negative impact on the economy. However, the online survey of 25,000 respondents in 45 countries found that only one in ten would eat less poultry as a result of the threat. About 57 of consumers said they are concerned about the safety of their food.

The UK's uncooked poultry market is worth £2.3bn a year and continues to grow at 2.6 per cent annual rate, according to ACNielsen. The UK exported 271,000 tonnes of poultry meat worth £220.4m in the 12 months to October 2006, according to the British Poultry Council.

Of the value £31.1m were earned from exports of turkey meat alone, the bulk of which goes to other European countries. About 90 per cent of the poultry meat consumed in the UK is produced domestically.

Ireland, Russia, Hong Kong, South Africa, South Korea and Japan have banned UK poultry meat, live birds and hatching eggs. Defra has also said that it is in the process of confirming whether India has also imposed a ban. Other countries could also impose bans as the UK has now lost its "disease free" status under International Health Organisation rules.

The H5N1 strain is usually carried by wild birds and then transmitted to domestic flocks. In rare cases the deadly disease can be transmitted to humans.H5N1 has so far infected 271 people worldwide, of whom 166 have died, mainly in Asia.

The UK outbreak represents the largest incident of avian influenza in a domestic flock in central Europe and a resurgence of the disease. Europe had had no reported cases of avian flu since last August.