The flu outbreak has led to millions of chickens being slaughtered

Shares in the firm dropped sharply after Uniq said the poultry unit would lose about �3m this year.

The division employs about 600 workers in Rotherham and Driffield, Yorkshire, and makes breaded chicken and turkey meals for High Street retailers.

Uniq added that the poultry business had also suffered from the loss of a key contract with Burger King.

The recent outbreak of avian flu in Asia has led to millions of poultry animals being slaughtered and caused the deaths of 20 people.

But a previous outbreak of bird flu in the Netherlands last year appears to have hit Uniq's business harder.

The company said the flu outbreaks had proved a major problem for firms like itself which bought in poultry from other suppliers and did not raise the birds themselves.