The film, shot by People for the Ethical Treatment of Animals (Peta), details improper treatment of chickens and unhygienic behaviour at a US plant that was named KFC's "Supplier of the Year" in 1997.
Available on Peta's kfccruelty.com website, the video depicts workers at the plant owned by Pilgrim's Pride, the second largest processor of chickens in the United States, breaking birds' beaks, throwing them into cages and shows dead and lame birds in appallingly overcrowded conditions.
The undercover journalist told the New York Times that he also saw workers tearing off heads, stamping on birds and spitting tobacco in their eyes.
The release of the film has caused outrage among animal rights campaigners, revulsion among consumers, and has undoubtedly tarnished KFC's image as a homely fast food outlet. How the scandal will affect the image of intensive farming however is less clear.
"It is conceivable that those who eat at KFC are not that bothered about welfare standards," said Sustain (Alliance For Better Food and Farming) spokesperson Jeanette Longfield. "If it was something that affected, say, ready meals in Tesco, that might have hit a wider audience."
But some campaigners believe that any publicity about cruelty in intensive farming is bound to make consumers question where their meat comes from.
"Any sort of footage of factory farming will show consumers the terrible conditions that the birds are kept in," claimed Kerry Burgess, communications director Compassion in World Farming. "This will make them think next time before they buy a chicken off the supermarket shelf."
The incident has certainly raised the visibility of suppliers in the food production supply chain. "Cruelty in industrial factory farming is a big problem," Burgess told FoodProductionDaily.com. "We recently took the UK government to court over the treatment of broiler breeders, and are currently awaiting the results. These chickens have their feed restricted so that they live long enough to breed."
Burgess also mentioned stock densities as a major problem. "Stock densities are much too high, and we want to see these reduced. We're awaiting the proposed directive on broiler chickens from the EU in October," she said.
"We haven't seen any improvement, to be honest."
The irony about the Peta video is that KFC claims to monitor its suppliers closely. The company website boasts that "as a major purchaser of food products, we have the opportunity, and responsibility, to influence the way animals supplied to us are treated. We take that responsibility very seriously, and we are monitoring our suppliers on an ongoing basis to determine whether our suppliers are using humane procedures for caring for and handling animals they supply to us.
"As a consequence, it is our goal to only deal with suppliers who promise to maintain our high standards and share our commitment to animal welfare".
It would appear that on this occasion, Pilgrim's Pride does not quite meet these vaunted standards. But the company, which saw its share price drop by 7 per cent in trading earlier this week, claimed it was "appalled" by what it saw on the video. Today it announced 11 workers have been sacked as a direct result of the allegations.