EU poultry processors are already seeing big drops in consumer demand from the rising fear that the avian influenza virus will spread throughout the bloc.
A panic is building as more and more EUmembers report incidents of the flu and authorities issue warnings.
The European Food Safety Authority yesterday said that Europeans should avoid eating raw eggs and cook chicken carefully as part of the precautions for ensuring that the virus does not infecthumans.
The agency's experts said there was no evidence that the virus could be transmitted through food.
However they warned the link could not be ruled out altogether.
When contacted, a spokesman for the European Egg Processors Association said he was unable to provide a comment on the statement at this time.
The deadly H5N1 virus first surfaced in Asia and is spreading westward through migrating birds.
Demand for poultry products has fallen by between 30 per cent to 40 per cent in Italy, with lesser falls occurring in other countries said Cees Vermeeren, the Brussels representative for theAssociation of Poultry Processors and Poultry Trade in the EU countries (AVEC).
Greece last week became the first EU member state to report a case of the deadly bird flu variant.
This after previous confirmation last week of cases in Turkey and Romania.
Even before the first H5 avian influenza case was found there, the Greek daily Expres said consumption of poultry meat had decreased by 40 per cent over the week.
Prices for poultry have dropped by up to 40 per cent, according to the Italian farmers' union.
European consumers are increasing concerned about food safety, mainly due to the bovine spongiform encephalopathy (BSE) scare in cattle, a foot and mouth disease outbreak in 2001 and avian flu in2003.
Chicken is the main source of food poisoning in Europe.
In the EU poultry consumption overtook beef and veal in 1996, when BSE hit the headlines.
Pork holds the number one position in the EU and could gain from the current crisis hitting the poultryindustry The EU produces about 11m tonnes of poultry meat annually, of which chicken accounts for 70 per cent of the total, turkey 20 per cent and ducks four per cent.
The poultry sector is the secondlargest meat producing sector after pork.
The EU exports about 1.1m tonnes a year.
Poultry production gradually recovered in 2004 after the outbreak of avian flu in the Netherlands during spring 2003.
The outbreak reduced EU production by about two per cent.
Production in 2004was slightly less than in 2003.
As EU food consultancy Gira has noted, bird flu had a high negative impact on consumer confidence in a number of Asian markets, resulting in dramatic decline in demand throughout the region lastyear.
Poultry consumption in Asia was further affected by trade restrictions which have limited supply, especially from Thailand and from China.
The ongoing outbreak in Asia has led to the destruction of more than 125 million birds, the death of around 60 people and economic losses estimated at €8 to €12 billion, according to AVEC, theEU's association for poultry processors.
In Europe the reduced import supply pressures from Asian markets led to European poultry prices rising, which was also boosted by high feed grain costs lastyear.
In August 2005 the threat of a new outbreak in the EU became more present after the high pathogenic H5N1 strain spread into the Ukraine and more than 10.000 birds had to be destroyed.
The outbreak of the milder H5N7 form of the virus in the Netherlands in 2003 gives some idea of potential losses.
The country was Europe's biggest poultry producer at the time with more than 100million chickens.
About 30 million had to be destroyed at a direct cost of €150 million.
The Dutch Agricultural Research Institute estimates that total costs for the Dutch farm sector, includingrelated industries, at €500 million.
Northern Foods, a UK company, has already noted that its expenditure on chicken meat has increased because it has turned to locally produced chickens rather than sourcing from cheaper providersoverseas.
In other developments the EU yesterday bans imports of live birds and specified poultry products from Croatia.
The decision was taken after a case of H5 avian influenza virus found in wild birds inCroatia.
In Germany, a dozen wild geese found dead at a lake tested positive for bird flu.
In France government has ruled that chickens, geese and ducks in specified risk areas must be kept indoors.
Theruling affects about one-fifth of the country.
In the rest of the country, poultry must not be fed outside.
There are about 30,000 poultry farms in France, of which 42 per cent reared birds in the open air.
Free range chickens account for 17.5 per cent of the total amount of poultry slaughtered,according to France's agriculture ministry.
The UK confirmed on 24 October that a parrot held in quarantine died from the H5N1 strain of avian flu.
The country is calling on the European Commission to ban all imports of wild birds into thebloc.
The EU is expected to make a decision today.
Other related measures: Germany, Poland said farmers must confine all live poultry to their pens to prevent them from coming into contact with migrating birds; The UK's organic poultry association warned members to be prepared to bring their poultry indoors; Romanian chicken consumption has dropped by half since the deadly H5N1 strain of bird flu reached the country; The Netherlands ordered all poultry all bird migratory routes indoors and the disinfectation of lorries carrying live poultry or eggs from countries affected by bird flu.
UK supermarkets are urging customers not to be put off buying chicken over fears of catching bird flu and are posting notices in stores reassuring them that poultry meat is safe to eat