Farmers ‘owed millions’ following collapse of Red Lea Chickens

More than 500 workers at the Western Sydney processing plant and various city retail stores have also had their jobs terminated after the poultry business entered voluntary administration over Easter after 60 years.

NSW Farmers’ Association feared several producers were reportedly owed millions of dollars by the poultry company.

Association chief executive Matt Brand said 28 chicken farmers in NSW were owed collectively at least $4 million as a result of Red Lea failing to honor payments dating back to July 2017.

He said many could will remain out of pocket, forcing them out of the game. 

“We commenced legal proceedings late last year before the company was put into voluntary administration as a result of our members failing to be paid for their chickens for months on end,” Mr Brand said. 

“We’re disappointed with Red Lea Chickens for not revealing the true financial mess the company was in when it gave solid commitments to farmers that everything was okay.

“This could break a number of farmers whose future now lies in the hands of the administrators.”

NSW Farmers has been working with other chicken processors and the Department of Primary Industries to ensure the welfare of birds that remain on farms.

The birds will now be assigned to other processors including Pepe’s, Cordina and Baiada.

There are reports the franchisee network of 22 stores will continue with retailers now considering alternate suppliers. 

Staff in the six company-owned stores have lost their jobs.

A creditors meeting is due to be held next week.

Red Lea was founded by John Velcich 60 years ago. He sold the company in 2016.