Investors panic as ostrich firm folds

NICHOLAS SCHOON

Britain's great ostrich investment bubble was deflating rapidly yesterday, with fraught investors jamming the phone line of a company under investigation by the Serious Fraud Office.

Nottinghamshire police have been called in by the SFO and another force is also expected to be involved in the inquiries into the Ostrich Farming Corporation, which is being wound up by the Department of Trade and Industry.

The Ostrich Farming Corporation offered investors the chance to buy ostriches of all ages and promised an annual return of just over 50 per cent of their initial investment. It was an extremely attractive rate by any standards, based on the investors getting a guaranteed price for a guaranteed number of chicks produced by the breeders. And it was promoted through extensive advertising. These advertisements attracted the interest of the Advertising Standards Authority.

The ASA looked into OFC's claims and passed a file to the Department of Trade and Industry, which last week asked the High Court for the firm to be wound up. The Official Receiver has been appointed as the provisional liquidator.

There had been warnings about the risks. The Securities and Investments Board warned that ownership of an ostrich was not regarded as an investment, and that owners would not be entitled to the official Investors Compensation Scheme in the event of a collapse.

OFC's managing director, Brian Ketchell, used to run a video rental chain, Video Magic, which went into liquidation in 1991. Yesterday, he could not be contacted at the firm's offices in Mansfield, Nottinghamshire.

The bovine spongiform encephalopathy (BSE) scare should be giving Britain's fast-growing farming industry its greatest boost as consumers seek an alternative red meat to beef. The composer Sir Andrew Lloyd Webber is among those who have joined the rush, raising the flightless birds on his estate near Newbury. But instead, the closure of the OFC, which has several thousand ostriches on farms in Belgium, is exposing how speculative the boom has been.

Ostrich meat has been much talked up as a new food for the next century -- red flesh with good texture and a pleasant, gamey taste which is much lower in fats and especially cholesterol than other red meats.

But while the British-farmed flock has gone from zero to about 10,000 in less than a decade, it consists almost entirely of breeding stock. Very few have been killed for the pot. The British Domesticated Ostriches Association, which represents the 300-plus farmers, says there is not yet one ostrich abattoir in Britain, although there are plans for three.

The rapid growth of the breeding flock has been fuelled by the hope that the market would expand while the meat would continue to fetch the premium, novelty price of about pounds 18 a pound. But while ostrich has found its way on to the menus of a few public houses and restaurants, it has failed to establish itself on the all-important supermarket shelves.

And the gap between the price of good carcass (pounds 450) and a live breeding bird (up to pounds 14,000) looks enormous.