THE British beef wholesale trade has started returning to life as supermarkets reported a surge in sales of cut price beef. But meat companies are worried they will have to destroy thousands of tonnes of stocks that have passed their sell by date.

Companies affected include Ireland's three largest meat companies, Kepak, Irish Food Processors and Dawn Meats, which control almost 30 per cent of the British meat processing industry.

Since the trade in Britain ground to a halt two weeks ago, many wholesalers have been caught holding stocks which are sharply reduced in value.

The Meat and Livestock Commission, the British industry's promotional body, has called on the British government to provide funding to compensate companies for loss of sales.

"Abattoirs tend to be highly capitalised and working on extremely low margins. If they have stocks they can't sell, it can be disastrous," said Mr Mick Sloyan, an MLC economist.

A survey by the commission found that companies are carrying 3_000 tonnes of beef stocks valued at £79 million sterling. Half is held by domestic wholesalers and the rest by exporters.

Some of this meat has passed its sell by date and the longer it is held, particularly if it is cut or frozen, the more value it loses. The wholesalers estimate the value of these stocks and for many companies the asset value of the enterprise could be reduced by 50 per cent.

Retail price cuts have helped stimulate demand.

"Beyond a doubt, beef sales have come back," said Mr Martin Hyson, the trading director of Budgens.