Poultry operators are crying foul over the draft amendment to the Slaughter and Meat Sale Act, which calls for an increase in slaughter and meat sales fees.
Poj Aramwattananont, president of the Thai Frozen Foods Association and vice-chairman of the Thai Chamber of Commerce, said the new law would raise poultry operators' production costs, which would eventually be passed on to consumers.
The new law calls for a rise in the slaughter and sales fees by a total of four baht, two for each of the processes.
The draft, aimed at upgrading food safety standards, is now pending the National Legislative Assembly's consideration.
The existing Slaughter and Meat Sale Act charges a slaughter fee of only 10 satang per unit of poultry, but that has been waived by the government.
Mr Poj said the higher fees could lead to the proliferation of illicit slaughterhouses, posing more health threats and unsafe poultry products.
Even worse, the fee hike would hit the industry hard as it would reduce its export competitiveness against products from Brazil, the US and China.
Currently, about 30 million birds are killed each week, with 60-70% for domestic consumption and the rest for export.
The industry estimates an increase of four baht would push up costs by 480 million baht a month. The higher costs would also lead consumers paying 8% more for fresh poultry.
Domestic poultry consumption is estimated to be worth 60 billion baht a year.
Kurit Arepagorn, manager of the Thai Broiler Processing Exporters Association, said Thailand is expected to ship 700,000 tonnes of frozen poultry this year, up by 2-3% from a year earlier, with exports worth 90-91 billion baht, up from 88 billion baht last year.
Key markets include the EU and Japan, which account for 43% and 47% of total exports, respectively.
Mr Kurit said the higher fees would also possibly result in an increase in the number of illegal and substandard slaughterhouses, which would make it tough for the authorities to control poultry-related diseases.
"Thailand has been free from the bird flu for a decade," he said. "If the flu breaks out again, gains incurred from the higher fees are unlikely to be enough to offset the hefty losses."