WHO killed Grampian Country Food Group? With Scotland's second biggest private company set to be sold to Dutch conglomerate Vion for a reported £380 million, the case is being hotly debated at all levels of the Scottish food chain.

Should Grampian be headed for the corporate abattoir, it means the end of the last of the big British suppliers of supermarket meat. If 66-year-old chairman Fred Duncan's alleged bid for a partial buyout fails, his own ties to the company he has controlled for the last 30 years will be cut.

But if blame is to be apportioned, Duncan himself must take his place in a suspects line-up alongside supermarkets, cheap foreign imports, his former chief executive and even Jamie Oliver.

The Grampian group farms, processes and supplies chicken, turkey, beef, lamb and pork products to most British supermarkets from 30 principal plants in the UK and Thailand.

Its roots are in the late 1970s, when Fred Duncan was still an agricultural sales manager in his native Aberdeenshire and he was approached by a local businessman, the late John Rhind, to manage an ailing chicken farm near Kemnay.

Already in his late 30s, Duncan and his business partner Mike Stephen set about turning the business around. In 1980 they moved the business to Banff and launched Grampian Country Chickens, forcing growth through acquisition. Their assumption was that small operators would be trampled by the march of the supermarkets.

During that decade they moved into pork and agricultural feed, working from new facilities in the Scottish central belt and England and Wales. They took on brands like Marshalls of Newbridge, makers of Chunky Chicken; Ross Poultry in Aberdeen and sausage specialist Hall's of Broxburn. The expansion was financed by borrowings from the Bank of Scotland on the Duncan philosophy that "you make one pound so that you can borrow another four".

With Rhind selling up in 1988, Stephen and Duncan are said to have been one of those neat double acts that sometimes occur in business. Duncan was the fearless, big-numbers visionary, Stephen the cautious details man. The company later moved into beef and lamb and into territories as diverse as Northern Ireland, Thailand and the Netherlands.

When Stephen sold his minority stake in 1999 (he now owns the family-run Celebrations department store in Turriff), the risk-taker was now flying solo.

For a high roller, Duncan maintains one of the lowest profiles in Scottish business. He rarely gives interviews, and Grampian's press office is notoriously tight-lipped in responding to press reports.

He has refused to accept almost all of the many business awards for which he has been nominated, although he did accept a CBE in 2003. Friends and acquaintances say that "reclusive" is an absurdly exaggerated term for a shy and private person, and a northeastener to boot.

"Country people in the northeast believe you should let your actions speak for themselves," as one source puts it. Like most people contacted for this story, he insisted on anonymity when discussing this famously private company.

"Chairman Fred", as he is known in certain circles, lives in Banchory, a rural residential enclave of (mainly oil) wealth. He has a holiday home in Majorca and is a keen shot, skier and fisherman. In person, he is said to be approachable and down-to-earth with employees. He pays well, although anyone not measuring up is quickly shown the door. He delegates control to the heads of local processing plants but insists on weekly profit and loss accounts from each. He is constantly on the move, wining and dining the supermarket buyers - the real power brokers of the modern food economy.

Duncan has a reputation for playing hardball with his own suppliers. Grampian has been accused of "squeezing" Scottish pig farmers to within an inch of their existence in a rearguard fight to ensure the profitability of its Broxburn processing plant - although the company insists it pays a fair price.

So what went wrong, and when? Grampian started closing plants in 2000, but most observers see 2003 - when Duncan stepped back from the business and installed David Salkeld, head of dairy firm Arla UK, as chief executive - as the point when the troubles really started.

With the business turning over nearly £1.5 billion at that time and hyped as a possible candidate for flotation, several well-placed sources say that Salkeld's tenure was a "disaster".

A subject of endless conjecture is why Duncan chose an outsider like Salkeld who knew nothing about meat processing, rather than one of the lieutenants who had run his plants for many years.

Possibly he wanted to avoid causing ill-feeling by choosing one among them, but more likely, none were suitable. He might also have been acting under pressure from the Bank of Scotland, by now a minority shareholder, and more importantly a creditor to the tune of several hundred million pounds.

It was Salkeld who moved the corporate headquarters from Aberdeen to Leeds, which must have seemed logical given the company's extensive English and Welsh operations. Amid plans to expand into places like South America and eastern Europe, he set about centralising plant functions such as sales, purchasing and finance in Yorkshire.

This ostensibly cost-saving exercise led to a classic clash of modern MBA strategy and a traditional business practice. It caused huge ill-feeling among staff, saw numerous key senior managers resign and proved enormously expensive. Although relocation costs were not the only drain on profits, Grampian went from a pre-tax profit of £21m on sales of £1.4bn in 2002-2003 to a pre-tax loss of £40.5m on sales of £1.9bn three years later.

Duncan reputedly attended a management meeting late in 2005, after which Salkeld is said to have expressed surprise, since he was used to running the show single-handed. "Yes," Duncan is said to have replied. "And you're making a f***ing bad job of it".

Salkeld, who did not return calls made to confirm this story, was ousted shortly after.

From the start of 2006, Duncan became hands-on again and appointed Eddie Powers as chief executive. A longstanding employee, Powers had left three years earlier and was lured back from a rival.

They moved the headquarters to Livingston and reversed the previous centralisation, as part of a rescue strategy. At this point if not before, sources say that matters were taken out of their hands.

With debts now at £300m, it is widely rumoured that the Bank of Scotland is now calling the shots, and insisting on the closure of unprofitable plants. Those who know him say that Duncan's own instincts were never to sell or close anything. He sold businesses during difficulties in the 1990s and later called it his "one mistake".

Grampian has withdrawn from nine plants around the country, including the original chicken plant in Banff, and the Buckie piggery that represented its first move into the pork industry. With the former HQ in Aberdeen's Bucksburn closed last year, the beef and lamb operation in Portlethen represents the company's only remaining tie to the northeast.

Between 3000 and 3500 staff are thought to have lost their jobs. There have been several bitter union disputes over pay and pensions. As of 2008, the headcount was 17,500, including about 5000 in Thailand.

Bad feeling has been further aggravated by the company's chalking up a pension deficit of around £100m, a possible further symptom of Duncan's fondness for heavy gearing. The deficit was said to have been made good last year, but observers await the imminent publication of annual accounts for the full picture.

None of Grampian's internal problems were necessarily fatal in themselves, but they coincided with seismic shifts in the global food industry. The company was being undercut by cheap imports from elsewhere - imports that Duncan has grumbled did not have to meet the UK's stringent production standards.

Then there were the supermarkets. The big four's ruthless pursuit of low prices has been notoriously tough on suppliers, while an inflation-phobic government has declined to intervene. Not many £2bn businesses make profits in the low tens of millions, an indication of the paper-thin margins in meat supply.

The supermarkets were at their toughest last year when they battled to minimise any rises in meat prices as the cost of grain doubled virtually overnight. According to one well-placed source: "Duncan has got absolutely sick of the supermarkets and the way they have treated him. The last time I saw him, he said he could write a book on the subject."

As if all this wasn't enough, Jamie Oliver and the rest of the "good food" lobby were stepping up the pressure. As broiler chicken farmers were demonised, Grampian struggled to supply enough free-range and organic produce to meet demand.

By last September, the company appears to have put itself up for sale and appointed investment bank JP Morgan Cazenove to oversee the process - allegedly at the Bank of Scotland's behest. News leaked out that the company was back in profit for 2007 - taken as a clear signal that it is touting itself in the market.

After reports that Brazil's Sadia and a private-equity-backed management buyout team led by Duncan had put in offers, Vion is now said to be the preferred bidder. Vion, which is more than double the size of Grampian but which has fewer employees, is especially strong in pork and beef. It already has a presence in England and has outlets in numerous European countries.

Scottish farmers are relatively relaxed about Vion's probable arrival. Already most of the UK's meat suppliers are Irish, Danish or American, so negotiating with new foreign faces holds few fears.

Whoever emerges with the prize of Grampian must seek to further consolidate the UK super-abattoirs by closing at least one of them down. But Broxburn, vital to the Scottish industry and the largest processing plant in the UK, benefited from major investment several years ago so looks an unlikely candidate.

For Chairman Fred, this is not necessarily the end of the road. The latest edition of the Sunday Times rich list puts his own wealth in the region of £50m, well down from previous years, but still Scotland's joint-81st richest individual.

It is not clear how much he will net from the sale. Grampian's most recent debt figures are not available, but some sources believe his payout may be negligible. On the other hand, he is still one of the country's largest pig farmers in his own right, with thousands of acres in the northeast.

So who did kill Grampian Country Foods? Obviously, there is no single culprit. Many will be scouring the 2007 annual accounts, overdue from the end of March, for further clues.

Whatever emerges, it seems an ignominious end for a great Scottish success story.

"Grampian got too big. It outgrew its financing and outgrew its management abilities. It became slow to shift," says one interested bystander.

"If Fred made a mistake, it was not to realise the value of his assets earlier, particularly if you compare him to someone like the Wiseman brothers.

"But Grampian has put an enormous amount of money into Scottish agriculture over the years. And even if the name goes, the business and the capacity will remain".