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UPDATE 3-China launches probe into Brazilian broiler chicken imports

* China frozen chicken imports worth more than $1 bln a year

* Brazil accounted for 85 pct of imports last year

* China's poultry industry recovering from bird flu crisis (Updating with details throughout)

BEIJING, Aug 18 (Reuters) - China on Friday launched an anti-dumping investigation into imports of Brazilian broiler chicken and products after a complaint from the domestic industry that the South American country has been selling its chicken below market value.

Brazil accounted for more than 50 pct of broiler product supplies to China, the world's No. 2 poultry consumer, between 2013 and 2016, a Commerce Ministry statement said on Friday, according to a preliminary review.

Any move to penalise imports worth more than $1 billion a year would be a major blow to Brazil's meat industry following a scandal over its beef exports earlier in the year, which threatened to tarnish the country's powerhouse protein industry.

Brazil replaced the United States as the top supplier of chicken after China slapped anti-dumping duties on U.S. broiler chicken products in 2010.

China is the biggest national consumer of Brazilian meat.

China relies on imports for its supply of white feather broiler chickens, which are favoured by fast-food chains like KFC and McDonalds for their more rapid development and plumper meat, compared with yellow-feathered birds, which are native to China and generally sold retail.

The investigation comes just months after Beijing slapped hefty penalties on sugar imports from top growers such as Brazil and Thailand after lobbying by domestic mills.

In 2016, Brazil accounted for 85 percent of China's frozen chicken imports. which totaled almost 600,000 tonnes valued at as much as $1.23 billion, customs data shows.

The push by China's domestic industry for an anti-dumping probe comes as poultry farmers and processors recover from the nation's worst outbreak of bird flu in years.

Chicken is a cheap alternative to pork, the nation's favourite meat. The outbreak hurt demand for chicken meat as people worried about catching the deadly virus and sent prices <0#JCI-BROILER> to more-than-decade lows in February.

Live broiler chicken prices in Shandong province, one of the nation's major producing areas, have since more than doubled, and were around 7.7 yuan ($1.15) on Friday, as the crisis passed and worries about infection eased.

Import prices from Brazil have remained quite low in comparison, making it hard for the local industry to compete, analysts said.

Shan Xuewei, a broiler chicken trader based in Shandong, said he believed the probe was unnecessary.

"Brazilian chicken is indeed cheap ... and people of course will go for the cheaper stuff." ($1 = 6.6765 Chinese yuan renminbi) (Reporting by Josephine Mason; additional reporting by Beijing newsroom and Hallie Gu; Editing by Richard Pullin)