Egg producers losing out in imbalanced contracts
A new model supply contract for free range egg producers – aimed at rectifying outdated agreements which a team of lawyers deemed “grossly imbalanced” in favour of buyers – was launched yesterday.
The contract drawn up by the British Free Range Egg Producers’ Association (BFREPA) offers professional guidance to producers to help them negotiate the terms and conditions before they sign up to new contracts.
The organisation’s chief executive, Robert Gooch yesterday said that there had been a growing number of complaints from members over imbalances in supply contracts.
As a result his organisation had given examples of contracts currently in operation to a major law firm – which had found numerous areas requiring improvement:
“These included pricing, payment terms and termination clauses which the legal team said were weighted entirely towards packers in some cases,” said Gooch.
Speaking at the organisation’s national conference, he said that, having vowed to help members, the association had spent the past ten months working through the necessary changes and asking more than 40 packers to engage and feedback on the proposals.
“With the expansion of the sector over recent years and a fiercely competitive retail environment we have seen members entering into agreements which simply aren’t fair to both sides,” said Gooch.
“We want to arm free range producers with a model contract which stands up to legal scrutiny.”
The new contract was a “live” document, said Gooch, which could be adapted as the sector changed to meet the needs of members and packers over time.
“It is intended for members to help negotiate the terms and conditions of the contracts put in front of them.”
He said that changes brought about by the lawyers’ work had been focused on a number of key areas, including pricing and payment where the title to the eggs should only move to the buyer after payment had been received.
• Jim and Anne Smillie of Corrie Mains Free Range Eggs, Ayrshire, took home local food producer of the year award at the conference. Terming the business ‘a shining example of what a free range egg business should be’, the judges admired the commitment of the family team, who had built their business over the past 15 years.