Retailers crushing egg sector

A move by supermarkets to blame empty shelves for eggs in shops on avian flu, has been heavily criticised and described as a ‘red herring’ by NFU Scotland.

It said that failing to deliver a price boost to farmers struggling with costs was the main reason for a lack of supply. The union’s frustration followed statement from several retailers, including Tesco, Lidl and Sainsbury’s, which had issued warnings about rationing the number of packs of eggs shoppers could purchase.

Some retailers suggested a link between the ongoing avian flu outbreak and a lack of eggs, but NFU Scotland said it was a factor, but really a red herring to divert consumers away from the truth that they were simply not paying farmers enough to produce.

The British Free Range Egg Producers Association (BFREPA) had requested an urgent meeting with Sainbury’s after it started importing Italian eggs. BFREPA argued that while the average price of a dozen eggs has risen by about 50p in shops, some farmers had only seen a price rise of 5-10p.

NFU Scotland argued forcefully that the shortage was down to retailers failing to recognise the surge in costs seen across the sector. Supermarkets had not delivered a fair price back to producers, forcing egg producers to reduce bird numbers in a bid to control losses.

NFU Scotland’s poultry working group chair, Robert Thompson, said the overall impact of the avian flu crisis had so far been ‘small’. The biggest driver behind falling egg production was ‘a crisis of confidence’.

“Retailer claims that avian influenza is behind the shortages [is] completely disingenuous,” Mr Thompson added. “Retailers were informed in the spring that soaring costs in feed, packaging, and electricity needed an immediate increase in the prices paid to farmers if they were to continue to keep birds.

“Shop shelf prices for eggs increased but the proportion of the price increase paid back to producers did not rise enough to cover costs.”

Retailers were well warned by NFU Scotland and other industry bodies but these were ‘ largely ignored’ and problems were ‘now coming home to roost’.

“If they deliver a fair price back to egg producers, egg producers will respond and ensure that fresh eggs will be freely available in stores,” he pointed out.

BFREPA said it was ‘not surprised’ by the development after warning that the UK would be short of British eggs by Christmas if farmers were not paid a sustainable price. Robert Gooch, its chief executive, said seeing imported Italian eggs on UK shelves was a ‘wake-up call to all retailers that they can’t expect farmers to work for nothing’.