UK supermarkets have pledged an additional £26 million (US$32 million) to the British egg industry at a time when the government is under pressure to investigate the supply chain to see whether an “exceptional market conditions” declaration should be made.
The Department for Environment, Food and Rural Affairs (Defra) has the power under the Agriculture Act 2020 to make the declaration in light of the severe disruption that egg producers and UK consumers are experiencing.
Tesco said its commitment to provide a further £13.9 million of support until March 2023, taking its total support to £27.5 million this year, adding the funds will be paid to suppliers to cover the cost of handling, processing and egg production, including any increases in feed prices for farmers.
Dominic Morrey, Tesco commercial director for fresh, said: “We know the British egg sector continues to face acute market conditions with input costs continuing to increase, and avian influenza causing disruption and adding complexities to farming conditions and the supply chain. We’re pleased to continue our support for UK suppliers and producers, as well as provide reassurance to our customers that we will remain 100% British on all our shell eggs.”
Tesco announced earlier this year 5-year contracts with its 5 main British shell egg suppliers – Anglia Free Range Eggs, Glenrath Farms, Griffiths Family Farms, Noble Foods and Skea Eggs. The long-term contracts, which began in October, have stressed the company’s support for buying British.
Aldi said it was contributing another £12.5 million by March, taking its total level of backing to £38 million for the year.
Adrian Blyth, head of business development at packers Stonegate Farmers, backed the move by Tesco but said more might need to be done to help hard-pressed producers: “We have an incredibly loyal producer network for our Clarence Court eggs who are continuing to supply us under significant cost pressures and whilst we have and continue to pass on prices increases from Tesco. We are engaged in ongoing discussions and recognise that further increases may be necessary to avoid further hardship and build towards a viable supply base for the medium term.”
Minette Batters, National Farmers’ Union president, said the union had raised its concerns about the functionality of the supply chain with Defra in recent months in the hope of avoiding the current situation, which has seen Tesco, Asda and Lidl having to ration eggs and Sainsbury’s import eggs from Italian barn-reared birds.
“There is a huge range of issues facing the poultry sector, in particular within the egg supply chain, which have built up over months and which we have been warning of for some time. Energy price inflation and supply chain disruption have added to the worst outbreak in avian influenza yet.
“Poultry and egg producers must have the confidence they need, working within a fair and transparent supply chain, with fair returns for farmers, so they can do what they do best; meet demand from shoppers for quality British eggs and poultry meat.”