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The National (Scotland)
The National (Scotland)
Nan Spowart

Supermarkets refusal to pay 'fair' price for eggs will result in shortages

RETAILERS’ refusals to pay a “fair” price for eggs will see shortages continue right through next year, the Sunday National can reveal.

The news comes as it was confirmed another Scottish farm has been hit by Avian Influenza (AI) bringing the total to four, with 190,000 hens lost.

Some supermarkets last week introduced egg rationing, claiming the shortage was due to AI but this has infuriated poultry industry leaders who have been warning of shortages since last spring because egg retail prices are not covering the rocketing costs of feed, packaging and energy.

While AI has reduced the total number of birds, a far bigger dent in production is being made by farmers unable to restock their flocks because of the high cost of maintaining them.

The Scottish commercial flock has already dropped from more than five million to around 4.5m according to Robert Thompson, NFU Scotland’s poultry working group chair.

He said the industry was losing “millions of pounds” because, other than Aldi and Lidl, retailers had ignored pleas to pay enough for producers to make a living. “Some of these units are losing huge amounts of money – six figure sums – but they have just ignored us,” he said.

“The only two that did something were the two German discounters, who came up with something to help ease the pain. It could be a little bit more but they should be acknowledged because they did attend to it very promptly. The other major retailers just ignored it. They didn’t even reply to our requests.”

It is predicted that the UK flock will be down by 7.9m hens by February, a reduction of around 28%, which will mean even fewer eggs than there are now.

“Avian flu will have an impact on supply but nothing to the degree that the papers and retailers are making out,” said Thompson. “We reckon that UK wide there will be a reduction of 3.5% and normally that could be absorbed because everybody has a little bit of cushioning in the system.”

Now, however, units are lying empty because farmers are having to pay more than £400 a tonne for feed, up from just more than £200 a tonne this time last year. Suppliers are also having to cope with packaging doubling in cost along with the rises in diesel price and drivers’ pay.

Meanwhile, egg prices in supermarkets have not risen to reflect the costs.

“A supermarket 20 years ago would be selling large eggs for £2.10 for six,” said Thompson. “That same box of eggs today is being sold at £1.50.”

He said it was also now more difficult and much more expensive to insure flocks because of AI.

“The risks of keeping poultry in Scotland and the UK are now so high it is just not worth bothering with,” said Thompson. “If you go down with avian flu you have to have a lot of meat on your bones to get started again if you have no insurance.”

Because of all the costs, farmers are reluctant to order pullets to restock.

“There are units sitting empty in Scotland and I think there will be more,” said Thompson, pictured right.

Producers are calling for an increase of around 40p for a dozen eggs.

“We are not asking for a lot – we are just asking for enough,” said Thompson. “Any person producing food should at least be able to produce it at a slight profit. We don’t need to make them so expensive that people can’t buy them as times are hard and eggs are going to become even more popular because it is such a low cost, valuable food product that you can feed a family on.

Eggs are in great demand and the quality of the eggs that are produced in Scotland and the UK is wonderful.”

However even if the supermarkets do start paying more, it will not be an “overnight fix” as units would have to be restocked, Thompson pointed out.

“This is going to take 10 to 12 months to sort as farmers need to order chicks, they need to be reared and have to come into production. We don’t reckon we are going to see any changes in this until the back end of next year with the peak of shortages around February and March. They are just not enough hens to meet the demand.

“The NFU Scotland, the Scottish Government and every industry body have been telling all the retailers since April they had to pay or they would not have eggs on the shelves and that is exactly what has happened, just as we predicted.”

A Scottish Government spokesperson said: “We are aware that there are a number of issues affecting egg supplies, such as the impact of Avian Influenza on all commercial flocks, the cost of living increases and a number of other issues, including labour shortages across all sectors of the industry.

“The issue of egg shortages is being monitored to ensure any disruption to supplies is minimised and to assess the impact of current egg prices on producers. We continue to engage with retailers on adopting proportionate practices and fair pricing across the board.”

A spokesperson for Asda said: “We are working hard with our suppliers to resolve the industry challenges which are currently affecting all supermarkets and, to make sure as many customers as possible can buy eggs, we have introduced a temporary limit of two boxes per customer.”

Morrisons and Sainsbury’s both referred the Sunday National to the statement from the British Retail Consortium (BRC), below, while Tesco did not respond to a request for comment.

Andrew Opie, BRC director of food and sustainability, said: “While avian flu has disrupted the supply of some egg ranges, retailers are experts at managing supply chains and are working hard to minimise impact on customers.

"Furthermore, retailers have long-standing, established relationships with their suppliers and know how important maintaining these are for their customers and businesses.

"Supermarkets source the vast majority of their food from the UK and know they need to pay a sustainable price to egg farmers but are constrained by how much additional cost they can pass onto consumers during a cost of living crisis.”

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