Following recent reports of shortages and the rationing of eggs in supermarkets, Tesco and Aldi have pledged a combined £26.4m of additional support to the UK’s struggling egg industry.
The shortages have partly been blamed on a major outbreak of Avian flu. However, farmers argue that this is not the main problem, but a scapegoat, allowing the supermarket chains to distract customers from their refusal to pay egg farmers a sustainable price.
The egg industry has faced soaring feed and energy costs, making production unviable for many farmers and forcing some of them out of the industry, so reducing capacity.
Tesco said its commitment to provide a further £13.9m of support until March 2023 takes its total support to £27.5m since March this year.
The UK’s leading grocer stated that the funds would be paid to suppliers to cover the cost of handling, processing and egg production, including any increases in feed prices for farmers. Tesco noted that it would work with its suppliers to ensure the additional investment gets passed to farmers as quickly as possible.
Dominic Morrey, Tesco Commercial Director for Fresh, commented: “We know the British egg sector continues to face acute market conditions with input costs continuing to increase, and avian flu 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.”
Meanwhile, Aldi announced that it would be contributing another £12.5m by March 2023, taking its total support to £38m for the year. The discounter has also pledged to continue stocking only British eggs in all its 980 UK stores.
Julie Ashfield, Managing Director of Buying at Aldi, said: “We have always believed in maintaining strong, long-term relationships with our suppliers, which is why we have already invested more than £25m in supporting our egg processors and producers this year, to help them meet the rising costs they are facing.
“Unfortunately, those challenges have not gone away, which is why we are pledging a further £12.5 million now to support the egg industry. We will continue to work with our suppliers to make sure that investment gets passed to those who need it most as quickly as possible.”
NAM Implications:
- It could be said that the issue is paying a price to farmers…
- …that will encourage enthusiastic development of the category.
- Otherwise, we shall all have to live with farmers leaving egg production…
- …en masse.
- And costing a lot more to win them back…
