Egg producers in the U.K. may have a little something to celebrate. Too early, perhaps, to crack open the champagne, but the country’s government has agreed to examine fairness in the egg and other supply chains.
It many have taken a year of calling for an inquiry, but the CEO of the British Free Range Egg Producers’ Association (BFREPA) welcomed the announcement and offered to play an active part in the investigation, in the hope that it will lead to a more sustainable supply chain and provide the confidence that egg farmers need to continue producing.
He commented that producers had been trapped in a boom-and-bust cycle for years, with unfair contracts leaving businesses carrying huge risk. The crisis in the sector over the past 12 month, he continued, was due to rocketing production costs but stagnation in the prices paid to farmers.
The number of eggs passing through packing stations during the first quarter of this year declined by 12%, compared to the first quarter of 2022, according to data released by the U.K.’s Department for Environment, Food and Rural Affairs (DEFRA).
Data from DEFRA also shows that imports in February were 10% higher by volume compared to February 2022, however exports for the month were also higher, up 11%. The average U.K. farm-gate price over the period was 39% higher than a year ago, and 11% up on the last quarter of 2022.
Despite the increases paid to producers, BFREPA warned last year that they did not cover costs. Over 12 months ago, it warned that producers were losing money on every egg produced, and at the end of the year called for urgent action as the U.K. started to import eggs from Italy.
Fingers must be crossed that the investigation reflect the name of its chair, Sir Robert Goodwill, who has said that his committee’s job is “to get to the bottom of what is going on.”
He continued that while it was known that consumers were paying higher prices, the question that needs to be answered is whether other parts of the supply chain are unduly benefitting.
The cross-party committee will investigate how profitability and risks are shared through the supply chain and whether the current monitoring system is working. The impact of external factors on the supply chain, including imports and global commodity prices, will also be investigated.
Whether the supply chain is operating effectively and efficiently, and its structural relationships will also come under the spotlight, as will the market power of supermarkets and manufacturers, and how this compares with equivalent relationships in other advanced economies.
Whether the inquiry members’ will be good or bad eggs remains to be seen but they are willing to accept evidence up until July 28.