Defra seeks to end unfair trading practices in UK egg sector

Egg producers and packers are being asked for their views on how their contracts stack up, as the government seeks to end any unfair trading practices.

The new, UK-wide consultation follows similar exercises in the dairy and pig sectors, and has been launched in fulfilment of a promise given by prime minister Rishi Sunak at the “farm to fork” summit held in Downing Street on 16 May.

See also: Fairer pricing for dairy farmers promised in new legislation

It follows a series of challenges experienced by the egg sector, including the avian influenza crisis, as well as increased energy and feed costs, which have raised questions about fairness of the supply chain.

Official figures show that the population of laying hens in the UK fell from 43 million in 2021 to 38 million in 2022.

Unequal power

The consultation is also in response to concerns that primary producers tend to occupy positions of relative market weakness, with unequal bargaining power.

Defra says it is committed to tackling contractual unfairness and has powers within the Agriculture Act 2020 to take action where necessary.

“Producers should be paid a fair price for their high-quality produce, which is why we are committed to ensure there is fairness across food supply chains,” said Defra secretary Therese Coffey.

“I would now encourage all stakeholders to take part in this review to ensure their voices are heard.”

Questions included in the consultation cover the nature of existing contracts, how changes are agreed or imposed, whether contracts are honoured, and whether they meet business needs for both buyers and sellers.

It also explores the extent to which parties feel free to negotiate terms, whether greater consistency of contracts is needed, the need for mandatory clauses, pricing mechanisms, levels of transparency, and dispute resolution.

Response

Producer organisations have welcomed the development.

NFU poultry board chairman James Mottershead said: “Amid ongoing cost increases, the message from our members has been clear – the egg supply chain needs revolutionising to share risk and reward more fairly.

“Almost one billion fewer eggs were packed in the UK last year compared to 2019 and we need to work with the government, alongside the entire egg supply chain, to ensure there isn’t any further contraction in the sector.”

British Free Range Egg Producers Association chief executive Robert Gooch said: “The consultation on the workings of the egg supply chain is needed to provide further stability for the sector and to ensure that there is no repeat of egg shortages in the future”.

British Egg Industry Council deputy chief executive Gary Ford said the packer-dominated organisation would be promoting the consultation to all stakeholders in the supply chain.

The consultation runs until 22 December and results will be taken into account in considering what further measures may be needed.