Food manufacturers hit by perfect storm

Food manufacturers are calling for urgent action to ease the market for eggs and egg products.

Addressing the cross-party Environment, Food and Rural Affairs Committee in Westminster, Terry Jones of the Food and Drink Federation said his members were deeply concerned about further price escalation.

“We need to keep the lights on in factories, we need to keep product lines going and we need to keep staff on,” he said.

As a way of counterbalancing the tight supply, Mr Jones suggested increasing imports of eggs from third countries.

However the British Egg Industry Council confirmed that this had already been ruled out by the EU Commission at a recent advisory group meeting. By the time legislation was put in the place, the market would have already rectified itself.

Mr Jones told committee members the conventional cage ban, which came into force on 1 January, had created “a perfect storm”, with egg prices rising between 70% and 225%.

This had been a result of seasonal demand and shortages, but he also pointed to the role of market speculators. “Prices have moved in such a way that it would tend to suggest there may have been other forces at work.”

Although EU egg prices have abated since Easter, Mr Jones said it was only a matter of time before they rose again. The EU had estimated that there were still 48m hens in illegal cages in some EU countries, accounting for 14% of the total EU flock, birds which still had to come out of production.

“Post June, we could see prices rise again as we put a large dent in the EU flock, with seemingly no replacement birds on stream,” he said.

But BEIC chief executive Mark Williams said manufacturers could be reassured supply would come back.

“When prices increase, production doesn’t follow far behind. We are already starting to see that,” he told Poultry World. “This is a temporary supply shortage and market conditions will rectify it. The whole food chain needs to work closer together to ensure sustainability.”

Call for unilateral ban

The EU Commission has suggested that it is possible for the UK to enforce a unilateral ban to prevent illegal eggs and egg products from entering the market.

Addressing the EFRA committee, senior Commission executive Andrea Gavinelli said that EU regulations did allow member states to take action.

“It is up to the member states to take measures to prevent the circulation of illegal products if they are causing problems,” he said.

However industry representatives remain cautious, as it is stark contrast to the message delivered by DEFRA farming minister Jim Paice last December. Kelly Watson, the NFU’s chief poultry adviser said she wanted to see written confirmation from the Commission clarifying the situation.

EFRA committee chairman Anne McIntosh told Poultry World that Mr Gavinelli had undertaken to “give us chapter and verse on this to clarify our understanding”.

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