Tesco announces new additional support for British egg industry
The support package includes £13.6m of support already provided to Tesco’s suppliers and producers since March this year, as well as a commitment to provide a further £13.9m of additional support until March 2023, with the support continuing after that date.
Earlier this year, Tesco announced five-year contracts with its five main British shell egg suppliers - Anglia Free Range Eggs, Glenrath Farms, Griffiths Family Farms, Noble Foods and Skea Eggs. The long-term contracts, which began in October, mean Tesco will continue to stock 100% British shell eggs in its stores, while helping to provide UK egg farmers with the confidence to invest and plan for the future.
Tesco has also confirmed the continuation of its industry-leading poultry feed model. Poultry feed represents up to 70% of the cost of production on egg and poultry farms. The model adjusts to price changes in the market, providing producers with the cost protection and security they need when buying feed.
The support package will be paid to suppliers to cover the cost of handling, processing and egg production, including any increases in feed for farmers. Tesco will continue to work with its suppliers to ensure the additional investment gets passed to farmers as quickly as possible.
Dominic Morrey, Tesco Commercial Director for Fresh said:
"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."
"With five-year contracts with our suppliers now underway, and our well-established feed model in place, we hope the support we’re providing alleviates some of the pressure being felt and provides the industry with confidence and protection during these uncertain times."
Tesco and its suppliers are committed to high welfare standards and together are working towards the retailer’s aim of 100% cage free eggs by 2025. It is hoped the new long-term contracts will help achieve the commitment.
Mark Williams, Chief Executive of the British Egg Industry Council said:
"We are delighted that Tesco is investing in its supply chain to support British egg producers. We know that consumers want and expect the eggs on retailers’ shelves to be British and it is great to see Tesco publicly reinforcing its commitment to stock British Lion eggs. The Lion is not only recognised by consumers as a sign of quality, but it also shows that the eggs are approved by the Food Standards Agency to be eaten runny by everyone, including vulnerable groups."
The continued support for UK egg farmers is the latest in a series of measures by Tesco designed to help its UK supply base through challenging market conditions. Earlier this year, Tesco announced a near 20% rise in the price it pays its British dairy farmers for all its fresh milk.
To help support the British pig sector, the retailer also announced a £10million enhanced payment plan for its farmers and suppliers, alongside a number of other initiatives, including an increase in the volume of British pork in store.
Supportive quotes from Tesco suppliers:
Anglia Free Range Eggs:
Clair Bullen, Head of Sales & Marketing, Anglia Free Range Eggs:
"We welcome Tesco’s ongoing commitment and support for our free range producers. Our farmers continue to face unprecedented inflationary costs and are now dealing with the devastating impact of Avian Influenza across the UK. Our goal is to continue to work closely with Tesco to create a truly economically sustainable model which will deliver for the future."
Glenrath Farms:
Ian Campbell, Managing Director, Glenrath Farms:
"Glenrath Farms have supplied Tesco for over 30 years, and we have a superb working relationship with them. Like many other suppliers we are currently facing unprecedented challenges due to inflation. Ten years ago Tesco introduced a cost of production and feed model to make supplier costs transparent and fair to both supplier and buyer. These models have given Glenrath a fair and up to date price for their product. This in turn has given our company the confidence to invest in the future. In addition the Tesco team are always just a call away in providing any support and advice."
Griffiths Family Farms:
Aled Griffiths OBE, Chairman, Griffiths Family Farms:
"Recent unprecedented events have added extreme volatility to the supply chain which has added significant pressure to production costs. Griffiths family farms are pleased to be working with Tesco and welcome their ongoing support in addressing the structural changes needed to ensure sustainable UK egg production for the future."
Noble Foods:
Duncan Everett, CEO, Noble Foods:
"We are delighted that Tesco have implemented this initiative to support the British egg industry. This is a challenging time for everyone involved, most recently exacerbated by utility inflation, the growing risk of AI and the rising cost of borrowings. This announcement demonstrates how by working together, we can ensure that the supply chain remains viable. We remain committed to continuing working with Tesco to overcome the long-term structural challenges that still exist within our industry. Today is a positive step for the future of the industry."
Skea Eggs:
Harold Richmond, Agricultural Director, Skea Eggs
"At a time when egg producers are facing huge inflation-driven cost increases, with an overhanging threat of Avian Influenza to their businesses, Skea Eggs very much welcomes Tesco’s support package which will help support producers now and over the coming months. We must continue to work together to ensure we have a sustainable, secure supply base now and in the future."
Stonegate:
Adrian Blyth, Head of Business Development, Stonegate Farmers Ltd:
"We have an incredibly loyal producer network for our Clarence Court eggs who are continuing to supply us under significant cost pressures and whilst we have and continue to pass on price increases from Tesco we are engaged in on-going discussions and recognise that further increases may be necessary to avoid further hardship and build towards a viable supply base for the medium term."
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