Tesco has announced further support for its British egg suppliers and producers, as the sector continues to experience challenging market conditions brought on by price increases in key inputs such as feed and energy and the avian flu outbreak.
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 poultry feed price tracker. 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.”
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.”
Clair Bullen, Head of Sales & Marketing, Anglia Free Range Eggs, said: “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.”
Aled Griffiths OBE, Chairman, Griffiths Family Farms, said: “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.”
Harold Richmond, Agricultural Director, Skea Eggs, said: “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.”