Tesco announces further assistance of over £14 million for the British egg business.
Between March 2022 and March 2023, £27.5 million will be invested in the UK egg industry.
All of the retailer’s shell eggs will continue to be produced in the United Kingdom.
Tesco has announced additional support for its British egg suppliers and producers, who continue to face challenging market conditions due to price rises in critical inputs such as feed and energy and the avian flu epidemic.
The support package includes £13.6 million in help previously delivered to Tesco’s suppliers and producers since March of this year, as well as a pledge to provide an additional £13.9 million in support until March of 2023, with support continuing after that date.
Tesco signed five-year contracts with its five major British shell egg suppliers – Anglia Free Range Eggs, Glenrath Farms, Griffith Family Farms, Noble Foods, and Skea Eggs – earlier this year. The long-term contracts, which began in October, will allow Tesco to continue stocking 100% British shell eggs in its stores, as well as provide UK egg farmers the confidence to invest and plan for the future.
Tesco has also confirmed that its industry-leading poultry feed program will continue. Up to 70% of the cost of production on egg and poultry farms is comprised of chicken feed. The methodology adapts to market price fluctuations, providing feed producers with the necessary cost protection and security.
The assistance package will be paid to suppliers to cover the cost of handling, processing, and egg production, as well as any feed price hikes for farmers. Tesco will continue to collaborate with its suppliers to expeditiously transfer the additional investment to farmers.
Dominic Morrey, Commercial Director for Fresh at Tesco, stated:
“We are aware that the British egg industry continues to endure severe market conditions due to rising input costs and the impact of avian flu on farming conditions and the supply chain. We are glad to maintain our support for British suppliers and farmers and to reassure our consumers that we will continue to get all of our shell eggs from the United Kingdom.
With five-year contracts in place with our suppliers and a well-established feed strategy, we hope that the help we’re offering will reduce some of the industry’s burden and provide trust and security during these unpredictable times.
Tesco and its suppliers are dedicated to high welfare standards and are collaborating to achieve the retailer’s goal of cage-free eggs for all production by 2025. The goal is that the new long-term contracts will assist in meeting the commitment.
Mark Williams, CEO of the British Egg Industry Council, stated:
“We are thrilled that Tesco is investing in its supply chain in order to support British egg producers. We know that people want and expect the eggs on retailers’ shelves to be British and it is excellent to see Tesco openly confirming its commitment to stock British Lion eggs. The Lion is not only recognized by customers as a symbol of excellence, but it also indicates that the Food Standards Agency has certified the eggs for consumption by vulnerable groups.
Tesco’s sustained assistance for U.K. egg producers is the most recent in a series of initiatives meant to assist its U.K. supply base in navigating difficult market conditions. Tesco announced earlier this year a nearly 20% increase in the price it pays British dairy farmers for all of its fresh milk.
In an effort to promote the British pig industry, the retailer announced a £10 million expanded payment plan for its farmers and suppliers, in addition to a number of other initiatives, including an increase in the amount of British pork sold in stores.
Supportive quotes from Tesco suppliers:
Anglia Free Range Eggs:
Clair Bullen, Director of Sales and Marketing at Anglia Free Range Eggs, states:
“We appreciate Tesco’s continued dedication and support for our free-range farmers. Our farmers continue to confront enormous inflationary costs and are also grappling with the tragic impact of Avian Influenza across the UK. Our objective is to continue collaborating closely with Tesco to develop a model that is truly economically viable and profitable for the future.”
The Glenrath Farms are:
Ian Campbell, Chief Executive Officer of Glenrath Farms:
“Glenrath Farms has been a supplier to Tesco for nearly three decades, and we enjoy an excellent working relationship with them. As with many other suppliers, we are today confronted with enormous obstacles brought on by inflation. Ten years ago, Tesco implemented a cost of production and feed model to make supplier costs transparent and equitable for both the customer and the supplier. These models have provided Glenrath with a reasonable and current price for their product. In turn, this has provided our business with the confidence to invest in the future. In addition, the Tesco team is always available to provide help and advise upon request.”
Family Griffiths Farms:
Aled Griffiths OBE, Griffiths Family Farms Chairman:
“Recent occurrences that are unprecedented have contributed tremendous unpredictability to the supply chain, which has exerted substantial pressure on manufacturing costs. Griffiths family farms are delighted to be working with Tesco and welcome their continuous help in addressing the structural reforms required to secure the future sustainability of the UK egg industry.”
Duncan Everett, Chief Executive Officer of Noble Foods:
“We are thrilled that Tesco has established this program to promote the British egg sector. This is a difficult moment for everyone, recently compounded by the rising cost of utilities, the growing threat of artificial intelligence, and the rising cost of borrowing. This news highlights how, by collaborating, we can ensure the viability of the supply chain. We remain dedicated to continuing to collaborate with Tesco to tackle the structural problems that still exist in our industry over the long term. Today is a positive milestone for the industry’s future”
Harold Richmond, Director of Agriculture at Skea Eggs
“At a time when egg producers are facing enormous inflation-driven cost hikes and the looming threat of Avian Influenza to their companies, Skea Eggs warmly welcomes Tesco’s support package, which will help producers now and in the months ahead. We must continue to collaborate to maintain a sustainable and secure supply basis for the present and future.”
Adrian Blyth, Director of Business Development for Stonegate Farmers:
“We have an extremely loyal producer network for our Clarence Court eggs, who continue to supply us despite significant cost pressures. While we have and will continue to pass on price increases from Tesco, we are engaged in ongoing discussions and recognize that further price increases may be required to avoid further hardship and build a viable supply base for the medium term.”