Difficult year predicted for egg producers despite optimism for egg consumption

Lion Eggs chief Andrew Joret fears the next year could be a difficult one for egg producers, although he is optimistic about continued growth in consumption.

Andrew says fierce competition between supermarkets has seen retail prices falling, packers struggling and some major cuts in producer prices this year.

"I think the market is tough for everybody right now and likely to remain so for a while, chiefly because of the competition between the discounters and the traditional supermarkets," he said at a meeting of the Yorkshire Egg Producer Discussion Group.

162 food production companies entered insolvency last year, more than treble the 48 insolvencies in the sector in 2010 and 11% more than just a year ago, new research shows.

Accountancy firm Moore Stephens says that food suppliers are still bearing the brunt of the on-going supermarket ‘price war’ as their profit margins are squeezed by big supermarket chains trying to offer consumers the lowest prices possible whilst maintaining their own profit margins.

Moore Stephens explains that the expansion of budget retailers in the UK market over the last five years has put traditional supermarkets under even more pressure to cut prices in order to compete and survive.

However, Joret said that egg consumption had been increasing.

Questions about salmonella and cholesterol had been largely answered and earlier this year a group of experts had recommended that official advice be changed to show that eating runny eggs was perfectly safe, even for vulnerable groups like the very young, the very old and pregnant women.

In January this year the Advisory Committee on the Microbiological Safety of Food (ACMSF) concluded that Lion eggs should be given the all-clear when it came to runny eggs.

The egg industry is now waiting to see whether the Food Standards Agency (FSA) will accept this advice and it is hoped that a decision may be forthcoming as early as this summer.