Lion rethink early release clause

The British Egg Industry Council (BEIC) may be set to reverse a move designed to make it easier for egg producers to switch packers.

The Ranger reported on a BEIC council meeting earlier this year at which subscribers voted on introducing a new procedure that would allow producers to move to a new packer even if they had outstanding contractual or legal issues with their existing packer. Under the rule change, Lion registration would have to be transferred to a new packer within seven days if that was the stated wish of the producer involved. The Ranger was told by subscribers who attended the meeting that a vote was taken and a majority voted in favour of the change.

However, we understand that moves are now under way to review that decision. The issue was due to be discussed again at a council meeting on May 10 and we believe that some packers are pressing for a change of heart. "There was a vote taken at the previous meeting but there was a feeling afterwards that it may have been rushed and that some people were not quite clear about what they were voting for. A decision was taken to look at the issue again," we were told by one of those present last time.

Some packers are concerned at the commercial consequences of what they see as producers being able to walk away with seven days' notice. They want to ensure security of supply in order to fulfil their own contracts. Others believe that the Lion should not be used to police contractual disagreements between a packer and a producer. They feel that contractual such disputes should be settled through normal legal procedures and that Lion registration should simply be transferred to a new packer at the request of a producer.

One of those who voted in favour of the change at the earlier meeting expressed surprise that the issue was going to be reviewed in May. "I had no idea. We voted on it last time and there was a clear majority in favour. I don't know what is happening. It has to change because the difficulty in moving from one packer to another is one of the reasons why prices are kept low." He said that the change had been voted on and agreed by the vast majority present at the previous meeting.

The Ranger approached the BEIC to ask for confirmation of the procedural change after the last meeting, but the BEIC would not comment. A spokesman said, “The BEIC is unable to comment on specific recommendations discussed at the BEIC subscribers’ meeting until the meeting minutes have been circulated.” When we asked when the minutes would be circulated, the spokesman said, “We can't commit to when that might be.”

Under the procedure voted on by subscribers, the egg producer and his new packer would both need to inform Lion in writing of the intention to switch. Lion would then inform the existing packer that the producer would be registered with the new packer within seven days.

The issue has been a delicate one for the industry, with opposing views within the BEIC membership. Some packers have felt that recruitment of a new producer may have been unreasonably blocked in the past as a result of contractual disagreements with an existing packer. Some producers who have felt their existing contracts had or should have ended have felt trapped by their inability to have their registration moved to a new packer. But some packers have been reluctant for the procedure to be changed.

It seems that the disagreements were set to continue at the May meeting of the BEIC.