Price rise comes out of packer’s pocket

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The UK's largest egg packer, Noble Foods, claims to have funded an increase in producer price from its own pocket.

The company has increased the free range price by 0.5p a dozen on Very Large, 5p on Large and 2p on Medium. On a weighted average this equates to just over 3p a dozen. Organic prices went up by 2p on Very Large and 6p on Large.

In a letter to supplying producers, chief executive Michael Kent told producers that despite recent rises in retail prices the packer had been unable to increase its average selling price.

"We believe the way forward lies in improving efficiency and removing costs from our overheads and packing operations," he wrote. "Our objective is a system which leads the industry in egg handling and quality, staff facilities and low operating costs.

"To this end a programme of rationalisation and investment was put in hand in July which should bear fruit in December. While the savings will not flow until then, I am very conscious that our producers need better returns now to cope with the year's accumulated cost rises."

Mr Kent went on "While you may think that this rise is overdue, I hope you will appreciate our difficult circumstances and the fact that we have had to dig deeply into our pocket to pay it now."

Acknowledging the valued role of producers, he added "the best egg packing network in the country is of little use without the best supply base to go with it." Mr Kent even included his mobile phone number with an invitation for producers to call him and a promise that unanswered calls would be returned within 24 hours.

The increase in producer prices comes just a week after BFREPA officials met with the packers' representative body Nemal, where low producer returns dominated the agenda.

Commenting after news of the price rise, Association chairman Tom Vesey said that it was welcome but didn't go far enough.

"Whilst we recognise that the packers also find themselves under financial pressure, we've been pushing for a minimum of five pence," said Tom. "And it is looking like even that may not be enough in the face of rocketing feed prices.

"We intend to continue price negotiations with the packers until we are satisfied that producer profitability has been fully restored."