- The retailer will remain 100% British on all of its shell eggs
- New five-year contracts for Tesco’s five British egg suppliers
Tesco has today reaffirmed its commitment to UK egg farmers as challenging market conditions continue to affect the industry.
The retailer has announced new five-year contracts for all of its five shell egg suppliers – Anglia Free Range Eggs, Glenrath Farms, Griffiths Family Farms, Noble Foods and Skea Eggs. The long-term contracts will mean Tesco continues to stock 100% British shell eggs, 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 industry-leading poultry feed model. Poultry feed represents up to 70% of the cost of production on egg and poultry farms. To tackle fluctuations in prices, Tesco introduced a fair and transparent feed model into its poultry and egg supply chains ten years ago. The model promotes open dialogue between Tesco and its suppliers and adjusts to price changes in the market, providing suppliers with the protection and security they need when buying feed.
Dominic Morrey, Tesco Commercial Director for Fresh said:
“Like many in the food and agriculture industry, we know the egg sector is facing some challenging market conditions with input costs continuing to increase. To provide much-needed support, all of our shell eggs will continue to be produced here in the UK, but we know we need to do more to support our egg farmers.
“That’s why I’m pleased to announce long-term contracts with all our UK shell egg suppliers. Taken together with our well-established feed model, we hope we can provide the industry with some confidence and protection during these uncertain times.”
Tesco and its suppliers are committed to high welfare standards and together are working towards the retailer’s aim of 100% cage free eggs by 2025. It is hoped the new long-term contracts will help achieve the commitment.
Mark Williams, Chief Executive of the British Egg Industry Council said:
“It is encouraging to see that Tesco is taking a long-term and sustainable approach to its egg supplier relationships at a very challenging time when costs are running so high, while the industry continues to balance its commitment to providing consumers with the highest quality eggs at affordable prices for all. British Lion eggs are an integral part of the nation’s diet, offering a highly nutritious and affordable everyday meal solution, so ensuring British farmers can keep Tesco’s shelves stocked with eggs produced to the British Lion’s world-leading food safety standards, is vital now and for the future.”
The support for UK egg farmers is the latest in a series of measures by Tesco designed to help its UK supply base through the current market conditions. In March this year, it announced a near 20% rise in the price it pays its British dairy farmers for all its fresh milk. Tesco works with a group of 520 British dairy farmers who produce all of its fresh milk. The farmers are paid a fair price which reflects the cost of production.
To help support the British pig sector, the retailer has also announced a £10million enhanced payment plan for its farmers and suppliers, alongside a number of other initiatives, including an increase in the volume of British pork in store.
Supportive quotes from Tesco suppliers:
Anglia Free Range Eggs:
“AFRE have worked alongside Tesco for the last 10 years supplying free range and organic eggs. The current economic climate is the most challenging it has ever been in all that time. In particular, for the poultry sector; feed, energy and inflation costs are all at record levels and this follows on from the worst season experienced so far for Avian Influenza.
“Tesco continue to work with us to help navigate these challenges, central to this is the Tesco Feed Model which helps protect producers from the worst of the feed cost inflation, this combined with the longer-term commitments Tesco offer will also help provide much needed security and stability.”
Clair Bullen, Sales & Marketing, Anglia Free Range Eggs
“Glenrath Farms have supplied Tesco for over 30 years, and we have a superb working relationship with them. Like many other suppliers we are currently facing unprecedented challenges due to inflation.
“Ten years ago Tesco introduced a cost of production and feed model to make supplier costs transparent and fair to both supplier and buyer. These models have given Glenrath a fair and up to date price for their product. This in turn has given our company the confidence to invest in the future. In addition the Tesco team are always just a call away in providing any support and advice.”
Ian Campbell, Managing Director, Glenrath Farms
Griffiths Family Farms:
“The Griffiths family are looking forward to working closely with Tesco as part of a new 5 year agreement starting later this year, and welcome Tesco’s responsible approach to working with UK egg producers. The market conditions as a result of the Ukraine conflict have undoubtedly put extreme pressure on the viability of some farmers in this sector, however, it is clear that the Tesco feed-linked model is already providing security for farmers today and for the future.”
Jonathan Griffiths, MD Griffith Family Farms
“Noble are pleased to announce the renewal of our partnership with Tesco through a new 5 year contract. This highlights the joint commitment that Noble and Tesco have in building a sustainable plan for the British egg industry, during a period of unprecedented volatility. We look forward to continuing to collaborate with Tesco to design further measures to help alleviate market conditions. This will ensure British egg supply is maintained so that consumers have access to an affordable and healthy diet.”
“Tesco is providing strong financial support to us as a supplier and subsequently to the farmers and have helped us through the most challenging period of cost volatility and inflation ever seen.”
Harold Richmond, Agricultural Director, Skea Eggs