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Farmers worried as supermarkets continue to slash prices

As Australian supermarkets continue to lower the price of free range eggs, farmers and egg producers are protesting that their profits will drop significantly.  

Both Coles and Woolworths have been cutting the prices off our shopping list staples, such as bread, milk and eggs and, while media headlines have so far focused on anger from dairy farmers over the reduction in the cost of milk, there is now a growing concern from egg producers that their profits are being wiped out, too.

The target of the recent egg price cuts has been on the free range egg market, with Coles slashing the cost of its free range eggs in December 2010 and then again at the beginning of this year.

Production of free range eggs is a lot more costly than the production of caged eggs, but with the price cuts, the supermarkets are positioning both varieties within similar price brackets.

Brian Ahmed, President of the Egg Group at the Victorian Farmers Federation, has said that “these cuts will make it impossible to sustain the free range market”.

Coles have stated that the rationale behind lowering the price of their free-range eggs is to encourage consumers to buy eggs that are more “ethically produced”.

Coles Merchandise Director, John Durkan has said that, “this is part of our ongoing campaign to offer all customers quality fresh food, ethically produced and at affordable prices.”  

However, Coles entered into this decision without consultation with industry representatives or their own suppliers of eggs, which has left egg farmers concerned for the future of their businesses.

Furthermore, the supermarket has said that it intends to cease selling its own-brand of cage-produced eggs by 2013. In so doing, Coles will effectively remove the most cost effective egg category on the market. 

Cage produced eggs currently accounts for nearly 65% of the eggs sold at retail in Australia, by removing this chunk of the market, Jacqueline Baptista, Communications Manager for the Australian Egg Corporation, believes “Coles are dictating to their customers what products they can and cannot purchase”.  

“Eggs from cage systems offer welfare, food safety and environmental advantages that cannot be found in alternative systems,” says Ms Baptista, “and by restricting the variety available to consumers, Coles strips shoppers of the freedom to make their own ethical choices at the supermarket checkout.”

Having variety in the production and quality of eggs means consumers are offered broader choice, but as the supermarkets lower costs, the difference provided by free range over caged eggs will first be undermined and then taken out of the equation altogether, as producers buckle under the pressure of rising costs.
 

 

Image courtesy of https://www.springhillbeefhamper.com.au

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