Easter is upon us and it should be a time to celebrate; however, EU countries are suffering from shell shock as a shortage on eggs promises to hamper production of some of our favourite sweet and savoury indulgences.
Since the beginning of the year supplies of eggs have decreased dramatically and now many small and medium sized businesses that rely on eggs or egg-based products are having to close down production lines. The average price of eggs throughout the EU has risen by up to 75%, but many supermarkets refuse to pass this price hike on to the consumer resulting in a serious breakage in the supply chain.
The shortage in supply and significant price increases are being blamed on new rules introduced within the EU which took effect on 1st January 2012. The EU Welfare of Laying Hens Directive requires egg producers using caged hens to use larger cages, rather than traditional battery farm conditions. The move to improve conditions for caged hens, providing them with enriched environments, has been welcomed by animal rights campaigners.
The new rules set out by the EU also prohibit imports of eggs from non-complaint countries. There are still thirteen EU countries that have yet to adopt the new housing for caged hens. This is another contributory factor in the shortage of supply and has left many businesses in EU countries scrambling around for declining sources.
These rules have had a negative impact in the unnecessary slaughter of hens by producers who have not been able to afford the capital investment in new pens. Spain has seen the slaughter of large numbers of flocks as a result and many producers have chosen to leave the market altogether. As a result, the country has gone from being a net exporter to a net importer of eggs. Not something that an already struggling economy needs at this point.
Although the new rules are being blamed it is too easy to point the finger at the EU. Member states and producers have known about this legislation for sometime and their failure to prepare is extremely poor. Farming subsidies are significant throughout European countries and the capital outlay to improve caged hen conditions is relatively small. Governments could have been far more proactive in helping producers.
Manufacturers also have their role to play. Those manufacturing biscuits and cakes have, arguably, been hit hardest by the supply shortage and price increases; however, if a company can see a threat to its supply chain on the horizon then it is in its own interest to act and soften any impacts. Manufacturers relying on eggs and egg-based products should have begun working with producers when the legislation was first mooted to assist with the improvements require by the Directive.
Although the situation appears to be dire, it does not need to continue for too long. In 2010 a battery cage ban was introduced in Germany, and although supplies reduced and prices increased, it did not take long before the market rebalanced. If governments, producers, manufacturers and retailers work together then this should not be too difficult an issue to crack.