Cracking on: NZ supermarket giants stand firm over egg strategies despite producer outcry

20-Feb-2023 - Last updated on 20-Feb-2023 at 03:54 GMT

Direct partnerships with egg producers are key for NZ supermarkets to manage supply chain disruptions given government's recent ban on caged eggs © Getty Images

NZ supermarkets Foodstuffs and Countdown say reinforcing direct partnerships with egg producers is crucial to tackle widespread supply chain disruptions given the government’s ban on battery-caged hens coming into force.

But egg suppliers say the country’s two supermarket giants have exacerbated the shortages by insisting on moving to a totally cage-free approach.

Talks between supermarkets and egg producers have been under way since 2016 and 2017 to prepare for the transition, first announced in 2012.

Since then, there have been other unprecedented stresses on the supply chain, posing greater challenge to egg buyers and sellers-alike to manage the transition.

“The current challenges with supply that we’re seeing are reflective of a very disrupted couple of years for our farmers with Covid-19 causing significant peaks and troughs in demand, the war in Ukraine resulting in feed prices spiking, and supply chain disruptions making it challenging for farmers to source raw materials to build new farming systems,” a spokesperson from the Countdown supermarket chain told FoodNavigator-Asia.

Managing the transition

According to egg industry representatives, the shortage has been exacerbated by supermarkets also indicating they will stop selling eggs from ‘colony cages’ – a system of larger cages adopted by many producers once the battery ban was announced.

In an official statement made in 2017, Foodstuffs announced their target to be 100% cage-free by the end of 2027.

“Giving the industry time to achieve this is important as this will ensure our customers’ needs can be met,

“On balance we believe 10 years is a reasonable timeframe to enable producers to realise their investment and be able to reinvest in alternative farming infrastructure.

“If this can be achieved, then the industry will have a much better chance of being able to meet the increasing demand from shoppers, which is seeing egg consumption increase by over 4% year on year,” Steve Anderson, then-Managing Director of Foodstuffs, said.

However, the shortage is so bad at present that it has set temporary limits on the quantity of eggs that each customer can buy.

“It’s a significant change for the egg supply industry and to help support the transition, and to make sure customers get a fair share when they shop, a number of Foodstuffs stores have put temporary limits on how many eggs customers can buy,” Emma Wooster, Head of Public Relations of Foodstuffs, told FoodNavigator-Asia.

Countdown does not have any limits on eggs for customers and says its relationship with egg producers is crucial to meeting future demand

“In 2016 we established our Egg Producer Programme which guarantees to our farmers that if they invest in barn or free-range farming systems, we’ll buy those eggs,

“We made this decision with the support of our farmers, and against a backdrop of changing customer shopping habits as well as rising animal welfare standards. Since 2016 we’ve seen a 93% increase in customer demand for cage-free eggs,” a spokesperson from Countdown told FoodNavigator-Asia.

Both supermarkets said they were responding to increasing consumer awareness on animal welfare, and a growing demand for free-range and barn-raised eggs.

But the Egg Producers Federation of New Zealand says the ban on colony caged eggs gave producers only two options – “buy a new farm” or stop production. Too many, it appears, chose the latter.

FoodNavigator-Asia has previously published about talks in the China’s egg industry to phase out caged eggs.