Woolworths cancels local contract in Tasmania

Tasmania's egg industry is reeling after a major supermarket chain cancelled one of its local contracts.

Woolworths, the largest supermarket chain in Australia has decided that a Queensland company will supply 65% of home brand eggs sold in its Tasmanian stores. Prior to the decision, all home brand eggs sold in the state are supplied by local farmers.

John Groenwald of the Egg Producers' Association said the decision will cost jobs and impact communities.

"It's roughly a million dollars worth of sales that we've potentially lost in Tasmania which will be going to an interstate Queensland company," Groenwald said.

Besides, this will not be a level playing field because these eggs will be branded as Woolworths brand, and the consumer would not be able to identify which are Tasmanian and which are Queensland eggs, Groenwald added.