March 9, 2011

Supermarket price cuts adversely affect Australian egg farmers

The Australian Egg Industry Association feels that supermarket chain Coles' new choice to reduce prices cannot be sustained and will cause damage to the local industry.

James Kellaway, the group's executive director, hopes industry and customer pressure can influence the chain to reverse the move. But he has stopped short of calling for a boycott.

"If Australian egg producers want their fresh eggs coming from Australia and not imported, then they should not support these kinds of price pressures," he said.

"We need to be careful because as suppliers we need to comply with the Trade Practices Act and trade law. They have the market power. All we can do is try and educate them and try and work with Coles. But suffice to say, it is unsustainable at this point in time."

But as with the current competition over milk prices, Coles maintained it is doing the correct thing by customers and farmers and is fully absorbing the cost of the price reductions.

Coles has allowed most suppliers a cost increase for home-brand eggs and will continue accepting genuine cost increases.