August 4, 2023

Tesco commits US$12.7 million additional support for UK egg sector

Leading supermarket chain Tesco has unveiled plans to inject a further GBP 10 million (~US$12.7 million; GBP 1 = US$1.27) in support of the UK egg sector, underscoring its steadfast dedication to sourcing all shell eggs from within the UK, Grocery Trader reported.

Of this sum, GBP 6 million (~US$7.6 million) will be allocated from August this year until March 2024. This move follows Tesco's substantial investment of GBP 27.5 million (~US$34.9 million) in the sector throughout the span of 2022 and 2023.

In a bid to provide an extra boost to both producers and consumers, Tesco is lifting its purchasing limits on shell eggs. Initially introduced in November 2022, these limitations, which restricted customers to buying only three packs of eggs at a time, aimed to mitigate the challenges stemming from supply chain disruptions due to surges in critical inputs' prices like feed and energy, as well as the avian flu outbreak.

The comprehensive support package will be extended to suppliers, covering expenses associated with egg production, processing, and handling, including any escalations in feed costs for farmers. Tesco is actively collaborating with its suppliers to ensure that this supplementary investment is promptly channelled to the farming community.

Maintaining its position at the forefront of the industry, Tesco will continue to implement its pioneering poultry feed model. Poultry feed expenses constitute a substantial portion, up to 70%, of the total production cost for both egg and poultry farms. This adaptive model adjusts in response to fluctuations in market prices, offering producers a crucial safeguard against feed cost variations.

Commenting on this development, Dominic Morrey, Tesco's commercial director for fresh, said that they are really pleased to be able to provide a further package of financial support to UK egg suppliers and producers.

He said the sector has faced some very tough conditions over the past 18 months, including increases to inputs such as feed and energy, as well as the avian flu outbreak, so Tesco hopes this support alleviates some of these challenges.

-      Grocery Trader