Producer views sought in supply chain fairness review

Published on : 24 Mar 2025

Later this year Defra are looking to introduce new regulations for the egg sector that will improve transparency within contractual agreements and tackle unfairness where it exists.

This is a key Defra workstream and was first announced at the Farm to Fork Summit held at Number 10 Downing Street in May 2023. The origins were in the extremely poor market returns that producers suffered in the wake of the Russian invasion of Ukraine in February 2022 causing significant increases in feed and energy process, compounded by other factors, such as losses to Avian Flu. The conditions combined to create a ‘perfect storm’ of unsustainable poor returns for producers and a crisis of confidence in the future of egg production across the UK.

The aim, as the working title of this workstream would suggest, is to address imbalances or unfairness in the egg supply chain and started with a public consultation which ran from October - December 2023. 102 BFREPA members responded and contributed to BFREPA’s response to this consultation. In addition responses were received from producers directly, packers and retailers from across the UK.

The aim of the UK-wide consultation was to understand whether contract reform could provide greater certainty to egg producers, packers and others in the supply chain, by improving access to data and ensuring that clear terms and conditions are established in contractual agreements.

The consultation responses demonstrated a strong consensus from most producers wanting a set structure when it comes to contracts as well as the need for clauses relating to notice periods and termination, pricing, premiums and deductions that should be clear and unambiguous to allow better transparency. In addition, most responses agreed with the need for legislation and mandatory clauses, e.g. termination clauses, notice periods, specific or transparent pricing mechanisms, along with fair pricing clauses (allow renegotiation of costs in extreme market conditions). Most respondents agreed that unilateral changes should be prohibited. On dispute resolution, the most popular method for resolving disputes was independent arbitration.

Defra responded to the consultation responses and shared with BFREPA a first draft of proposals for the regulation. James Baxter and I met with the Defra team working on this policy area in mid-January this year to give our feedback. As a result of that, feedback from the other trade associations as well as building on the findings from the consultation, Defra have produced a second draft and have asked for feedback by 4th April.

This draft document details the initial proposals for the Fair Dealings Regulations in the Egg sector which will impose obligations on any businesses (“business purchasers”) purchasing shell eggs for consumption only (e.g. not liquid, powdered or fertile eggs) from sellers. The purpose being to provide greater certainty and transparency for both parties.

The document sets out obligations that the proposed Regulations may introduce to address unfair contractual practices in the egg sector and covers areas such as pricing and pricing mechanism, method and frequency of payment, supply volumes, charges, deductions, variations, dispute resolution, termination, enforcement, penalties as well as introducing an implementation period.

Defra have asked for our views and, when reading the document, please remember the market conditions and experiences that we were going through back in 2022/23 that led to these proposals and bear in mind:

1. Would these regulations tackle the issues of unfairness that you are aware of in the supply chain?

2. Would any further measures help promote fairness and transparency in the supply chain? Have Defra missed anything substantive or impactful?

3. Could any of the measures here create issues or unintended consequences that may not have been considered?

We will circulate the draft on email and on the Member only WhatsApp group. Can I encourage members to read through the draft as this is an important policy area for our sector, and respond either to myself or email Defra directly: eggcontractconsultation@defra.gov.uk This is a golden opportunity to influence contracts for decades to come.

Click here to download the draft proposals.