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2120 final report.pdf - Agra CEAS Consulting

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THE SOCIO-ECONOMIC IMPLICATIONS OF THE VARIOUS SYSTEMS TO KEEP LAYING HENSThe processed sector utilises the entire Finnish production of second quality eggs 69 and supplementsthis with first quality to give a ratio of 65-70:35-30. Whilst there is generally no differentiationaccording to production system, Scanegg does have a dedicated organic processed product for whichthey both charge and receive a premium. It is generally difficult to ensure identity preservationwithout the need to halt production and this presents a barrier to differentiated processed products,especially in the case of liquid eggs. With this exception, second quality eggs from alternativesystems are bought without premium and are sold as undifferentiated egg products.A1.4.3.1. Main egg processorsThere are just two main egg processors in Finland. The largest is Scanegg, a subsidiary of Munakunta(there are also some other minor shareholders), the other is Farmimuna. Farmimuna also producesand packs eggs and has its own feed mill. The market for processed egg products in Finland in 2003was between 7.0 and 7.5 million kg (112 million to 120 million shell eggs 70 ), and of this total, Scaneggaccounted for 5.2 million kg (83.2 million eggs) 69% to 74% of the total market and Farmimunaaround 0.5 million kg (8.0 million eggs). The residual (about 1.4 million kg, 22.4 million eggs in 2003)was made up of imports.Finnish customers of the egg processing sector tend to use two suppliers in order both to mitigateagainst supply problems and to exert downward pressure on price.Box A1.12: Profile of ScaneggScanegg is the largest processor of eggs in Finland accounting for almost three quarters of Finnishprocessed egg productionOwnership: the majority owner is Munakunta (65%) and thus ultimately Scanegg is mainly cooperativelyowned by producers. Munakuutoset Oy owns 20%, Ōsterbottens Äggcentrallag 5%and a Danish holding company 10%Subsidiary: Eesti Munatooted, Estonia, 50% ownershipTurnover: €8 million in 2003Profit: €150,000Employment: 34 staffMain markets: domestic 80% to 90%, some exports to Sweden, Lithuania, Estonia andoccasionally Denmark and the NetherlandsMain product: plain liquid eggA1.4.3.2. Processor concentrationThe processing sector in Finland is extremely concentrated with only two main producers, one ofwhich (Scanegg) has almost 75% of market share. Farmimuna was founded approximately five yearsago and prior to that Scanegg was the only significant producer.69 Approximately 6% to 8% of egg production is second quality.70 At a conversion rate of 62.5 grams per egg.154

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