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2120 final report.pdf - Agra CEAS Consulting

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APPENDIX 1: MEMBER STATE REPORTSA1.8.5.2. Expected implementationThe industry does not expect to invest in enriched cages before 2012 as any producers who didinvest ahead of schedule would then be competing at a cost disadvantage until all producers make theswitch. However, packers recognise that they may need to help drive investment in order to ensurethat they have sufficient egg supplies post-2012. To this end, packers are likely to reduce the pricethat they will pay to producers using traditional cages in order to prompt them to invest in enrichedfacilities. It is not thought possible for packers to offer a price incentive to producers using enrichedcages as retailers are expected by the industry to switch to cheaper, traditional cage producers until2012 if packers tried to pass the additional cost on.A problem facing the Irish sector is the fact that much of the traditional cage equipment is reachingthe end of its useful life. Much of this has already been modified to allow for the space enlargementfrom 450cm 2 to 550cm 2 . There is therefore a current need to invest in facilities which will becomemore pressing as 2012 approaches. It is the view of the industry that there have been too manyenforced changes over too short a time period.The growth of the free range sector in Ireland is considered to be demand-led and it is possible thatdemand for eggs produced under this system will continue to grow to 2012, although growth hasslowed recently. One respondent made the point that no one predicted that the Irish free rangesector would approach 25% market share and that it would therefore be heroic to predict where itmight move to from here. However, free range production is still considered a niche product andthe view is that demand for a mass market product will remain strong.218

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