2120 final report.pdf - Agra CEAS Consulting

THE SOCIO-ECONOMIC IMPLICATIONS OF THE VARIOUS SYSTEMS TO KEEP LAYING HENSthis Section and this indicates that retailers (as well as government support) were instrumental inensuring that the Swiss transition to a system which has no caged production progressed asplanned. On the basis of interviews with retailers and NGOs in the EU it would, however, atpresent appear highly unlikely that food retailers in general will cease stocking eggs fromtraditionally caged hens prior to the introduction of the ban on the use of such cages in 2012.While retailers interviewed noted that they took animal welfare into account in their supplierspecifications, they considered it unlikely that moves to stock only alternatively produced eggswould go significantly beyond those companies serving the minority needs of specific populationgroups (e.g. with higher incomes, higher levels of environmental/welfare consciousness, etc.).The general view taken was that, unless there was a sharp shift in consumer requirements, thenumber of retailers selling only alternative egg products would probably not go significantlybeyond the current levels where, in a number of countries and particularly at the premium endof the market, some retailers have taken such action (for example, Marks & Spencer in the UK,Spar and Billa in Austria, Albert Hein in Belgium and the Netherlands, health food shops(‘Reformhäuser’) in Germany) 24 . In this context it should, however, also be noted that consumersurveys have shown there to be hitherto untapped potential demand for alternatively produced‘welfare friendly’ eggs even in markets such as Spain with relatively low apparent demand 25 .It is expected by the industry in the EU that a significant number of caged egg producers(variously estimated at between 20% and 60%) will choose to leave the sector rather than makethe necessary investments. Inevitably there will be some increase in the number of producers inalternative systems but in much of the northern half of the EU-15, where demand for such eggs isstrongest, planning and environmental constraints will limit the scope for such an increase. Thepercentage of producers likely to leave the sector in each country and across the EU-15 as awhole will vary according to how recently investments have been made and whether they havebeen made with a view to adjusting to an enriched cage system. This will also depend on the agestructure of existing producers, level of sector indebtedness, etc.In view of relatively inelastic demand for eggs any additional production costs incurred are likelyto be passed on to consumers in the form of higher prices if there is sufficient border protectionto stop imported third country shell eggs undercutting those produced in the EU-15. In theabsence of such protection, producers/packers would have to absorb some of the additionalcosts or face being undercut by eggs produced to lower welfare standards. The industry in theEU-15 does not expect retailers to commit to buying domestically produced eggs if cheaperproducts are available from elsewhere whether from within the EU-25 or from third countries.24 Strictly speaking the ‘Reformhäuser’ do not have a formal ban on caged production, but only stock organically produced eggs whichwould not be derived from traditional caged production.25 See for example: Public perception of farm animal welfare in Spain, Gustavo A. Marin, Animal Welfare and Food Quality Group, Facultyof Veterinary Medicine, University of Zaragoza, Spain.83