2120 final report.pdf - Agra CEAS Consulting

THE SOCIO-ECONOMIC IMPLICATIONS OF THE VARIOUS SYSTEMS TO KEEP LAYING HENSnew labelling legislation will mean that it is no longer possible for ‘cascading’, i.e. the movementof surplus alternatively produced eggs into the caged egg chain, to take place, mean that in futureeither the premium that such eggs currently command will reduce as supply exceeds demand, orproducers may withdraw these eggs from the shell market and seek to sell into the food serviceand processing sectors instead at a lower price 28 . In either case this is likely to reduce thecompetitiveness of alternative production.6.1: The experience of banning caged egg production in SwitzerlandSwitzerland introduced a ban on caged production of eggs in 1981 with a ten year transition period.All shell eggs produced in Switzerland are now produced from alternative systems (the majority(60%) of which have outdoor access and might be equated with the EU free range system, theremainder in barn systems). During the 1980s it was decided that the Swiss version of ‘enriched’cages appeared not to adequately satisfy animal welfare needs and they were therefore not acceptedas an alternative.This process was greatly enhanced by the fact that from the early 1990s onwards the two dominantsupermarket chains in Switzerland (Co-op and Migros) saw it as a major means of enhancing theirmarketing strategy and image to provide consumers with eggs from alternative systems. They thusinvested heavily in the promotion of eggs produced in alternative systems and thereby contributed toa change in consumer demand patterns 29 . This was further reinforced border protection and bygovernment funded programmes providing substantial investment subsidies for the transition toalternative production systems 30 . The combination of these factors has meant that consumers arenow willing to pay a premium for alternatively produced eggs 31 .The consequences of this policy are highlighted in Figure 6.1 below. Overall egg consumption fellfrom the mid 1980s to the mid-1990s, although remained stable from this point. Within overall eggconsumption the share of domestically produced shell eggs, as well as the share of processed eggproducts, in total consumption has risen. Egg product imports have doubled from some 32 eggs percapita in 1990 to some 62 eggs per capita in 2003. At the same time the share of imported shell eggsfell sharply between 1990 and 1995 (from some 74 eggs per capita to some 37 eggs per capita) asimport protection measures were adopted and consumer preferences changed 32 . Thus, the overallbalance on the market between imported and domestically produced eggs has remained broadly28 According to some players in the processing sector it is already cheaper to import. The only alternative to this outlook would be if themarket for alternatively sourced eggs in the food service (catering) sector or the processing sector expanded dramatically. At present thismarket is very limited although one retailer in the UK, Marks & Spencer uses only alternatively sourced eggs in its branded processedproducts and we are aware that there is currently some, albeit limited usage of such eggs in the food service sector. There is, however, nocurrent expectation amongst producers or retailers that in the short to medium term this market will grow to take a significant marketshare.29 Zweifel, Ruedi., ‘Schweizer Eierproduktion: 22 Jahre nach dem „Käfigverbot’, Aviforum Colmar Conference on ‘Haltungssysteme imWandel’, November: 2003.30These were BTS ‘besonders tierfreundliche Stallhaltungssysteme ‘ (particularly welfare friendly production systems) and RAUS‘regelmässiger Auslauf ins Freie (regular access to free range).31 The average price of an egg in Switzerland was approximately double that in the four adjacent EU Member States in 2003.32 Oester, H. & Fröhlich, E.K.F., Non-cage housing systems for laying hens in Switzerland, Centre for proper housing: poultry and rabbits(ZTHZ), Swiss Federal Veterinary Office, (FVO), Zollikofen, Switzerland.85