Examination of Witnesses (Questions 1-63)
Q1 Chair: Good
afternoon, Mr Williams. Thank you very much for joining us in
our inquiry into the Welfare of Laying Hens Directive and the
implications for the UK egg industry. For the record, would you
like to introduce yourself, and Mr Clifton?
My name is Mark Williams, Chief Executive of the British Egg Industry
Council (BEIC). Good afternoon, ladies and gentlemen.
I am Giles Clifton, Head of Public Affairs for the British Egg
Q2 Chair: You
are both very welcome. Thank you. Perhaps I may ask you first
a general question. How would you describe the state of the egg
industry at the moment?
At the present moment in sheer commercial terms the industry is
going through a sticky patch, but because we are an unsupported
industry we have always responded to supply and demand and met
exactly what the consumer requires. Like all industries that
operate under market conditions, our slight over-supply situation
at the moment will correct itself in the coming months.
Q3 Chair: Would
you care to comment on the cost of production as opposed to one
year, three years or five years ago? How do you find the cost
of production looking particularly at feed prices and also fuel
Both have risen significantly. How energy prices have increased,
and continue to increase almost on a daily basis, is I believe
well documented. For egg producers the cost of feed is a significant
proportion of the overall cost of producing a dozen eggs. We
have seen the price of wheat effectively double; the price of
soya, which is the main protein ingredient in a laying hen's diet,
has also shot up considerably; and of course there are supply
issues that are well documented from problems with harvests in
different parts of the year. So the industry has been under severe
pressure from increasing costs of feed and energy.
Q4 Chair: The
industry has made a significant investment in enhanced cage production.
Would you like to quantify what the impact of change on production
costs will be?
Yes. We are very proud to be part of an industry that has always
taken the initiative here in the United Kingdom. Our egg producers
and the other parts of the industry have made a phenomenal investment
in meeting the requirements of the new laying hens welfare directive.
If you look at it over the implementation period of 12 years,
our industry will have invested £400 million in meeting the
requirements of that directive. I believe that is the crux of
the argument and why we are here today. That investment made
by the UK industry must be protected from what we believe will
be noncompliant production coming out of Europe in just
under 12 months' time.
Q5 Chair: At the
moment how competitive do you think UK egg production is compared
with production in the rest of the EU and with the rest of the
If you look at our current rate of self-sufficiency, the UK is
80% selfsufficient in eggs. Therefore, we import 20% of
our consumption needs and roughly two thirds of that will come
in a shell form and tends to get sold in wholesale markets and
small retail shops in big cities and food service outlets, at
least some of them. The other one third of the import requirement
will come in as egg products already. That is where we believe
the battle ground will be as we come to the end of this year and
Q6 Chair: What
would you say are the main challenges to UK egg production at
the present time?
Besides what you raised, Madam Chairman, at the beginning about
the increasing cost of feed and energy, the very real concern
is that other parts of the European Union will not be ready, as
we will be, to implement the laying hens directive in its entirety.
Q7 Neil Parish:
In your evidence you suggest that some Member States may be given
a last-minute extension to implementing the directive. On what
do you base that assessment?
We have done a considerable amount of work over the last 10 years.
In 1999, in the early days when the directive was adopted, we
did various economic analyses of the effects on EU production
vis-à-vis third-country imports. If we leave third-country
imports aside for the moment and look at what is happening just
within the EU, it became abundantly clear to us in the mid-part
of the last decade that all producers across the EU just would
not be ready on time due to a number of factors, some within the
control of producers and some certainly outwith their control.
As we look todaywe believe that our figures
are still relevant and are based on data from the European Commission,
so they are their own statistics collected from Member States29%
of commercial laying hens in the European Union of 27 will not
be compliant with the directive on 1 January next year. That
is nearly one thirdor, put into simple terms, 83 million
eggs a day would have to be destroyed. The Commission has very
clearly saidwe totally support it on this pointthat
the directive will be implemented on time. However, on 19 January
it held a stakeholder meeting of various participants: the industry,
welfare groups, consumers and retailers as well as Member State
representatives. I was part of that meeting. It became very
clear that other options would have to be looked at. Some of
those options we would support; other options we certainly would
not support. But let me make it clear, Madam Chairman: as far
as we are concerned we are working closely with our own Government
here in the United Kingdom to make sure this directive is implemented
Q8 Chair: Which
other Member States are ready and which are not? Do we have that
As things stand at the moment, in theory we are still in the implementation
period. They should all be ready at the end of this year. For
example, Germany went ahead of the directive and decided to ban
battery or conventional cages at the beginning of last year, by
the time it was phased in. Austria does not have any conventional
cages any more but allows enriched cages, which are allowed under
the directive, but they will phase out those eventually in 2020.
Sweden went ahead and banned battery cages but started that process
before they acceded to the EU in 1995, so there was a transitional
Q9 Chair: Sweden?
Q10 Thomas Docherty:
They started it in 1995 and then came into the EU?
Yes. They banned battery cages in 1989 with a 10-year phase-out,
and joined in 1995.
It is also true, Madam Chairman, that Poland has repeatedly gone
to the Council of Ministers to ask for a three-year extension
to the 1 January 2012 ban on the grounds that they simply will
not be ready. At the moment the vast majority of their production
is still in the conventional systems.
Q11 Neil Parish:
I just wanted to add that Jim Paice has been very much part of
the Council of Ministers' opposition to any extension of the present
system, so the new regulation has to come into force. But do
you suspect that one of the things that will be done is that,
for example, you will not be able to export eggs from Poland to
the rest of the European Union out of the existing cages, but
they will be able to sell their egg production in Poland? Does
that worry you? Will it stay in Poland under the lower conditions
or will we find it going into the rest of Europe in processed
form in particular?
There are two issues here. The first one is getting the policies
in place. As you correctly say, the policy is basically to put
in place what would effectively mean an export ban of non-compliant
production if producers were either given more time or took more
time from the beginning of next year to phase out battery cage
production. Of course, the second phase is the detail, which
is all-important to my members operating out there on the farms
in the United Kingdom. How do you prevent either eggs or egg
products that are supposed to stay in that Member State from finding
their way across the channel or through the tunnel? That is the
key point. Defra has been hugely supportive on this pointin
particular the Minister and Secretary of State in pressing Europe
to ensure that the directive is implemented. But what worries
me somewhat at the moment is that the Hungarian presidency at
the last Council meeting on 21 February was already talking about
If I may come in, Mr Parish, you can see the problem. You might
imagine a large farm with seven poultry houses, three of which
are converted to the new enriched system and four are still using
the old conventional cage system. All the eggs go to a central
packing station. Overseeing that things are done properly in
accordance with the directive, even if there is a phased derogation
period, would be a recipe for chaos, frankly.
Q12 Neil Parish:
There is the question of how much processed food we might buy
from Poland. If you were buying processed food you would have
no idea of the eggs used in it, would you?
Exactly. With your permission, Madam Chairman, we have brought
along some props to try to illustrate the point.
Q13 Chair: You
will have to describe it for the record.
We will. I am holding up a six-egg pack. Fresh eggs would be
sold in it. This would be sold, as it happens, in one of our
named retailers in the United Kingdom. Just under half of all
the eggs produced in the United Kingdom will be sold at retail
level in shell. The other problem we have is that at the moment
23% of all eggs produced in the United Kingdom will be processed;
in other words, they will be taken out of their shell and made
into a variety of egg products. You name it, they can do it now.
The balance, which is really shell eggs again, go
to the food service (catering) sector. That sector, not exclusively
but generally, is governed by price. That is a key point. So
in retail, as you know yourselves, there are eggs from different
production systems used and consumers make their choice. It is
as simple as that. As to the food service sector, increasingly
there are now moves by companies to use non-cage eggs because
that is what their customers want, but today it is still very
much a price-sensitive market.
We then get into the processing market. Unless the
manufacturer can gain a marketing advantage from selling a product
made with free-range eggs they will not do it. What they are
interested in is both the price and the microbiological safety,
i.e. no salmonella or other bugs in it. Animal welfare considerations
come low down the chain.
If I am a consumer and go into a retailer on 2 January
of next yearbecause of the bank holiday, of coursebasically
I wish to ensure that when I buy a bag of imported pasta, the
egg from which it is produced is a legal product in that other
European country. I know that you are to speak to the British
Retail Consortium afterwards, but certainly my members are talking
to their customers, who are retailers as well as food service
companies and manufacturers, to make sure that they are buying
legal product from the beginning of next year. While the vast
majority of those people will be responsible, there will be those
who perhaps are not in membership of that organisation or others
who may just decide to buy on price, and then we have leakage
I cannot stress enough the collateral damage that
will be done to our industry from illegal product coming on to
our shores from the beginning of next year unless measures are
put in place. The two measures we clearly set out in our submission
to you, Madam Chairman, are: that basically the directive should
be enforced to the letter, and that if more time is given or taken
by producers in certain other Member States then that production
must stay within their own borders.
One particular point that I see in black and white,
but I am afraid the European Commission does not, is that there
should be a different number marked on the shell of eggs that
do not comply with the directive, if producers in other member
states are given, or take, more time to phase out the use of conventional
battery cages after 1 January 2012. This would allow our enforcement
authorities in this country, Animal Health and the Egg Marketing
Inspectorate, to be able to check that any eggs coming in were
legal. To me, it is simple. It then makes it clear that an egg
which carries a No. 3 code on the eggshell comes from a legal,
enriched cage egg. Any egg that comes across our borders but
is not supposed to must carry another mark, a skull and crossbones
or whatever. It does not matter, as long as it does not carry
a No. 3. That is really what we are pushing for. Defra is supporting
that but the Commission is not listening at the moment.
Q14 Chair: Did
you say you would not know until the end of the year which Member
States are not in a position to comply?
We know there are certain Member States that physically cannot
comply now from the very fact that equipment must be ordered;
erection gangs must be contracted; and then physical erection
has to take place. I could name the Member States but prefer
not to, but, if I generalise, the northern European Member States
in general will be ready and the southern and eastern countries
will struggle. It is not all producers, because a lot of them
in those countries will be ready, but the whole of their industry
will not be readyhence Poland, Romania and Bulgaria went
to the Agriculture Council just over a week ago to ask for more
Q15 George Eustice:
I just want to probe this. You said in your opening remarks that
there were factors within their control and others outside it
that meant they were not ready to comply. Can you explain a bit
more what these are? You talked about lack of time to order,
but are we just talking about the fact that they have different
attitudes to animal welfare and so do not care, or is lack of
financial capital a barrier to compliance? Why is it that Germany
complied very easily ahead of time and these other countries are
In certain European countries the actual percentage of cage production
is above 90%, so consumers in those particular Member States do
not really place animal welfare considerations high up on their
agenda. For example, by the beginning of next year free range
will be 50% of all eggs produced in this country. In the Member
State I am referring to, at the moment 95% of all eggs are produced
in a cage system. To change that industry to enriched or non-cage
will take longer than the deadline that has been given to them.
You mentioned the financial crisis. In the same Member State
normally they would receive Government assistance to oil the change.
Because the financial crisis has hit this particular Member State
very hard indeed, Government has delayed providing that grant
It is also true, Mr Eustice, that the Commission itself has not
helped matters in some ways because when it initially brought
in the directive it said it would give a more definitive final
say on this by 1 January 2005. It did not produce that final
definitive viewpoint until 8 January 2008, which meant that producers
in the UK, for example, did not then have the green light that
this would most certainly happen on the date it was meant to,
so that did not help matters.
Q16 George Eustice:
So are there other factors? The number one factor is the basic
lack of financial capital.
I would say market demand is number one. There has not been the
willingness to do so. Why on earth would I invest in an enriched
cage system in this particular Member State when the cost of production
is 8% higher? I have my competitors down the road who will probably
carry on using a traditional battery cage. Straight away I am
making myself uncompetitive. Therefore, you leave it and leave
it and then the financial crisis comes along to compound an already
Q17 George Eustice:
Basically, you are saying it is a judgment call that the authorities
would not enforce it. This is not like going to free range where
you try to get a premium for your product; this is a new legal
requirement, and you are saying they are actively just ignoring
One of our legitimate fears is that at the moment the Commission
points towards current enforcement measures. The current enforcement
measures it uses is missions from the Food and Veterinary Office
to check that Member States are complying with and enforcing EU
legislation. I refer you to an FVO mission to Poland at the beginning
of last year that picked up non-conformity on the current stocking
density in cages. The individual producer was fined in the order
of 7,500. This particular business has 1.25 million hens.
I would say that is not satisfactory. That fine would be classed
as a business expense, so what is the incentive to do anything
about it? There isn't one.
Q18 Neil Parish:
Taking that particular Member State, do you have any idea how
many have converted to the enriched cage? Eventually there will
be pressure within that Member State because those who have made
the investment in the higher standard cages and have extra costs
will want to stop the rest of their fellow farmers producing eggs
according to lower standards. Do you have any ideas on that?
I can refer you, Mr Parish, to the stakeholder meeting on 19 January.
The representative from the Government of Poland noted that there
were 452 production units in Poland using conventional cages.
She said that 131 had enriched cages, but I believe she meant
to say "enrichable cages". What it means is that it
is still a conventional cage in which you would put the furniture
of a nest box, perches and scratching area from the beginning
of next year. But she clearly said that a phenomenal percentage
of their hens would not be legal from the beginning of next year,
hence their return to the Agriculture Council last week to ask
for more time.
Q19 Neil Parish:
Therefore, there will not be much pressure within Poland at the
There was also reference to lack of enforcement ability at the
moment in Poland.
Q20 Amber Rudd:
Do you think that it is small and local producers who might suffer
most under this directive in terms of the costs of adapting and
being commercial going forward?
To be honest, I do not think any distinction could be drawn between
large, medium or small. At the end of the day, the large producers
in this country have spent many millions of pounds. To move from
a conventional cage to an enriched cage costs £25 per hen.
If that is something which your counterpart on the continent
does not have to do, it is a significant cost. Therefore, I do
not draw any differentiation between sizes.
Q21 Amber Rudd:
What about employment issues? Do you think it will affect employment
in the industry?
My personal view is that if we do not get this right, it will.
Ladies and gentlemen, you will know better than I do what happened
to the UK pig industry a few years ago. One thing we want to
avoid collectively is for our successful UK egg industry to go
along similar lines.
Q22 Amber Rudd:
Have you made any assessment of what effect implementation of
the current directive might have in terms of employment?
In round figures, currently, 10,000 people are employed directly
in the industry, and another 13,000 are employed in ancillary
industries like feed, veterinary and equipment, which we share
with the poultry meat industry, if you like. Quite simply, if
you are putting up your production cost by 8%, bearing in mind
that price is the governing factor in the particular segments
of the market I described earlier, there is no doubt that the
impact will be severe.
Q23 Chair: You
said that feed and energy costs were challenging. Is that the
same across the piece? Do you have energy costs in terms of both
heating the units and transporting?
In terms of energy, the cost of oil will have gone up and affected
the price of feed deliveries and the price of manufacturing feed
as well. Energy costs have gone upelectricity for running
feed mills and so on. We have heating costs because a day-old
chick must have heat, which you gradually decrease over the first
few weeks of its life until it can produce its own heat to keep
it at ambient temperature. These are all costs that the industry
has to bear.
In addition, other input costs are going up. For
example, vaccine costs are going up significantly. There are
issues about availability of supply, all of which must be addressed
as we go forward. I would hesitate to use the expression "perfect
storm", but at the moment it seems to us there are quite
a few clouds gathering. We would wish to get out of the storm
rather than allow it to hit us full on.
Q24 Chair: You
just referred to the parallel of the pig industry, but there we
were in the German position of going ahead unilaterally, well
ahead of our competitor countries.
Q25 Chair: Are
you getting support from Germany and their position on their producers
Absolutely. The German Government representatives supported Caroline
Spelman when she made her statement in the council rejecting the
Poles', Bulgarians' and Romanians' wish for more time, so we were
very happy about that.
Q26 Chair: So,
you have named the countries.
We are very happy about the Secretary of State supporting our
Q27 Dan Rogerson:
For the record, you have explored a little the trend in what consumers
demand here and what retailers provide. Can you set out what
evidence there is that consumers are prepared to differentiate
between production methods in terms of the choices they make?
I take you back to 2004 or 2005I cannot remember whichand
the European egg marketing regulations. So they are egg-marketing
regulations that are directly applicable. They were amended.
They required that every single class A egg produced had
to have a code put on it. The code on the egg started with a
zero if it was an organic egg; it was one if it was free range;
two if it was a barn or three if it was a cage. Then you had
the country of origin, in our case "UK", or "NL"
for the Netherlands, and so on; and then a unique code after it
saying that it came from my farm, for example. That very clearly
allowed consumers to see which egg was produced from which system
of production. Led by both industry as well as particular retailers,
they were already asking for clear labelling on the pack.
Our industry has always been totally transparent.
We believe in transparency, and when you are market led you must
be. As we saw back in 1999, about 75% of all eggs produced in
this country at that time came from a cage system. Today, about
50% of eggs come from a noncage system, and all of that
is done by market demand and by being honest and open with consumers.
Madam Chairman, with your permission I should also
bring in that my organisation runs the Lion quality scheme for
eggs. That is basically a food safety scheme to ensure that eggs
are as safe as possible for consumers. Some 90% of all eggs produced
in the UK come under those standards. We took the decision many,
many years ago to prohibit the use of misleading terms on packs.
Therefore, on a cage pack we do not use the term "farm fresh
eggs"; we call them "fresh eggs". There can be
no pretty pictures of farmyard or countryside scenes on a cage
pack, so when consumers go into a shop they can see very clearly
what eggs they are buying. It is their choice, and I believe
that is the way it should be.
Q28 Dan Rogerson:
Some have argued that in addition to the system that is used,
how birds are looked after obviously can have a crucial effect
on welfare. Is the industry doing much in terms of training about
how to get the best out of the systems that are there to increase
Yes, absolutely. Within the Lion code there are higher standards
of animal welfare than those prescribed by either UK or EU legislation.
You are probably aware that Freedom Food runs a scheme for non-cage
eggs, and our colleagues from RSPCA will touch on that. We mirror
the Freedom Food welfare standards for our non-cage production,
so you can see we already have higher standards of welfare. Producers
are audited independently to make sure they are trained in bird
welfare. We have the Defra code and the same codes in the devolved
Administrations. The codes of practice for welfare must be available
and understood by farm staff. I certainly would not put someone
in charge of £1 million, £2 million or £3 million-worth
of stock without making sure they knew what they were doing, if
you know what I mean. It is so critical. The margins in our
industry are so wafer thin that you cannot afford to get it wrong.
Q29 Chair: For
clarification, in the memorandum you have submitted you say that
free range eggs currently account for 41.7%.
Q30 Chair: You
forecast that free range production will go up to 50% by 2012.
Q31 Chair: Are
you confident that will be reached?
Looking at figures supplied by people like TNS and others, certainly
retail sales of free range eggs are still going up. Perhaps they
are not going up at quite the extortionate rate they were now
we are in recession, but it is certainly true that free range
eggs sales are continuing to grow. It is a forecast and we believe
it is still relatively accurate.
Q32 George Eustice:
You said at the start that you were proud to be implementing this
new directive, but, to play devil's advocate, is it that much
better for a bird that it has 50% more space and a perch? If
you are a chicken do you feel much, much better in that type of
cage, or is it still a million miles from barn eggs and even further
from free range? I have heard some producers defend cages as
better for animal welfare than barns, for instance. I find that
counter-intuitive, but I wondered whether you had a view on it.
The welfare directive prescribes what an enriched cage should
provide. A current battery cage provides 550 square centimetres
a hen; an enriched cage provides 750, plus the provision of a
nest box, scratching area and perching space. In the UK certain
companies have led the design and development of this. We now
use what we call enriched colony cages. For example, instead
of having traditional battery cagesI am sorry; I struggle
to describe it for the shorthand writerwe put in big colony
cages, which effectively are a series of cages where the hens
have open access throughout.
What we are seeing now is that mortality levels are
even lower than for a battery cage, which were already very low;
the feather cover is better; the bird behaviour is better. It
is not just industry saying that; it has been scientifically proven
by research done under a LayWel project funded by the European
Union on an EU-wide basis that concurs with that.
Q33 George Eustice:
With colony cages there is free movement, which enables them to
behave more normally, but to comply with the directive do people
have to have colony cages, or can they just have a slightly bigger
You are quite right, Mr Eustice. They can have just a slightly
bigger furnished cage, but here in the United Kingdom as far as
we are aware all the cages that have been installed are colonies.
In the early days of the directive we moved towards, say, 40bird
colonies, then to 60 and the majority of the units going in currently
are 80-bird colonies. We are seeing fantastic results. It is
important to note that there are not just welfare benefits; there
are also economic benefits for the producers. While the cost
of production has gone up by 8%, we have now overcome the problems
of second-quality eggs that we saw in the early days, where 90%
of eggs being laid in a nest box knocked into one another causing
hairline cracks, which are not acceptable at retail. Therefore,
we have overcome those problems.
Q34 George Eustice:
How far away from a barn system is a colony as you describe it
in terms of, say, life expectancy of the bird?
Barn and free range systems inside a house are exactly the same.
The difference between the two is that free range hens have access
to a range area outside. A barn system has a stocking density
of nine birds per square metre, as per the welfare directive.
Obviously, Freedom Food/Lion free range hens have higher standards
in terms of access by hens to the outside. We have bigger pop
holes so they can get out more easily. We enrich the range outside
to encourage hens outside, all for their welfare benefit.
Q35 George Eustice:
Is there a big difference between the two systems in terms of
life expectancy of the hens?
No. Basically, a laying hen is reared to point of lay and is
then transferred to its laying quarters from its rearing quarters,
and it will stay in lay for about 13 months. The traditional
cycle is 72 to 76 weeks of age, when it is slaughtered.
Q36 George Eustice:
The "colony" point is really interesting. How many
of the other European countries will take the colony system route,
which seems to me almost more significant than the arbitrary and
slight increase in space?
We do not have any cage manufacturers in the UK any more; they
are European-based, and the work that is being doneI dare
to say it is led here in the UKwill effectively be implemented
by other European countries. The problem is that, as we said
earlier, a lot of them are well behind at the moment.
Q37 George Eustice:
So, if they renew their system they are likely to end up with
a colony system?
Q38 Mrs Glindon:
I would just like to ask about the potential quality of the eggs
in the worst-case scenario if these other European countries were
allowed a time delay and were able to undercut the British market.
I want to ask about the quality of the eggs. Obviously, the
egg has a 'best-before' date. So there must be some implication
if eggs are being imported that that would be reduced by the time
it gets to the consumer in whatever form. If that is the case,
are there also any implications for health and well-being in relation
to the consumer? Am I clear in what I have said?
Totally clear. Because we have European egg marketing regulations
that are directly applicable, that sets a 'best before' date on
an egg. So when you go into a shop to buy an egg it has to be
taken off the shelf at 21 days from lay because that is the so-called
sell by date. The EU 'best-before' date is set at 28 days. Within
the Lion scheme we set a shorter 'best-before' date because it
is a quality scheme. So if you are talking about quality, in
theory all other eggs produced throughout the European Union should
have the same best-before date of 28 days from lay; it is as simple
If you are talking about safety, that could be a
slightly different issue. In the United Kingdom we have done
a fantastic job, and full marks to the industry. We had our problems
with salmonella in December 1988 and during the early part of
the 1990s. Those days have long gone. We are a chalk and cheese
industry compared with then. You have only to look at the success
of the Lion scheme in effectively eradicating salmonella from
UK eggs. That is backed up by our Government's figures and European
survey figures, which improve year on year. The industry should
really be congratulated on that.
That has not always been the case with all 27 Member
States. A survey done a few years ago by the European Commission
showed that there were a number of Member States that had a problem.
They are sorting out their problem, but they have not achieved
what we have achieved here in the United Kingdom. I think your
final question was: would it take longer for eggs to be imported
from the continent? There is a time factor, but because the best
before dates are so long, in many ways, commercially it would
not provide protection to say that British eggs are fresher than
eggs that have to come across the Channel.
Q39 Mrs Glindon:
But it is not ideal. Probably being able to get them more locally,
being based in this country with all of the protection around
them, means the ideal would be if they were British eggs?
It is certainly what the consumer wants as well.
That is right. We have something like 88% consumer recognition
of the Lion mark. You only have to look around the retail sector,
and increasingly the food service sector, to see the number of
packs now sold with the Lion mark on the box. It has been a phenomenal
success story. The problem is that with every success story there
is always a risk that you can have problems going forward, and
through no fault of our own we can see real problems arising potentially
from imports of illegal eggs and egg products from the beginning
of next year.
Q40 Thomas Docherty:
Good afternoon. It is good to see you again, Mr Clifton.
The same to you.
Q41 Thomas Docherty:
We have had evidence about some egg producers choosing to leave
the industry as a result of the transition costs. I think it
would be helpful to the Committee to get a sense from you as to
how widespread a factor that is.
The Lion scheme represents 90% of UK egg production. I suggest
that the vast majority of the 10% that is non-Lion will be egg
production that is still in a battery cage or is changing to colony
cages. The reason I bring in the 90:10 figure is that the people
who are part of the Lion scheme have agreed collectively that
regardless of what any legislation says, on a commercial basis
there will be no Lion conventional cage eggs sold from the beginning
of next year; in other words, it will be policed rigorously.
The people who are not part of the Lion scheme do
not come under the control of our auditing system. Many of those
people in the submissions that you have received have expressed
severe concern because of lack of finance and so on, and will
leave the industry. I am hearing that others are now starting
to invest. Some will be ready on time. I hope all will be ready
on time here in the United Kingdom. That is certainly the plan,
and Defra and Animal Health in their enforcement arrangements
will be making sure that they do comply. I hope that answers
Q42 Thomas Docherty:
What percentage is leaving the industry, if you had to take a
stab at it? I appreciate that it is difficult.
It is difficult to say. Because you are providing hens with more
space, if you use existing housing you will get fewer hens in
the new enriched cages, quite simply. Therefore, producers who
want to stay in the business and keep their hen numbers at the
same level will have to expand production. A lot of producers
have severe problems in getting planning permission to build new
houses. Nimbyism is rife, so to speak, in many respects. That
has caused problems. There is no doubt that it has delayed things,
but it is difficult to put a figure on it, and I would be wrong
Q43 Thomas Docherty:
My understanding is that at least one nation of the UK is providing
financial assistance to its egg producers. Scottish ministers
provide it through rural development grants and financial assistance
to Scottish egg producers to make the transition. I am not clear
if it is buying the cages or expanding their areas. Do you think
this difference in approach between Scotland and the rest of the
United Kingdom has distorted the market within the UK?
Madam Chairman started by asking whether there were any problems
with our industry at the moment. We are suffering from over-production.
I believe that one factor that has added to that has been the
provision of grants in certain parts of the country. The devolved
Administration to which you refer, Mr Docherty, has also made
those grant aids available to go into non-cage or free range production.
Q44 Thomas Docherty:
Has not? Oh, it hasright.
It has been made available to producers to get into free range
production; it was not just kept to that. What do I think of
grants? Not a lot, to be perfectly honest, because I think they
distort markets. You just leave the market to get on with it,
as long as everybody plays by the same rule book.
Q45 Thomas Docherty:
Are you aware of any discussions between Defra and Scottish Ministers
as to the impact that the different approach has had on the market?
I think you would need to ask Defra that question, because I would
have thought that is a discussion between the devolved Administration
and the Government.
Q46 Thomas Docherty:
Have you asked Defra through your public affairs arm, or through
your own discussions, to raise the issue with Scottish ministers?
We have not directly, but the provision of grant aid will have
been mentioned in conversations. For example, when we have made
submissions to Defra over the past 10 years we have asked for
funding under rural development for, I suppose, UK producers,
but then some of the devolved Administrations went ahead and provided
grant aid; however, in England it has always been refused.
Q47 Chair: How
would you describe the current enforcement regime?
Here in the United Kingdom or on a Europe-wide basis?
Q48 Chair: Both.
If I may talk first about Europe, Madam Chairman, it has considerable
room for improvement. I quoted the example of the FVO mission
in Poland in 2010. One of the points made at the stakeholder
meeting, not by me but by the representative from the Food and
Veterinary Office in Dublin, was to the effect that they need
to have more teeth to ensure enforcement takes place that is proportionate
to the misdemeanour, so to speak. I have no doubt at all that
these other producers in European countries who are looking for
more time will eventually comply, but they will not be able to
comply on 1 January next year. Some are looking for two more
laying flock cycles; some are looking to 2018, or, if the truth
be known, probably even longer than that, and the concern is the
damage they can cause to our industry in the intervening period.
Q49 Chair: You
rather trustingly said that they should put "No. 3"
on the egg, or that they must not have that number on it. Which
It must have "No. 3" on the egg for it to be legally
sold from the beginning of January next year.
Q50 Chair: Who
would have responsibility for ensuring that they complied, and
had the right to have "No. 3" on the egg?
As it comes under the egg marketing regulations it would be Animal
Health Egg Marketing Inspectorate in this country.
Q51 Chair: So,
they would be taking on trust what the exporting country was saying.
Quite, yes. I was talking about the policy and detail. If we
get on to the detail, as Giles mentioned earlier our great fear,
taking a producer who has part-convertedto be clear, there
are many in Europe who are part-convertedis how to ensure
that we do not receive non-compliant eggs or egg products. That
is where the difficulty arises. We are discussing with Defra
ways and means of preventing that happening. To be perfectly
honest, I do not see demonstrations at ports helping.
Q52 Chair: It
is the same with poultry from Brazil, is it not?
Anything that is actually imported from another country in the
EU is assumed to be produced according to our standards, so it
is never checked. Everything else is checked on a speculative
Q53 Chair: But
they could put on "No. 3" without knowing.
It would be illegal to do so.
Q54 Chair: If
they are taking it on trust, how do they know?
One of the animal welfare groups, for example, in their submission
to you said that they saw no need for a different production number.
They argue that it would suffice if the egg marketing regulations
say that from the beginning of January next year no battery cage-produced
egg can carry a "No. 3", so it sorts the problem out
straight away. I would suggest, however, that to many producers
in other countries, to have a product legal at five minutes to
midnight on 31 December and illegal five minutes after midnight
is hard to get their heads around. I talked about 83 million
eggs a day, or 29% of EU egg production, not being compliant.
It would be totally naïve to assume that those eggs or egg
products would not enter the marketplace from the beginning of
January. Of course they will.
When you consider that in Spain there is 20% unemploymentit
is 40% in some Spanish regionsthe idea that the Government
will come along and put anyone out of business, and that the directive
will be fully in force on 1 January 2012, is just wishful thinking.
Q55 Chair: Assuming
that the directive comes into force, do you expect the inspection
regime to be more onerous or expensive than the current one?
I would certainly hope that Defra-Animal Health will provide sufficient
resource to ensure that the directive is implemented properly;
and that will, according to all our beliefs and the increasing
noises coming out of Europe, ensure that no illegal eggs or egg
products are allowed to cross Member State borders. I should
also add for the record that we are not against the import of
legal product. So if an egg or egg product has been produced
from a barn, free range, enriched cage or organic system, that
is absolutely finethat is commercial competitionbut
we cannot have illegal product coming into this country.
Q56 Chair: But
are we assuming that they will be just as rigorous in other EU
countries in ensuring that they are legal at the point they leave
the country to cross into another Member State?
I think that is the big problem. As we are in a financial crisis
with official resource being scaled back for inspection, for example,
it compounds an already difficult situation.
Q57 Neil Parish:
I want to take further this line of questioning. Basically, will
the countries that cannot comply by next January have all their
poultry farms registered? Will they know where they are? Are
they going to know whether they are partly converted or partly
not? Do you have any ideas about that?
The honest answer is that I do not believe that is the case in
a lot of other countries, for a variety of reasons, and different
attitudes by governments towards their agricultural industries
is just one of them. Every Member State authority should know
where every single commercial egg production unit is, because
they are required to register for the producer code that goes
on eggs, so it is on record already. The problem we see at the
momentit frustrates me greatlyis that when I presented
at the stakeholder meeting in January I used data from May 2010
provided by DG AGRI. I know that DG SANCO, where the welfare
dossier sits under their control, had asked all chief veterinary
officers in Member States for details of their national plan to
implement the directive, plus an update of which hens were in
which systemin other words, the state of implementation.
Those figures were not put on the table at the meeting,
and the cynic in me would question why. I have no evidence to
support it, but I suggest it is because they were too close to
the industry forecasti.e. 29% of illegal hens from the
beginning of next yearand I would have thought it would
have been an embarrassment. Mr Parish, we have pressed the Commission.
They invited us to write to them and request those figures.
Because of confidentiality, they then have to go to Member States
to ask their permission to release them. We did that, but we
are being stalled at the moment in receiving those figures.
If I may just add to that, Mr Parish, the European Parliament
overwhelmingly passed a resolution in Decemberby 459 votes
to 32, with only 17 abstentionsrequesting that the Commission
submit by no later than 31 December of this year a list of egg
and egg product processors and retailers who would not be compliant
with the provisions of the directive.
Q58 Neil Parish:
In broad terms, it is bad that 29% will not be compliant, but
one would have thought that the fact that 71% should be means
there would be a bigger amount of political pressure on the countries
to get the rest of them to comply, so the 71% are not disadvantaged.
I know it is country by country, whereas the 71% is the overall
EU figure, so it is very much targeting those countries, but surely
there will be pressure in lots of Member States for compliance,
not just in Britain.
Yes, absolutely. If you look at Germany, which went ahead and
did this two years before everyone else, they are absolutely on
side, as it were, so are a host of other countries. It is certainly
the case that the UK has very strong allies in sticking to a firm
line in enforcing this directive and making sure that our producers
who have put in all this money and investment are treated fairly.
Mark Williams: This ought to be
mentioned now: please do not compare the German situation with
the UK situation directly. Germany is the world's largest importer
of eggs. It is a seriously big importer. Most of their imports
come from Holland, so the two industries are really very closely
associated. Germany was 70%-plus self-sufficient. Then they
introduced the battery cage ban ahead of time. Their self-sufficiency
went down, as you would expect, because cheap imports were coming
in, but the German industry did a very clever thing. They worked
with their retailers to ensure that the only eggs sold in German
retailers were noncage, so they protected themselves, if
you like. But the situation we have in the United Kingdom is
that we produce eggs in all systems of production. You have seen
our forecast: 50% of eggs will be free range; 43% will be enriched
cage-produced; 4% will be barn-produced; and 3% will be organic
at the beginning of next year. Enriched-cage eggs will still
be a significant sector, and that takes into account those consumers
who are very price sensitive, and it is really offering the consumer
choice. This is where we started from. I just thought it was
important to ensure that the German situation is not comparable.
Q59 Neil Parish:
The next question you have more or less answered, namely the two
actions in particular that you require. One is a ban on non-compliant
eggs, and the other is, I take it, to have a "No. 4"
stamped on those eggs as well. Is there anything else you want
Chair: Could we wrap up
two questions as well from Mr Eustice and Mr Docherty?
Perhaps you could then answer them all together.
Q60 George Eustice:
You have partly answered my point in what you said about Germany.
You said that their self-sufficiency went down. By how much
did it go down? What impact did it have on their overall production
levels? That is a good case study in a way because they have
gone unilaterally ahead of the rest of Europe on this.
Q61 Thomas Docherty:
My understanding is that you cannot move a hen out of a conventional
battery into a new cage. My understanding is that if it is a
73-week cycle of life, surely they have to be in now and that
is the clearest marker. If you have hens continuing to go into
battery cages at the moment, that says that farmers either here
or overseas will miss the target.
Chair: Perhaps you would
like to answer all those questions together.
If we may we will take them in reverse order. Defra has clearly
said here in Englandit was reiterated by the devolved Administrationsthat
the directive would be implemented to the letter here in the United
Kingdom, so if I as an egg producer wanted to get a full flock
cycle through, the last date I could house a hen in a conventional
cage would have been December last year; so, the 13 months in
lay. That is very clear. Therefore, if people are putting hens
in conventional cages today across Europe, I would suggest that
they are taking a brave step and assuming they will get the return
on that pullet before 31 December, or they intend to run
them beyond. I suggest that the latter is probably more in tune
Q62 Thomas Docherty:
Is that happening?
Anecdotal evidence would suggest it is, yes. There is also the
issue about the way certain Governments interpret 1 January 2012.
Some people may say that it is pullets housed from the beginning
of the year, so straight away they get a 13-month advantage.
To answer the question about self-sufficiency, I believe it is
roughly 10%. I can provide you with the exact figure afterwards.
Because the German market is different from many others, in that
it is such a large importing country, it rather distorts the facts,
but that is what all the figures point to. There would be a massive
decrease in self-sufficiency. I am sorry; I cannot remember your
question, Mr Parish.
Q63 Neil Parish:
It is really about reinforcing the measures that you want to see.
It is very simple. We want to see full implementation of the
directive here in the United Kingdom and across the European Union.
However, we realise that there will be problems with some producers
in other Member States. I have already talked about the figure
of 83 million eggs a day. Our view is that those eggs will
continue to enter the marketplace illegally, or, even if the Commission
and Member States allowed more time at the last moment, those
eggs or egg products should stay within those Member States.
It must be; otherwise, the investment of UK producers has all
been for nothing. It is not just UK producers but UK consumers
who will suffer that disbenefit. We then need to give the enforcement
authorities some means of differentiating.
Chair: You have been very
generous. We have overshot your time, but thank you very much
indeed for your evidence this afternoon.
1 Note by Witness: The following was provided by the
German government representation at the Multi-Stakeholder Meeting
on the Implementation of Council Directive 1999/74/EC, on the
Protection of Laying Hens, held in Brussels on 19 January 2011-Self-sufficiency
had decreased from 69% in 2008, to 59% in 2009 and was estimated
to be 58% in 2010. Back