House of Commons - The Welfare of Laying Hens Directive - Implications for the egg industry - Environment, Food and Rural Affairs Committee

The Welfare of Laying Hens Directive - Implications for the egg industry - Environment, Food and Rural Affairs Committee Contents

1 Introduction

Background to this inquiry

1. EU Council Directive 1999/74/EC on the Welfare of Laying Hens is due to come into force on 1 January 2012.[1] Under the Directive the use of conventional cages (commonly referred to as 'battery cages') for laying hens will be prohibited in the EU as will the marketing of eggs from hens housed in such cages. The Committee decided to conduct a short inquiry into implementation of the Directive following concerns that some Member States would not be able to implement the ban in time. UK egg producers fear imports of non-compliant eggs from other Member States following the 1 January 2012 would put this country's egg producers at an unfair commercial disadvantage.[2]

2. We announced terms of reference for our inquiry, encompassing English egg production, on 27 January 2011. On 7 February we announced that the scope of the inquiry had been extended to encompass egg producers across the whole of the UK. Twenty two organisations and individuals submitted written evidence to the inquiry; in addition the European Commission provided us with data on the state of compliance across the European Union. We took oral evidence from representatives of the British Egg Industry Council (BEIC), the Royal Society for the Prevention of Cruelty to Animals (RSPCA), the British Retail Consortium (BRC) and Noble Foods Ltd and from officials of the Directorate General Health and Consumer Policy of the European Commission and from the Minister for Agriculture and Food, Department for Environment, Food and Rural Affairs (Defra). We would like to thank those who gave oral evidence as well as those who submitted written evidence to the inquiry.

The Welfare of Laying Hens Directive

3. In 1999 Member States agreed to the Welfare of Laying Hens Directive, which was prompted by the European Commission's Scientific Veterinary Committee report which condemned conventional cages because of their "inherent severe disadvantages for the welfare of hens".[3] The Directive has been incorporated into English law since 2002, most recently in the Welfare of Farmed Animals (England) Regulations 2007 (S.I 2007/2078) and in similar but separate legislation in Wales, Scotland and Northern Ireland. The Regulations specify requirements for the keeping of hens in establishments with 350 or more laying hens, whether kept in non-cage systems, conventional cages or enriched cages. The Regulations forbid the building or new use of conventional systems from October 2007, and all use of such systems from January 2012, and require premises to register so that eggs can be traced.[4]

4. Egg production in the UK is broadly divided into cage and non cage production systems. Non-cage systems include:

Free range, including organic, in which eggs are produced by hens which have continuous daytime access to runs which are mainly covered with vegetation. They can be kept in multi-tier or single tier housing. In 2010, in the UK, 45% of the eggs produced were free range.
Barn eggs, in which hens are able to move freely around an indoor enclosure. These account for 5% of eggs sold in the UK.

Cage systems, accounting for about 50% of UK commercial egg production, include:

Conventional battery cages, which contain around five birds with a minimum of 550cm² space, less than the size of a sheet of A4 paper, per bird. In the UK in December 2010, these accounted for 28% of all laying hens.
New enriched cages, which provide at least 750cm² per bird and a minimum height of 45 cm along with a nest, perching space and a scratching area. In the UK in December 2010, these accounted for 21% of all laying hens.

The BEIC predict that the market split for 2012 will be 50% free range, 43% cage, 4% barn and 3% organic.[5]

5. The Directive is intended to improve the welfare of laying hens. According to Defra "There is clear evidence that conventional cages are detrimental to hen welfare and therefore the decision to ban them by 2012 represents a significant welfare advance across the European Union".[6] The RSPCA described the Directive as "...one of the first multi-country agreements in the world to phase out a method of production due to animal welfare concerns".[7] The Minister felt that, given producers' investment in new cages, the Directive was likely to be the last major regulatory change designed to improve the welfare of laying hens for some time.[8] In this inquiry we have considered how implementing the Welfare of Laying Hens Directive would affect the UK egg production industry rather than its merits as an instrument to improve the welfare of laying hens.

6. In the UK around 31 million eggs are eaten per day, which equates to an annual consumption of 182 eggs per person. In 2010, the UK produced 9,023 million eggs representing around 80% self-sufficiency in shell eggs and egg products.[9] The remaining 20% are imported from other Member States, in particular France, the Netherlands, Germany and Spain. About 66% of these eggs are imported as shell eggs for use by wholesalers, caterers and the food industry. The remaining 33% are imported as egg products.[10] Egg products include liquid, powdered (dried) and frozen whole or part eggs. They are mainly used by food processors and in food service industries. The UK egg products market is worth approximately £250m per year.

7. 'Lion Code' producers account for around 90% of the UK's egg production. The Lion Code of practice is administered by the British Egg Industry Council (BEIC), all of whose members adhere to the code. The code sets higher standards of both hygiene and animal welfare than are currently required by UK or EU law.[11] Defra anticipates that from 1 January 2012 all Lion Code egg producers will comply with the Directive and smaller producers that have not invested in enriched cages will leave the industry by 2012.[12] The Government therefore expects "virtually" all UK cage-produced eggs will be compliant following implementation of the Directive.[13]

8. Egg producers have had several years to prepare for the Directive's implementation. Since the Welfare of Farmed Animals (England) Regulations 2007 came into force, producers have been forbidden from the building or new use of conventional systems. The BEIC estimate the capital investment by British producers in erecting new enriched cage units to comply with the Directive to be around £400 million—or £25 per hen.[14] In addition to the capital costs, the production costs for enriched cages are estimated to be 8% higher compared to a conventional cage.[15] According to the NFU the level of investment required to comply with the Directive has "... led to accelerated consolidation of the industry, with fewer producers and a much smaller independent egg industry".[16] Defra estimates that about 80% of all total UK egg production goes through just 20% of companies, with 60% of all eggs marketed by the top four companies.[17]

9. Defra expects all UK cage egg production to be compliant with the Directive by the 1 January 2012 deadline. While this is encouraging, the UK's ability to argue for strict adherence to the Directive will be undermined if this country is not fully compliant. We therefore seek Defra's assurance that UK egg production is on course to be fully compliant by 1 January 2012. We expect Defra to confirm when the UK achieves full compliance with the Directive. We further recommend that Defra publish its assessment of the total capital cost to UK producers of implementing the Directive.

UK egg industry concerns

10. The industry's principal concern is that after 1 January 2012 there will be unfair competition from non-compliant producers elsewhere in the European Union. The NFU told us that:

English egg producers have serious concerns that if the Directive is not uniformly implemented across the EU, after investing heavily in conversion to enriched cages to meet the requirements of the Directive, they will be put at a commercial disadvantage by imported non-compliant eggs and egg products from conventional cages.[18]

Similar arguments were made by Scottish Egg Producer Retailers Association and NFU Cymru.[19] Mark Williams, Chief Executive of the BEIC described the investment as the 'crux of the argument' and told us "That investment made by the UK industry must be protected from what we believe will be non compliant production coming out of Europe in just under 12 months' time".[20]

11. Compassion in World Farming, however, argued that producers may be less vulnerable to non-compliant imports because of the "strong support from UK food businesses many of which no longer sell or use battery eggs".[21] CWF's argument has some weight in relation to the retail sector. Waitrose (shell eggs and own label food products), the Co-op (shell eggs), Marks and Spencer (shell eggs and food products) and Morrisons (own label shell eggs) have already stopped selling cage eggs or have indicated their intention to do so in the near future. Sainsbury's no longer sell cage eggs and have stated that they will move to using eggs from non-cage systems in their own label food products by 2012. However, 49% of egg production in the UK uses cage systems and the two largest retailers, Tesco and ASDA, have both stated that they intend to continue to offer cage eggs for sale in their stores to satisfy the demands of their diverse consumer base.[22] In addition, more than 1,800 million eggs were bought by food processors last year.

12. The Government shares the UK egg producers' concerns. The memorandum from the department told us that:

The UK government wishes to protect compliant UK producers from any competitive disadvantage of illegal production in other Member States or indeed the UK. Such behaviour would affect economic stability and fairness within the sector. Simply relying on infraction proceedings against non-compliant Member States will not be enough to deal with the commercially negative impact that the non-compliance would cause. Additional measures will need to be put in place to prevent market disturbance.[23]

In oral evidence the Minister told us the Government stood "four-square with those producers in this country who have made the investment", and added "We have been pressing the Commission for some months now to prepare for action, because it has been abundantly clear to me and to, indeed, the industry that a number of countries were not making the progress that was necessary".[24] We share the industry's concern that other Member States have made insufficient progress in converting to enriched cages to be able to comply with the 1 January 2012 deadline for implementation of the Directive. That being the case there is a real risk that UK producers, who have spent around £400 million on new infrastructure and have on-going higher production costs, will be competing with imported shell eggs and egg products from non-compliant producers who have lower capital and production costs. We conclude that the UK cage egg production industry will be at a competitive disadvantage after implementation of the Directive if non-compliant cage egg producers in other Member States are able to export shell eggs and egg products.

Implementation of the Directive

Data provided to the Commission

13. In preparation for the implementation of the Directive the European Commission has been collecting and collating data from Member States. The Commission provided us with data which sets out the number of laying hens and production sites by production method as at 31 December 2010, 1 April 2011 and Member States' forecasts for 31 December 2011. In Germany, conventional cages have been banned since 1 January 2010 and enriched cages will be banned from 1 January 2012 (so production will be entirely in non-cage systems). The use of conventional cages is also already banned in Austria, Sweden and the Netherlands. Member States' own forecasts of the position at 1 January 2012 show that Belgium, Cyprus, Poland, Portugal Romania and Slovakia do not expect to be in compliance by the deadline. In addition, Hungary, Italy, Latvia and Malta have indicated that the status will not be known; while France, Greece and Spain have provided no data to the Commission. In total around one third of production throughout the EU is likely to remain non-compliant by the 1 January 2012 deadline.[25]

14. Ms Joanna Darmanin, Head of Cabinet, Directorate General Health and Consumers (DG SANCO) described the data provided to the Commission as "far from optimal".[26] She told us that "The data we have are patchy, and there are some data that are reliable, but others where we have, I have to say, gaps, or where the data that we have requested are not exactly comparable".[27] She explained that the Commission had requested data from those Member States that had failed provide the required information; and that Member States had been asked for an action plan to show how they intended to comply with the legislation by the 1 January deadline.[28]

15. Certain Member States have failed to provide the data requested by the Commission. The Commission needs to know the likely level of compliance in advance of the 1 January 2012 deadline in order to gauge the scale of enforcement activity required. The Commission will also need an accurate assessment of the level of compliance across Member States at 1 January 2012 so that it can implement the necessary enforcement action. We recommend Defra press both the Commission and individual Member States to provide the necessary data that will enable the Directive's effectiveness to be assessed.

16. The figures have many omissions but the Commission has no power to penalise those Member States that had failed to provide the required data.[29] We considered whether the Commission has sufficient powers to require Member States to provide information relating to compliance with European Union legislation. We do not consider it appropriate to give the Commission the power to impose penalties on Member States.

17. As a general principle, the Commission should ensure that Member States fully understand their reporting and monitoring responsibilities in relation to existing or forthcoming European regulation.

18. Egg-laying hens have a productive lifespan of approximately 13 months. Assuming that a producer would not sacrifice a proportion of that productive lifespan, for a flock to be fully compliant by the deadline birds would need to have been housed in compliant cages from the end of 2010. Mr Williams told us:

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 with that.[30]

19. Ms Darmanin confirmed her understanding that the Directive required all hens at 1 January 2012 to be in compliant enriched cages.[31] We recommend that the Commission makes clear that Member States should be advising their egg producers that no new hens should be being placed into non-enriched cages now.

PROBABILITY OF COMPLIANCE

20. The Government considers that Member States and their egg producers have had sufficient time to prepare for the Directive. The Minister told us that:

The industry has had plenty of time to prepare for it, and indeed the new Member States who have joined the EU since then knew what they were joining and the rules they were going to have to achieve, so I am not sure that anybody can complain they have not had sufficient notice.[32]

21. Mr Williams told us that "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".[33] The Minister agreed that the manufacturers of compliant cages did not now have the capacity to deliver and install cages so that every country could be compliant by the deadline.[34]

22. Giles Clifton, Head of Public Affairs, BEIC noted, however, that when the Directive was initially adopted the Commission had said that it would provide a definitive date for implementation by 1 January 2005, but did not, in fact, produce that definitive answer until 8 January 2008 which had put time pressure on producers.[35] Mr Williams noted that the low market demand for higher welfare eggs in some Member States had been a commercial disincentive for early adoption for producers facing an 8% higher cost of production in enriched cages.[36]

23. Mr Williams' comments about consumers' views on higher welfare eggs echo the findings of the 2007 Eurobarometer report Attitudes of EU citizens towards Animal Welfare. The report found that animal welfare was a slightly greater concern in the countries of the EU15 than in the ten new Member States and that lower importance was attached to the subject in Hungary, Slovakia, Latvia, Lithuania and Spain.

24. The Commission's own evidence makes clear that several countries will not have complied by the deadline and yet it appears to believe that full implementation of the Directive by the 1 January deadline is feasible.[37] Defra has pressed the Commission to prepare for non-compliance.[38] The Minister recounted a discussion with the Commissioner, who had said "We are not prepared to contemplate that people will not have converted. We think they all will"; a position which the Minister described as "unwise".[39] He considered that the Commission were "now much more aware that there is going to be a problem".[40] Ms Darmanin summed up the Commission's strategy: she told us that once the data was collected it would reveal the extent of the problem and the potential noncompliance, and that "it is at that point that obviously we will start to kick it into high gear and have a strategy on how to deal with it".[41] She added:

... we have to know exactly what the situation is going to look like on 1 January 2012 before we decide how to tackle it. I think it would be foolish of us to say, "Okay, we are going to give you a safeguard clause; you can ban this and ban that." I think we really need to see, number one, the extent of the problem—whether it is limited to one or two Member States, or whether it is a more generic problem across the Member States. I think all those issues we really do have to factor into any decision that we are going to take.[42]

25. The Commission has said that the Directive must be implemented to the letter but does not appear to have considered how it will mitigate the impact for egg producers and consumers. If, on 1 January 2012, the Directive were to be fully complied with, the 30% of EU egg production that is expected to be non-compliant would have to be taken off the market and destroyed, creating a sudden catastrophic shortfall in eggs across the EU. Contemplating this scenario, the BEIC concluded:

We very much doubt this will be allowed to happen [...] The commercial reality is that such eggs would continue to be produced and enter the marketplace unless certain measures are put in place.[43]

26. The Commission's own data confirm that a significant proportion of cage egg production across the European Union will not comply with the Directive by the deadline. At that point, assuming the Commission does not insist on the destruction of millions of eggs, the choice is between allowing non-compliant eggs to be traded, negating the whole purpose of the Directive; or instituting enforcement action that will put pressure on Member States and producers to become compliant. Given these facts it is mystifying that Commission feels able to wait until after the deadline has passed before kicking into "high gear" and producing a strategy.

27. The Commission's forecasts show clearly that the Welfare of Laying Hens Directive will not be complied with across the entire European Union from 1 January 2012. The Commission has had the evidence to show this for some time. We are concerned by the Commission's evident complacency: it does not appear to recognise the potential damage that will be done to compliant egg producers.

28. The Commission has not developed a plan to manage the anticipated non-compliance. If such a plan were already developed and publicised it would have had the additional benefit of acting as a deterrent to non-compliance.

Enforcement options

29. On 19 January 2011, in response to pressure from Member States and egg producers, the Commission held a stakeholder meeting to discuss the implementation of the ban.[44] The Commission is considering the 14 enforcement options proposed by Member States and stakeholders at that meeting, including:

Derogation from implementing directive for a period of time.
New code '4' to distinguish illegal eggs.
Intra-community trade ban.
Official list of non-compliant producers.
Increased inspection regime.

DEROGATION

30. Several Member States have requested additional time to implement the Directive. To date those requests have been refused.[45] Ms Darmanin told us that "at last count", Poland, Romania and Bulgaria had called for an extension of the deadline, but those requests had been "immediately shot down by the rest of the Council and the Commission saying that is simply not an option that is on the table".[46] Referring to that discussion, the Secretary of State told the House that she had told the Council "any delay would be grossly unfair to egg producers in the UK and other Member States that have made significant investments to adapt and enrich cages".[47] The European Parliament has also called on the Commission to maintain the requirement for the ban to come into force on 1 January 2012 and to oppose strongly any attempts by Member States to secure a deferral of that deadline.[48]

31. The UK egg production industry is concerned that, despite current opposition to any derogation within the Commission and Council, as the deadline approaches the economic and practical reality will force some form of concession to non-compliant Member States. The BEIC "... anticipate that producers in some other Member States may be given permission at the last minute to extend the deadline and that cheap, lower welfare eggs, especially from Southern and Eastern Member States could be available in the UK".[49] Defra must resist the granting of a derogation from the Welfare of Laying Hens Directive to any Member States as strongly as possible.

NEW CODE/LABELLING

32. Eggs are marked with a production indicator which allows enforcement authorities and the general public to easily identify the production method under which the egg was produced. The BEIC recommended that, if after 1 January 2012, eggs from non-compliant cages were still being marketed they should be marked in a way that differentiated them from eggs produced under other regimes:

... eggs from an enriched cage would be marked with a No.3 and eggs from a conventional cage would be required to be marked with a No.4 or other mark, if more time should be provided to phase out the use of conventional cages.[50]

The UK Egg Producers Association Ltd (UKEP) also argued for an additional code number to differentiate between eggs coming from enriched or conventional cages.[51]

33. Mr Jorêt, Technical Director of Noble Foods Ltd and Deputy Chairman of the British Egg Industry Council, questioned whether such an approach would work. He thought producers of illegal eggs "will also mark them illegally anyway, so whether or not we have the number they will probably use it wrongly".[52] The European Commission opposes the introduction of an additional production indicator for non-compliant, conventional cage produced eggs after 1 January 2012 as this would "give a legal status to something that is de facto illegal".[53] Defra agreed with the position taken by the Commission. The Minister told us:

... it seems odd to me that you should be suggesting you label something that is unlawful. Are people willingly going to put a label on an egg that says "This is an unlawful egg"? [...] I think we should say there should only be eggs from enriched cages on the market, and we have to move towards making sure that the others do not come on to the international European market, at least.[54]

34. We understand the industry's wish to see non-compliant eggs differentiated by an additional code. However, we are persuaded by the argument put forward by the Government and the Commission that requiring producers to mark an egg as unlawful would be illogical and probably counter-productive.

INTRA-COMMUNITY BAN

35. The Commission is considering "limited circulation of illegal eggs within Member States of production", in other words an intra-community trade ban on non-compliant eggs. Such a ban would mean that eggs from hens housed in conventional cages could only be marketed in their Member State of production.[55] The Minister told us that the UK Government, the devolved administrations and other Member States were pressing the Commission for an intra-community ban, which he considered would be the "best way of ensuring that our producers, and indeed those in other countries who have made the investment, are not undercut".[56] The Minister advocated a complete ban on eggs from non-compliant Member States; he thought that either a ban on individual producers, or a ban that allowed a Member State only to export egg from enriched cages would not apply pressure on Member States to enforce compliance.[57]

36. Compassion in World Farming (CWF) expressed concern about an intra-community ban because it could undermine the ban on conventional cages. CWF argued that:

Legalising the sale of battery eggs would result in farmers in countries such as Spain having little incentive to move away from battery cages [... and the UK] may find other Member States pressing for a lengthy period during which illegally produced battery eggs can continue to be sold.[58]

37. Mr Williams described those egg products as the "battleground" once the Directive comes into force.[59] According to the BEIC one third of the UK's egg imports are in the form of egg products, such as powdered or liquid egg. In order for a intra-community ban to be effective it would be necessary to identify shell eggs from non-compliant Member States; powdered and liquid egg products from the same source; and any number of products containing some ingredient derived from non-compliant eggs.

38. The difficulties of tracing egg products was highlighted in several submissions. UKEP state that:

Whilst manufacturers may ask egg product suppliers if the product is from compliant cages, what tangible guarantees can be given?

A significant amount of egg product used in the UK is in the form of powder. As no powder is produced in the UK, all this will be imported, possibly from non-compliant cages in the EU, and certainly from third countries.[60]

Roy Kerr, an egg producer argued:

It is absolutely essential to insist on full traceability on liquid egg, and country of origin on product, as retail organisations are increasingly stating that they use only free-range eggs in their products, this is impossible to police with liquid egg and product being sourced from other countries on a cost basis.[61]

39. Our witnesses all agreed that traceability of egg products was a major problem. Mr Bowles argued that "retailers, processors or producers, particularly in the food industry sector", had an important role to play in ensuring they were only importing compliant eggs.[62] Mr Jorêt agreed that products with eggs as an ingredient were a particular concern; and he added that many consumers were unaware of the range of products that contain eggs.[63] Mr Opie argued that large retailers, who stock a large percentage of own brand products, would be able to control traceability of legal eggs through their supply chains.[64] He was not able to offer a satisfactory answer to how retailers would respond to concerns about egg products contained in imported branded items—saying instead that retailers would prefer consumers bought own-brand alternatives.[65]

40. The Government and industry are concerned that an intra-community ban should include egg products as well as shell eggs. The Secretary of State told the House that it was important to establish "the provenance of liquid-egg and dried-egg products", and confirmed that the Commission was considering the issue.[66] The Minister agreed that a ban should include shell eggs and egg products. He acknowledged that a ban should include products containing eggs but was unable to offer a mechanism to achieve this.[67]

41. Ms Darmanin told us that the Commission's legal services was assessing whether an "intra-community ban for those egg products that will be illegal by the time of the entry into force on 1 January", was a "feasible and a proportionate measure".[68] She confirmed that the question of a ban on non-compliant eggs was both a legal question and a policy judgement.[69] Dr Vassallo, Member of Cabinet, European Commission Directorate General Health and Consumer Policy, appeared to suggest that the Commission was not fully committed to introducing a ban. He argued that the lack of clarity around whether an intra-community ban was to be introduced was "a form of pressure on producers who are not yet compliant, in the sense that a total ban of illegal eggs is a risk to somebody who is producing 5 million eggs a day—a risk he will not take". More tellingly he told us that as "... at the end of the day, we have minimal non compliance, why go all that way".[70]

42. The Commission's goal must be that all egg producers comply with the Directive. The purpose of an intra-community trade ban should therefore be to protect compliant producers across the EU, while providing an incentive to producers to quickly convert to enriched cages. Producers who have invested in enriched cages should not be penalised. An intra-community ban should therefore cover only non-compliant eggs, whether or not other producers in the same Member State are non-compliant.

43. The Commission has the option of initiating infraction proceedings against Member States which have non-compliant producers. Infraction proceedings would provide an incentive for national Governments to put pressure on their non-compliant producers.

44. We support the calls for an intra-community trade ban on the export of shell eggs and egg products from non-compliant egg producers. We recommend that the Government press the Commission to confirm that such a ban would be permissible under the European law.

45. We recommend that Defra press the Commission to initiate infraction proceedings against Member States whose caged egg producers are non-compliant once the Directive comes into force.

46. We recognise that the obstacles to establishing a trade ban that encompassed all products that contained egg derived ingredients produced in non-compliant cages may well be insurmountable.

47. We recommend that Defra investigate establishing a voluntary approach under which retailers and food manufactures would undertake stringent traceability tests to ensure that they are not responsible for bringing products containing non-compliant egg products into the UK. We further recommend that Defra publish a list of those retailers and food manufacturers that have signed up to the voluntary approach.

48. On 16 June, Defra published the Government buying standards for food and catering services. In March the Minister confirmed that it:

... will be mandatory on central Government, subject to no overall increase in cost, and those mandatory standards will require that all food purchased by central Government and its Departments should be produced to, at minimum, the standards of production required of our producers or their equivalents from overseas.[71]

The Mandatory Standards require all shell eggs are "sourced from systems that do not use conventional cages. If from a caged system, enriched cages are used".[72] Under the Best Practice standards "All eggs, including liquid and powdered eggs, are sourced from systems that do not use conventional cages. If from a caged system, enriched cages are used".[73] We recommend that the Government buying standards should be amended to make clear that after 1 January 2012 it will be mandatory that no products containing egg products from non-compliant eggs are purchased.

INCREASED INSPECTION

49. Enforcement of the legislation is carried out by national inspection agencies. However, the Commission has to be assured that the competent authority in each Member State is going to enforce compliance. There is a degree of trust that each Member State will ensure compliance within its own country.[74] Two options put forward at the stakeholder meeting were increased inspection by the Commission's Food and Veterinary Office (FVO) or increased Competent Authority inspection regime. The Commission witnesses explained that the Commission's Food and Veterinary Office (FVO) audits Member States' inspection systems and that once the Directive was in force they would inspect "different Member States to ensure that Member States are actually doing what they have told us they were supposed to be doing".[75]

50. Mr Williams, chief executive of the BEIC, told us that the FVO representative at the February stakeholder meeting had said the FVO needed "more teeth to ensure enforcement takes place that is proportionate to the misdemeanour".[76] He added that the current levels of fines imposed through the FVO were not sufficient to act as a deterrent.[77] The FVO inspects the enforcement in each Member State: the NFU argued that while in theory each Member State would ensure proper implementation of the legislation:

... in practice this relies on the Competent Authority effectively enforcing legislation and we would argue that those Member States which have significant numbers of non-compliant producers have already demonstrated they cannot be relied upon to robustly enforce the directive in a timely manner.[78]

51. Anecdotal evidence suggests the inspection regime in the past has varied from one Member State to another—the Scottish Egg Producer Retailers Association refers to a country with a flock population "equal to the UK" with only one inspector.[79] UK egg producers are therefore concerned that enforcement will be weak in some countries and that by the time non-compliance has been discovered, reported and acted upon, they will have suffered irreparable commercial damage. The Minister made clear that he considered enforcement of the Directive to be a matter for the Commission.[80] He explained that in the UK producers would be inspected to ensure compliance and agreed that:

... there is a suspicion, shall we say, that with previous regulations, some countries have signed up to them and not really paid too much heed to implementation, and that has to be a worry, but I am afraid it is not for us to do those inspections: it is for the FVO from the European Commission to make sure that other countries keep to it.[81]

Defra's memorandum adds that "it is unlikely that relying on [enforcement] will be enough to deal with the commercially negative impact that non-compliance would cause".[82]

52. The Commission has a responsibility to ensure enforcement of the Directive. We therefore urge Defra to press the Commission to bolster the powers and resources of the Food and Veterinary Office.

53. We further recommend that Defra press the Commission and Member States to have robust inspection regimes in place, that swift action be taken if non-compliance is uncovered, and that Member State's fine producers for non-compliance at a level that will act as a deterrent.

54. The list of enforcement options includes two that rely on Member States providing information to the Commission or other Member States: an official list of non-compliant producers; and implementation plans and flock data to be freely available to all. Given the inability of several Member States to provide the data requested to date it seems unduly optimistic to assume that the data required for these two options would be provided.

55. We conclude that lists of non-compliant producers would only be of benefit if officers were available at ports of entry to check imported eggs against the list. Such an approach would be costly. Given the current poor state of the data available to the Commission we doubt any enforcement method relying on comprehensive accurate data will be effective.

UK unilateral action

56. The Government has said it may take unilateral action. However, the Minister was not prepared to discuss what that action might be, or whether the Government would pursue a unilateral UK ban on non-compliant eggs.[83] We understand that the Government may be unwilling to 'show its hand'. However, we would not wish the promise of the UK clipping the wings of non-compliant egg producers from elsewhere giving the UK industry misplaced confidence. We recommend that Defra confirm whether it is still exploring unilateral action and that the devolved administrations support that approach. We recommend that Defra investigate the potential for putting in place a UK ban on shell eggs and egg products from Member States with non-compliant production.

57. The UK not only imports eggs and egg products from the EU but also from outside the Union. A ban on eggs or egg products that do not comply with the animal welfare standards required in the EU is attractive. However, the Minister confirmed that there would be very high risk of being challenged under the World Trade Agreement if an attempt were made to ban eggs or egg products imported from third countries produced in cage systems below the welfare standards specified in the Directive.[84] Under the WTO Agreement on Sanitary and Phytosanitary Measures, governments can regulate trade in agri-food products only on food safety, plant and animal health grounds and as long as these do not act as disguised trade barriers.[85] Given the history of international trade negotiations it is unlikely that any changes reflecting animal welfare standards would be successful in the medium term. However, the inclusion of animal welfare standards in future rounds of WTO negotiation should remain a long-term goal of the Government. As we argued in our report on Common Agricultural Policy after 2013; it is in the interests of fairer trade in the long-term that the EU should argue more strongly for recognition of standards of production (for example animal welfare, use of water, greenhouse gas emissions) within international trade agreements.

Conclusion

58. The Welfare of Laying Hens Directive will be the first piece of EU legislation intended to improve animal welfare to be implemented. As such the Commission's ability to enforce this Directive will be a test of the European Union's resolve to improve standards of animal welfare. We have seen little evidence that the Commission appreciates the serious risks associated with implementation of this Directive. First, the Commission has been insufficiently robust in securing the data required to assess the current trajectory to compliance. Second, the Commission has also shown little enthusiasm for establishing tough enforcement measures in the face of certain non-compliance by several Member States. Third, the Commission appears to have failed to grasp the very serious consequences for compliant egg producers if full implementation of the Directive is not vigorously pursued. We therefore recommend that Defra work with other concerned Member States to make the case for swift action by the Commission.

1 Ev 36,43 Back

2 Ev 36 Back

3 Report of the Scientific Veterinary Committee, Animal Welfare Section on the Welfare of Laying Hens, Brussels 30 October 1996, p 109. Back

4 HoC Library note SN/SC/1367 para 2.1 Back

5 Ev 44 Back

6 Ev 43 Back

7 Ev 41 Back

8 Q 216 Back

9 See http://www.defra.gov.uk/statistics/foodfarm/food/eggs/ Back

10 Ev 43 Back

11 Ev 41 Back

12 Q 118 Back