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

Written evidence submitted by the National Farmers' Union (NFU)

The NFU represents 55,000 farm businesses in England and Wales involving an estimated 155,000 farmers, managers and partners in the business. In addition we have 55,000 Countryside members with an interest in farming and the country.


—  Difficulty of securing credit to make re-investments due to financial crisis.

—  Two tier egg industry where smaller producers are unable to secure funds and rapid consolidation of the industry.

—  Wastage of lifespan of existing infrastructure due to directive and potential for future wastage if further regulations are enacted.

—  Concerns over implementation in other countries, there is significant evidence that a vast proportion of the flocks of some countries and 29% of all EU stocks will not meet the conditions required by the directive by 1 January 2012.

—  Concerns over policing of directive as many countries are set to not meet the requirements, doubts as to the effectiveness of some country's "Competent Authorities".


1.  Within the UK a majority of cage housed laying hens will be in enriched colony cages by the January 2012 deadline. Significant investment has been required by egg producers to comply with the Welfare of Laying Hens Directive. It has cost British egg producers £400 million (around £25 per hen place).

2.  The recent financial crisis and credit restrictions have made borrowing for reinvestment difficult and this has been further compounded by poor returns to egg producers and record high feed and other input costs.

3.  Alongside the huge capital costs involved with erecting new enriched cage units there is also the associated increased cost of production. An LEI study entitled "International comparison of production costs of table eggs" (Van Horne, November 2008) showed that cost of production was +8% higher for an enriched system compared to a conventional cage.

4.  The type of market commitment or confidence required for this level of investment means that those with retail contracts (limited to Lion production) or other large long term market have felt confident to invest. This has led to accelerated consolidation of the industry, with fewer producers and a much smaller independent egg industry. Smaller egg producers, supplying local markets and those with their own egg deliveries to local businesses have been unable to secure the necessary levels of finance, or garner customer commitment necessary for this long term investment.

5.  The directive will mean conventional cage capital investment will be scrapped before it has reached the end of its useful life. As an indication, research carried out by the NFU in 2009 showed the average age of a broiler (meat chicken) house was 27 years. Over 45% of broiler houses ranged from 30-50 years old. It is typical for poultry farmers to get in excess of 30 years use from major infrastructural investment. By loading the cage egg industry with all its capital investment in a small time band, costs of production will be high, relative competitiveness of UK and EU egg will be compromised and existing infrastructure is being wasted.

6.  The NFU is concerned future lobbying by NGO's will be focused on a ban on all cage production. The RSPCA and CIWF have both indicated this publically. There is a fear amongst producers that investment in the enriched colony cage could also be vulnerable to legislative condemnation before investment is recouped. This must not be allowed to happen.

7.  Industry forecasts suggest that 29% of EU egg production will remain in conventional cages on 1 January 2012. This equates to 103.5 million laying hens or 83 million eggs a day.

8.  A study completed in April 2010 commissioned by the European Parliament's Agriculture Committee on the future of EU poultry meat and egg sectors, reported that "very large" proportions of the flocks in Spain, Poland, Italy and Greece and to a lesser extent the Czech Republic, Hungary and France are not expected to make the 2012 deadline. UK Border agency figures show that 27% of the UK shell egg imports come from Spain and 12.5% from France.

9.  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.

10.  It is the NFU's belief that he UK egg market is already being distorted as a secondary effect of the welfare of laying hens Directive. Currently we have a two tier cage market operating with those producers who are not converting running their conventional cages up to the January 2012 deadline alongside producers who have converted to enriched cages systems. Additionally there has been accelerated expansion of the free range egg sector to satisfy the predicted deficit in 2012, when conventional cages are taken out of production. While it is hard to see how this effect could be mitigated, it is another indication of the distorting effect of 2012 ban. NFU figures (derived from Defra chick placement figures) indicate that in December 2010 the national laying flock was 33.3 million birds compared to 30.2 million birds in Dec 2009. The average flock size between 2000 and 2009 was 29.5 million hens. These figures clearly indicate that normal market signals governing supply and demand are being confused and distorted. This has resulted in overinvestment and oversupply in the UK egg sector.

11.  Despite current market difficulties, investment in free range production shows the determination of the UK egg industry to ensure the consumer still has access to high welfare UK egg post 2012.


12.  The European Commission has always stated that it is up to the individual Member State to ensure proper implementation of this legislation. This means that eggs which are not produced in compliance with the Welfare of Laying Hens Directive are not marketed according to Commission Regulation 589/2008/EC which lays down the detailed rules for the marketing standards for eggs.

13.  In theory these plans are robust and each Member State should enforce the regulation and ensure only eggs from legal systems carry an official production indicator. However 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.


14.  We are grateful for Defra's support for differentiation of compliant and non-compliant cage, which would be essential to facilitate an intercommunity trade ban. Defra must maintain its commitment, and act to ensure only eggs and egg products from legal systems, are traded within Europe and enter the UK market. We are concerned however; that there is a lack of clarity from Defra on what action will be taken in the UK.

16 February 2011

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Prepared 2 September 2011