Regulations to ensure a fairer egg supply chain are due to be finalised and laid before Parliament in the UK this year.

This follows years of action across the food sector, including the introduction of the Groceries Supply Code of Practice in 2010, the establishment of the Groceries Code Adjudicator in 2013, and sector reviews of dairy (2020) and pigs (2022).

Reviews were announced into the egg and fresh produce sectors in 2023, and the Proposals for Fair Dealings regulations were first shared with the egg sector last year.

Industry calls for clearer, more consistent contracts

Lewis Acred, senior policy adviser at the UK Department for Environment, Food and Rural Affairs (Defra), said the consultation found widespread industry support for clearer and more consistent contracting practices.

Key findings included that all contracts should be in writing, although at the time one in five producers still operated under verbal agreements. The review also found that approaches to contract changes varied significantly, with some producers reporting that changes were implemented without prior discussion.

While most producers said their contracts were generally honoured, others reported inconsistencies. Many also said price changes were communicated, but transparency around pricing mechanisms needed to improve.

In addition, many egg producers felt they lacked the ability to negotiate contract terms, although most respondents supported the idea of a standard contract structure with terms tailored to individual circumstances.

Proposed regulations

There was also broad support for introducing legislation with mandatory contract clauses, including termination provisions, notice periods, dispute resolution mechanisms, and clearer, more transparent pricing arrangements.

Acred said the proposed regulations, which has been held up slightly due to the conflict in Iran, will not regulate price, stressing the government was keen to leave that to the free market. It would however:

• Guarantee clear, written contracts
• Prevent unilateral changes to contracts
• Provide clarity on supply periods, volumes and pricing mechanisms
• Provide clarity on why variable prices change
• Prevent reductions to price when giving notice
• Ensure all contracts have force majeure clauses
• Provide protections for producers to immediately terminate contracts in severe scenarios
• Ensure contracts have dispute resolution procedures for producers
• Introduce the Agricultural Supply Chain Adjudicator (ASCA), Richard Thompson who will enforce the regulations.

The regulations will not mean existing contracts become void and the legislation will still allow fixed, variable and cost or feed tracking prices.

“We want every producer to clearly understand their own rights and obligations under the contract, as well as those of their buyers,” he said.

Early intervention

Thompson told delegates at the British Pig and Poultry Fair to seek early intervention with him if they felt they had a dispute or a complaint: “There is often a lot we can do to help parties resolve disputes earlier on,” he said.

The British Free Range Producers Association (Bfrepa) is now arranging a series of farm visits for Richard to help him gain a closer understanding of the egg sector and producer concerns. Producers interested in taking part are encouraged to contact the new chief executive Gary Ford.

While Thompson is keen to hear from producers experiencing contract concerns or supply chain difficulties, he made clear that he is not yet able to intervene in disputes within the egg sector until the new regulations formally come into force.