NI farmers who supply free-range eggs under contract to English company Bowler Eggs maintain they have been left to work for effectively nothing after prices failed to keep up with input costs.
Estimates suggest there are around 28 suppliers to Bowler in NI, with total hen numbers approaching 1m. The farmers joined Bowler about five years ago when the company looked to NI for supply. Most are located in the Co Tyrone area.
They are locked into a five-year contract (four crops of birds), with a notice period of the same length. To break the contract would cost £2 per bird per crop, so for a typical 16,000 bird house, that cost is prohibitive.
Outside of seconds found on farm, eggs from NI are all graded by Derby-based Bowler Eggs, and mainly end up with Noble Foods, a major egg packing business in England with a long history of supply to Tesco.
However, there is also an intermediary involved, with suppliers in NI paid by NIEP limited, which lists Oxford-based egg consultant Peter Furlong as the sole director. It is understood that it was Furlong who spent a considerable amount of time in NI setting up the Bowler Egg supply chain a few years ago.
Alongside Furlong, representatives from both Bowler Eggs and Noble Foods have met with local suppliers on previous occasions, but that communication channel seems to have dried up.
“There were lots of meetings at the start – now neither Bowler nor Noble representatives come over. We do have a couple of good field officers in NI, but otherwise we are left to our own devices. When we ring Bowler they just pass the buck, and blame everyone else,” commented a local supplier.
At the start of the contract, suppliers maintain they were on an “all-egg” price, and with meal costs reasonably low, sustainable returns were made.
But in the last 12 months egg price has not tracked feed cost rises, with suppliers estimating that they are currently receiving around 10p per dozen less than that paid by other egg companies.
Suppliers are also very unhappy with a decision by Bowler Eggs to start grading their eggs, and the high rates of seconds that are being recorded. At the start of the crop, that rate could be as high as 14%, but even with older birds it is often greater than 5%.
“When we candle on farm, we get 0.5% seconds – it makes you question what has gone wrong,” commented a Bowler supplier.
Another said that grading has left farmers taking all the risk, especially if eggs are damaged in transit to England. With Bowlers only paying around one-third of the price for large eggs, a high percentage of seconds brings a severe financial hit.
“If we are to move forward, we need an all-egg price, linked to meal price, and an annual end of flock review,” he suggested.
Overall, Bowler suppliers estimate their income per 16,000-bird house could be up to £50,000 less than what counterparts get supplying NI egg packers.
It means they are struggling to just pay bills, including the repayment term on the house which is typically 10 to 15 years. Some have had to extend their repayment term.
“I am at the limit of my overdraft. It gets you down. There is the worry and the stress, and the impact on your mental health. I have got that I don’t look at the grading result when it comes through because I know it will ruin my weekend,” said another supplier.
Others said that they feel “like a prisoner” caught in a long contract. “The banks wanted the security of a long contract. But I am effectively working for nothing. There is also a lot of fear among suppliers – if you put in your notice, will things get even worse?”
The Irish Farmers Journal put the various concerns to Bowler Eggs, but a response was not received.
Companies in the egg supply chain
Bowler Eggs was sold to businessman Colin Shed in 2015, who registered the company in Guernsey, so recent accounts are not readily available.
Noble Foods is one of the UK’s largest egg packing companies. Its last accounts to 1 October 2021 show it recorded an operating loss of £32.6m on a turnover of £282.6m, following a £2.7m loss in the previous year. The overall Noble Food Group is controlled by a company also registered in Guernsey.
In their statement to accompany the latest accounts, Noble Foods directors said that the losses were the result of a challenging year during which there was an oversupply of eggs in a competitive market place.
Tesco commits to UK sourced eggs
In May 2022, local Bowler suppliers were given hope that things might change when Tesco announced that it had reaffirmed its support for egg producers by entering into new five-year contracts with its egg suppliers, including Noble Foods.
In a statement, the retailer referred to its “fair and transparent” feed model, which adjusts to price changes in the market.
Four months later, the situation that Bowler suppliers in NI find themselves in is more difficult than ever. As well as feed, energy and pullet prices have also seen significant hikes this year.