Online egg tender system comes under fire from IFA

SUPERMARKET group Musgrave has been criticised by the Irish Farmers’ Association for trying to cut egg prices with an online auction.

IFA National Poultry Committee chairman Alo Mohan described the move as a blatant attempt to force a beleaguered industry to drop the price of eggs below the cost of production.

A spokesman for Musgrave defended the e-auction system, saying they were confident that increased costs incurred by producers would be reflected in the prices they receive.

However, Mr Mohan contended that the e-auction involved suppliers blindly bidding against each other in an effort to secure the contract.

“The end result is that a supplier wins the tender at a lower price than the previous year,” he said.

Musgrave has been using e-auction to purchase all SuperValu and Centra own brand eggs since 2005 and believes the system is both fair and equitable.

According to figures supplied to the Irish Examiner by the IFA, the supermarket price for a dozen free range eggs is €4.40 while the price paid to the farmer is €1 — 22% of the consumer price.

The supermarket price for a dozen of commercially produced eggs is €3.40, with 70c paid to the farmer — 20% of the commercial price.

Both egg prices are based on an average of branded and own brand products.

Mr Mohan said the commercial egg sector has had to invest millions to comply with European welfare requirements.

“All retailers, not just Musgrave, must take this investment, as well as the price of animal feed into consideration of their purchasing policies,” he said.

A spokesperson said Musgrave fully understood the issue of rising costs as it affected its business and that of all their suppliers.

“Already this year we have given our own brand egg suppliers a significant price increase to reflect the increased cost pressures within their businesses. We believe, through the e-auction system, these increased costs will be reflected in the prices we receive,” he said.