The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Taylor of Holbeach)
My Lords, there can rarely have been a more opportune moment to debate the egg industry than today and I would like to thank my noble friend Lord Shrewsbury for tabling this Question and giving us the opportunity of talking about it this evening. As he and all noble Lords know, my right honourable friend Jim Paice, the Minister of State for Agriculture and Food, has been at a Council of Agriculture Ministers in Brussels today dealing with this matter.
As has been said, the provision in Council directive 1999/74/EC, which bans the keeping of hens in conventional—battery—cages from 1 January 2012, represents one of the most significant welfare advances across the EU, and we wish to see it effectively implemented across the European Union. My noble friend Lord Plumb recalled the debates in Europe that led to its introduction. However, I recognise that the cage ban is causing great concern to the egg industry. It is also a huge challenge for the Commission and other member states.
I will address the issue of compliance first. The Government acknowledge the sterling job that the egg industry has done in preparing for the ban and the very big investment that it has made in converting to other production systems, which are more acceptable in terms of animal welfare. My noble friend Lord Lexden made evident the cost in human terms that this has meant for some farmers in Northern Ireland. Despite all that he told us, he said that Northern Ireland will be fully compliant with the directive. The vast majority of UK producers will be compliant by 1 January 2012. Of the remainder, we expect many producers to leave the industry at the end of this year.
Perhaps I can help my noble friend Lord Shrewsbury by explaining just what the legal position is. Who will be in breach of the legislation if eggs from conventional cages are used in products after 1 January next year—the producer, the processor, the product manufacturer or the retailer? The egg producer would be committing an offence by continuing to keep hens in illegal cages after the ban and then illegally marketing his eggs as caged when they would be non-compliant. If processors, product manufacturers or retailers bought eggs that they knew were from illegal production systems, they too would be committing an offence. I also say to my noble friend Lord Greaves that the mandatory criteria of government buying standards will include the provision that neither eggs nor egg products from illegal producers should be used in any supply after 1 January 2012. The Government will take tough enforcement action against any UK producers found to be non-compliant after 1 January.
The far more significant concern is that compliant UK producers will be disadvantaged by having to compete with cheaper eggs still coming from non-compliant conventional cages in other member states in 2012. We want to protect our producers, who have invested some £400 million in converting from conventional cages, which is equivalent to spending £25 per hen housed.
The UK is the sixth-largest egg producer in the EU and the industry is an important contributor to the economy. The egg industry is one of UK agriculture’s success stories and is used to responding to market signals, without receiving direct subsidies from the EU or the UK Government. A prime example is the way that the consumer demand for free-range eggs has increased dramatically over the past decade, and now around 50 per cent of the eggs produced in the UK are free range. The UK is 82 per cent self-sufficient in egg and egg products, with the remaining 18 per cent coming from other member states, in particular France, the Netherlands, Germany, Spain and Poland. Some of those countries have been mentioned as being non-compliant. Of the 18 per cent of eggs and egg products being imported, around 50 per cent is imported as shell eggs for use by UK processors, corner shops and caterers, and 50 per cent are imported as egg product, liquid and powder. The UK industry estimates that 23 per cent of the EU flock will remain in conventional battery cages on 1 January.
What sort of problem areas do we see? The vast majority of shell eggs marketed through the major retailers are UK sourced. Small retailers, street markets and food service outlets are more likely to provide an outlet for imported eggs from illegal cages. The Government are confident that we have a robust strategy to enforce imports of shell eggs. The prime concern is with imports of egg products, where the supply chain is less transparent and more challenging to audit. Currently, 27 per cent of the egg products used each week in the UK are imported. Along with noble Lords, the industry fears that this percentage will increase and prices will be dragged down by large-scale non-compliance in other member states.
Products which the industry considers most at risk from illegal egg imports from 1 January are Scotch eggs, sandwiches, quiches, cakes, gateaux and Yorkshire puddings, which use a high percentage of imported egg—I see my noble friend Lord Shutt raising an eyebrow at that information. The Government are working with the egg industry, retailers, food manufacturers and the food service industry in preparing their enforcement strategy to deal, not only with imports of non-compliant eggs from other member states, but also non-compliant domestic production.
The British Retail Consortium has come out publicly in support of UK egg producers and guaranteed that conventional caged eggs will not be bought by the major retailers or used as ingredients in their own-brand products. They have put in place stringent traceability tests to ensure that they will not buy non-compliant eggs. Retailers that have made this guarantee include Marks & Spencer, Morrisons, Asda, J Sainsbury, the Co-operative Group, Tesco, Waitrose, Iceland Foods, Greggs, Starbucks and McDonald’s.
Tomorrow, my right honourable friend the Minister of Agriculture will meet the Food and Drink Federation, which represents food manufacturers, and the British Hospitality Association, which represents the food service industry, to see whether they would be willing to follow the retailers’ lead. I hope that this reassures my noble friend Lord Cathcart that the trade in this country is determined to stick to sourcing eggs from legally housed hens.
Ultimately, it will be the for the competent authority in each member state to take responsibility at source for ensuring that their producers no longer keep hens in conventional battery cages after 1 January 2012. If the Animal Health and Veterinary Laboratories Agency, the body that will enforce the conventional cage ban, has grounds to suspect that a particular consignment of eggs may have been produced in illegal conventional cages, then it will contact the competent authority in the member state to check if it knew whether it was sourced from a compliant producer. I can assure my noble friend Lord Greaves that traceability is a key responsibility placed on member states.
Alongside the preparation of a rigorous enforcement strategy, we are still pursuing UK interests in Brussels. For well over a year, the Government have been at the forefront of efforts to convince the Commission that simply relying on infraction procedures against non-compliant member states will not be enough to deal with the negative effect that non-compliance would cause and that additional enforcement measures would need to be put in place to prevent market disturbance. On my noble friend Lord Greaves’s question about strengthening the Food and Veterinary Office, the FVO clearly has a key role here, but relying on infraction proceedings alone will not be enough.
We are pushing the EU hard to use all its available resources to ensure that a ban is implemented and enforced. In September, the Secretary of State wrote jointly with nine other concerned member states to the European Commission, urging it to act quickly. At the October Agriculture Council, the Commission ruled out the option of an intra-community trade ban. It is very disappointing that we have ended up with no legal solution to protect compliant producers from the large-scale non-compliance that there will be in January 2012.
As my noble friend Lord Cathcart passionately observed, given the scale of non-compliance that we are expecting, the Commission is now looking for a robust enforcement approach that avoids large numbers of producers having to close down their operations and the destruction of millions of hens and non-compliant eggs. At the same time, we rightly demand that the Commission must protect all those producers who have complied with the ban and implemented a flagship animal welfare policy. The Government are contributing to ensure that any solution is as tight as possible to protect our producers.
I can assure my noble friend Lord Lexden that we are working with the devolved authorities. Earlier today, Jim Paice, the Minister of Agriculture, fought our corner on this issue at a meeting of the Agriculture Council in Brussels. I regret to say that no agreement was reached, and there will now be further discussions on 29 November to try to find a solution.
There have been some questions about a unilateral trade ban, which was raised by the noble Lord, Lord Grantchester. The Government have thoroughly investigated the possibility of taking unilateral action and bringing in a UK ban on imported eggs and egg products which have been produced in conventional battery cages in other member states. There are significant legal challenges in instigating a unilateral ban, but at this stage such a move is still on the table. We are also considering other measures that we could introduce swiftly.
In conclusion—and I am sorry if I have taken more time than I should—I thank my noble friend Lord Shrewsbury and all noble Lords who have spoken in this debate. UK egg producers must not be put at a disadvantage for leading the way on animal welfare issues. They should be able to operate within a level playing field across the European Union.