SHELL SHOCK – COMPROMISES HAVE BEEN MADE

A recent story involving caged eggs being sold as free range eggs by suppliers to Countdown has highlighted issues within the poultry industry about the classification of eggs and the role of big players in the market, with calls now being made for the government to intervene. On this occasion the retailer concerned was Countdown, however it could have been any of the other retail chains. Indeed, similar scandals have happened before on an arguably greater scale, for example John Garnett in 2014.

“The accurate labelling of brands that we sell is extremely important to Countdown and our customers,” Countdown’s General Manager of Corporate Affairs, James Walker, told Supermarket News. “As soon as we became aware of the problem we took immediate action to remove those products from our stores and have commenced an internal investigation into the allegations.  These claims are very serious, and if true are deeply concerning to us and to our customers,” he added.

“There are strong consumer laws in place in New Zealand, which regulate the truth of claims made by brand owners. There is a Serious Fraud Office investigation underway into this matter, and if these allegations are true, criminal deception has occurred. Given the severity of what has been claimed, we have also appointed an independent third party to review the traceability controls in place on all suppliers of free range and barn egg farms to Countdown supermarkets. This work is in progress. Following the conclusion of our investigations and supplier reviews, we will know if further actions are required,” Walker explained.

“On an ongoing basis, we will audit all Countdown own brand egg suppliers under our New Zealand Supplier Excellence Programme. We are discussing the issue of traceability with the Egg Producers Federation and how the industry plans to deal with it, moving forward.  We would also support the Ministry for Primary Industries to consider the extent to which further regulation may be required to ensure labelling claims around eggs can be verified, potentially as part of their ongoing Risk Management Programme verification visits,” Walker said.

However, Primary Industries Minister, Nathan Guy, told reporters on Tuesday, “it is very difficult at the moment, as I understand it, to determine what is free range.” A legally binding definition of free range may have to be created.

Rob Darby, of Frenz Eggs, said this story highlights two big issues in the poultry industry; traceability and authenticity. “It’s disgusting if you are paying for something that you are not getting,” he said. He added he had met a lady from Singapore who had bought New Zealand eggs in her home country but had thought they were organic since they were from New Zealand. Therefore the issue is not just a national one but involves New Zealand’s poultry industry’s reputation abroad too.  Darby used to consider the SPCA blue tick accreditation a trustworthy guide but thought that once the big players in the market wanted to have it on their boxes, compromises were made which were supported by a government keen to please big business interests.

Originally the SPCA standard was 1500 birds per shed but this was changed to 5000 birds per enclosure and Darby thought that this was a key problem. “A lot of free range birds will never have seen the outside because the rules allow them to be kept inside for a host of reasons (for example weather) and yet still be called free range,” he said, it’s the different standards, or lack of, that is the key thing here. “The big players want to muddy the waters and don’t want a standard set for free range.” He also said that because the Egg Producers Federation gives 1 vote to its members per 5000 chickens owned it allows for the big producers to get what they want. These big operators are holding back a standard to maximise profits as the flexibility allows them to make more money according to Darby.

Consumers are under the impression that free range means exactly that – free to roam. “If the birds are outdoors all the time, and this is science backed, they will have higher protein, higher omega 3 and less saturated fat,” he said. And yet, because of the different accreditations (SPCA’s or New Zealand Welfare Code) and the various rules, this is not generally the case. Additionally, New Zealand’s welfare code is not prescriptive and currently has no penalties for non-compliance. Consumer New Zealand said that the story highlights important issues about how much checking is done of claims and that they would like to see supermarkets doing due diligence on their supply chains and checking that they can sell third party products with confidence. “They’ve been on notice already,” they said.

Free-range eggs account for about fourteen per cent of commercially produced eggs bought in New Zealand. Free-range egg buying has increased over recent years at a rate of approximately one per cent per year, with the trend set to continue. The approximate split for Countdown is seventy per cent caged to thirty per cent free range and barn. Recent research by Nielsen revealed that 42% of shoppers who buy eggs would pay more for free range products. This group are also 12% more likely to shop at New World.

This is an ongoing issue for supplier, retailer and consumer and it will be interesting to see if change will occur this time around for the industry.