Sunday, February 12, 2012

Egg Industry's self-destruct wish

The gullibility of our politicians, regulators and egg producers never ceases to amaze me. The Australian Egg Corporation Ltd is simply a private company controlled by major egg producers, and so – understandably – it looks after their interests.

So why is everyone so quick to believe what they say even when the views they express are not backed by any science or even common sense?
One simple example is the headlong rush by AECL to adopt new standards for egg production which will allow intensive farms to label the eggs they produce as 'free range'.
The big operators in the industry seem to believe this is a great idea because they think they will increase profits by labelling their eggs as 'free range' to take advantage of the fastest growing sector in the industry.
However, all it is doing is playing into the hands of the major supermarkets who are in the middle of a price war. They will be able to seize on the new version of 'free range' to offer huge price discounts in their stores to consumers eager to buy any eggs which are labelled as 'free range'.
But the egg producers haven't thought this through. If the price of free range eggs in supermarkets is cut by $1 a dozen, do they really think that the price of cage eggs won't drop? This really is an issue of industry self-destruction.
If Meat and Livestock Australia embarked on a marketing campaign to lower the price of beef, angry cattlemen would camp on their doorstep telling them exactly what they thought. But not the gullible egg boys! Whose interests are the Egg Corporation looking after anyway – the supermarket chains.

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