Cheaper import eggs not likely to lower price of Estonian alternatives
The price of a certain type of imported eggs is dropping on Estonian store shelves, despite egg prices rising across Europe over the past month and a half. According to local egg producers, no price decrease for Estonian eggs is expected and the changes in imported egg prices are attributed to retail chains competing for customers.
Although food prices in stores generally trend upward, eggs have recently become an exception, with several retail chains reducing the price of a 10-egg carton to €1.19.
Allan Tohver, board member of Estonia's largest egg producer, Dava Foods, told ERR that over the past month and a half, egg prices in Europe have risen sharply, with the price per kilogram now exceeding two euros.
"Due to fierce competition among stores over who can offer the lowest prices, they might even be selling at a loss. It's cheaper than radio or TV advertising," Tohver suggested. "As a producer, I can't sell that cheaply."
Tohver also pointed out that, for instance, Lidl often sells eggs at lower prices that are sourced from outside the European Union, where animal welfare standards are less strictly enforced and feed costs are lower.
"About 65 percent of the egg price is determined by feed costs. We only buy grain from Estonian farmers and do not import it," Tohver explained, highlighting the source of price differences.
Lauri Bobrovski, board member at Äntu Mõis OÜ, which produces Kikerikii organic eggs, emphasized that consumers should consider more than just price when buying eggs.
"To my surprise, I've seen eggs on store shelves with a note indicating that they do not meet European Union standards. These are cage eggs produced in Ukraine or elsewhere, but while the EU introduced requirements to improve cages over a decade ago, non-EU countries don't even offer the conditions that Estonian caged hens have today," Bobrovski said.
The price of Kikerikii eggs last increased in the fall of 2022, and since then, efforts have been made to keep it stable, according to Bobrovski. Even with that previous price hike, Äntu Mõis aimed to stay within what consumers would tolerate. However, this fall and into the new year, a slight price increase for eggs will be necessary.
"While some component costs have decreased, the pressure on wages is enormous and most input costs continue to rise," he said.
Bobrovski also noted that there has been no significant drop in the number of buyers for organic eggs, as this segment of consumers tends to be more informed and often wealthier than average.
"In light of the upcoming tax changes next year, we are taking a wait-and-see approach. Time will tell," Bobrovski added.
According to Dava Foods' representative, their egg sales have also remained stable. However, international retail chains exert strong price pressure on producers, as they have the option to source eggs from outside Estonia. Local chains, on the other hand, tend to be more understanding of producers' circumstances, Tohver said.
"There are no Estonian eggs for sale at Lidl," he remarked, adding that even other retail chains usually include foreign eggs in their promotional campaigns due to their lower price.
Tohver expressed concern about impending tax changes, noting that they are a worry for every business owner, as economic hardship for consumers can lead to reduced spending. Nonetheless, since eggs remain one of the cheapest protein sources, it is likely that they will still end up in shopping baskets.
He also pointed out that, due to competition among retail chains, a carton of identical eggs often costs half a euro less in Estonia compared to Latvia or Lithuania, which benefits consumers but makes things more challenging for producers.
"I would like to offer my hens better and more modern living conditions, but investments can only be made from profits. When there is strong pressure on prices, profits shrink, which is a concern," said Allan Tohver.
Lauri Bobrovski stated that the farm is currently able to sustain itself, but if input costs had remained at 2022 levels, they would have needed to raise prices even more. Additionally, agricultural subsidies have generally decreased, which has a significant impact on the sector. While the situation has improved compared to the peak of the energy crisis, it is still far from easy.
According to Bobrovski, smaller producers also face challenges when they experience production slowdowns during certain times of the year, making it impossible to supply eggs of a specific size to retailers. In such cases, retailers can either temporarily suspend orders or impose fines on producers.
"So far, thanks to good cooperation, we have managed to avoid fines, but warning signs are there," noted the Kikerikii egg producer.
Marilin Jürisson, purchasing manager at Rimi Estonia, commented that lowering the price of the cheapest eggs to €1.19 demonstrates how competition and market dynamics work in the consumer's favor. She emphasized that eggs hold a significant place in people's shopping baskets.
"We see that during this period, many people base their purchasing decisions primarily on price. However, price isn't the only factor affecting sales performance. Other aspects, such as origin, brand and, in the case of eggs, the conditions in which the hens are kept, also play a role," Jürisson explained.
She added that the chain aims to offer a wide selection that includes eggs from Estonian hens.
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Editor: Marcus Turovski