Scotland’s largest egg producer has warned of potential market oversupply within the next decade.
The chairman and founder of Glenrath Farms, which is based in Peebles, Sir John Campbell said there could be a glut of eggs in the run up to 2025 – the deadline set by supermarkets to phase out eggs from colony production.
“In the short term we are concerned that with the new UK free-range and barn production coming on stream and with colony production still in place, there could be a surplus of eggs in the UK running up to 2025,” said Sir John.
“This situation could have a serious impact on profits of the industry.”
The poultry industry stalwart also suggested that his company, like all UK colony producers, had “misjudged the market”.
“Over the years we invested considerable amounts bringing our colony houses up to EU standards to meet the 2012 deadline only to discover that there would be no colony eggs in UK supermarkets by 2025 or earlier,” he added.
Sir John made his comments in the latest set of accounts for the company, which reveal an increase in profits against a drop in turnover.
According to accounts filed with Companies House, pre-tax profits for the year ended May 31, 2016, were £8.190million, up from £7.826million the year before.
Turnover at the company was £51.716million, from £52.340million previously.
In his report accompanying the accounts, Sir John said the net asset value of the company had increased by 9% to £72.16million.
He said the company had the most modern production and packing facilities in the UK as a result of more than £60million investment in facilities since 2000.
Sir John also revealed that the company was increasing its free-range egg production to meet demand, and said the phasing out of colony units was expected to cause a reduction in turnover.
He said the firm was watching the avian influenza situation closely and ensuring high levels of biosecurity.
Sir John also revealed that Glenrath had declined to contract with Sainsbury’s as the retailer had demanded a fixed price until March 2020 with no increases except for feed.
“Our board consider that this request was unsustainable. We declined contract,” he added.
The accounts also reveal that the company, which employed 207 people in the year including various direct members of the Campbell family, paid its highest-paid director £211,475. This was up from a pay cheque of £155,088 the year before.
The company produces a range of different eggs including Kitty Campbell’s Free Range Eggs and Big and Scottish.
