BFREPA launches contract guidance to restore supply chain balance

15 October 2019

BFREPA launches contract guidance to restore supply chain balance

The British Free Range Egg Producers Association has today launched free, professional guidance to help restore balance in the supply contracts held between farmers and egg packers.

Earlier this year the organisation vowed to help reform outdated agreements which a team of lawyers deemed grossly imbalanced in favour of egg buyers.

Birketts LLP examined contracts provided by producers and found numerous areas requiring improvement.

They included pricing, payment terms and termination clauses which the legal team said were weighted entirely towards packers in some cases.

For the past 10 months BFREPA has been working through the necessary changes and asking more than 40 packers to engage and feedback on the proposals.

Today, at BFREPA’s national conference in Birmingham, CEO Robert Gooch launched the Model Egg Supply Agreement and outlined why the piece of work was so important to his membership.

“With the expansion of the sector over recent years and a fiercely competitive retail environment we have seen members entering into agreements which simply aren’t fair to both sides,” Robert said.

“We want to arm free range producers with a model contract which stands up to legal scrutiny.

“What we’re launching today is a live document and can be adapted as the sector changes to meet the needs of members and packers over time.

“It is intended for members to help negotiate the terms and conditions of the contracts put in front of them.”

The focus of the lawyers’ work has been varied but includes the following areas:

Pricing and payment – title to the eggs moving to the buyer only when payment has been received

Exclusivity – changes to the strict term imposed on producers.

Codes of practice – harmonising a number of agreed codes and regulations into one, uniform set.

Grading – the producer being given the right to agree the grading and prices of the eggs it supplies

Duration and termination – clear guidelines on contracts vary in terms of the length of the notice period.

The model contract will be made available on the BFREPA website this week and will be posted to every member.