Egg Prices Slashed: Bargain or Blow to Producers?

Published on : 29 Aug 2025

86p? Economically unsustainable!

BFREPA members have reacted angrily to reports earlier this month of a new Free Range mixed-weight pack on the shelves at a national discounter, priced at 86p.

The pack is arguably indicative of the changing balance of supply and demand. Over the past two and a half years, supermarket ranges have been distilled to a bare minimum of choice for consumers in a bid to make limited supplies stretch further. Fifteens have turned into dozens, ten-packs into sixes, all in the name of eking out the maximum number of sales units through the tills.

Today’s data shows that food inflation has surged to an 18-month high in the UK, with fresh food inflation - particularly from staples like eggs, butter, and chocolate - driving much of the increase. Food inflation rose to 4.2% in August, up from 4.0% in July, while fresh food alone climbed to 4.1%.

Despite a palpable increase in egg availability around the trade in recent months, evidenced by the sliding spot market price reported each week, shelf-front prices in supermarkets have continued to climb. This is true also in any retailer. Where, a year ago, a dozen Large free-range eggs would cost £2.69, in August the same pack increased in price for the third time in the past year to £2.89. As a demonstration of just how far we’ve come, the same pack just over three years ago was a whole pound cheaper.

So, it’s definitely not a one-way street to pricing oblivion. Concerns that the benchmark price of £1.35 for six Medium is about to be slashed back to the desperate levels of 2021/22 may be premature. But there is no escaping the fact that this is a deeply worrying sign for the value our market and our consumer will place on eggs. Why on earth would the cost-conscious shopper continue down the aisle to pick up a pack priced at a 60% premium but containing ostensibly the same product?

Mixed-weight, for the savvy shopper, is the bastion of value. The canny know that the egg sizes vary from week to week, and small-cell packs are often brimming with Large-grade content, offering unbeatable bang for buck. It’s no surprise that, in the photos shared on farming social media channels, the images of the 86p pack outer cases showed empty boxes, quickly cleared by value-conscious shoppers.

Talk has turned to a phrase not heard since hyperinflation gripped the food industry in the wake of the Brexit / Covid / Ukraine triple whammy (or quadruple whammy, if you’re going to talk only eggs, and are minded to include the first reappearance of Avian Influenza). Loss leader.

What is a loss leader, and is it legal?
Loss leaders were once an all-too-familiar phenomenon in retail. The principle is for supermarkets to deeply discount goods, often household staples such as milk, bread, eggs or alcohol. These cut prices, sold below the cost of bringing them to market, were then leveraged in advertising campaigns to drive footfall and increase overall basket spend.

The message to consumers was: “We’re the cheapest store on the patch, you can trust us to save you money. Now come on in and, while you’re enjoying the cut-price milk, pick up the rest of the weekly shop and maybe a telly so we can make our money back.”

It works, but the key question being asked now is: “Is it legal?”
The answer is yes, of course it is. But there is a grey area, known as predatory pricing. A seller can legitimately decide to sell an item for less than they paid for it as part of a marketing strategy. Low pricing, even below cost, is a widely used tactic to attract customers.

What they cannot do, however, is wilfully lower prices below their own financially sustainable levels in order to damage competitors and ultimately drive them out of business. This is predatory pricing. It’s illegal, deemed as being anti-competitive across the UK and Europe.

To be clear, there is no suggestion that any retailer is engaging in predatory pricing; the concern is the wider impact of deep discounting on the supply chain.

So could loss leaders actually be good for farmers?
No. Selling goods below the cost of their production is never, ever good. Legality doesn’t mean the practice is without consequences, particularly for primary producers. As the saying goes, pressure always rolls downhill.

While consumers might enjoy cheaper prices at the checkout, regardless of the commodity, the strain on the system is felt throughout. Retailers count the investment or opportunity cost, trying to evaluate whether losses in product A have been recouped in margins earned elsewhere in the store. The supplying manufacturer is permanently on the back foot in price negotiations, knowing full well that the typical 35–50% margin enjoyed by their customer has gone.

You can hear the message from the buyer: “Don’t bother asking for a cost of goods increase. Can you not see that we’re at war in retail price and I’m having to invest my margin to sell your product? I’m doing you a favour.”

Inevitably, as we saw throughout the boiling frog years between 2018 and 2023, just and necessary calls for moderate inflationary recognition fail like seeds sown on barren ground.

A counter-argument would talk about lower prices being a gateway to volume increase, but as is the case with commodity staple items, the elasticity in demand is not quite that simple. Promote today with a timed discount, and I’ll buy tomorrow’s requirement today. Over a prolonged period of time, the underlying total demand remains stubbornly set against habitual trends.

The greatest problem of all
The greatest problem of all is the signal to the wider market. It’s any retailer today, but that means it is likely to be Aldi tomorrow, then Asda, and so on. And once prices are down, even in part of the range, they’re a drug the market cannot kick. It takes, just as in late 2022, an event to stop the rot, let alone to move the dial back up.

At 86p, are eggs actually selling below cost of production?

Certainly. Let’s tot it up in very crude numbers:

• The eggs cost £1.50 per dozen to buy from an average UK free-range producer.

• The transport from a farm to a packing centre, then onwards to a retail depot costs, for argument’s sake, 10 pence per dozen.

• The carton: 20p.

• A bit of labour: maybe 10p.

• Some overheads: another 10p.

Grossly simplified and wholly approximate but indicative, it comes to £2 per dozen, or £1 per six-pack before any margin is applied.

86p? Economically unsustainable!

Striking a balance
Food inflation is back in the news, cited as a concern for Government along with their many other social priorities. As producers, we know that food is undervalued, and cheaper as a proportion of income in this country than in many others. It’s an impossible circle to square.

Today’s data underlines that pressure: consumers are feeling the squeeze as egg prices join butter and chocolate in driving food inflation to its highest level since February 2024, reminding us that the perception of value - even in a bargain - can mask deep distortions in the supply chain.

Margins at farm gate are better than ever, and seemingly everyone in the chain is profitable. Whisper it, but many may at least consider an investment in margin to protect long-term security. No-one wants boom and bust on a repeat cycle. No-one wants to witness another race to the bottom, with their livelihood just a pawn on the board.

Any retailer’s decision to price a six-pack of eggs at 86p may seem like a win for consumers at first glance, but it raises concerns about a sharp return to the dark days of inequality and unfairness throughout the supply chain. Memories of bare shelves and rationed cartons have already faded, yet the lesson remains: bargains at the checkout often come at a hidden cost. For producers, those costs are real, immediate, and unsustainable. What looks like a bargain for shoppers may, in reality, be a heavy blow to the very people who keep eggs on the shelf.

Cheap eggs today could mean fewer producers tomorrow.