Egg producer has a crack at low margins

Seething WA egg producers are warning that major supermarket chains could price them out of existence, demanding the competition watchdog hold an immediate probe into the industry to guarantee businesses’ survival.

Perth businessman Joe Sacca is leading the charge in calling for an Australian Competition and Consumer Commission investigation into the competitiveness of prices within the egg sector.

The straight-talking 78-year-old, who had a topsy-turvy career in gold mining before turning his attention from the lucrative commodity to poultry, said the egg industry was suffering under low prices for caged eggs.

Mr Sacca has 100,000 laying hens, producing up to 6000 dozen caged and cage-free eggs per week at his Forrestdale facility.

The former boss of defunct gold minnow Maldon Minerals told Countryman the price issue was maximised by record grain prices increasing feed costs and said an ACCC-led inquiry was imperative to assure the State’s egg producers’ longevity.

“It is a real battle — I’m struggling to break even,” Mr Sacca said.

“I’m calling for an investigation into the whole industry and how the supermarkets are driving down the prices.

“We need to push and put pressure on the politicians for an inquiry to be held.”

When Mr Sacca first diverted from bullion to yolk in 1991, he was getting paid about $2 per dozen eggs — a significant amount more he says, when accounting for inflation, than the $1.50 received today.

Commercial Egg Producers Association of WA president Ian Wilson backed Mr Sacca’s calls for an ACCC probe and said egg farmers had been hindered by the major retailers’ volatile pricing environment. “The retailers are acting like bullies,” he said.

“Our industry would support an inquiry, as would the broader agricultural sector too, I am sure.”

Australia’s record grain value has increased stress on egg producers’ feed costs, after wheat was trading as high as $500/tonne last year on the back of the Eastern States’ drought.

WA Agricultural Minister Alannah MacTiernan said an ACCC inquiry could improve egg producers’ bargaining negotiations.

“Clearly the imbalance of negotiating power between major supermarkets and domestic food producers is a problem for our growers,” she said. “We would give our full support to any action the ACCC could take to deal with this issue, and to give food producers a fairer return for their product.”

Mr Sacca said he feared egg businesses could be forced out of the industry or have to consider downsizing if the pricing competitiveness was not addressed.

“I have 16 full-time staff and if it keeps going this way we might have to put some off,” he said.