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Agriculture: Egg Industry

Volume 732: debated on Monday 14 November 2011

Question for Short Debate

Asked By

To ask Her Majesty’s Government what is their assessment of the impact Council Directive 1999/74/EC will have on the competitiveness of the United Kingdom egg industry from 1 January 2012.

My Lords, I am most grateful to the House for providing me with the opportunity to raise this matter, which is of very considerable importance to the future well-being of the British egg industry. I declare an interest, as my younger son is a producer of free-range eggs in Lincolnshire and contracted to Britain's largest producer of eggs, Noble Foods. As my noble friend the Minister will be fully aware, the welfare of laying hens directive, which is the subject of this Question, comes into full force on 1 January 2012. The directive prohibits the use of conventional battery cages and the marketing of eggs from hens housed in such cages. The new cages, known as enriched colony cages, will provide a more animal welfare-acceptable environment. Yet again, Great Britain is leading the field in agricultural animal welfare but such action comes at considerable cost to this sector of agriculture.

The British Egg Industry Council estimates that the industry has, to date, invested some £400 million in the new cage systems and that this country will be fully compliant by 1 January. This has been a truly massive change to the industry. Those producers who have not been in a position to upgrade their systems to the enriched colony systems have gone out of business. Others who have been in a position to make the change have invested heavily in the new systems; such investment has to be serviced and the capital repaid. However, while Britain will be fully compliant there is a very real concern within the industry that producers in some other EU member states will not be—indeed, some might never be.

In recent research conducted on behalf of the British Egg Industry Council, it was found that UK retailers, caterers, manufacturers, processors and producers have for some time been working together to secure the supply of eggs and implement traceability systems to ensure full compliance with legislation. As a result, it is anticipated that the vast majority of shell eggs and all Lion Mark eggs produced in the UK will comply, and that all major retailers will sell own brand shell eggs with the Lion mark. However, further evidence suggests that the main difficulty will be in ensuring that imported shell or processed egg used in manufacturing or catering products will be compliant. This will be particularly so where eggs or egg products are imported directly from those member states where doubts have been raised about the producer's ability to implement the legislation, but also from member states which have taken in eggs to process from non-compliant producers in other member states.

The matter is further complicated by the fact that in member states where there will be non-compliance there are farms with both conventional cages and enriched colony cage systems, often on the same site, thus making policing and traceability extremely difficult. The fact is that we in the UK are not self-sufficient in our supply of eggs. I believe that we produce 85 per cent of the eggs that we need. Egg products are also included in this, and therefore we need to import.

When this directive was first discussed, the egg industry thought that it was not good news but following comments made recently by Commissioner Dalli, the industry is far more worried for the future. The industry is not afraid of competition from legal imported eggs but is extremely concerned that if the directive is not uniformly implemented across the EU from 1 January 2012—and it is as clear as crystal that it will not be—it will be at a serious and unfair disadvantage because of the risk of non-compliant eggs and egg products with considerably lower associated costs being imported. All the industry wants is to be treated fairly and to be able to compete on a level playing field. Can my noble friend the Minister say whether, following 1 January 2012, first, anyone in the UK using eggs or egg products from illegal cage systems will be breaking the law and, secondly, what action Her Majesty’s Government envisage taking to ensure that only eggs and egg products from compliant cage systems will be imported into the UK following that date?

The British egg industry is highly successful and very efficient. It has improved in leaps and bounds since the introduction of the Lion brand as a measure of quality. Consumers have confidence in the product and the poultry sector is one of the great successes of British agriculture. Should Her Majesty's Government fail to act in the interests of the UK egg industry to stop the import of cheap non-compliant eggs and egg products, the British egg industry will be in very real danger of following down the path of the pig sector in the UK. Since 1999, the national pig herd has declined by 40 per cent through the import of cheap pig meat, produced in inferior systems and with far lower animal welfare standards.

My Lords, I declare my interest as a farmer—not as an egg producer, but one who recognises the egg industry as one of the most efficient sectors of British agriculture. I congratulate my noble friend Lord Shrewsbury on securing this short debate on an issue that is pertinent to today's problems and that affects producers and all who are concerned and involved in the industry. As my noble friend said, the pig industry went this way some time ago, when welfare standards were improving in this country; not so in some other countries from where we are still importing pig meat. This relates to the Council directive, agreed in 1999, that battery cages should be phased out and welfare standards improved. I remember it vividly because it was my last year serving in the European Parliament. I well remember the debates that we had then, but it went through and here we have it. It should now be fully implemented on 1 January.

The estimated cost to the industry of £400 million to convert from battery cages to what are called enriched colony cages, which afford the hen 50 per cent more space than in a battery, is something that we must obviously take note of. For a producer who has a medium-size unit of 100,000 birds, the cost of erecting a new unit will be in excess of £2 million. In addition to people who have been in that situation and are converting, we are seeing free-range producers, and those who are also involved in free range from battery hens that they had before, being involved heavily in the preparation for the 1 January deadline. This follows that European directive on the welfare of laying hens, which prohibits the use of battery cages from 1 January. We should be proud of a business whose people have responded to the demands of consumers concerned with welfare standards. I understand that the majority of birds are going into the enriched cages by the deadline. In this country, under the egg industry’s assurance scheme, producers have agreed that they will meet the deadline by 2012.

As my noble friend said, the UK is not self-sufficient in eggs, with some 15 per cent being imported. We produce 9 billion eggs in this country every year, with 10,000 people being involved directly in the egg industry and 13,000 indirectly. I hope that my noble friend the Minister can satisfy British producers that the Government will not agree to eggs being produced in lower welfare battery cages, which can be imported into the UK, undermining the market and therefore distorting prices. From the figures submitted by the Commission, after requesting all member states to submit figures on the number of hens in cages, it would appear that there is still a significant number of hens in conventional cages, particularly in major countries such as Spain, Portugal, France and Italy. The single market surely has to be based on equal standards on trade and welfare grounds and there has been ample room and time for this to develop since 1999.

British consumers can be satisfied that the 31 million eggs consumed each day are a key source of food and nutrition. The salmonella scare of the 1980s sparked panic in the country and among producers but, in a test of 28,000 British eggs in 2004 the Food Standards Agency found no salmonella; tests in 2008, 2009 and 2010 showed further improvement. There is continued satisfaction, therefore, in the quality of the product. The progress made in the United Kingdom is a great success story which must not be undermined by cheaper imports produced in countries with lower welfare standards.

My Lords, I too congratulate the noble Earl, Lord Shrewsbury, on bringing this matter to the attention of the House and look forward to the Minister’s reply. As always, I enjoyed listening to my noble friend Lord Plumb and his robust representation of British agriculture, which, as he rightly says, is in the forefront of egg production.

The changes we debate originate from a welfare of laying hens directive 1999/74/EC, which comes into full force on 1 January 2012. From that date it will be illegal to use what most people would call battery cages but, in slightly obscure Euro-speak, are now called non-enriched cage systems of 550 square centimetres—a great deal less than it sounds. The minimum requirement will be an enriched cage system with more living space per hen—at least 750 square centimetres and a nest, perching space, litter to allow pecking and scratching, and unrestricted access to a feed trough. Many of us would still find this a small cage space in which to live but it is nevertheless a very significant improvement. That is the positive side and a good example of why we need to be in the European Union and why the European Union needs to legislate on such matters. Without legislation across Europe it would be very difficult to bring in this kind of law because of the competitive pressures which, in this transitional period, we are concerned about.

This is reported as being the first piece of EU legislation to ban a specific method of food production on animal welfare grounds. I do not know if this is true but there will be and there should be more. The problem with this, to be frank, is that the implementation of it by the European Commission has been botched. The House of Commons Environment, Food and Rural Affairs Committee issued an excellent report on this matter on 2 September. The press release said:

“The European Commission is sleepwalking into a potential commercial disaster over animal welfare regulations that could result in unfair competition for UK egg producers”.

As previous speakers have said, that is the nub of the problem. It is being suggested by trade sources that perhaps one-third of European egg production on that date will not comply and will be illegal. It is suggested that half of the 300 million laying hens currently producing eggs in conventional cages in the 25 European countries do not at the moment comply and will have to change. It is a difficult position and the Commission has proposed a transitional period covering half a year but says this must be voluntary. It is absolutely clear there will be a problem, at least for a substantial part of the next year and perhaps longer. It is all a very worrying precedent for the future of animal welfare legislation in the European Union. The legislation may be excellent but if it cannot be introduced in a competent way then it will produce this kind of problem.

Can the Government of this country ban the import of eggs, processed eggs or products including eggs which do not comply? If they cannot, what action can be taken? The Environment, Food and Rural Affairs Committee suggested in its recommendation 13,

“that the obstacles to establishing a trade ban that encompassed all products that contained egg derived ingredients produced in non-compliant cages may well be insurmountable”.

It therefore recommended that:

“Defra investigate establishing a voluntary approach under which retailers and food manufacturers”,

in this country,

“would undertake stringent traceability tests”,

—and all egg producers throughout the European Union are supposed to be registered and declare what system of egg production they are using—

“to ensure that they are not responsible for bringing products containing non-compliant egg products into the UK. We further recommend that Defra publish a list of those retailers and food manufacturers that have signed up to the voluntary approach”.

I suppose that is the “naming and praising” approach; people not on the list can be shamed. Recommendation 16 was that Defra should,

“press the Commission to bolster the powers and resources of the Food and Veterinary Office”.

Is it doing that? It further recommends that after 1 January the Government should not purchase any eggs that come from non-compliant sources. Is that government policy? Will that instruction go out and will the Government make whatever effort they can to make sure that the whole of the public sector in this country follows such recommendations?

My Lords, I congratulate my noble friend on the timing of this debate. With EU civil servants failing to reach agreement on 28 October, this issue is to be discussed today and tomorrow at the meeting of the EU Ministers. Like my noble friend, my son has a free-range egg contract through Noble Foods, which takes place on my farm. With Brussels failing to reach agreement, UK egg producers fear that Britain will be subjected to a flood of cheap imports from countries breaking the law by still using illegal cages. While Commissioner Dalli says he will not postpone the introduction of this new legislation, he will not permit the destruction of illegal eggs. He has come up with a number of proposals to soften the blow for those countries which, unlike Britain, have failed to comply with the law. In effect, he will be postponing the introduction of the legislation.

It is important to appreciate the magnitude of the problem. There are expected to be 80 million illegal laying hens from 1 January 2012, laying between 20 and 25 billion illegal eggs a year. Italy will have a staggering 25 million illegal hens, France 9 million, Poland 17 million and Spain 20 million, which is about half its total laying hen population.

Let us look at some of Commissioner Dalli’s proposals. First, he wants on-farm inspections followed by legal proceedings. Call me cynical, but I cannot see the Italian or Spanish inspectors bothering. They have not in the past, so why now? Secondly, Dalli proposes that all illegal first-quality eggs must be processed into liquid or powder. This would be totally impractical. There is neither the processing capacity nor the market demand for the processing of nearly 25 billion illegal eggs a year. In Spain, currently about 15 per cent of eggs go into processing. How on earth is its processing going to be increased to 50 per cent of its total egg production within the next two months? It is just not going to happen. Thirdly, Dalli proposes that no more pullets are to be housed in illegal cages from 1 January. This is impractical; for example, many of the pullets to replace the 20 million Spanish hens in illegal cages from 1 January have already been reared, as they will be delivered when they are already 16 weeks old. Where else can all these birds go if not into illegal cages? I cannot see the Spanish destroying them.

Fourthly, Dalli proposes a final cut-off date of 31 July to comply. Unfortunately this date makes no sense, as the life cycle for laying hens is 14 months, not seven. Even if there was the will to comply with the directive and the money was available to finance the required changes, this timescale is not achievable. It takes at least six months to refit or build a poultry house and there is not the capacity or money in the EU to erect housing for 80 million laying hens in the next nine months. It is completely unrealistic. Fifthly, Dalli proposes that if illegal cages are to be used, the current stocking requirement of 550 square centimetres per hen must increase to 750 square centimetres to give each hen more room. For most illegal cages, this would mean removing two hens per cage. Can you imagine this really happening—that the foreign farmer will slaughter his surplus hens, hens that have been making him a perfectly good profit? I do not think so.

Dalli plans that these and other proposals will be implemented under a gentleman’s agreement. He does not propose any new legislation or regulations to enforce them. Can you see it? Once Dalli leaves the door ajar, the illegal egg producers will storm through it, entrenching large-scale illegal production in certain EU states and creating a deeply uneven playing field. UK producers would be at a permanent competitive disadvantage just like in the pig industry. Frankly, I do not believe that any gentleman’s agreement would be worth the paper it is written on.

Where now? What do we want the British Government to do? First, the concerns felt by the British egg industry need to be conveyed to Brussels as a matter of urgency: that Dalli’s proposals are unworkable and totally unsatisfactory as far as UK producers are concerned; that Britain will not import any illegal eggs, egg products or prepared food containing egg products after 1 January; and that Britain, along with other compliant countries, should insist that no illegal eggs or egg products can be exported from the country of origin, even for processing.

There is a chink of good news. Last Monday my honourable friend Jim Paice, speaking at the Egg and Poultry Industry conference, confirmed that anyone in the UK using eggs or egg products from illegal cages would be breaking the law. He went further by saying that it needed to be made clear to owners of branded food products that the law applies to their ingredients. He added that any company using eggs produced from illegal cages from 1 January would be breaking both the letter and the spirit of the law. Of course, this is most welcome, but what plans does Defra have to ensure that known importers of eggs or egg products from the continent are alerted to the change in the law—that the importation of eggs and egg products produced from banned cages from 1 January will be illegal? Will they be fined or threatened with closure if they persist? Treating like with like, if a UK egg producer still used illegal cages after 1 January he would be heavily fined and his business shut down. The same two questions apply to the owners of branded food products. Will the Minister alert them and will they be penalised if they break the law?

We joined the Common Market in 1973 thinking we would get a level playing field for trade. After 38 years, is it not about time we got one?

My Lords, I am a newcomer to the important matters highlighted in this debate, for which we are indebted to the noble Earl, Lord Shrewsbury, who introduced it—the first of two Earls to speak in this debate, which lends it a splendid distinction.

I wish to speak briefly about the effect this directive will have on the egg industry in Northern Ireland, a part of our country in whose well-being—all aspects of it—I am always deeply interested, as I have pointed out before in your Lordships’ House. I do not believe that the existence of a devolved Assembly should preclude the discussion of Northern Ireland issues in this House, particularly where a wider UK dimension exists, as it does with this issue.

It is estimated by the Ulster Farmers’ Union, a long established and highly regarded voice of rural interests, that the Northern Irish egg industry is worth some £50 million a year to the Province’s economy. This directive was published in 1999. Many of the problems foreseen then by the UFU and their colleagues in other parts of the country have still not been resolved, although the European Union has had 12 years in which to put in place measures to ensure that compliance does not entail a competitive disadvantage for our farmers, as other noble Lords have already stressed. They have also stressed that fairness—a level playing field, in today’s well loved jargon—for poultry farmers is absolutely essential, given that in the United Kingdom in particular this industry historically has not enjoyed direct government support.

My friends in the UFU estimated in 1999 that 1.8 million birds in Northern Ireland would need to be moved to the new “enhanced colony cages”, at a cost of around £10 a bird. The average cost of conversion to the Northern Irish poultry farmer has been estimated at £300,000—or more, should they decide to convert to free-range production rather than the enhanced colony cage systems. Farmers south of the border in the Republic of Ireland have been eligible for financial help amounting to roughly 40 per cent of the cost per bird of conversion. Despite helpful discussions with United Kingdom Ministers, no similar assistance has been forthcoming to help farmers in Northern Ireland, who compete in the same geographical market.

Those more familiar than me with the farm modernisation scheme will know it to be a heavily oversubscribed fund, with no specific remit to help the poultry sector in particular, and will be unsurprised to hear that it has been of little help to the Ulster farmer looking to convert. The £300,000 cost is coming in the form of bank loans which will require repayment in the harsh economic circumstances in which we find ourselves, and amid a price war among the major supermarkets, which is preventing producers from raising the prices of their product. Several UFU members considered the costs too great at the outset, and ceased production. Small-scale, family-run farms, vital to Ulster’s important rural economy, have been replaced by major industrial producers, and others are at risk.

It is also worth bearing in mind that while the EU itself has had more than a decade to deal with the problems this directive might cause, farmers themselves have enjoyed no such luxury. A report due in 2005, but not published until January 2008, set the standards for these enriched colony cages, and farmers in Ulster prudently waited—they are extremely prudent, for the most part, in Ulster—until they could read this report before undertaking major financial risks. This was an excellent decision on their part, as it turns out that a farmer who converted to what might have been called an industry-standard enriched cage system in 1999 would have found his cages declared non-compliant after 2008. Farmers have therefore had just four years to raise the funds and complete the transitional process. This makes it all the more impressive that Northern Ireland expects to be fully compliant with this directive on 1 January 2012, in line with other parts of the United Kingdom, while other countries, as we have heard, have made public that they will not be compliant in time, if ever.

There was particular concern in Ulster arising from the fact that, under this directive, food manufactured using eggs from caged hens could still be tradable across the European Union. So we are back once more to the much invoked level playing field. Farmers in Ulster are looking for an assurance from the EU that products that use non-compliant eggs are at the very least clearly labelled as such for import and export so that farmers who invested in compliance are not at a serious disadvantage. There was a real risk that eggs from caged hens would continue to be used in the manufacturing of goods that could then be sold right across the European Union, pricing eggs from compliant farms out of the market.

For many farmers in Northern Ireland, as elsewhere, much is at stake. I ask the Minister to ensure that there is close communication between his department and the Northern Ireland Executive as these matters advance to a conclusion.

I would like to add my congratulations to the noble Earl on securing this debate at this time. All speakers have expressed concern as it was only on Friday 28 October that EU Ministers met to discuss how to address the problem of eggs being illegally produced in contravention of directive 1999/74, which lays down minimum welfare standards for laying hens and will take effect on 1 January 2012.

We have heard tonight about the cost that the UK industry has borne to convert conventional cages to the new standard and that all of the UK will be compliant. I know that an egg producer in the next village to me, Betley, has invested £10 million to convert, with a continuing added cost of 5p to 6p per egg over and above the cost of production under a more conventional system. He will be looking to the Government to protect his investment from competition from producers in some overseas countries that do not meet the same standards to which he must abide.

The EU commissioner for health John Dalli has confirmed that, despite predicted high levels of non-compliance, the Commission has no intention of postponing the 1 January ban. He is quoted as saying that the Commission,

“will not hesitate to start infringement procedures in cases of non-compliance”.

Is the Minister satisfied that the Commission has the power to act? The industry is concerned that the Commission has not yet come forward with firm proposals for enforcement and penalties.

Furthermore, from the meeting in Brussels on 28 October, there is concern that egg-production units with conventional cages will be allowed to continue until at least July 2012, subject to certain rules and that these rules are less than robust—for example, no non-compliance shell eggs to be exported outside national borders and all non-compliant shell eggs to be prohibited from being placed on the shell market as class A but are to be processed within that member state. However, if there is no processing plant or insufficient capacity in that member state, shell eggs will be allowed to be processed in a neighbouring member state and then returned. Such egg products could then be used in prepared food and products and exported. Could I ask the Minister who will monitor non-compliant eggs moving across a border, and who has the responsibility and by what process to ensure the egg is then returned?

Could the Minister confirm whether any analysis of supply and demand has been undertaken to determine that there will not be any massive market distortions or a displacement effect on seconds from compliant producers? Has the Commission got robust data from all member states on the conversion status of their industries?

In a batch-housing production system, the industry is also sceptical that the reduction in stocking density can be actioned between batches. At the Egg and Poultry Industry conference, the Minister of State for Agriculture and Food in the other place welcomed the British Retail Consortium’s commitment to ensure that all major retailers source their shell eggs and own-label products containing egg from producers with the new enriched cage system. What evidence will be available to consumers, and will any labelling system be put in place? Could I ask the Minister what action his department will be taking to ensure non-compliant shell eggs and egg products do not enter the market place? Is his department confident that there is ample consumer recognition of the industry’s food assurance schemes and is there more it would like to see being done?

The Minister will know that in the past certain countries have banned imports of certain foodstuffs—I am thinking of beef in particular. Has the Minister’s department made any plans to ban the import of shell eggs or egg products from any particular country that poses a more extreme risk of being non-compliant?

The UK industry and its farms in particular must be congratulated that they have met the demand for higher welfare standards. There is cross-party support for these measures. The consumer must also be sure that the food supply is legal, especially if a product has been procured overseas.

My Lords, there can rarely have been a more opportune moment to debate the egg industry than today and I would like to thank my noble friend Lord Shrewsbury for tabling this Question and giving us the opportunity of talking about it this evening. As he and all noble Lords know, my right honourable friend Jim Paice, the Minister of State for Agriculture and Food, has been at a Council of Agriculture Ministers in Brussels today dealing with this matter.

As has been said, the provision in Council directive 1999/74/EC, which bans the keeping of hens in conventional—battery—cages from 1 January 2012, represents one of the most significant welfare advances across the EU, and we wish to see it effectively implemented across the European Union. My noble friend Lord Plumb recalled the debates in Europe that led to its introduction. However, I recognise that the cage ban is causing great concern to the egg industry. It is also a huge challenge for the Commission and other member states.

I will address the issue of compliance first. The Government acknowledge the sterling job that the egg industry has done in preparing for the ban and the very big investment that it has made in converting to other production systems, which are more acceptable in terms of animal welfare. My noble friend Lord Lexden made evident the cost in human terms that this has meant for some farmers in Northern Ireland. Despite all that he told us, he said that Northern Ireland will be fully compliant with the directive. The vast majority of UK producers will be compliant by 1 January 2012. Of the remainder, we expect many producers to leave the industry at the end of this year.

Perhaps I can help my noble friend Lord Shrewsbury by explaining just what the legal position is. Who will be in breach of the legislation if eggs from conventional cages are used in products after 1 January next year—the producer, the processor, the product manufacturer or the retailer? The egg producer would be committing an offence by continuing to keep hens in illegal cages after the ban and then illegally marketing his eggs as caged when they would be non-compliant. If processors, product manufacturers or retailers bought eggs that they knew were from illegal production systems, they too would be committing an offence. I also say to my noble friend Lord Greaves that the mandatory criteria of government buying standards will include the provision that neither eggs nor egg products from illegal producers should be used in any supply after 1 January 2012. The Government will take tough enforcement action against any UK producers found to be non-compliant after 1 January.

The far more significant concern is that compliant UK producers will be disadvantaged by having to compete with cheaper eggs still coming from non-compliant conventional cages in other member states in 2012. We want to protect our producers, who have invested some £400 million in converting from conventional cages, which is equivalent to spending £25 per hen housed.

The UK is the sixth-largest egg producer in the EU and the industry is an important contributor to the economy. The egg industry is one of UK agriculture’s success stories and is used to responding to market signals, without receiving direct subsidies from the EU or the UK Government. A prime example is the way that the consumer demand for free-range eggs has increased dramatically over the past decade, and now around 50 per cent of the eggs produced in the UK are free range. The UK is 82 per cent self-sufficient in egg and egg products, with the remaining 18 per cent coming from other member states, in particular France, the Netherlands, Germany, Spain and Poland. Some of those countries have been mentioned as being non-compliant. Of the 18 per cent of eggs and egg products being imported, around 50 per cent is imported as shell eggs for use by UK processors, corner shops and caterers, and 50 per cent are imported as egg product, liquid and powder. The UK industry estimates that 23 per cent of the EU flock will remain in conventional battery cages on 1 January.

What sort of problem areas do we see? The vast majority of shell eggs marketed through the major retailers are UK sourced. Small retailers, street markets and food service outlets are more likely to provide an outlet for imported eggs from illegal cages. The Government are confident that we have a robust strategy to enforce imports of shell eggs. The prime concern is with imports of egg products, where the supply chain is less transparent and more challenging to audit. Currently, 27 per cent of the egg products used each week in the UK are imported. Along with noble Lords, the industry fears that this percentage will increase and prices will be dragged down by large-scale non-compliance in other member states.

Products which the industry considers most at risk from illegal egg imports from 1 January are Scotch eggs, sandwiches, quiches, cakes, gateaux and Yorkshire puddings, which use a high percentage of imported egg—I see my noble friend Lord Shutt raising an eyebrow at that information. The Government are working with the egg industry, retailers, food manufacturers and the food service industry in preparing their enforcement strategy to deal, not only with imports of non-compliant eggs from other member states, but also non-compliant domestic production.

The British Retail Consortium has come out publicly in support of UK egg producers and guaranteed that conventional caged eggs will not be bought by the major retailers or used as ingredients in their own-brand products. They have put in place stringent traceability tests to ensure that they will not buy non-compliant eggs. Retailers that have made this guarantee include Marks & Spencer, Morrisons, Asda, J Sainsbury, the Co-operative Group, Tesco, Waitrose, Iceland Foods, Greggs, Starbucks and McDonald’s.

Tomorrow, my right honourable friend the Minister of Agriculture will meet the Food and Drink Federation, which represents food manufacturers, and the British Hospitality Association, which represents the food service industry, to see whether they would be willing to follow the retailers’ lead. I hope that this reassures my noble friend Lord Cathcart that the trade in this country is determined to stick to sourcing eggs from legally housed hens.

Ultimately, it will be the for the competent authority in each member state to take responsibility at source for ensuring that their producers no longer keep hens in conventional battery cages after 1 January 2012. If the Animal Health and Veterinary Laboratories Agency, the body that will enforce the conventional cage ban, has grounds to suspect that a particular consignment of eggs may have been produced in illegal conventional cages, then it will contact the competent authority in the member state to check if it knew whether it was sourced from a compliant producer. I can assure my noble friend Lord Greaves that traceability is a key responsibility placed on member states.

Alongside the preparation of a rigorous enforcement strategy, we are still pursuing UK interests in Brussels. For well over a year, the Government have been at the forefront of efforts to convince the Commission that simply relying on infraction procedures against non-compliant member states will not be enough to deal with the negative effect that non-compliance would cause and that additional enforcement measures would need to be put in place to prevent market disturbance. On my noble friend Lord Greaves’s question about strengthening the Food and Veterinary Office, the FVO clearly has a key role here, but relying on infraction proceedings alone will not be enough.

We are pushing the EU hard to use all its available resources to ensure that a ban is implemented and enforced. In September, the Secretary of State wrote jointly with nine other concerned member states to the European Commission, urging it to act quickly. At the October Agriculture Council, the Commission ruled out the option of an intra-community trade ban. It is very disappointing that we have ended up with no legal solution to protect compliant producers from the large-scale non-compliance that there will be in January 2012.

As my noble friend Lord Cathcart passionately observed, given the scale of non-compliance that we are expecting, the Commission is now looking for a robust enforcement approach that avoids large numbers of producers having to close down their operations and the destruction of millions of hens and non-compliant eggs. At the same time, we rightly demand that the Commission must protect all those producers who have complied with the ban and implemented a flagship animal welfare policy. The Government are contributing to ensure that any solution is as tight as possible to protect our producers.

I can assure my noble friend Lord Lexden that we are working with the devolved authorities. Earlier today, Jim Paice, the Minister of Agriculture, fought our corner on this issue at a meeting of the Agriculture Council in Brussels. I regret to say that no agreement was reached, and there will now be further discussions on 29 November to try to find a solution.

There have been some questions about a unilateral trade ban, which was raised by the noble Lord, Lord Grantchester. The Government have thoroughly investigated the possibility of taking unilateral action and bringing in a UK ban on imported eggs and egg products which have been produced in conventional battery cages in other member states. There are significant legal challenges in instigating a unilateral ban, but at this stage such a move is still on the table. We are also considering other measures that we could introduce swiftly.

In conclusion—and I am sorry if I have taken more time than I should—I thank my noble friend Lord Shrewsbury and all noble Lords who have spoken in this debate. UK egg producers must not be put at a disadvantage for leading the way on animal welfare issues. They should be able to operate within a level playing field across the European Union.

Sitting suspended.