Is supply pressure making the egg industry crack?
Overview
British egg prices have risen by almost 20% for shoppers since the start of the year. Why is this happening, how is this reflected in the foodservice sector, and what does the coming year hold for the egg industry as a whole?
Is the spread of avian influenza (bird flu) a cause for concern?
Biosecurity restrictions are currently in place across England, Wales and Scotland under an Avian Influenza Prevention Zone, although mandatory housing measures have now been lifted in England. Since last October, around 1.8 million farmed and captive birds have been culled. The latest outbreak of avian influenza in the UK was first reported in November 2024.
The most serious incident occurred on 20th January 2025 at Oaklands Farm Eggs in Shropshire, where 1.6 million birds were culled to contain the spread of the virus. The affected site accounts for half of the UK’s barn egg production and approximately 5% of the total laying poultry flock.
The situation has led to a 5% reduction in the UK flock, and has already impacted prices – chicken meat prices are currently 7.3% higher than this time last year (as of June 2025). Looking ahead, there are other concerns that will further drive up costs.
Other factors are driving price increases
Limited supply is not the only factor affecting prices; production and supply chain costs are also rising. Higher feed prices, which account for approximately 65% of total egg production costs, along with increasing fuel costs, are contributing to the overall price surge. Additionally, from April 2025, increases in National Insurance contributions and the minimum wage are further impacting the supply chain and farming industry.
Says allmanhall’s Managing Director, Oliver Hall: “Increases to the national minimum/living wage and employer National Insurance contributions will very quickly force egg producers and distributors to recover costs. Increases can therefore be expected to be seen from April 2025.
One of the major drivers of price rises is the ongoing transition to cage-free egg production.
Why is the UK market moving to cage-free production?
Due to overwhelming scientific evidence that they caused significant suffering to laying hens by severely restricting their natural behaviours and movement, the European Union banned the use of conventional battery cages in 2012. Old battery cages were replaced by colony or enriched cages.
On average an enriched cage holds 80 hens (13 birds per square metre) and has a screened-off area for laying, a scratch mat and low perches. Once placed in a cage, the hens won’t leave the cage until they go to slaughter
Although this was an improvement on the previous battery cage method, current cages still limit the hens’ ability to perform natural behaviours and can cause the birds to suffer high levels of stress and frustration. Hens need to be active and perform their natural behaviours like walking, nesting, perching, stretching their wings, dustbathing, scratching the ground, and foraging.
Advocacy from animal welfare organizations such as the British Hen Welfare Trust and the RSPCA has played a crucial role in encouraging consumers to choose higher-welfare eggs. In response, major retailers and food companies have been working towards a significant transformation, aiming to be completely cage-free by the end of 2025.
Several UK retailers, including Tesco, Asda, Lidl, and Aldi, have pledged to eliminate the sale of eggs from caged hens by 2025. In 2022, Martin Kottbauer, Chief Trading Officer at Lidl GB, stated, “We know that, in addition to taste, the welfare and conditions in which hens are housed are important to our customers. Our commitment to selling 100% free-range eggs by the end of 2024 builds on our strong credentials as a grocer that sources sustainably and responsibly.” Lidl has further reinforced this commitment by pledging £1 billion over the next five years to support the British egg industry.
As of May 2025, 18% of the eggs consumed in the UK still come from hens kept in enriched cages, with free range eggs accounting for 70% of the total.
However, over the past five years, the UK has been transitioning away from enriched-caged eggs. Since 2019, production has declined by 47.2%, with this reduction offset by significant growth in free-range production and an increase in barn egg production.
One of allmanhall’s major supplier partners is committed to move away from supplying cage-reared eggs from September 2026, although they are hoping it will happen sooner.
What is the difference between barn-reared and free-range eggs?
Barn-reared birds have no outside access, but they are free to move around the house. Stocking density is much lower at 9 birds per square metre. Birds are less stressed when offered perches, especially when given perches at different heights.
In the UK, birds also have access to at least two items such as Lucerne bales and pecking objects, which relieves boredom and means they are less likely to peck others. This varies slightly from the European Union model, where no enrichment is provided.
Litter on the floor means that hens can dust bathe – another natural behaviour. This farming method allows natural behaviours such as dust bathing, playing, and sparring
Free-range birds must have outdoor access from 21 weeks of age and each hen must have a minimum of 2 square feet of outdoor pasture to forage.
Free-range hens may only be housed indoors during specific circumstances to protect their health and welfare, i.e. during government housing orders to protect against avian flu.
Here’s a simple chart to show the differences:
It’s worth noting that food miles are a small part of the food supply value chain when it comes to emissions and an oversimplification of the issue. For more information on moving away from considering food miles and instead focusing on what food is being eaten, not just where it comes from.
How will this transition impact the price of your eggs?
Moving to the higher welfare barn-reared eggs will incur a price increase of around 12% as shown below, but on a positive note, a number of large users are already planning to switch to support their CSR commitments.
allmanhall fully supports the transition to higher welfare eggs but we understand that rising costs throughout the food industry are causing concern. We will be surveying our clients over the coming months to ask: Will you work with us to switch to barn eggs or free-range eggs by September 2026?
