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Saturday, December 15, 2012

More Expensive Eggs - "End" of Battery Hens

Coles and Woolworths promise no support for battery chickens and pork grown in like manner. They say they will only purchase from "green" suppliers. Is this being good citizens on their part? Well frankly, it is not. Controlling 80 per cent of the market they have the power to force low prices on more expensive production.

We will see small operations go to the wall and a future oligopoly forming. When this is finalized, like in the paint market, buyers will have to pay the price offered by the few gigantic producers. For example, Bunnings has to take prices of the few paint manufacturers. Furthermore, there is nothing to stop backyard battery operations selling at weekend markets.

Legislated changes have unintended consequences. The result will be more expensive eggs. This has to be the case. Higher costs mean higher prices overall. This is economic fact. Get ready to see cardboard signs nailed to front fences of houses selling "home grown" eggs.
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