Egg farmers are complaining about distributor extortion. It is a widespread practice for distributors to demand lower wholesale prices before the Chinese New Year holiday and then pocket the difference. One retailer says this is a normal part of doing business.
Workers wash, sort and package eggs. One egg farmer recently filed a complaint against egg distributors, who routinely force farmers to lower their prices during the Chinese New Year holiday while they profit from the difference.
Egg Farmer: “(Egg farmers) told distributors, "We don't want [lower] prices [while you profit as the middleman]." In response, they told us, "Fine, go sell your eggs yourselves then." They said they would stop selling our eggs.”
Egg farmers say they are forced to lower their prices every year before the Chinese New Year holiday so that distributors can give themselves a nice new year's bonus. This year, local egg prices were around NT$34.5 per catty. Distributors refused to take the eggs unless farmers agreed to a wholesale price of NT$30.4 per catty. Farmers therefore can't afford to replace older hens because of this and the government freezing egg prices.
Chen Chiu-chi, Erlin Egg Farmer: “We can't get new chickens. Our hens are old, but we can't replace them. The cost of new chickens is too high and we can't afford them. Feed costs (are also very high). It's really hard to be a chicken farmer right now.”
One retailer says distributors do demand a wholesale and retail price difference of NT$3-5 every year before the holiday, but that's because the market is closed for so long.
Lin Bo-yi, Egg Retailer: “(It's true that distributors ask farmers to lower their prices before the holiday.) Eggs are perishable. The market is closed for seven or eight days (during the holiday). (Egg farmers) have to lower their prices because the market is closed for so long. (During the holiday), stores are closed (so demand goes down).”
The retailer says eggs are perishable and they have to sell them as quickly as possible during the holiday to minimize losses. They also say egg distributors and farmers both make adjustments based on market mechanisms and everything returns to normal after the holiday. The Changhua County Government says it will step up inspections and help egg farmers develop their own distribution channels.