Resulting from EU-wide initiatives of animal welfare organizations, the Council of the European Union has approved stricter legal standards for keeping laying hens in battery cages (Council Directive 1999/74/EC). The economic impacts of this legislative review can be summarized as follows:
1. The current trade protection in favour of EU-producers versus imports from non-member countries amounts to approximately 0,01 Euro/egg. Hence, there is little scope for passing increased costs on to consumers.
2. Competitive disadvantages for the EU-producers, caused by increasing legal standards for keeping laying hens will become even more critical if future WTO-agreements cause further reduction in tariffs. As a whole, this will lead to a drastic cut in EU egg production.
3. Due to their cost advantages, countries with less stringent standards for keeping laying hens will extend their share of the EU- egg market. Thus, looking at the global picture, stricter legal standards within the EU will not lead to an improvement of animal welfare, but to a regional shift of the problems.
4. The fall in egg production in the EU will result in heavy losses to net value-added and employment. Given a decline in production of 10 billion eggs, it can be estimated that
- net value-added will decrease by approximately 270 million Euros.
- employment will lower by approximately 12,000 jobs.
