Tesco and Aldi provide extra 26.4 million pounds to support British egg industry

FILE PHOTO: Vehicles are pictured outside a Tesco supermarket in Hatfield

LONDON (Reuters) -Tesco, Britain's biggest supermarket group, and German discounter Aldi will provide 26.4 million pounds ($32 million) of additional support to the country's struggling egg industry.

The UK egg industry is currently in crisis with shortages leading to rationing by major supermarkets including Tesco, Asda and Lidl.

Retailers have blamed the shortages on Britain's largest ever outbreak of Avian flu, which has led to some birds being culled, and on an element of panic buying.

However, producers say the main reason is that they are not being paid enough for eggs to take account of soaring feed and energy costs, which has forced some out of the industry, reducing capacity.

Tesco said its commitment to provide a further 13.9 million pounds of support until March 2023 takes its total support to 27.5 million pounds since March this year.

Aldi said it was contributing another 12.5 million pounds by March, taking its total support to 38 million for the year.

Tesco said the support will be paid to suppliers to cover the cost of handling, processing and egg production, including any increases in feed prices for farmers.

"Tesco will continue to work with its suppliers to ensure the additional investment gets passed to farmers as quickly as possible," it said in a statement.

($1 = 0.8280 pounds)

(Reporting by James Davey; editing by William James, Kirsten Donovan)