Retail Shifts Logistics to Producers: How This Will Affect Egg and Poultry Prices

Egg prices have nearly doubled in the last two weeks, and the restructuring of logistics may further pressure their cost. Poultry and egg producers estimate a potential increase in production costs by 10-15% due to the need for direct delivery to stores.

This was stated by Sergey Karpenko, Executive Director of the Association "Union of Poultry Farmers of Ukraine," to Delo.ua.

• New logistics may raise the cost of eggs and poultry by 10-15%.
• Egg and poultry producers have lost hundreds of thousands of hryvnias due to strikes on distribution centers.
• Retail requirements may lead to a reduction in product assortment.
• Producers propose to replace destroyed distribution centers to curb price increases.

New logistics may raise the cost of eggs and poultry by 10-15%.

Rocket strikes on the distribution centers of retail chains have destroyed the supply system that has provided stores for years. Now, retail demands that poultry and egg producers restructure logistics and deliver products directly to supermarkets, and also proposes to transfer up to 100% of the risks of product loss due to the war to suppliers.

Producers warn that such conditions may lead to price increases, a reduction in assortment, and decreased competition in the market.

Due to the restructuring of logistics, the cost of poultry and eggs may increase by 10-15%, forecasts Karpenko.

Producers and retail will try to pass additional costs onto the end consumer, he noted.

"The question is whether the consumer can pay more for the same product today, as purchasing power is only decreasing," said Karpenko.

Producers are sometimes forced to reduce their margins just to maintain consumption of their products.

Egg prices have nearly doubled in two weeks
"Egg prices have almost doubled in the last two weeks, and the main driver of price growth was the requirement to deliver goods to stores," reported the executive director of the association.

Logistical problems will now also be compounded by seasonal factors, the expert explained.

According to the Ministry of Finance, as of August 26, the average price of chicken eggs "Yasensvit" (C1 10 pcs) was 61.00 UAH, while chicken eggs "Nasedka" (C1 10 pcs) were 58.75 UAH.

"However, it is quite difficult to predict how much retail prices may rise due to other factors, especially consumer purchasing power. As soon as prices rise, consumption immediately decreases," explained Karpenko.

Egg and poultry producers have lost hundreds of thousands of hryvnias due to strikes on distribution centers.

Logistics problems have not yet led to the loss of the ability to sell all poultry products.

Currently, sales have shifted towards those chains whose distribution centers were not damaged, and they have seen an increase in order volumes. Additionally, sales through other distribution channels (exports, wholesale trade, own retail outlets) have increased, the expert reported.

A significant amount of products that were supposed to reach stores of various chains was in the destroyed distribution centers.
"As a result of the strikes, it was destroyed. Those who already had contracts for compensation of losses - they were distributed between the supplier and the chain, thus, producers incurred losses measured in hundreds of thousands," stated Karpenko.

As for the distribution centers where there were no conditions for risk distribution of product loss, processes for determining the value of lost goods and possible compensations are ongoing.

Retail requirements may lead to a reduction in product assortment.

The requirement from retailers to transfer 50-100% of the risks of product loss due to military actions to suppliers may lead to a reduction in the number of suppliers and, consequently, a weakening of competition in the market.
"It is clear that some suppliers will sign additional agreements since they are 100% dependent on sales in chains, but there will also be those who do not agree to the chains' proposals," said the expert.

If indeed the consequence of not signing will be the termination of cooperation, as warned by retail, Karpenko predicts a reduction in competition due to a decrease in the number of suppliers, which will inevitably lead to a reduction in the product assortment on supermarket shelves.

"Already now, one can observe a shortage or minimal presence of poultry products in certain stores and in specific regions," he emphasized.

Producers propose to replace destroyed distribution centers to curb price increases.

Poultry producers believe that under current conditions, both supply formats should remain possible - both to distribution centers and to stores.

"However, it is necessary to find additional warehouse spaces to replace the destroyed distribution centers as much as possible, as this is the most efficient supply option," believes the executive director of the association.

Direct deliveries to supermarkets do not suit some suppliers as they require significant territorial coverage and additional resources.

In the opinion of producers, this format should only be used temporarily - where it is impossible to quickly resume the operation of distribution centers. Otherwise, it may weaken competition and create additional pressure on end prices.

Separately, the Association advocates for a clear distribution of military risks.
"The risks of product loss should pass to retail upon delivery to the distribution center or store, producers also bear the risks of product loss, there are already examples of the destruction of entire poultry farms, warehouses, sorting facilities, and transport," said Karpenko.

Recall that in July 2026, Ukrainian poultry farms sent 216.9 million eggs to foreign markets. The total value of the products sold amounted to $17.7 million.

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