Egg supplier Deans Foods is offering farmers 'portable contracts' in an effort to mollify competition watchdogs over its merger with rival Stonegate to form Noble Foods.

The company has offered to release suppliers from long-term contracts and place them on three months' notice to make it easier for them to sell their eggs to a rival packer.

In a formal submission to the Competition Commission, it said: "This would make it substantially easier for other packers to supply retailers at short notice and would allow any retailer to reallocate a substantial proportion of its business to other packers."

The Commission provisionally mooted the idea of a major divestment on the grounds that the merger would lessen competition as other packers would be unable to find new egg supplies.

However, the National Farmers' Union has backed Deans' solution, arguing the merger was already too far advanced.

It accused the CC of pandering to the biggest multiples and failing to understand the market. President Peter Kendall also criticised the watchdog's findings for favouring own-label shell eggs over Deans and Stonegate brands.

However, the company's hopes of a speedy conclusion to the Commission's investigation have already foundered, after the deadline for a ruling on the merger was extended by eight weeks to 24 April

The delays were beginning to take their toll, said Stonegate marketing manager Richard Langdon.

New product development was on hold until after April, he told The Grocer. Stonegate had been due to roll out an omelette mix product in Asda stores nationally after a successful trial last year, for instance.

But Langdon said it could not do so until the CC had ruled because the product would be made at a factory belonging to Deans.