UPDATE 1-Tesco provides 14 mln stg of support to British egg industry

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LONDON, Nov 25 (Reuters) - Tesco, Britain'sbiggest supermarket group, will provide close to 14 millionpounds ($17 million) of additional support to the country'sstruggling egg industry, it said on Friday.

The UK egg industry is currently in crisis with shortagesleading to rationing by major supermarkets including Tesco, Asdaand Lidl.

Retailers have blamed the shortages on Britain's largestever outbreak of Avian flu, which has led to some birds beingculled, 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 13.9million pounds of support until March 2023 takes its totalsupport to 27.5 million pounds since March this year.

It said the support will be paid to suppliers to coverthe cost of handling, processing and egg production, includingany increases in feed for farmers.

"Tesco will continue to work with its suppliers toensure the additional investment gets passed to farmers asquickly as possible," it said in a statement.($1 = 0.8277 pounds)(Reporting by James Davey; editing by William James)

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