Consumers are being warned that the price of bacon will rise significantly next year as European producers quit the industry ahead of new laws governing animal welfare.

The predicted decline in the number of European producers comes while many of their counterparts in the UK industry, who account for 40% of all domestic bacon sales, are battling to stay in business.

Last week British pig farmers mounted a publicity drive to encourage consumers to buy British pork products. The National Pig Association warned that farmers who are responsible for as much as 10% of all British pig production will be forced to leave the industry by Christmas.

The association blamed poor crop-growing conditions, particularly in the US, for a 25% rise in the cost of pig feed ingredients, which has meant many producers are unable to turn a profit.

It claims that, if British pig farmers continue to leave the industry, around 1.5m rashers of British bacon and 2.3m British sausages a week will disappear from supermarket shelves.

Sharp rises in pig feed prices are not new. There have been spikes in 2008 and 2011 due to poor weather. "But what we are seeing now is a fundamental shift in grain prices going upwards," said NPA general manager Dr Zoe Davies.

For the British consumer, soaring feed prices may not be a problem in the short term. High street rivalry is making supermarkets reluctant to pay farmers more to cover their extra costs of production. And empty spaces on supermarket shelves, caused by British producers quitting the industry, can be filled with imported bacon and sausages, which are often cheaper than British alternatives but do not adhere to stringent welfare standards.

However, a partial ban on sow stalls, due to take effect throughout Europe from 1 January 2013, will have a major impact on the EU pig meat market, according to experts.

BPEX, the body that represents the interests of pig producers, said that similar animal welfare legislation, which came into force at the start of this year, has caused serious disruption with the price of eggs up 75% compared with a year ago.

BPEX warns that pig production is likely to fall by between 5% and 10% with the result that retailers will be face substantial price increases.

Only three EU member states have reported that they comply with the new legislation. Several have already indicated that they expect a "significant number" of their producers to stop breeding pigs or allow their herds to run down.

"In the past, the UK was 40% self-sufficient for pork and 60% came from elsewhere," Davies said. "But that is no longer going to be the case. We could soon see pork being imported from South America or Thailand if British producers go out of business."