Two of the largest egg producers in New South Wales and Western Australia are facing legal action from the Australian Competition and Consumer Commission over the alleged misuse of the term “free range”.
The consumer watchdog has launched separate Federal Court proceedings against Pirovic Enterprises in NSW and Snowdale Holdings in WA, alleging they used words and images, both on cartons and company websites, which misled consumers because the hens were not able to move about freely on an open range each day.
ACCC Chairman Rod Sims said the action was not a value judgment, but about deceptive conduct and accurate labelling.
“The ACCC does not have a role in determining whether particular farming practices are appropriate and the ACCC is not debating the merits of cage, barn or free range systems,” he said.
“Credence claims such as free range, organic, place of origin or country of origin are all powerful tools for businesses to distinguish their products, but misleading consumers who may pay a premium to purchase such products damages the market and is unfair to competitors.”
The ACCC has an ongoing investigation into free range claims. In April 2013 it served substantiation notices on a number of egg producers that supplied eggs labelled, free range, requiring them to substantiate the claim.
One area of concern to the consumer umpire is that birds are trained or conditioned to remain indoors, as well as the number, size and location of openings to outdoor areas.
There is no national standard for the “free range”, which now makes up 40 per cent of sales and continue to rise. While many who pioneered the industry consider stocking rates of 1500 birds per hectare to be acceptable, the Australian Egg Corporation was pushing for 20,000 per ha, but it was rejected by the ACCC as likely to mislead consumers.
In June, the Queensland Government changed the definition from a stocking density of 1500 hens per hectare to 10,000.
Supermarket giant Coles now uses the same definition.
The Snowdale case is set down to begin in Perth on 23 January, 2014 and Pirovic in Sydney on 4 February.
Meanwhile, NSW egg lovers are likely to pay more for eggs over Christmas as the state faces a shortage following an outbreak of bird flu last month and the destruction of 450,000 hens.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.