The Federal Court has ordered an egg producer to pay a pecuniary penalty of $300,000, contribute $25,000 to the legal costs of the Australian Competition and Consumer Commission (ACCC) and establish a trade practices compliance program after the court found that the egg producer had engaged in misleading and deceptive conduct by marketing its eggs as “free range”.
In ACCC v Pirovic Enterprises Pty Ltd  FCA 1028, the respondent was found to have engaged in misleading and deceptive conduct in breach of section 18 of the Australian Consumer Law by selling eggs branded as “Free Range Eggs” and engaging in other marketing activities promoting the eggs as “free range”.
The court found that by labelling the eggs as free range, the respondent was representing to consumers that the eggs were produced by hens that were farmed in conditions such that the hens could and did in fact move about freely on an open range on most days. The court found that in fact most of the hens did not move about freely as a result of a combination of the stocking density of the barns, the flock sizes in the barns and the number, size, placement and operation of the physical openings to the open range.
The court noted that in marketing the eggs as free range the respondent had regard to the following:
- that its farming conditions were consistent with the practices of most of its competitors marketing eggs as free range
- its labelling practices were reviewed by the Australian Egg Corporation and deemed compliant
- the respondent’s free range egg farms had a “Level A” accreditation for free range egg production under the Egg Corporation Assured National Egg Quality Assurance Program Trade Mark Certification Scheme (the Scheme)
- the NSW Food Authority deemed the Scheme to be compliant with the Primary Industries Standing Committee’s Model Code of Practice for the Welfare of Animals – Domestic Poultry.
This case is part of a larger investigation by the ACCC into the marketing of eggs as free range by Australian producers.
Author: Alexandra Ottens
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Ron Eames, Partner
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