What exactly is a ‘free-range’ egg? Ultimately, it is about a consumer not having to feel guilty about the dozen eggs in their shopping trolley. So many consumers are affected by images of hens living in battery cages that a mainstream market (with a sales premium) now thrives for eggs laid by hens not living most of their lives in cages or sheds.
However, there is no uniform standard for what free-range means. If a producer wants to market their eggs as free-range, numerous industry bodies and animal welfare associations offer their own accreditations. Some demand a maximum of 1,500 birds per hectare, while others allow product to be called free-range with 10,000 birds per hectare. There are even pushes to raise this to 20,000 per hectare. This lack of standardisation creates an economic problem for many producers: the 10,000 per hectare producer has considerably better efficiencies than the 1,500 producer, but both can call their product free-range. This translates to a lower shelf price for the 10,000 per hectare farmer, and since (at least presently) most consumers in the free-range egg market only look for the words ‘free-range’ without delving into the differences between certifications, the lower priced free-range product will be treated by consumers as ‘ethically interchangeable’ with the higher priced free-range product. That is, the only relevant market differentiation is price.
To make matters even more interesting, Coles recently announced that its home-brand eggs can be called free-range where they come from birds kept at 10,000 per hectare. That creates real pressure on producers who want to sell to Coles but farm at less that 10,000 per hectare. This has recently seen legislative change. In Queensland, until a few weeks ago, a State-imposed code defined free-range as being 1,500 birds per hectare. This has increased to a maximum of 10,000 per hectare (subject to certain conditions). The driving purpose behind the change was to prevent Queensland free-range farmers from being at a State-created disadvantage to their interstate colleagues who can produce free-range at 10,000 per hectare. In other words, for the Queensland free-range industry to remain competitive, things needed to change.
However, in another State – South Australia - the government is looking at going the other way. There is currently consultation on setting up a voluntary State-backed code to impose free-range standard of 1,500 per hectare. Not surprisingly, some producers are already concerned about their government creating a self-imposed market disadvantage.
This issue is not going anywhere soon. If mainstream consumer consciousness regards free-range product as desirable, that consciousness will become concerned to learn that there can be such a massive difference between one certifier’s idea of free-range and another’s. To avoid the erosion of trust in such marketable concepts as ‘free-range’ something will need to be done. It may be that a ‘premium free range’ product emerges and secures consumer support. It may be that a national scheme needs to be set up strictly limiting conditions. In any case, this is one area where the confluence of ethical, legal, State, economic and market forces still needs to be properly resolved – keep your ears open.
While it is only free range farmers who are affected by these latest changes it may not be too long before other producers in other industry sectors face their own ‘free range’ dilemmas. It is also possible that challenges may not come just from legislative change but from demanding consumers. Consumer awareness and tastes will likely have future impact on how livestock producers market and care for their product.
Author: Bede Haines
Ron Eames, Partner
T: +61 7 3135 0629
Special Counsel - Litigation
T: +61 2 8083 0447
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed above.