Egg supplier falls fowl of ACCC

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An egg supplier has been slapped with a $300,000 fine for misleading ‘free range egg’ claims.

The case highlights the importance of businesses complying with Australian Consumer Law, which prohibits making false or misleading representations in product labelling and promotion.

The Australian Competition and Consumer Commission (ACCC) slapped egg supplier Derodi Pty Ltd and Holland Farms Pty Ltd, trading as Free Range Eggs Farms, with a $300,000 penalty for false free range egg claims.

According to the ACCC, Free Range Egg Farms marketed its Ecoeggs, Port Stephens and Field Fresh brands as ‘free range’. However, Free Range Farms was found to have contravened Australian Consumer Law by using these claims when in fact, some of the hens were not kept in ‘free range’ conditions.

“Hens from some of the farms that supplied eggs to Free Range Egg Farms did not move about freely on an open range on most days because of the conditions in which the laying hens were kept,” the ACCC said in a statement.

“Those conditions included the flock size in the barns in combination with the size, placement and use of the physical openings to an open range.”

This took place over a period of nearly three years, from 1 January 2012 to 2 December 2014. The presiding judge noted his concern about the customer deception that resulted from the misleading marketing of the eggs.

“Credence claims such as ‘free range’ are powerful tools for businesses to distinguish their products,” says ACCC chairman Rod Sims.

“Consumers are willing to pay a premium for free range eggs on the understanding that they are getting something different to ‘cage’ and ‘barn laid’ eggs. Where free range egg claims are not true, consumers are harmed and, as important, other egg suppliers who are producing eggs that are genuinely free range are disadvantaged.”

According to Sims, the position of the ACCC is that any free range egg claim must be backed by farming conditions which allow hens to actually move about on an open range each day.

A new national standard under Australian Consumer Law was introduced on 31 March 2015 regarding ‘free range’ egg claims. This requires eggs labelled as ‘free range’ to have been laid by hens with meaningful and regular access to the outdoors and with a maximum outdoor stocking density of 10,000 hens.

The ACCC notes the Commonwealth, State and Territory Consumer Affairs Ministers expressed their desire for the information standard to be in place within 12 months.

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