The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against Derodi Pty Ltd (Derodi) and Holland Farms Pty Ltd (Holland) alleging that their use of ‘free range’ in relation to their Ecoeggs, Field Fresh and Port Stephens egg brands was false and misleading.

Derodi and Holland have a business known as Free Range Egg Farms. The business supplies eggs under the label Ecoeggs nationally, and under the labels Port Stephens and Field Fresh Free Range Eggs in New South Wales.

‘Free range’ crack down

Australian Food News reported in November 2014 that the ACCC had called on egg industry participants to take heed of the recent Pirovic Enterprises Federal Court decision.

In September 2014, the Federal Court handed down a $300,000 penalty against Pirovic after finding, by consent, that its ‘free range’ egg representations were false or misleading.

Australian Food News reported in June 2014 that concerns about the definition of ‘free range’ had also led to the NSW Government’s Department of Fair Trading starting development of a draft National Information Standard on free range eggs and with regard to the current review of the Model Code. The NSW Department of Fair Trading said the developments, which will also examine any improvements in the effectiveness and enforceability of the Code, will “work to enhance consumer confidence and certainty around egg labelling”.

Retailers move away from cage eggs

Questions around the definition of egg production systems have received much attention in recent years.

A definition of ‘free range’ may be increasingly called for as big retailers and fast food chains such as Coles, Woolworths and McDonald’s have each announced plans to phase out cage eggs in favour of cage-free eggs, which may include both barn-laid and free range eggs.

Meanwhile, Australian Food News reported in November 2014 that an announcement from South Melbourne Market that it will ban the sale of all caged eggs by introducing a “We Care about the Chicken and the Egg” campaign, has been met with widespread criticism from farmers and industry commentators. Many producers said they saw the move as a trend likely to put additional cost pressures on local egg producers, and that this would ultimately create unsustainable cost pressures that would shut down their businesses.

Derodi and Holland case

The ACCC alleges that Derodi and Holland made false, misleading or deceptive representations about their egg brands on egg cartons, websites, a Facebook page and a Twitter account to the effect that the eggs supplied and labelled as “free range” were produced:

• by hens that were farmed in conditions so that the hens were able to move about freely on an open range on every ordinary day; and/or
• by hens, most of which moved about freely on an open range on most days.

The ACCC alleges that the hens used to produce the eggs for the Free Range Egg Farms business were not able to move about freely on an open range on an ordinary day because of the farming practices and conditions of the farms where the hens were kept.

The ACCC also alleges that most of the hens did not move about freely on an open range on most days.

“The ACCC considers that free range means more than animals just having potential access to the outdoors,” ACCC Chairman Rod Sims said.

“Consumers expect free range to mean animals genuinely can and do go outside on most days.”

The ACCC has asked the Court for declarations, injunctions, pecuniary penalties, orders for the implementation of compliance programs, corrective notices and costs.

The proceedings are set down for a directions hearing in Sydney at 9.30am on 4 February 2015 before Justice Edmonds.

Background

This case forms part of a wider investigation by the ACCC into free range claims made by egg producers.

The ACCC understands that there are a number of farming conditions that impact on whether hens are able to, and do, move freely on an open range each day. The conditions (and their impact) vary between producers and no single condition of itself is conclusive. The relevant conditions include:

• the internal stocking density of sheds;
• the conditions of the internal areas the hens are housed in;
• the number, size and location of any openings to an outdoor area;
• the time of the day and how regularly the openings are opened;the size and condition of the outdoor area, including any shaded areas, the presence of food, water and different vegetation and ground conditions;
• the stocking density of any outdoor area; and
• whether the hens have been trained or conditioned to remain indoors.