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Not so free: Australian watchdog takes egg producers to court

By Ankush Chibber , 11-Dec-2013

The Australian Competition and Consumer Commission has filed separate proceedings in the Federal Court against two major egg producers for misleading “free range” claims.

In its filings, the ACCC has alleged that Snowdale Holdings and Pirovic Enterprises, through the use of words and images, made false and misleading representations on their egg cartons and websites to the effect that their eggs were produced in “free range” conditions.

According to the ACCC, the eggs supplied by each of Snowdale and Pirovic were produced by hens that were not able to move about freely on an open range each day because of the stocking densities of their barns, the physical openings of the barns, the conditions of the outdoor range, and the manner in which the hens were trained.

All about the 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,” said Rod Sims, chairman at the ACCC.

“The ACCC’s concern is simply to ensure that the labelling of eggs accurately reflects the particular farming practices of the producer and the expectations of a consumer making purchasing choices based on those representations.

“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.”

“These matters form part of a continuing investigation by the ACCC into free range claims made by egg producers, which has involved the ACCC serving substantiation notices on a number of egg producers that supply eggs labelled as free range,” Sims said.

Hearings next year

According to the filings, the ACCC is seeking declarations, injunctions, pecuniary penalties, implementation of compliance programmes, corrective notices and costs against each producer.

The Snowdale proceedings are set down for a directions hearing in Perth on January 23 and the Pirovic proceedings are due to be heard in Sydney on February 4.

Snowdale is one of Western Australia’s largest egg producers. It produces eggs labelled as cage eggs, barn-laid eggs and free-range eggs to a number of retailers. Pirovic is one of the largest independent egg producers in New South Wales and supplies eggs labelled as cage, barn laid, free range and organic free range. It also produces and distributes a variety of liquid egg products to retailers nationally.

It was in April 2013 that the ACCC first served substantiation notices on a number of egg producers that supplied eggs labelled as free range, which required them to give information or produce documents that could be capable of substantiating or supporting their claims or representations.

Both Snowdale and Perovic did not respond to requests for comment. 

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