Monday, June 27, 2022

Egg producer must pay highest penalty for misleading ‘free-range’ claims

The Federal Court has ordered egg producer Snowdale Holdings to pay penalties totalling $750,000 for making false or misleading representations that its eggs were ‘free range’, in proceedings brought by the Australian Competition and Consumer Commission.

“This is the highest penalty that a court has ordered in relation to misleading ‘free-range’ egg claims,” ACCC Commissioner Mick Keogh said. “It reflects the seriousness of Snowdale’s conduct and the importance of egg producers being truthful about marketing claims they make.

“Consumers pay a higher price for free-range eggs, so when a ‘free-range’ claim is made, it’s important that consumers are purchasing eggs laid by chickens in free-range conditions.”

“Farmers who have invested in changes to their farming practices so they can make valid credence claims such as ‘free range’ also need protection from others making false credence claims.”

Snowdale supplied eggs labelled as ‘free range’ in Western Australia under brands including Eggs by Ellah, Swan Valley Free Range and Wanneroo Free Range. Snowdale also promoted its eggs as ‘free range’ on the Eggs by Ellah website from May 2013.

In May 2016, the Federal Court found that Snowdale’s labelling of its eggs as ‘free range’ between April 2011 and December 2013 was misleading or deceptive, and amounted to false or misleading representations. The court found that most of the hens from Snowdale’s sheds did not go outside, as the farming conditions significantly inhibited them from doing so. These conditions included the number of ‘pop holes’, the number of birds per metre of pop hole, the flock size inside the shed and the shed size.

The court has also made an order preventing Snowdale from using the words ‘free range’ relating to its eggs unless the eggs are produced by hens that are able to go outside on ordinary days, and most of which go outside on most days.

Snowdale was also ordered to implement a consumer-law-compliance program and pay a contribution towards the ACCC’s costs.

In April 2017, Commonwealth, state and territory Consumer Affairs Ministers introduced a national information standard under the Australian Consumer Law. The standard 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.

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