ACCC secures $270,000 boost to the organic food industry

A boost to current moves to develop a national Australian standard for organic and biodynamic produce will follow from an Australian Competition and Consumer Commission action.

A total of $270,000 has been provided by GO Drew Pty Ltd after it admitted to the ACCC that it had substituted free range eggs to its free range organic products over an extended period.

The products concerned were sold as being certified organic by the National Association for Sustainable Agriculture, Australia Ltd. 

The Organic Federation of Australia, the peak organic industry body, will receive $216,000 to be used to assist in the development of a national standard for organic and biodynamic produce through Standards Australia.

NASAA will receive $54,000 to enhance its ability to certify and monitor organic produce.

"The funding is a very timely event for the industry which is currently developing an Australian Standard for organic and biodynamic produce," ACCC Chairman, Mr Graeme Samuel, said today.

"Many consumers actively seek out and are prepared to pay a premium for organically produced products. Many farmers also make a significant investment to grow and differentiate organic produce. The development of a national standard will benefit both consumers and producers by enhancing the opportunity for informed choice."

In November 2005 the ACCC commenced court action against GO Drew and Mr Timothy Drew, GO Drew’s former manager and compliance officer, for misrepresenting that its range of organic eggs were all organic when in fact, over a period of two years (March 2003 to March 2005) Mr Drew had deliberately substituted its free range eggs to make up short falls in organic egg production.

The court proceedings has been the subject of a hearing in the Federal Court before Justice Gray in March 2007. The decision in respect of the orders to be made by the court has been reserved. The ACCC, GO Drew and Mr Drew have asked the court to make declarations, injunctions and an order for costs in the amount agreed upon between the parties.

In the course of the hearing Justice Gray advised the parties he had no objection to the disbursement of the funds, received following a court-enforceable undertaking offered by GO Drew, before handing down his decision. Consequently the ACCC has taken action to permit release of the monies to OFA and NASAA ahead of the decision.