ACCC appeals AECL decision

2 March 2016

The Australian Competition and Consumer Commission has filed a Notice of Appeal from the Federal Court’s decision on 10 February 2016 dismissing the ACCC’s proceedings against the Australian Egg Corporation Limited (AECL) and four other corporate and individual respondents. The ACCC alleged that the respondents attempted to induce egg producers to enter into an arrangement or understanding to restrict or limit the production or supply of eggs.

The ACCC had alleged that AECL, Farm Pride Foods Ltd (Farm Pride), and Ironside Management Services Pty Ltd (trading as Twelve Oaks Poultry) (Twelve Oaks Poultry), had attempted to induce egg producers who were members of AECL to cull hens or otherwise dispose of eggs, for the purpose of reducing the amount of eggs available for supply to consumers and businesses in Australia.

The ACCC had also alleged that Mr James Kellaway, the managing director of AECL, and Mr Jeffrey Ironside, a director of AECL and Twelve Oaks Poultry, had attempted to induce egg producers to engage in cartel conduct.

The Court dismissed the ACCC’s application, finding that while the ACCC had established that the respondents intended that egg producers should take action to address and correct an oversupply of eggs, it did not establish that this action was intended to be pursuant to an agreement or understanding involving mutual or reciprocal obligations by competing producers.

“Detecting and deterring cartel conduct continues to be a major focus for the ACCC. It is important that we seek clarity from the Full Court on issues of what will and will not constitute attempted cartel conduct, particularly in the context of conduct by a trade association interacting with its members,” ACCC Chairman Rod Sims said.

Background

AECL is an industry corporation that collects levies for promotional activities and research and development activities from member egg producers. At the relevant time, AECL had between 100 and 150 egg producer members.

The ACCC instituted proceedings in May 2014 – ACCC takes action following alleged egg cartel attempt

The ACCC’s case was dismissed in February 2016 – Federal Court Finds Australian Egg Corporation and egg producers did not attempt to induce a cartel arrangement

 

Release number: 
MR 23/16

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