The Federal Court has declared that RL Adams Pty Ltd, trading as Darling Downs Fresh Eggs, engaged in misleading conduct and made misleading representations in its labelling and promotion of eggs as ‘free range’, in proceedings brought by the Australian Competition and Consumer Commission.
The Court ordered that Darling Downs Fresh Eggs pay a pecuniary penalty of $250,000.
The ACCC alleged, and Darling Downs Fresh Eggs admitted, that from 31 December 2013 to 6 October 2014, Darling Downs Fresh Eggs supplied eggs marketed and labelled as ‘free range’ when in fact the laying hens had been continuously confined to barns and had never had access to the outdoors.
The Court found that by labelling and promoting eggs as ‘free range’, Darling Downs Fresh Eggs represented to consumers that the eggs were produced by hens which were able to move about freely on an open range each day, and that most of the hens did in fact do so on most days.
In fact, as Darling Downs Fresh Eggs admitted, the doors to its barns were kept shut at all times so that none of the laying hens were able to access or use the outdoor range.
“The issue of free range is very important to many consumers and the Australian Consumer Law requires egg producers to make truthful, and not misleading, claims,” ACCC Chairman Rod Sims said.
“It’s clearly misleading to claim your eggs are free range when the hens that laid the eggs didn’t roam freely outdoors.”
“People are willing to pay a premium for free range eggs which they believe meet ethical or welfare standards. Businesses should not be benefitting financially from misleading claims about farming practices,” Mr Sims said.
The Court also ordered that Darling Downs Fresh Eggs implement a compliance program and publish corrective notices in major metropolitan newspapers and on its website, and contribute to the ACCC’s costs.
In his judgment, Justice Edelman commented that RL Adams’ near-complete cooperation with the ACCC investigation, and its admission of responsibility, were significant mitigating factors in determining the appropriate level of penalty.
Darling Downs Fresh Eggs supplies eggs from farms located in Queensland, approximately 40km south west of Toowoomba. It sold eggs labelled as ‘free range’ to consumers in Queensland, the Northern Territory and New South Wales.
Darling Downs Fresh Eggs supplied eggs it represented were free range under its own ‘Mountain Range’ label and under the ‘Drakes Home Brand Free Range’ label. Darling Downs Fresh Eggs also supplied eggs it represented were free range to other producers who used them to supplement their own free range egg supply.
This case forms part of the ACCC’s broader work in the area of free range claims made by egg producers.