UPDATED: QUEENSLAND-based egg producer, Darling Downs Fresh Eggs has been fined $250,000 for falsely labelling eggs as "free range".
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 (ACCC).
The Court ordered that Darling Downs Fresh Eggs pay a pecuniary penalty of $250,000.
In a statement released today, the ACCC said it alleged - and Darling Downs Fresh Eggs admitted - that from December 31, 2013 to October 6, 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.
However, 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 in the statement.
“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."
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 NSW.
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.
The company also supplied eggs it represented were free range to other producers who used them to supplement their own free range egg supply.
Producer calls for national standard
RL Adams Pty Ltd says while it was working to satisfy one farming code, it was fined for inadvertently breaking another.
In a statement released today, RL Adams Pty Ltd said it is calling for a national standard for the egg industry that covers both the Australian Consumer Law and animal welfare standards.
During a period across 2013/14, the company said it was so focused on biosecurity issues during a national Avian Influenza (bird) flu outbreak it inadvertently broke a consumer code.
The company is now calling for greater alignment between
animal welfare standards and consumer law standards after being fined by the ACCC.
RL Adams Pty Ltd executive Geoff Sondergeld said Animal Welfare was the number one focus for the company’s egg business.
Mr Sondergeld said during that period there were significant outbreaks of highly pathogenic avian influenza (HPAI) and a large number of infectious Laryngotracheitis (ILT) outbreaks across the country, including the Darling Downs area.
“In effect we are guilty of doing the right thing," he said.
“We were so focused on the biosecurity issue that we didn’t change our packaging from free range to barn or caged.
“We are concerned other egg producers could be taken to court inadvertently unless we have a national code covering all issues of the production of eggs that includes both consumer and hen welfare.
“Our company is a very small free--range producer in the context of the overall egg industry.
"We have been fully transparent with the ACCC cooperating with them throughout the whole investigation.
"Unfortunately the ACCC stuck to the letter of the consumer law and dismissed all other industry guidelines so we feel we have been made an example of.
“During this period the Australia egg industry culled half a million hens as a result of Avian Influenza.
"It is highly pathogenic and easily spread by vehicles, people and among birds particularly by water fowl (such as ducks) who might come in contact with the free range ranging areas.
“The US has been battling AI for the last 12 months and has culled over 40 million birds and there have been other outbreaks across major egg producing countries.
“We followed the Australian Model Code of Practice for the Welfare of Animals as dictated by the Primary Industries Standing Committee, the Animal Welfare Committee (AWC) within the Primary Industries Ministerial Council (PIMA).
“The Code sets guidelines for farmers in understanding the standard of care required to meet their obligations under the laws that operate in Australia's States and territories.
“When consulting the code Section 220.127.116.11 provides for free range hens not to be ranged when serious outbreaks of disease occur or in instances of severe weather.
"We thought we were doing the right thing and in all honesty didn't think we had done anything wrong.
The company and its Darling Downs Fresh Eggs operations is the first Australian egg producer, and one of only a few in the world, to power its business using renewable energy generated from poultry manure.
It expects to reduce its grid electricity usage by 60 per cent in the first year, saving around $250,000.
The company said it remains committed to providing its customers the freshest of eggs "produced in the best possible environments for hens".