Free range guidance from the ACCC at last!

The Australian Competition and Consumer Commission has released guidance for egg producers on its approach to enforcing the new National Information Standard on free range eggs, which comes into effect on April 26 2018. Under the new Standard, egg producers cannot use the words ‘free range’ on their egg cartons unless the eggs were laid by hens that: had meaningful and regular access to an outdoor range during daylight hours,were able to roam and forage on the outdoor range, were subject to a stocking density of 10 000 hens or less per hectare, and that outdoor stocking density is prominently displayed on the packaging or signage. “Shoppers are willing to pay a premium for free range eggs, but only if the chickens genuinely have regular access to an outdoor range. From April 26, free range must only be used by compliant egg producers so consumers can have confidence in the products they are buying,” ACCC Chairman Rod Sims said. “If an egg producer’s hens are using the outdoor range on a regular basis and they satisfy the stocking density requirements, then the producer can call their eggs free range.” The guidance also explains egg producers’ obligations under the misleading or deceptive conduct provisions of Australian Consumer Law. This includes representations made through marketing activities such as product packaging and advertising. “If egg producers use images, pictures, or words, other than free range, that imply their eggs are free range when they are not, this would likely raise concerns under the Australian Consumer Law,” Mr Sims said. “The ACCC is monitoring the market to ensure that free range claims are truthful and accurate and will continue to take action against those that don’t.” The industry expects there will be many more prosecutions because many corporate egg producers with intensive facilities have for years been marketing their eggs as free range and they don't propose to change their ways. The debate over outdoor stocking densities on free range farms was hi-jacked by animal rights groups. It is more than a welfare issue – it’s about land sustainability. A laying hen produces half a cubic metre of manure a year. So with a stocking density of 10,000 hens per hectare farmers will see their land covered with 5000 cubic metres of manure per hectare every year. As chicken manure has the highest amount of nitrogen,phosphorus, and potassium of all manures, it will likely render the land useless for farming within a few years. Contamination of groundwater and water courses is also likely.

ACCC may ignore Ministers' new 'Free Range' standard

Great news for free range egg farmers. The Australian Competition and Consumer Commission is ignoring the intensive 'free range' egg standard approved by Ministers for Consumer Affairs and may press ahead with prosecutions against producers who breach the standards identified in Federal Court decisions. In its Enforcement Guidance for the egg industry on Free Range claims, it says “use of the descriptor ‘free range’ requires, at least, that the hens are able to move about freely on an open range on most days, and that most of the hens do so. the ACCC rejects claims by some that it is OK to tell consumers that the eggs are from free range hens when the outdoor range is not regularly used by the hens because the farming practices are such that the hens stay indoors all or most of the time. Producers do not have to use the label ‘free range’. Producers choose to describe their eggs as free range to promote their products and consumers are generally willing to pay a premium for free range eggs. it is open to producers to market their eggs under different labels, such as barn-laid or cage-free, where their practices do not meet consumer expectations for free range.” It's a pity the Ministers for Consumer Affairs and the federal Small Business Minister are too dumb to understand the problem.

ACCC waiting to pounce on more dodgy free range egg producers

Free Range egg farmers in Australia who follow the outdoor stocking densities set out by Ministers for Consumer Affairs and the Federal Minister for Small Business, in their recent decision on a free range standard are likely to face prosecution by the Australian Competition and Consumer Commission. The ACCC has produced a guide to help hen egg farmers of all sizes understand their fair trading rights and obligations when promoting or selling free range eggs. The guide also informs consumers and the public about the ACCC’s approach to free range egg claims, which are made on labels. On 31 March 2016 Australian Consumer Affairs Ministers said they wanted an information standard for free range eggs to be in place within 12 months. The information standard is not currently enforceable as reforms to give effect to the new regulations have not been introduced or passed by Parliament. The ACCC will amend its guidance as the information standard progresses. https://accc.gov.au/…/accc-enforcement-guidance-free-range-…

Egg farmers could be heading for trouble if they adopt the new 'free range' standards proposed by Ministers.

Egg farmers who follow the new 'free range' standards proposed by Ministers for Consumer Affairs and the Federal Small Business Minister Kelly O'Dwyer could face trouble with planning laws as well as the Australian Competition and Consumer Commission. I wrote to Victoria's Planning Minister Richard Wynne, asking if the Minister could intervene in the decision to allow egg producers with stocking densities of 10,000 hens per hectare to be classified as free range instead of the accepted standard of 1500 hens per hectare. Mr Nick Wimbush, Acting Executive Director,Planning and Building Systems of the Department of Environment, Land, Water and Planning responded, saying “It is not possible for the Minister to issue a directive regarding free range egg production as each proposal must be considered on its individual merits and circumstances in line with land use definitions. However, he said “changes to national labelling laws do not change these land use definitions or the farming zone. I recommend that an egg farmer considering increasing their stocking density in response to the labelling law changes contact the planning department of their municipal council for advice about whether planning approval will be required.” The ACCC has already said that it will review is guidelines for free range egg production in light of the recent ministerial decision. ACCC action in the Federal Court resulted in several fines of $300,000 against businesses which falsely labelled their eggs as free range.

Myths about eggs

The widespread concern over the definition of 'free range' will be sorted out when the ACCC has taken a few more big egg producers to court for their deceptive practices, and State Ministers for Fair Trading have finally established a legal standard for what constitutes a free range egg.  Genuine producers in the industry have followed the Model Code which sets a maximum outdoor stocking density of 1500 hens per hectare and prohibits beak trimming as a matter of course. Hopefully it will all be done and dusted by April.  Even when a definition is finally agreed the crooks will still try to find ways around the regulations.
But there are other issues too. There are so many myths around eggs some of which we have dealt with on a new page on our website: http://www.freeranger.com.au/myths-about-eggs.html

Shonky egg farms on the run

It's way past time for  big businesses involved in the Australian egg industry to wake up and stop their deceptive practices designed to bolster profits by labelling eggs from their intensive 'farms' as free range - and charging a premium.
The industry has known for years that this has been going on but politicians and bureacrats have refused to take action - sticking to supporting their mates and allowing industry 'self-regulation'.
Now that is suddenly coming to a halt with the Australian Competition and Consumer Commission taking on the big operators in the Federal Court.
Yet another egg farm is going to have to defend action in the Federal Court over claims by the ACCC that it has committed serious breaches of Consumer Law. The ACCC says Darling Downs Fresh Eggs, which is based in Queensland, labelled their products as “free range” between 31 December 2013 and 6 October 2014 when the hens had in fact never had access to the outdoors.Darling Downs Fresh Eggs is just the latest in a string of egg producers to face court action for misleading claims. Many more are expected to be put through the wringer.
ACCC chairman Rod Sims said  consumers deserved to know if what they are buying is in fact free range.
“The ACCC considers ‘free range’ eggs to mean that the laying hens can and do go outside and move around freely on an open range on most days,”
He said.“The ACCC considers that the alleged misrepresentations in this case are particularly serious, because it is the ACCC’s case that the Darling Downs Fresh Eggs hens were never given outdoor access.”
Now is an appropriate time for heads to role at the Australian Egg Corporation which has encouraged the long term deception of consumers. It claims to act for the whole of Australia's egg industry - but in reality it works against the interests of free range producers even though they provide funding to AECL through levy payments on every hen.

ACCC wrong to claim "no need' for a definitive free range standard

The consumer watchdog has declared there is ‘‘no need’’ for a free range egg standard in Australia,

But egg producers and consumer groups are helping to develop a standard with consumer Affairs Ministers in every

state.

Rod Sims, chairman of the Australian Competition and Consumer Commission, said producers should instead use commonsense and rely on court rulings to avoid misleading labelling.

‘‘Some have expressed concern there is no government standard that producers need to meet to be a free-range producer. We see no

need for any standard,’’ he said at an agricultural forum in Melbourne this week.

 

While I understand his position, I believe he is wrong.  There is far more to the definition of free range egg production than animal welfare issues.  On our farm we have a three pillars approach, with food safety, land sustainability and asnimasl welfasre taking equal positions. There is considerabl;e pressure from the corporate sector of the industry - as well as the Federal, Queensland and Victorian agriculture ministers not to define stocking densitiers. There is a push thatif that an outdoor density is defined, it should be the major supermarkets version of 10,000 hens per hectare instead of the 1500 per hectare allowed in the current Model Code. 

Unless a maximum outdoor density of 1500 per hectare is adopted by Ministers, then Rod Sims is right - don't bother with a national standard because the big players will simply maintain their intensive production systems.

 

Irrational arguments against ACCC action over 'free range'

Writing in Stock and Land, and various other publicatioins, SamTrethewey has tried to justify the consumer deception practised by many egg farmers who label eggs as 'free range' even though they are from intensive production systems. He argues that those producers have simply followed the Model Code. But all that shows is that he hasn't read the Model Code, because, if he had, he would see that the maximum outdoor stocking for free range egg laying hens is 1500 per hectare. There is a reference in the Appendix to 'any higher density' being allowed for meat birds as long as a rotational system is in place.

In his rant, Mr Tretherwey claims that  'the Australian Competition andConsumer Commission (ACCC)"starts throwing their weight around and penalising some farmers to satisfy some consumer complaints.

But against which standard? These farmers have been following the agreed voluntary code.

Admittedly, industry hasn’t been able to unite to form mandatory standards for production.

So the ACCC penalises against perception, but whose perception?

A recent case saw the ACCC smacking free-range egg farmers in the face because not all hens were outside.

That’s right'.

Yes indeed, that's right Mr Trethewey, the ACCC was right to take action as  demonstrated by the farm's decision to accept an agreed penalty of $300,000. The Federal Court judgement is a great result for the industry.

Free Range - the legal definition

At last in Australia we now have a legal definition what the term 'free range' means, thank to the ACCC and the Federal Court.
Here are details which we will publishing as a poster available at the Farmers' Markets we attend.

The Federal Court found that by labelling and promoting eggs as ‘free range’, a NSW egg company Pirovic Enterprises 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 so on most days. Pirovic admitted, most of its hens did not move about freely on an open range on most days.

The Court found that the eggs supplied by Pirovic were produced by hens, most of which did not move about on an open range because of a combination of factors:

• the stocking densities inside the barns where the hens were housed;
• the flock sizes inside those barns; and
• the number, size and placement and operation of the physical openings to the open range.

This decision provides clear guidance that any free range egg claim must be backed by farming conditions and practices implemented by suppliers under which hens actually move about on an open range each day.

The ACCC and Pirovic agreed on joint submissions and proposed orders put to the Court. That resulted in fines of $300,000 plus costs to be paid by Pirovic for misleading consumers.

The court found that there are a number of farming conditions that impact on whether hens move freely on an open range each day. The conditions vary between producers and no single conditionis conclusive. The relevant conditions include:

• the internal stocking density of sheds;
• the conditions of the internal areas the hens are housed in;
• the number, size and location of any openings to an outdoor area;
• the time of the day and how regularly the openings are opened;
• the size and condition of the outdoor area, including any shaded areas, the presence of food, water and different vegetation and ground conditions;
• the stocking density of any outdoor area; and
• whether the hens have been trained or conditioned to remain indoors.

Free range court battles - ACCC acts

At last the Australian Competition and Consumer Commission has taken action against a couple of big egg producers who claim that the eggs they sell are 'free range'. The industry knows that this con has been going on for years, but it became big business - worth millions - once some of the smart operators interpreted a clause in the Appendix to the Model Code of Practice for the Welfare of Animals - Domestic Poultry as allowing an unlimited stocking density on free range farms.
The Code actually limits outdoor stocking densities to 1500 hens per hectare - but the guys chasing dollars chose to interpret a clause relating to meat birds as also applying to egg laying hens. They were dreaming, but (for them) it made sense for their bottom lines. The difference of course is that stocking density for meat birds is not as relevant as they are sent off to the abattoir when they are five or six weeks old so they hardly have any time out of the sheds in which they were raised.
Keep it up ACCC !!!!
http://accc.gov.au/media-release/accc-institutes-proceedings-against-free-range-egg-producers

Egg cartel case looming?

In a keynote address to an Economics Conference in Sydney, the Chairman of the Australian Competition and Consumer Commission, Rod Sims argued that Australia should embrace the root and branch review of competition policy and law and forshadowed major moves against egg producers who have been involved in collusion.

Here's a few quotes from his address: “Most of our consumer issues have an important competition dimension. For example, our work on credence claims, dealing with false claims as to where (Australia, King Island) or how (free range, or by a skilled artisan) a good is made is for two reasons. First, the consumer is not getting what they paid for; second, and often more important, genuine producers are losing out to those making the false claims.

“Consider an industry with high entry barriers and three competitors who collude to raise prices. Suppose the demand curve for the goods is or is near vertical. In this case there may be no efficiency loss (at least in a static sense), just a transfer of wealth from the consumers to producers.

“How is the welfare loss from this cartel to be compared to inappropriate monopoly utility pricing, or misleading consumers about their consumer guarantee rights?

“With our collusion cases I expect more will be purely local cases, but international cases must always also be a priority, particularly when Australians, Australian businesses, and businesses in Australia suffer significant harm.

“I expect to be able to announce the commencement of another domestic cartel case before the end of the year.”

Let's hope it gets rolling!!
Details of his address here:
 http://www.accc.gov.au/speech/keynote-address-rbb-economics-conference

Hopes run high for ACCC action on egg industry

ABC Radio in Victoria ran this today in its rural news programmes.  It was a follow up piece to the news that the ACCC has asked for major egg farms to supply details of their trading actions which may have been anti-competetive.

http://www.abc.net.au/news/2013-09-11/nrn-egg-accc/4950912 

ACCC gets tough

 

Many 'free range' egg producers in Australia are running for cover now that the ACCC has begun a campaign to clean up the industry.

The Australian Competition and Consumer Commission has issued Substantiation Notices under Consumer Law to a cross section of the egg industry in Australia. The operators who have received the notices will have to justify the claims made on their packaging and promotional material - many do not even come close to meeting the standards required by the Model Code of Practice for the Welfare of Animals - Domestic Poultry.

The Australian Egg Corporation Ltd is trying to cover its backside as the dodgy operators are claiming they have only done what AECL told them was OK.

Should be an interesting few months. It might even help to fix up some of the certification and accreditation bodies which have very slack inspection standards (if they bother to inspect at all).

More publicity against intensive egg plans

Here's part of an article about the ACCC decision published  in the South Gippsland Sentinel Times - our local newspaper:

A PRELIMINARY decision by the Australian Competition and Consumer Commission has been welcomed by the free range sector of the Australian Egg Industry led by Phil Westwood of Freeranger Eggs at Grantville.

The ACCC says it plans to reject AECL’s application for a trade mark for new standards for egg production as it did not believe they would meet Consumer expectations.

Standards proposed by the Australian Egg Corporation were designed to decieve consumers and boost the profits of corporate egg businesses, while decimating family farms throughout the country Mr Westwood said.

He said this decision (by the ACCC) demonstrates the strength of opposition to the Egg Corporation's plans from within the industry and is likely to spark strong debate at the Egg Corp’s annual meeting in Sydney on November 29.

Of 1700 direct submissions only 7 supported the AECL plan.

Most of the proposed standards were acceptable to the industry and simply retlected existing production methods.

But the purpose of several of the standards which related specifically to the free range sector of the industry, was to allow intensive production facilities to lable the eggs they produce as free range in order to obtain a price premium from unsuspecting consumers.

Mr Westwood said the fundamental elements of the proposal allowed a maximum stocking density of up to two hens per square metre (20.000 hens per hectare), to keep young hens locked in sheds until they are about 25 weeks old (even though they usually start laying at 16 to 20 weeks of age). to have no restrictions on the beak trimming of hens and to keep the hens locked up if the weather its too hot, too windy, too wet or in any other way adverse’.

Egg Corp on the run

For anyone who has missed it, full details of the Egg Corporation's Egg Standards Australia application to the ACCC can be found here:
http://www.accc.gov.au/content/index.phtml/itemId/1060311/fromItemId/ACCC

There is still time to make a submission as the deadline has been extended.

The Egg Corporation has at last realised that it has a problem and is using spurious arguments to urge its members to make submissions. Quite a few already have sent in their concerns about the proposals because they realise the damage which the Australian Egg Corporation has caused the industry.

Many cage farmers recognise that the proposals put forward will only benefit the major supermarket chains and the corporate producers who control AECL.

ACCC calls for submissions

The Australian Competition and Consumer Commission is inviting comment on an application from the Australian Egg Corporation Ltd for new egg production standards - including its controversial high density standard for free range egg farms.

The Australian Egg Corp. has made an application to register a certification trade mark, including amendments to  Farm Standards for Egg Producers.

Among the things being considered by the ACCC are that:

the new standard would not be to the detriment of the public (the pubic detriment test); and
would be satisfactory having regard to the principles relating to restrictive trade practices in Part IV of the Competition and Consumer Act 2010 and the principles relating to unconscionable conduct (Part2-2), unfair practices (Part 3-1), and safety of consumer goods and product related services (Part 3-3) in Schedule 2 (Australian Consumer Law) of the Competition and Consumer Act 2010 (the trade practices test)
Submissions are required by 20th June 2012 and can be lodged by email to adjudication@accc.gov.au

We urge anyone who is interested to send a submission to the ACCC.

ACCC takes court action against SA egg supplier

The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court against Ms Rosemary Bruhn, who trades as Rosie's Free Range Eggs.

The ACCC alleges that from March 2007 to October 2010, Ms Bruhn represented that eggs she supplied to business customers including 117 customers in South Australia such as retail outlets, bakeries, cafes and restaurants, were free range eggs when a substantial proportion of the eggs were not free range but cage eggs.

The ACCC says that such conduct contravened section 55 of the Trade Practices Act 1974 (now known as the Competition and Consumer Act 2010).

The ACCC is seeking:

• a declaration that Ms Bruhn contravened the Trade Practices Act
• an injunction in relation to engaging in similar conduct in the future
• an order for a corrective notice
• an order for Ms Bruhn to write to affected customers advising them of the outcome of the proceedings
• an order for Ms Bruhn to attend compliance training
• penalties, and
• costs.

More:
http://www.theaustralian.com.au/news/nation/accc-begins-federal-court-proceedings-against-rosies-free-range-eggs/story-e6frg6nf-1226294112944

ACCC acts on 'roaming' chickens

Major meat chicken suppliers in Victoria are facing court for allegedly claiming their chooks roam freely in spacious barns.

The Australian Competition and Consumer Commission has launched Federal Court action against Baiada Poultry and Bartter Enterprises and Turi Foods, which supply chickens to Steggles and La Ionica respectively, and peak industry body the Australian Chicken Meat Federation Inc.

All three are accused of claiming their chickens have been raised in spacious barns where they can roam freely, similar to free-range birds.

If the action is successful, it will send a great message to all those intensive 'free range' egg producers who are making a fortune out of gullible consumers and slack regulations.

The consumer watchdog claims chickens raised in barns cannot enjoy a free range-type lifestyle because there are so many of them.

"Promotional activities that convey an impression of farming practices are powerful representations which influence many consumer purchases and food choices," the ACCC says.

ACCC takes no action against AECL

The Australian Competition and Consumer Commission has replied to the complaint lodged against the 'mislabelling' of free range eggs approved by the Australian Egg Corporation.
Here's part of the response:

I understand from your email that you are concerned by a study that has found that only 9% of ‘free range’ chickens actually use the range area and that the Australian Egg Corporation Ltd are trying to change the amount of chickens allowed per hectare in free range farming.

The ACCC is an independent statutory authority responsible for ensuring compliance with the Trade Practices Act 1974 (Cth) (TPA). The main purpose of the TPA is to promote competition and efficiency in markets within Australia, and to protect consumers and businesses from unlawful anti-competitive conduct or misleading and deceptive practices. The ACCC's role includes fostering fair and informed markets by seeking compliance with the TPA.
The ACCC does not have a definition of what constitutes ‘free range’ eggs under the TPA. These definitions are generally set by certification bodies. You may wish to seek further information from Free Range Egg & Poultry Australia.
However food and beverage labelling may potentially breach the consumer protection provisions of the TPA if the label conveys a misleading or deceptive impression or representation (through words, pictures or other means) or a claim can not be substantiated. Section 52 of the TPA is a broad provision which prohibits a corporation, in trade or commerce, engaging in conduct which is misleading or deceptive, or which is likely to mislead or deceive. Whether particular conduct is misleading or deceptive is a question of fact to be determined in the context of the evidence as to the alleged conduct and to the relevant surrounding facts and circumstances.

The AECL version of 'free range' egg production does not meet the standards of the Free Range Egg and Poultry Association of Australia Inc. or of Free Range Egg and Poultry Australia Ltd - so I have no idea why the ACCC would suggest contacting them (anyway as I am spokesman for FREPAA Inc I am already well aware of the standards).

It seems that the ACCC will only consider taking action if it gets a flood of complaints from consumers - so log on to the ACCC website and complain away!!!  http://www.accc.gov.au/

'Free range' complaint lodged with Australian Competition and Consumer Commission

After discussions with a number of free range and cage egg producers, today I lodged a complaint against the Australian Egg Corporation Ltd with the ACCC over its endorsement of 'free range' egg production standards.

Research which is publicly available on the website of the Poultry CRC (which is funded from a levy paid by all egg producers) shows that only 9% of 'free range' egg laying hens actually use an outdoor range area. The details can be seen at  http://www.poultryhub.org/index.php/EChook_News/Enriching_the_range_to_reduce_feather_pecking

In our view, this clearly demonstrates that consumers are being mislead and deceived by a system that is endorsed and approved by the Australian Egg Corporation.

And the industry recognises that things will become even more deceptive if the AECL goes ahead with its draft 'free range' standard. The Egg Corporation tries to pretend that's it's only a small number of 'troublemakers' who are voicing concerns - but the reality is that even big cage farmers recognise that the AECL's proposed definition for 'free range' is a crock which will harm the reputation of the whole industry.

The AECL seems hell-bent on sending the message to consumers that 'You can't trust labels on eggs'