Responses to last week’s Australian Federal Court’s decision to impose a $300, 000 penalty on Free Range Egg Farms (FREF) has attracted a strong reaction in food industry and food compliance circles.
In a decision handed down on the 15 April 2016, the Federal Court determined that the eggs supplied by FREF were not free range eggs and fined the company plus awarded that it must pay the Australian Competition and Consumer Commission’s (ACCC) legal costs.
Decision a ‘bit rough’: Food compliance expert
Joe Lederman, expert in food law from food compliancy practice, FoodLegal said the decision was a “bit rough” on the business. “I can understand why the company could feel it was unfairly treated, it was advertising its eggs at a time when free range was not properly defined, it’s a bit rough,” he said.
CHOICE welcomes ruling
Australian consumer advocacy group CHOICE said it welcomed the Federal Court ruling and used it as an opportunity to express the group’s anger over the recently decided up free range definition.
“Ministers responsible for consumer affairs had an opportunity to clean up this market,” CHOICE spokesperson Erin Turner said about the new definition.
“Instead they bowed to the requests of big industrial egg producers and locked in an information standard that will continue to rip-off consumers as ‘free-range’ hens can still be kept in cramped conditions with no guarantee they go outside,” she said.
CHOICE believes that the definition of free range should be 1, 500 birds per hectare instead of the 10, 000 decided upon by the ministers.
ACCC
The Australian Competition and Consumer Commission (ACCC) initiated the Australian Federal Court case.
ACCC Chairman Rod Sims said when free range egg claims are not correct consumers are harmed.
“This decision reinforces the position the ACCC has taken that any free range egg claim must be backed by farming conditions which allow hens to actually move about on an open range each day,” Sims said.
FREF’S response
In response to the court’s ruling, FREF said the matter related to the period when the egg industry and FREF were seeking a code and formal guidance on free range eggs.
The FREF spokesperson said tthe case was limited to one farm it had since ceased working with and one shed which was in the process of improving its practices when legal proceedings commenced.
“FREF has more recently implemented various changes to its farming practices and had voluntarily implemented a robust compliance program and undertaken a thorough review of its packaging and marketing material,” FREF said in a statement.
“FREF is confident that these measures will assist in ensuring that its farming operations meet and in some cases exceed industry standards,” the company said.
A national definition for free range eggs was announced in early April 2016 with free range eggs now defined as eggs coming from farming situations where there is no more than 10, 000 birds per hectare of land. The birds must also have “meaningful access” to outdoor space.
What actually happened in the court case (for those who missed it)
The ACCC initiated the Australian Federal Court case. Free Range Egg Farms sell eggs under the brand names of Ecoeggs, Port Stephens and Field Fresh.
The free range description was found to contravene Australian Consumer Law as it represented that the hens were able to move freely on an open range on an ordinary range when this was not the case.
The fine was issued for labelling and promotion which occurred between 1 January 2012 to 2 December 2014.
During the judgement Justice Edelman said the conduct was significant, occurring over nearly a three year period and involving a widely consumed food. He noted that the conduct concerned “representations upon which consumers were heavily reliant” and that the loss and damage suffered by consumers and competitors is likely to be significant.
