No eggscuses – ACCC releases guidance on new national standard

Published On 09/02/2018 | By Aarthi Sridharan | Consumer protection, Enforcement

The ACCC has issued guidance on the new National Information Standard on free range eggs.

The guidance comes after long-awaited legislation was passed by the Federal Government in April last year, with a 12-month transition period meaning the Standard comes into effect on 26 April 2018.  With consumers willing to pay premium prices for eggs which are claimed to be “free range”, the legislation follows many years of consultation with stakeholders and enforcement action taken by the ACCC in relation to misleading ‘free range’ claims (see here for an example).

 The Information Standard

 Under the Information Standard, free range eggs are defined as eggs laid by hens that:

 (a) had meaningful and regular access to an outdoor range during daylight hours during the laying cycle;

(b) were able to roam and forage on the outdoor range; and

(c) were subject to a stocking density (number of hens per hectare on an outdoor range) of 10,000 hens or less.

The Standard also covers display requirements. Where the words “free range” are used on packaging, the packaging must also state the stocking density. If unpackaged eggs are sold, business must display a sign containing the words “free range” which prominently states the stocking density.

The ACCC’s guidance also notes that the Government intends to introduce a ‘safe harbour’ defence for misleading conduct, providing immunity from ACL proceedings, where egg producers comply with the Standard.  Importantly, the proposed safe harbour, will only apply to the use of the words “free range” and not to any other words or pictures.

Eggsellent guidance

To assist egg producers and consumers, the ACCC’s guide sets out what the ACCC will consider when assessing whether hens have meaningful and regular access to an outdoor range. This includes indoor conditions which encourage the use of the outdoor range such as:

  • Flock size: the ACCC notes that larger flock sizes mean a hen must travel further to reach an open side
  • Internal architecture: the ACCC will consider obstacles that reduce the hen’s likelihood of using an exit
  • Openings: the ACCC will consider whether an exit in close proximity is available and the size, location and ease of access to the outdoor range

The ACCC also recommends that egg producers take a ‘common sense approach’ in relation to observing whether or not their outdoor range is in regular use by the majority of their hens. This will be relevant to an assessment of the ability of hens to roam and forage on the outdoor range.

Not an eggsact science

While the ACCC has offered its guidance, the guide acknowledges that only a court can provide a definitive ruling on compliance with the Standard. Until there is enforcement action taken by the ACCC which is heard before the courts, egg producers will need to rely mostly on a ‘common sense approach’ and usual principles of interpretation.

The Standard will apply to all egg producers who use “free range” claims from 26 April 2018. Offering a little eggstra comfort, the ACCC has stated that in the period between now and 26 April 2018, it is not likely to take action against egg producers for false, misleading or deceptive conduct for use of the words “free range”, if the producer is already complying with the Standard.

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About The Author

is a solicitor in the Sydney office of King & Wood Mallesons where she works in the competition dispute resolution team.

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