In a recent case, the Federal Court was asked to consider what makes free range eggs “free range”.
From 2011 to 2013, Snowdale Holdings Pty Ltd (Snowdale) marketed eggs as free range eggs. It used brand names including Swan Valley Free Range, Wanneroo Free Range and Eggs by Ellah. Such eggs would be sold at a premium price.
The Australian Competition and Consumer Commission (ACCC) sued Snowdale, alleging that it had misled consumers. Specifically:
Snowdale was representing that its hens were able to access and mostly actually did access, and move around freely on, an outdoor range on most days;
Snowdale’s hens did not do this. In fact, they were significantly prevented from doing so; and
by making this representation, Snowdale had engaged in misleading and deceptive conduct.
On 18 May 2016, Siopsis J ruled that Snowdale had indeed misled consumers.
Snowdale argued that for their eggs to be “free range”, it was sufficient if the hens were housed in sheds which had a means of access to an outdoor range. This was irrespective of the extent to which the hens actually used that access.
However, the Judge said that it was enough that the ACCC’s meaning was one of several that was reasonably open to a significant number of the class of consumers to whom it was directed.
“Free range” might reasonably evoke the predominant image of hens roaming freely in a spacious environment and expressing natural behaviour. He noted that the packaging reflected this. Terms such as “outdoors they are free to exercise” were used.
In reality, most of the hens might never actually get outdoors on most days. They had to compete with a large number of other hens to do so.
The representation was misleading and deceptive as a result.
On its face, the decision brings some clarity to consumers. However, an agreement reached earlier this year had already changed the landscape.
In March 2016, Australian Consumer Affairs Ministers agreed changes to the Australian Consumer Law. Under a new standard, “free range” eggs will have been laid by hens:
with meaningful and regular access to the outdoors; and
with an outdoor stocking density of 10,000 hens per hectare or fewer.
Producers will have to disclose the outdoor stocking density to consumers.
Compliant egg producers will be protected from further claims.