South Aust govt challenges large egg suppliers with tough ‘free range’ rules

Posted by AFN Staff Writers on 16th February 2015
South Aust govt challenges large egg suppliers with tough ‘free range’ rules
South Aust govt challenges large egg suppliers with tough ‘free range’ rules

The South Australian Government is one step closer to defining ‘free range’, with the release of a draft code for ‘free range’ eggs, regulations and trademark for further consultation.

The draft code has been welcomed by consumer group CHOICE but poses a challenge to the supermarkets and large egg producers hoping for a more lenient definition of ‘free range’ eggs.

Australian Food News had previously reported that the Australian Egg Corporation had been pushing for a stocking density of 20,000 birds per hectare, 13 times the Model Code limit, but this was rejected by the ACCC in its initial assessment.

Major retailers Coles and Woolworths have been advocating a ‘free range’ definition requiring stocking densities of up to 10,000 birds per hectare.

The draft Code

The South Australian Cabinet approved the draft Fair Trading (SA Free Range Egg Industry Code) Regulations and associated trademark.

The Code outlines that in order to receive the endorsement, providers must meet conditions such as:

  • a maximum density of 1,500 layer hens per hectare on the outdoor range
  • hens to have unrestricted access to outdoor areas during daylight hours
  • outdoor areas to provide adequate shelter; and
  • a prohibition on induced moulting by food deprivation

South Australian Minister for Business Services and Consumers Gail Gago said consumers have the right to know precisely what they are buying.

“There has been much debate and frustration from both industry and consumers about what defines free range in South Australia,” Ms Gago said. “We have undertaken a lot work to produce a regulatory scheme that will provide consumers with guidance in selecting South Australian free range eggs without restricting or affecting the industry,” she said.

“What we have drafted is a voluntary code, where egg producers who meet our free range conditions will receive a trademarked tick of approval,” Ms Gago said.

Ms Gago said an effective and fair regulatory scheme could not be made or implemented “in haste” and that there was still more work to be done.

“We will be working with stakeholders and egg producers to seek their feedback on the draft voluntary code and trademark,” Ms Gago said.

IP Australia and ACCC to have a say

The national body that administers legislation governing trademarks, IP Australia, is required to examine the proposed trademark to ensure it doesn’t conflict with existing trademarks. The ACCC will also assess and approve the rules for the use of the trademark to ensure it is not detriment to the public, likely to raise concerns relating to competition, unconscionable conduct, unfair practices and product safety.

Certification scheme will ‘reduce consumer confusion’, CHOICE

Consumer group CHOICE has applauded the South Australian certification scheme, saying it would “help reduce consumer confusion” and that national rules would be the next step.

“South Australia has acknowledged that both consumers and industry are frustrated by the lack of a definition of free range eggs in Australia and has stepped in to reduce confusion and frustration in the state,” said Tom Godfrey, CHOICE spokesperson.

“Without a standard, consumers are at a loss as to what free range actually means and often needlessly pay a price premium,” Mr Godfrey said. “South Australia’s voluntary code defines what free range is and sets conditions that are in line with the model code and we congratulate them on creating a definition that meets consumers’ expectations,” he said.

National standard needed, CHOICE

Mr Godfrey said that while CHOICE welcomed South Australia’s development of a draft code, an enforceable national standard on free range eggs that “meets consumers’ expectations” was needed.

In June 2014, following a super complaint from CHOICE, Australian Food News reported that NSW Fair Trading commenced work on the development of a national information standard for free range eggs.

CHOICE’s super complaint showed that while close to 40 per cent of the egg market was free range, the egg industry had admitted that many products labelled ‘free range’ did not meet the existing voluntary national standard, which sets a maximum stocking density of 1,500 hens per hectare on the outdoor range.

“What we need now is for other state and territory governments to follow the leadership position taken by both New South Wales and South Australia and deliver a national standard for consumers,” Mr Godfrey said.

“A national standard makes sense for businesses and consumers,” Mr Godfrey said. “At the moment we have an absurd situation where consumers are given different information about eggs in different states. A shopper in Mount Gambier, SA will be getting different information to a shopper in Mumbannar, VIC even though the towns are half an hour apart,” he said.

“Without an enforceable national standard, Australians in most states continue to pay a premium for eggs labelled ‘free range’ with little confidence they are getting the real deal,” Mr Godfrey said.

Mr Godfrey said a national standard would benefit consumers and “genuine free range producers” across the country.

‘Free range’ labelling trouble

The latest news follows the Federal Court’s ruling in September 2014 that Pirovic Enterprises engaged in misleading conduct and made misleading representations in its labelling and promotion of eggs as ‘free range’. It also follows the ACCC’s decision in December to take the supplier of Ecoeggs to court for alleged false and misleading free range claims.

Stocking densities

  • The National Model Code of Practice for the welfare of animals defines “free range” using a stocking density of no more than 1,500 birds per hectare but is not enforceable.
  • The Australian Egg Corporation was pushing for a stocking density of 20,000 birds per hectare, 13 times the Model Code limit. This was rejected by the ACCC in its initial assessment on the grounds it may mislead consumers.
  • Major retailers Coles and Woolworths have announced stocking densities of 10,000 birds per hectare, nearly 7 times the Model Code limit.
  • In August 2013, CHOICE lodged its free range super complaint with NSW Fair Trading.
  • In June 2014, NSW Fair Trading commenced work on the development of a national information standard for free range eggs. However this would require Federal Government support to proceed.
  • Both ACT and Queensland have free range legislation in Australia;
    • ACT’s Egg (Labelling and Sale) Act 2001 follows the model code and sets a stocking density of 1,500 birds per hectare
    • Queensland’s Animal Care & Protection Amendment Regulation sets a stocking density of 10,000 birds per hectare

Impact on industry of moves towards ‘free range’

Meanwhile, Australian Food News reported in January 2015 that some egg producers had expressed concerns about the impact on Australia’s egg industry of moves by supermarket giants Coles and Woolworths, and fast food chain McDonald’s Australia, to ditch cage eggs.

Australian egg farmer and Chair of the NSW Farmers’ Association Egg Committee Bede Burke told Australian Food News that the 2014 announcement from Woolworths in particular that it would phase out cage eggs completely could lead to an egg shortage in Australia.