In proceedings brought by the ACCC, the Federal Court has
declared by consent that an egg supplier contravened the Australian
Consumer Law (ACL) in relation to the supply and
promotion of eggs represented to be "free
range".1 This decision is the latest in a line of
cases in which the ACCC has targeted credence claims in the food
industry – please see our
previous article on the topic.
Pirovic Enterprises Pty Ltd (Pirovic) supplied
and sold eggs bearing the brand "Pirovic Free Range
Eggs", and promoted the said eggs on its website. Pirovic
published statements on its website about the laying hens,
including: "Our hens feed on wholesome natural grains, roam
freely on green pastures during the day and return to the safety of
large barns at night". This statement (and others to a similar
effect) was placed alongside images of hens in a grassy field,
images of the egg cartons, and the words "Free Range
The Court held that Pirovic represented to consumers that these
eggs were produced:
by hens farmed in conditions which made them able to move
around freely on an open range on an ordinary day (being an average
day when weather conditions and predators did not threaten the
safety or health of the hens, or when the hens were not being
by hens, most of which moved about freely on an open range on
most ordinary days.
In fact, the eggs sold under the "Free Range" label
were produced mostly by hens that did not move about freely on an
open range on ordinary days, because of the stocking densities of
the barns, flock size, and the number, size and placement of
physical openings of the barns to the open range.
Pirovic admitted that it had:
engaged in misleading or deceptive conduct in trade or
commerce, in contravention of section 18 of the ACL
made misleading representations that the eggs were of a
particular quality, or had a particular history, in contravention
of section 29(1)(a) of the ACL
engaged in conduct liable to mislead the public as to the
nature or characteristics of the eggs, in contravention of section
33 of the ACL.
Meaning of "free range"?
The Court agreed with Pirovic that the case should not be seen
as resolving what constitutes the meaning of "free range"
in the abstract, but it does provide guidance around the issue. It
is the ACCC Chairman's view that the decision provides
"very clear guidance" that if a supplier makes a claim
that eggs are free range, its farming conditions and practices must
allow hens to move freely on an open range every
The Court ordered that Pirovic pay a penalty of $300,000, and
contribute $25,000 to the ACCC's costs. The Court also ordered
Pirovic to implement a Trade Practices Compliance Program for a
period of three years.
The amount of the penalty had been submitted by the parties in
proposed orders. While the Court noted that it should not act as a
"mere rubber stamp" in approving the penalty agreed to by
the parties, it found that $300,000 was appropriate in the
circumstances to deter the respondent and those tempted to engage
in similar conduct. In accepting the agreed penalty, the Court also
held in favour the cooperation of Pirovic, and the public interest
in avoiding a lengthy penalty hearing.
The ACCC is continuing to focus on protecting consumers from
misleading and deceptive claims relating to how food products are
made, grown or produced.
This recent case serves as a useful reminder to all business
owners to give consumer issues due attention, and to avoid making
false representations or promoting products in a way that may be
misleading or deceptive. It is important to consider what consumers
will understand by a term or representation. In particular,
businesses which claim that their products are "free
range" may look to this case for guidance on what the ACCC
will consider to be "free range" farming conditions and
1Australian Competition and Consumer
Commission v Pirovic Enterprises Pty Ltd (No 2)  FCA
The Sportscraft refunds and returns policy limitations went beyond consumer's rights under the Australian Consumer Law.
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