Australia: ACCC continues to crack down on free range credence claims

Focus: Australian Competition and Consumer Commission v Pirovic Enterprises Pty Ltd (No 2) [2014] FCA 1028
Services: Competition & Consumer Law, Intellectual property & technology

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 Eggs".

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 medicated), and
  • 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 day.2


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 practices.


1Australian Competition and Consumer Commission v Pirovic Enterprises Pty Ltd (No 2) [2014] FCA 1028.

2ACCC Media Release, "Federal Court orders $300,000 penalty after finding 'free range' egg claims to be misleading, 23 September 2014

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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