16 February 2012 ACCC cracks down on free range claims


Declaring a crackdown on claims by poultry producers of "free range" eggs or birds (or similar expressions), the Australian Competition and Consumer Commission (ACCC) has accused a number of Australia's main chicken suppliers of engaging in misleading and deceptive conduct regarding the promotion and supply of their products. The ACCC has indicated that it will continue to take action to ensure that claims made about the ability of birds to move or roam are accurate, and that all market participants adhere to relevant laws.

Turi Foods, which supplies La lonica brand chickens, has been ordered to pay a $100,000 fine ending a legal battle initiated by the ACCC. In Australian Competition and Consumer Commission v Turi Foods Pty Ltd (No 2) [2012] FCA 19, the ACCC alleged that Turi Foods incorporated false and misleading claims into their advertising, portraying that La lonica chickens were housed in an environment of substantial space, allowing the animals to roam freely. However, the ACCC alleged that with coups containing up to eighteen chickens a square metre and this high population density precluding any movement, the chickens were not 'free to roam'. The ACCC succeeded in proving that the birds were not free to roam, and that, therefore, the representations to that effect were misleading.

Recently, the use of expressions like 'barn laid', 'free to roam' and 'cage free' have increased on packaging and in advertising of eggs and poultry products. Consumer advocates and animal welfare activists believe companies have introduced these 'feel good' expressions to encourage the consumer to pay a premium for these products by appealing to the customer's ethical sensibilities.

The head of the Australian Meat Chicken Federation claims the term 'free to roam' is used by producers as a way to explain that the chickens are not kept in cages but rather are housed on the floors of large barns where they are able to move freely without the constraint of barriers.

Irrespective of the reasoning, it is clear that the ACCC is monitoring the use of these expressions, and will take action if it believes that the phrases do not accurately represent the ability of the birds to roam "freely".

However, what does cause confusion and some frustration amongst consumer groups, animal welfare organisations and chicken producers, is the lack of any agreed definition or set of Australian standards in respect of terms such as "free to roam" or "free range".

This recent decision and the increased activity by the regulator are important for anyone involved in the industry. However, more than that, any producer or seller must take care to ensure that the labelling and marketing of their goods is accurate. In particular, sellers should ensure that extra care is taken when using terms that may mean one thing to an expert in the trade, but which may be interpreted very differently by the average consumer, so that it is clear that the term is not likely to mislead, and expose the business to significant adverse publicity, and significant monetary penalties.

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This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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