The Australian Competition and Consumer Commission (ACCC) has taken a dozen of the country's eggs businesses to court over alleged cartel conduct.
The watchdog filed civil proceedings in the country's Federal Court yesterday (13 October), seeking declarations, penalties, injunctions and costs. The alleged conduct covers free-range, cage and organic eggs.
The ACCC alleged that, since at least October 2020, key egg suppliers "coordinated on a range of business decisions", including production volumes, distribution, expansion plans and the culling of birds to manage perceived oversupply.
The regulator claimed the alleged “concerted practice” likely reduced competition substantially for many years. It is the first time the ACCC has brought concerted practice allegations since the prohibition was introduced in 2017.
The companies named in the lawsuit include Sunny Queen, Doug Hall Poultry (Hall), Alpair (trading as McLean Farms), Ellerslie Free Range Farms and Kinross Farm.
ACCC chair Gina Cass-Gottlieb said: "Our investigation has uncovered alleged widespread anti-competitive conduct in the egg industry that we allege has impacted the supply of eggs to Australian consumers since at least 2020.
"This alleged conduct is extremely serious, which is why we have commenced this Federal Court action."
She further claimed coordination between Sunny Queen, Hall and McLean Farms extended to the purchase of a property in Queensland, "for the purpose of preventing its acquisition by rival egg suppliers". She alleged this had the effect of "substantially lessening competition".
The filing further claimed Sunny Queen capped how many eggs rival Kinross could sell and barred it from supplying Coles, Woolworths, Aldi, Metcash or Costco.
"Anti-competitive conduct disadvantages Australian consumers, who can face reduced choice and higher prices, as well as those businesses seeking to compete fairly or who are seeking to enter markets," the ACCC chair said.
Separately, Sunny Queen confirmed it had been notified of the ACCC's decision but denied the allegations, saying it "intends to defend the proceedings".
The company added the allegations primarily relate to the "terms of Sunny Queen's agreements" with its shareholders and main egg suppliers in Queensland and Victoria.
The egg industry has also been under regulatory spotlight in the US.
In June, Cal-Maine Foods, Versova and Hickman's Egg Ranch reached an agreement with the Department of Justice and 17 states over allegations they manipulated prices.
Under the deal, the companies agreed to supply 53 million eggs to food banks and non-profit organisations and pay a total of $3.3m to the states.
