Australia’s consumer watchdog has accused some of the country’s largest egg producers of breaching competition laws, as well as engaging in cartel conduct to reduce competition across the country.
The Australian Competition and Consumer Commission (ACCC) filed civil proceedings in the Federal Court against Sunny Queen – the country’s largest egg supplier – and 11 other egg producers, including McLean Farms and Doug Hall Poultry.
They allege the companies have co-ordinated on a range of business decisions that “likely substantially reduced competition for many years” since October 2020.
Some of the alleged conduct includes production volumes, expansion plans and culling to manage perceived oversupply.
The 11 egg producers have also been accused of engaging in cartel conduct, and have allegedly engaged in a concerted practice with the purpose of reducing competition.
ACCC chair Gina Cass-Gottlieb said the alleged conduct was “extremely serious”.
“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,” she said.
“This alleged conduct is extremely serious, which is why we have commenced this Federal Court action.”
She said fair competition in the supply of fresh foods such as eggs is “extremely important”.
“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 to provide competing supply,” she said.
Ms Cass-Gottlieb accused Sunny Queen, Hall and McLean Farms of purchasing a property in Queensland to purposefully prevent it from being purchased by rival egg suppliers.
“We also allege that Sunny Queen restricted how many eggs its rival Kinross could sell to customers, and prevented Kinross from selling its eggs to Coles, Woolworths, Aldi, Metcash or Costco,” she said.
“We are committed to protecting competition in fresh food supply chains so Australian consumers receive the benefits of businesses competing on price.
“These proceedings are a reminder that businesses must make their production, supply and pricing decisions independently.”
The ACCC is seeking declarations, penalties, injunctions, costs and other orders as part of the civil proceedings.
In a statement, Sunny Queen said the company had fully cooperated with the ACCC during its investigation.
“Sunny Queen denies the allegations and intends to defend the proceedings,” a spokesman said.
“Sunny Queen was founded by Australian farmers and has been supplying Australian families with eggs for more than 50 years.
“Over those five decades Sunny Queen has earned a reputation for ethical farming and consumer practices and remains committed to adhering to these high standards.
“While this process is underway, it’s business as usual for Sunny Queen and we will continue to supply Australian families with fresh, nutritious eggs.”
NewsWire has contacted Hall and McLean Farms for comment.