“Free range” labelling of food prod­ucts can be misleading

In brief — ACCC pros­e­cutes egg pro­duc­ers for bogus free range claim

Many peo­ple choose to pay more for prod­ucts labelled ​“free-range” because they believe that the ani­mals used in their pro­duc­tion were treat­ed in a more humane way. How­ev­er, the ACC­C’s recent suc­cess­ful pros­e­cu­tion of egg pro­duc­ers demon­strates that such labelling can be misleading.

Free range prod­ucts and eth­i­cal preferences

Con­sumers are increas­ing­ly like­ly to con­sid­er farm­ing sys­tems when mak­ing deci­sions about pur­chas­ing ani­mal prod­ucts. The grow­ing dis­play of ​“free range” prod­ucts in super­mar­kets reflects the desire of food pro­duc­ers to cater for con­sumers’ eth­i­cal pref­er­ences as much as to address a com­mer­cial mar­ket. How­ev­er, is ​“free range” prod­uct labelling accu­rate­ly inform­ing us as con­sumers and tru­ly facil­i­tat­ing con­sumer choice?

The debate sur­round­ing inad­e­quate labelling and mar­ket­ing of free range prod­ucts is not new. How­ev­er, a recent Fed­er­al Court case brought by the Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion (ACCC) is a time­ly reminder that con­sumers do not always receive accu­rate infor­ma­tion from food labeling.

No leg­isla­tive def­i­n­i­tion of ​“free range”

Aus­tralia has con­sumer pro­tec­tion laws and food safe­ty laws which cov­er many aspects of food labelling. How­ev­er, prob­lem­at­i­cal­ly, there is no fed­er­al leg­is­la­tion requir­ing farm­ing sys­tems for ani­mal-derived food prod­ucts to be iden­ti­fied on prod­uct labels. 

Con­se­quent­ly, the term ​“free range” is not sub­ject to any leg­isla­tive def­i­n­i­tion. Any restric­tions on the use of the term are cur­rent­ly lim­it­ed to egg car­ton labelling. It is there­fore left to food pro­duc­ers, ani­mal rights groups and the indus­try to deter­mine what ​“free range” means for them. Gen­er­al­ly, con­sumers assume that the term ​“free range” indi­cates that ani­mals are not kept in close con­fine­ment, have access to the out­side and are treat­ed humane­ly. How­ev­er, the term is open to broad inter­pre­ta­tion and can eas­i­ly be manip­u­lat­ed by pro­duc­ers and marketers.

While con­sumers may assume that ​“free range” equates to a min­i­mum stan­dard of enhanced ani­mal wel­fare for the ani­mals from which the food prod­uct is derived, this may not be the case and it will be great­ly influ­enced by the stan­dards applied by the food producer.

Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion v C.I. & Co Pty Ltd [2010] FCA 1511

The Fed­er­al Court recent­ly hand­ed down its deci­sion in a mat­ter com­menced by the ACCC against West­ern Aus­tralian egg whole­salers C.I. & Co Pty Ltd, Anto­nio Pisano and Anna Pisano. The ACCC claimed that the respon­dents had labelled and sup­plied car­tons of eggs promi­nent­ly using the words ​“free range” and ​“Fresh-Range Omega‑3” eggs, cre­at­ing the over­all impres­sion that the eggs were free range, when in fact a sub­stan­tial pro­por­tion of the eggs was not free range but caged.

Mis­lead­ing and decep­tive con­duct finding

The court held that the egg whole­saler had engaged in con­duct which was mis­lead­ing or decep­tive, false­ly rep­re­sent­ed that goods were of a par­tic­u­lar stan­dard or qual­i­ty of which they were not and that such con­duct was liable to mis­lead the pub­lic as to the nature or char­ac­ter­is­tics of goods in con­tra­ven­tion of the Trade Prac­tices Act 1974 (now the Com­pe­ti­tion and Con­sumer Act 2010).

His Hon­our Jus­tice North was par­tic­u­lar­ly crit­i­cal of the con­duct, stat­ing that it involved a high lev­el of dis­hon­esty and that it ​“amounts to a cru­el decep­tion of con­sumers who seek out free range eggs as a mat­ter of principle”.

The judg­ment con­firms that courts are will­ing to impose sig­nif­i­cant penal­ties upon busi­ness­es that adver­tise and label food prod­ucts in a way that is like­ly to mis­lead the pub­lic. The penal­ty imposed on the respon­dents in this case was $50,000 plus costs.

The cur­rent pro­vi­sions in respect of mis­lead­ing and decep­tive con­duct and mak­ing false rep­re­sen­ta­tions in rela­tion to the sale of goods and ser­vices are con­tained in sec­tions 18 and 29 of the Aus­tralian Con­sumer Law, which is embod­ied in Sched­ule 2 of the Com­pe­ti­tion and Con­sumer Act 2010. More infor­ma­tion about mis­lead­ing and decep­tive con­duct can be found at the web­site of the ACCC.

ACCC as enforcer of con­sumer pro­tec­tion laws

The ACCC enforces con­sumer pro­tec­tion laws con­tained in the Com­pe­ti­tion and Con­sumer Act 2010 and can take action against cor­po­ra­tions and relat­ed indi­vid­u­als involved in mis­lead­ing con­duct. The ACCC focus­es on indus­try-wide con­duct to achieve out­comes and is more like­ly to take action in respect of mis­lead­ing adver­tis­ing if it has been car­ried out through a medi­um that reach­es a wide audi­ence, such as over the inter­net, on nation­al tele­vi­sion, or through a nation-wide print adver­tis­ing campaign.

If you have suf­fered a loss as a result of mis­lead­ing or decep­tive con­duct or mis­rep­re­sen­ta­tion, you may have a right of action under the Aus­tralian Con­sumer Law and be enti­tled to dam­ages, an injunc­tion or oth­er orders against busi­ness­es found to have engaged in mis­lead­ing or decep­tive conduct.

For fur­ther infor­ma­tion, please con­tact Swaab Attorneys?.

Co-authored by M Hall.