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Estimates: Economics Legislation Committee (Australian Competition and Consumer Commission)

Estimates & Committees
Lee Rhiannon 27 Feb 2014

Economics Legislation Committee

26/02/2014

TREASURY PORTFOLIO - Australian Competition and Consumer Commission

Senator RHIANNON: There is growing interest in news that some food producers have been investigated and prosecuted for claims their products come from free-range animals. How many complaints, using free-range claims, have been lodged with the ACCC?

Mr Sims : A lot. Mr Gregson is looking up the answer. If we do not have it immediately we will get back to you on it.

Senator RHIANNON: While we are waiting for that, I was interested in what products this covers and who the producers are. Do you have that data?

Mr Sims : Yes, we do, but there is the issue of whether we have it all to hand now. But the main proceedings we have underway at the moment are in relation to free-range eggs. We are still looking at that sector. We may have other prosecutions to follow. We are very concerned about this behaviour. Not only are consumers not getting what they are paying for, which is bad enough, but producers who are actually producing their eggs by free range means are being disadvantaged. So we are concerned about his under both our consumer and our competition headings. We have more action to come. We believe we will be successful in this area.

Senator RHIANNON: I understand Pepe's Ducks and Rosie's Free Range Eggs. Are they the two cases that are running?

Mr Sims : Those are completed cases. We have two cases running.

Mr Gregson : We have, I think, previously provided a list of current matters, and I am happy to update that for you.

Senator RHIANNON: That is what I was after.

Mr Gregson : The two most recent matters are Pirovic and Snowdale, in which we have made allegations of free-range-egg claims. They are different from the previous matters we have referred to you in response to questions on notice. The answer to your earlier question on numbers is that we do not have them broken down presently in relation to free range specifically, but roughly we deal with about 300 food-labelling complaints a year. For the year to date we are at about 180.

Senator RHIANNON: Could you remind me, does that information cover the outcome of the investigations ad where they are up to, or could you include that?

Mr Gregson : We can certainly provide you with matters that we have proceeded to formal resolution, either through courts or otherwise, and certainly matters on which we have formal allegations in the court. I am happy to provide you high-level data about where particular investigations are up to.

Senator RHIANNON: Thank you, because there certainly is a lot of interest in it. Does the ACCC believe that the current Coles free-range-egg standard that allows 10,000 hens per hectare meets consumer expectations for free range?

Mr Sims : I have two comments and then Mr Gregson may have an additional point. A number of 10,000 is against the voluntary standard that we understand exists, so we have used that as a bit of a benchmark. The other benchmark we are using is just trying to put ourselves in the position of your typical consumer: what would they expect? Under both criteria we would have concerns with that.

Mr Gregson : I would add that the ACCC does not look at density alone. That is one factor that may lead to whether or not a claim is free range. For example, in the two matters we have recently instituted we looked at stocking density, the physical openings on barns, condition of the outdoor range, and the manner in which the hens were conditioned. I should say, also, that as the chairman indicated our interest does not end with those two that we have proceeded to court with. We have broad-ranging inquiries with industry participants, and the very matters you have raised will come for consideration in due course.

Mr Sims : We are very confident we can deal with this one.

Senator RHIANNON: How are you engaging with Coles on this one?

Mr Sims : At the moment we are mainly engaging with the producers rather than Coles.

Mr Gregson : It is fair to say that we have drawn our interest to the attention of Coles, and we will be having further engagement with them to make sure they are aware of the actions we are taking.

Mr Sims : But this is mainly the people who produce the eggs. Our focus is the people who are producing the eggs and presenting them to the supermarkets as free range.

Senator RHIANNON: Is there anything going on around a trademark using the words 'free range' or an inference that it is free range. Is that something you are giving attention to in terms of managing how that is developing?

Mr Gregson : Ms Webb might have something to add. The ACCC has a role in relation to certified trademarks and we have had dealings with past free-range-egg CTMs.

Ms Webb : We did have an application in relation to a free-range-egg trademark, but once we got going on our inquiry that was withdrawn. So it is not current at the moment.

Mr Sims : If we do run some court cases on this I think the court will give us very useful guidance it that might actually help sort the problem out. That is our hope.

Senator RHIANNON: The trademark is not alive at the moment?

Mr Sims : No.

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